Friday, April 5, 2013

Nokia sides with Google against Judge Posner and Apple on FRAND

Another amicus curiae brief has been filed in connection with Google's appeal of the FRAND part of Judge Posner's Apple v. Motorola ruling. The brief itself is not publicly available yet, but a motion for leave to file the brief contains a summary of the positions Nokia is taking in this case:

"Nokia [...] writes to support reversal of the district court opinion to the extent that it establishes a bright-line rule prohibiting injunctive relief based on the infringement of standard-essential patents altogether and to the extent that it requires that patent damages in the case of standard-essential patents in networked products be based purely on the smallest salable component of a product embodying the patent at issue. Nokia takes no position on any of the other substantive issues on appeal in this matter."

These two objectives -- allowing injunctions over FRAND-pledged standard-essential patents (SEPs) and the calculation of SEP damages based on a broader royalty base than, for example, a baseband chipset -- are shared by Google's Motorola Mobility. Obviously, Nokia doesn't always agree with Google. For example, it opposes some of Google's plans with the VP8 video codec. And it doesn't always disagree with Apple: it supported its pursuit of injunctive relief against Samsung in another recent amicus brief.

Nokia's motion for leave goes into more detail on injunctions arguing like Google and its other supporters that case-by-case determinations are needed to "avoid rules which prevent issuance of injunctive relief in broad swaths of cases", which is the key issue in this case. With respect to the royalty base, Nokia argues that chipset prices aren't the right measure and warns against disincentives for patent holders to contribute intellectual property to standards.

While Google will certainly appreciate Nokia's amicus brief (especially after Apple received broadbased support from Intel, Microsoft, BSA | The Software Alliance, four law professors, Cisco, HP and others, while Google was supported only by Qualcomm and BlackBerry), Nokia's own SEP enforcement differs significantly from what Google's Motorola is doing, as I'll show in the next section of this post.

Unlike Google's Motorola, Nokia did not seek an outright SEP injunction against Apple

Nokia sued Apple in 2009; the dispute was settled in 2011. Nokia asserted dozens of patents, including a significant number of SEPs but also plenty of non-SEPs. While Nokia pursued outright injunctions and ITC import bans (none of which happened before the case was settled) over its non-SEPs, it actually sought FRAND damages and royalty payments for use of its SEPs, requesting an injunction only in the event that Apple would not pay a court-determined FRAND rate. By contrast, Google's Motorola communicated prohibitive, out-of-this-world royalty demands to Apple and Microsoft, knowing that those would never accept to meet them, and was only interested in the leverage it would gain from obtaining and enforcing injunctions in the United States and Germany. Motorola treated SEPs and non-SEPs the same way.

These are Nokia's prayers for relief in its SEP lawsuit against Apple filed in the District of Delaware on October 22, 2009 (click on the image to enlarge or read the text below the image):

"WHEREFORE, Nokia prays for judgment and seeks relief against Apple as follows:

(a) For judgment that the patents-in-suit have been and continue to be directly and/or indirectly infringed by Apple;

(b) For judgment that the patents-in-suit are not invalid and are enforceable.

(c) For judgment hat Nokia has complied with its legal obligations with respect to negotiating F/RAND terms and conditions of licenses to the patents-in-suit to Apple.

(d) For judgment that Apple has refused to compensate Nokia on a F/RAND basis for Apple's use of the patents-in-suit;

(e) Once the appropriate F/RAND compensation is determined, for a permanent injunction preventing further infringement, contributory infringement, and inducement of infringement until and unless Apple pays to Nokia such F/RAND compensation for past infringement, and irrevocably commits to payment of such compensation in the future;

(f) For actual F/RAND damages together with prejudgment interest; [...]"

Item (e) is the key one: Nokia asked for a "permament injunction", but only "until and unless Apple pays to Nokia such F/RAND compensation [once determined] for past infringement, and irrevocably commits to payment of such compensation in the future". Nokia's course of action in the dispute with Appple would actually be reconcilable with Judge Posner's position, which is why I frankly don't understand the need for Nokia to fight against that part of the ruling and to support Google's efforts to abuse SEPs.

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