Wednesday, May 29, 2013

German court unconvinced that HTC, ViewSonic infringe Nokia patent on pre-sorting text messages

HTC and ViewSonic continue to defend themselves vigorously and, so far, effectively against Nokia's patent infringement lawsuits in Germany. Today the Munich I Regional Court held a second hearing (tantamount to a trial) on Nokia's assertions of EP0982959 on a "mobile telephone user interface for short messages" against HTC and ViewSonic. The court had held separate first hearings (ViewSonic in November, HTC in January).

At the outset of today's joint trial Judge Andreas Mueller ("Müller" in German), who presides over one of two chambers (panels) hearing patent infringement cases at this court, outlined the court's preliminary views, based on which there would be a finding of no violation. The primary issue Nokia faces in the claim construction and infringement analysis in this case is that the patent refers to "folders" in which text messages (SMS) are stored upon receipt and from which they are retrieved for a threaded display, while HTC and ViewSonic's Android-based devices store incoming messages in an SQLite database and retrieve them by a thread ID at the time of displaying. Nokia already argued at the first hearings (see my reports, which I linked to further above) that there is no relevant functional difference, and filed additional arguments and evidence in the meantime, but at least at the outset of today's trial Judge Mueller and his two colleagues still believed that the patent does not give Nokia monopoly rights over the functionality as seen by end users -- in the court's preliminary opinion, the patent is specific to a particular way to organize data, and a file system is considered something else, even for the specific purposes of this patent, than a database. Nokia tried hard to persuade the court of its broader interpretation of the patent, but when the ruling comes down in two months it's probably going to be a finding of no infringement.

Judge Mueller's court has a reputation not only for narrow claim constructions but also for applying his claim constructions narrowly to the accused technologies. I can't think of a more difficult panel of judges in Germany when it comes to infringement. This also affects invalidity contentions, which rarely meet the threshold of a high likelihood of invalidation in Judge Mueller's eyes.

Nokia's functional perspective on this patent is reasonable, and it will be interesting to see the appeals court's position at some point. At the same time I wish to point out that in all of the Nokia v. HTC cases I watched I haven't seen any indication of HTC deliberately infringing Nokia's intellectual property in terms of clear and reckless copying. Nokia was an industry leader at a time when hardly anybody knew about HTC (and those who did viewed it as more of a manufacturing company). As a result, Nokia owns patents that cover technologies today's devices implement, though in some cases this depends on claim construction. In March Nokia won a first German injunction against HTC over a power-saving patent and it still has a number of cases pending in three jurisdictions (U.S., UK, Germany). Given the breadth and depth of Nokia's patent portfolio it's unlikely that there's nothing in it that HTC needs to license -- but for the time being HTC believes it's a better choice to litigate than to sign a deal. In my opinion, both companies' actions appear legitimate.

Not only is HTC defending itself but it's also countersuing Nokia over a couple of patents of its own (including a patent belonging to wholly-owned HTC subsidiary S3 Graphics). The Mannheim Regional Court will hold an HTC v. Nokia trial on Friday. On that same day the ITC will commence an evidentiary hearing (i.e., trial) on Nokia's complaint against HTC.

Last week I reported on a couple of other Nokia v. HTC trials in Munich and noted that Nokia's enforcements were progressing "but not a slam dunk". A few hours later a couple of new patent infringement complaints Nokia filed against HTC became discoverable. Nokia still has plenty of ammunition. Most other companies also experience high drop-out rates (sometimes even 100%) in their patent enforcement efforts, and nowadays these disputes tend to take much longer before settlements fall into place. There are still some cases in which settlements happen quickly, such as between Nokia and RIM, but generally things take years. Of the major "big company vs. big company" smartphone-related disputes I started watching in 2010, only two (Apple-HTC, which started in March 2010, and Nokia-Apple, which started in 2009) have been settled, while Oracle-Google (the cross-appeal of the district court's ruling is in full swing), Microsoft-Motorola and Motorola-Apple are still ongoing. So is Apple-Samsung after more than two years. Nokia started suing HTC only in 2012, so if this one got settled anytime before the end of this year, it would be one of the quicker settlements by the (current) standards of this industry...

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