Tuesday, April 23, 2013

German court dismisses (another) Nokia lawsuit against HTC targeting Google Play

Just like other litigants in this industry, Nokia is experiencing a fairly high drop-out rate of its patent infringement claims against its rivals. While Research In Motion (now operating under the BlackBerry name), which is known to be a particularly soft target for patent infringement claims and royalty demands, settled rather quickly last year and ViewSonic was already close to settling with Nokia last month, HTC has been defending itself vigorously for almost a year and shows no signs of backing down.

This morning the Mannheim Regional Court held a trial on Nokia's patent infringement action against HTC over EP1581016 on "a communication network terminal for accessing Internet", and -- which is unusual -- decided to announce a decision later the same day. After another trial held in the afternoon (relating to Nokia's lawsuits against HTC over EP0792077 on a "multi-service mobile station" and against ViewSonic over that patent as well as its divisional EP1601167) Judge Dr. Holger Kircher, who presides over the panel of judges that heard today's cases, announced the dismissal of Nokia's case based on a finding of non-infringement.

Nokia had alleged that Android's app architecture centered around the Google Play store infringes the '016 patent because of the way it allows third-party app developers to provide data to the end-user devices on which their programs run via a Google-operated server. The nature of Nokia's infringement contentions triggered an intervention by Google. Another Nokia lawsuit that the Mannheim court recently dismissed also targeted Google Play (the fact that it provides a changing catalog of offerings to end users), and Google had intervened in that case as well.

At the outset of the EP'016 trial Judge Dr. Kircher expressed the court's skepticism concerning Nokia's infringement theory in no uncertain terms. He and his colleagues felt that they could only side with Nokias infringement contentions by adopting claim constructions stretching the envelope in three ways at the same time:

  1. Nokia considered the term "service page" to include not only web pages (as the term suggests) but also apps. If this had been the only issue, an infringement would not have been too likely, but not inconceivable.

  2. Nokia faced an insurmountable challenge in persuading the court that two "means for wireless comunication" limitations could mean one and the same mobile Internet connection. Based on the claim language the court felt that these claim limitations are meant to be different connections, with only the second one relating to communication "with a device", conversely suggesting a structural differene between the two consecutive limitations. The court identified further support for this position in the specification, such as its Figure 8 (which illustrates two types of connections), and in the fact that independent claim 11 uses a different article, presumably reflecting the author's awareness of this issue. Nokia's lawyers tried their best to argue that the patent also covers cases in which the same connection serves both purposes at the same time, but their arguments were of a functional nature and lacked a basis in the claims and the description.

  3. The court also touched on a third issue that the parties had not paid much attention to. It would take too long to explain this one here, and it wasn't outcome-determinative in the end.

The dismissal of a second Nokia lawsuit targeting Google Play is a significant achievement for HTC's lead counsel, Dr. Martin Chakraborty of Hogan Lovells, and Google's lead counsel, Dr. Marcus Grosch. Google needed some good news for a change. Last week Microsoft signed up the world's largest manufacturer of consumer electronics devices, Foxconn parent Hon Hai, as an Android patent licensee (the 20th royalty-bearing Android patent deal to have been announced), and the Mannheim-based court denied Google an injunction against Microsoft over a push notification patent. Yesterday the United States International Trade Commission tossed whatever little was left (one patent only) of Motorola's complaint against Apple. While Google's attempts to gain leverage over Apple and Microsoft are utterly unsuccessful (the only thing Google has won will likely go away after a German appeals court rules tomorrow on the push notification case against Apple), today's dismissal of Nokia's second Google Play-related suit against HTC shows that Google is still a very effective defendant. But patent holders like Nokia own so many patents that sooner or later they will achieve a breakthrough and gain leverage for settlements. That's why it's not enough to fend off certain patent assertions: it's also key to win offensive cases.

HTC has brought at least three countersuits against Nokia, asserting a power-saving patent in Mannheim as well as Munich, and having its wholly-owned subsidiary S3 Graphics assert a video processing patent in Mannheim. Nokia recently won its first injunction against HTC (in Mannheim) over a power-saving patent. It's already enforcing that one, but HTC has said that its German sales won't be affected thanks to a workaround. So far, three Nokia v. HTC lawsuits have been dismissed and a couple of others have been stayed voluntarily. HTC's countersuits will likely be adjudged in the late summer. It's unclear how much leverage Nokia will have at a point at which HTC may finally win something.

The aforementioned afternoon trial didn't go much better for Nokia than the one in the morning. The divisional (EP'167) Nokia is asserting only against ViewSonic is too narrow in the court's opinion to read on the accused technology, which is the auto-save feature of the Android email client. The court is inclined to find the broader EP'077 infringed, but it strongly doubts its validity, making a stay the most likely outcome and an outright dismissal the second-most likely one. Nokia does have some gems in its patent portfolio, but it takes dozens of patent assertions to identify them. I've said on numerous occasions that the moment of truth for a patent is not when the patent office grants it: patent offices grant too many patents they shouldn't issue. The moment of truth is litigation. Once you assert a patent against a deep-pocketed, sophisticated rival, you'll see its true strength (or weakness). No patent valuation method is a substitute for this real-world test.

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