Tuesday, February 5, 2013

Samsung says one of Ericsson's patent assertions at the ITC was made in bad faith

Yesterday Samsung filed an opposition brief with the United States International Trade Commission (USITC, or just ITC) against Ericsson's request to replace one of its 11 asserted patents with a reissue patent, and to add 15 new claims at the same time. The original complaint had been filed on November 30, 2012 and already mentioned the intent to replace U.S. Patent No. 6,278,888 on "radiotelephones having contact-sensitive user interfaces and methods of operating same" with a reissue patent Ericsson expected to be granted in the near term. Meanwhile, the reissue patent has been granted (U.S. Patent No. RE43,931, same title as the '888 patent), and on January 22, 2013 Ericsson filed its motion to amend the complaint accordingly.

The Office of Unfair Import Investigations (commonly referred to as the "ITC staff"), which participates in many ITC investigations as a third party (but whose opinions are not binding on the judges or the Commission, the top-level decision-making body) said on Friday that it does not oppose the motion. While it "notes that this amendment will add 15 new claims to this investigation, which will result in nearly 160 asserted claims across 11 patents being investigated within a 15 month target date", the staff believes that the ambitious 15-month schedule can be kept nevertheless because this investigation is still in the early stages. Samsung had proposed a 20-month target date, and the staff felt that 17 months (always counting from the institution of the investigation, i.e., roughly a month after the filing of the complaint) would be a reasonable goal.

Samsung's opposition brief proposes that Ericsson's motion to amend be denied or that the schedule at least be extended. Samsung argues that Ericsson was "misusing" the original '888 patent when it asserted one of its claims in its November 2012 ITC complaint against Samsung because it had allegedly been telling the patent office for years that this claim was "defective". I haven't looked into the prosecution history but a reissue wouldn't happen only because Ericsson wanted to add some claims to an existing patents. A reissue is an instrument to fix problems. Therefore, Samsung says that "the '888 patent should never have been asserted in this Investigation to begin with". Samsung also notes that the USPTO had notified Ericsson of the upcoming reissue but Ericsson didn't even seek an expedited reissue. And Samsung claims to be prejudiced because "expert disclosures are due just days from now, on February 11, claim construction exchanges are due March 15 and fact discovery cutoff is just three months away". That's why it at least wants more time.

Defendants generally benefit from delay, so Samsung is probably overstating the alleged prejudice. Nevertheless I see a problematic trend of different types of complainants -- non-practicing entities and operating companies, large and small organizations -- filing ITC complaints prematurely, and recently this appears to affect Samsung more than anyone else. Last week Samsung said that InterDigital, a non-practicing entity asserting standard-essential patents, had failed to show any actual importation of infringing products because the ones it purchased had undoubtedly been imported at a time when Samsung was licensed to six of the seven patents-in-suit. But the ITC went ahead and instituted an investigation anyway. Now Samsung has to defend itself against an Ericsson complaint involving (besides ten other patents) one that wasn't really ripe for assertion under the standard Samsung advocates. Until the ITC clearly penalizes (at least through delays) those who file complaints rather than having everything in place, patent holders are going to play this game and get the process started even if they know that certain amendments will be necessary while the investigation is already ongoing.

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