Tuesday, January 15, 2013

U.S. judge orders Nokia, HTC and ViewSonic to hold court-moderated patent settlement talks

Judge Leonard P. Stark of the United States District Court for the District of Delaware just entered an order referring a handful of Nokia patent cases against HTC and ViewSonic to Magistrate Judge Christopher J. Burke for mediation. The order comes less than a week after the same judge set a schedule that comes down to a 2015 trial date.

I don't believe that it makes sense to order the parties to talk during the very early stages of a litigation. If they had been willing and able to settle the case without guidance from the court, they would have entered into a license agreement prior to any complaint. Settlements happen in almost all of these cases, and they usually happen when no one expects them to, but if these Delaware lawsuits were the only litigations pending between these parties (which they aren't), why would there be settlement pressure on defendants? They know that a trial won't happen for at least the next two years, and after a trial it's another question if and when any permanent injunction will result from whatever liability is established.

With its long and expensive lawsuits that don't result in meaningful remedies most of the time, some U.S. courts should ask themselves whether the only type of plaintiff that benefits hugely from the status quo are patent assertion entities suing for nuisance value. If a plaintiff is willing to settle for a cost well below the expenses of a proper defense, then the system works pretty well, and in such a scenario it actually makes sense to settle early on before the costs of discovery, claim construction briefings etc. kick in. But Nokia is not a troll. Nokia is a legitimate innovator that now has to compete with (mostly Android-based) devices that implement some of its inventions, and it needs to resolve this through licensing because sitting by idly is not an option. Nokia doesn't bring lawsuits like these just because U.S. courts don't require the losing party to bear the other party's costs.

If there's any chance at all for those Delaware settlement talks to yield a result, it's only because of the headway Nokia continues to make in Germany. Earlier today I reported on how scared HTC appears to be due to at least some (if not all) of Nokia's German patent infringement actions. It told a UK court that it wouldn't be able to sell any more smartphones (in Germany or also in other jurisdictions if Nokia brought its claims there) if Nokia's proposed claim constructions for some of these patents were adopted and if the patents weren't deemed invalid.

Case in point, while the Delaware court hopes that the trial will never take place, the Munich I Regional Court will hold a first hearing (the second one will be a trial) tomorrow on another Nokia v. HTC lawsuit. A couple of other first hearings in Munich, and a couple of Mannheim trials, have already taken place. Tomorrow's patent-in-suit is EP0982959 on a "mobile telephone user interface for short messages". Nokia is also asserting it against ViewSonic, which suggests to me that this patent is one the entire Android ecosystem needs to watch out for. I'll be there, of course.

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