Judge James L. Robart in the Western District of Washington is the world's pioneer in FRAND rate-setting decisions, but cases presenting similar challenges are pending in other jurisdictions, including Germany and the United Kingdom. Today I discovered an order by the England and Wales High Court to stay a FRAND rate determination and damages case involving IPCom (plaintiff), Nokia (defendant) and HTC (which according to the ruling "joins with Nokia in saying that there should be no party, but if there is one it still wants to be invited", which is typical of HTC's masterfully creative and efficient stalling tactics demonstrated against other parties -- even against Nokia).
While the court granted Nokia's motion to stay (and, by extension, HTC's request to the same effect), Justice Mann wrote that "[r]eliance on the desirability of waiting for [a] ruling [by the Court of Justice of the European Union (CJEU)] in the Orange Book case seemed to me to be highly questionable". Instead, he stayed the FRAND determination lawsuit because the patent to which it related, EP1841268 on "access of a mobile station to a random access channel in dependence of its user class", is subject to an opposition proceeding at the European Patent Office and -- as Justice Mann concluded -- will survive only in an amended form (if not revoked entirely) when all is said and done, but apparently not in the form in which the UK court had previously (in an infringement case before Justice Floyd) found it valid, essential, and infringed. Justice Mann did not believe that court and party resources should be spent on a FRAND rate and damages determination for the patent in the form in which it was asserted in the previous infringement case. For example, the commercial value of the patent could differ as a result of amendments, and if as a result of an amendment the patent was no longer standard-essential, this could have implications for Nokia and HTC's entitlement to a license on FRAND terms (and their desire to take a license).
Justice Mann's order does not elaborate on his skeptical position on Nokia's proposal to await the CJEU's opinion on the questions a German court (the Düsseldorf Regional Court) referred to it with respect to the application of EU competition law to FRAND SEP cases (in that particular case, a Huawei v. ZTE case). Since the case got stayed anyway, on different grounds, Justice Mann didn't have to reach the stay-pending-CJEU-opinion issue at all. By expressing a skeptical position he already said more about it than he needed to.
For the most part the Düsseldorf Regional Court strives to ensure consistency between EU-level case law and German case law concerning injunctions based on FRAND-pledged SEPs. From today's perspective the Düsseldorf referral makes even more sense than it already did at the time. In a Q&A document accompanying its Monday announcement of a Statement of Objections (SO) against Google's Motorola's pursuit of injunctions against Apple (and creation of an agreement under allegedly-abusive circumstances) the European Commission stated in no uncertain terms its disagreement with some of the terms certain German courts have in recent years imposed on implementers of FRAND standards if they wanted to avoid sales bans under the Orange-Book-Standard framework. Differences of this kind have to be reconciled, and the CJEU is equipped to do so.
Given that the case before Justice Mann is about a FRAND determination and damages for past infringement, most of the questions the Düsseldorf case referred to Luxembourg (the seat of the CJEU) aren't relevant. But the fifth question of the Düsseldorf court relates to other remedies, specifically also mentioning damages, that may or may not be affected by whether the implementer meets particular criteria for a "willing licensee".
National courts have to ensure consistency of their decisions with EU-level case law, including the Commission's application of EU competition law and the CJEU's rulings (Commission decisions can be appealed to the CJEU). This doesn't mean that they have to stay all cases involving questions that are, in a more or less similar form, at issue in a pending CJEU case or ongoing Commission investigation. But a stay is warranted in some cases. It depends on how much of an overlap there is, and if it can be outcome-determinative.
The Mannheim Regional Court has so far also been reluctant to stay German SEP cases to await certain EU-level decisions. But I'm sure the Mannheim judges will take note of the Commission's clear disagreement with their (and their appeals court's) application of Orange-Book-Standard. The Apple-Motorola FRAND rate case could be the first SEP case to be stayed in Mannheim pending EU-level proceedings. It's not even clear whether the agreement created between Apple and Motorola is valid (and if so, to what extent). Based on how the Commission interprets EU antitrust law in this context, Apple should now have (again) the opportunity to challenge the validity of Motorola's declared-essential patents through nullity complaints it may file with the Federal Patent Court. At the end of the day Google's Motorola may not be able to base a FRAND royalty demand on the actual infringement of a single valid SEP (which would present some interesting write-down questions).
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