Friday, June 21, 2013

ITC institutes investigation of Nokia's second complaint against HTC -- VP8 also at issue

Late on Thursday the United States International Trade Commission ("USITC", or just "ITC") gave notice of its (expected) decision to investigate Nokia's second complaint against HTC, filed about four weeks ago.

In this new investigation Nokia is asserting six patents against HTC, one of which is allegedly infringed by HTC's implementation of Google's VP8 video codec (part of the WebM project). Two German VP8 cases have already gone to trial. In the first one an infringement (or at least a rather likely infringement) has apparently been identified, and while I doubt that Nokia will win the second one (except perhaps on appeal), it's again very close to an infringement finding as the decision hinges on the court's construction of a single claim limitation (whether "based on" can have the meaning of "depending on").

Google is an intervenor in the first Nokia-HTC ITC investigation and is presumably going to intervene again (it's also an intervenor in various German Nokia-HTC cases, including among other things the ones involving VP8).

All in all Nokia is asserting 50 (or more) different patents against HTC in the U.S., UK, and Germany.

The ITC investigation of Nokia's first complaint went to trial in late May/early June, and as a result of the case narrowing that is expected in ITC investigations in order to keep the case schedules (which are relatively fast by U.S. standards), there are now three patents remaining in the case. One of those patents covers tethering. The other two patents involve chipsets used by HTC, and HTC's patent exhaustion defense was dismissed by the Administrative Law Judge (the Commission, the six-member decision-making body at the top of the U.S. trade agency, declined to review that determination for the time being though patent exhaustion could be reviewed after a final initial determination by the judge on the overall case).

During the first year of the current wave of smartphone patent disputes the ITC was a very popular venue. Some litigants apparently thought that this forum provided them with the best chances of gaining leverage resulting in settlements. But the drop-out rate of patent assertions at the ITC has been extremely high, and certain German courts (particularly the ones in Mannheim and Munich) have become increasingly popular in disputes between global players because they adjudge patent infringement actions much faster than the ITC. Most of the original smartphone-related ITC complaints by large operating companies against their peers have been adjudged by now and are on appeal (just yesterday the Federal Circuit scheduled a hearing on the Microsoft-Google cross-appeal of the ITC ruling on Microsoft's complaint against Motorola, which resulted in an import ban). But there have still been some new complaints of this kind, including the ones Ericsson and Samsung lodged against each other.

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