Tuesday, June 11, 2013

Nokia announces partial settlement with ViewSonic: standard-essential patents licensed

Nokia announced today that "Viewsonic recently took a royalty bearing license to Nokia's wireless essential patents for 2G, 3G, 4G and wireless LAN, becoming the latest of more than 40 companies licensed to Nokia standards essential patents". The immediate effects of this settlement include that two Nokia v. ViewSonic SEP trials scheduled to take place in Mannheim today were canceled, as was the announcement of a ruling on a case that went to trial in March, where the parties already confirmed to the court that they were in settlement talks.

From a FRAND point of view I really like the fact that Nokia was willing to extend to ViewSonic an SEP license rather than insisting on a global settlement involving SEPs and non-SEPs alike. Nokia has more than 20 non-SEPs in action against ViewSonic in the U.S. and Germany, and the related litigations will continue. Other companies, including Qualcomm, have commented negatively on the possibility of SEP license deals happening prior to resolution of non-SEP issues between the same parties. While it's obviously more efficient if companies can settle all SEP and non-SEP issues at the same time, SEPs and non-SEPs are two distinct categories of patents presenting different issues. In an amicus brief that became available yesterday Microsoft notes that "[t]he judicially-enforceable [F]RAND commitment--an unequivocal contractual commitment to license a patent to anyone on reasonable terms and conditions--is a substantial relinquishment of the right to exclude, and the right to extract whatever royalties the market will bear, that is presumed elsewhere in patent law". This also means that patent holders must be willing to agree on SEP licenses separately from non-SEP licenses. There are companies out there who give lip service to this concept but, in reality, try to exert so much pressure on their adversaries with their aggressive SEP assertions and outrageous demands that they hope the other party will ultimately offer non-SEP-related concessions (that's clearly Samsung's strategy vis-à-vis Apple, and it's also Google's/Motorola's strategy, though antitrust interventions and court decisions have so far prevented Google from succeeding with this approach).

In May 2012 Nokia announced the filing of a multiplicity of patent lawsuits against RIM (BlackBerry), HTC, and ViewSonic. RIM and HTC already had a license to Nokia's SEPs (though a certain renewal concerning WiFi patents was the subject of an arbitration proceeding triggered by RIM), but ViewSonic had refused to take one, which is why Nokia asserted four SEPs against ViewSonic in Mannheim, Germany. RIM settled with Nokia last December (putting any SEP as well as non-SEP issues between them to rest). Now ViewSonic is paying for Nokia's SEPs. But both HTC and ViewSonic still don't have a license to Nokia's non-SEPs (some of which Nokia would presumably be willing to license).

Today Judge Dr. Holger Kircher of the Mannheim Regional Court announced decisions on three non-SEP cases brought by Nokia, all of them related to Android's auto-save functionality as I mentioned in my April 23 trial report. Nokia's lawsuits against HTC and ViewSonic over EP0792077 on a "multi-service mobile station" were stayed pending a parallel nullity (invalidation) proceeding before the Federal Patent Court, but infringements were identified. Nokia has commented on the orders to stay these cases as follows:

"We are pleased that the Mannheim court found that HTC and Viewsonic infringed Nokia's patent EP 0 792 077 and we look forward to demonstrating the patent's validity at a later date.

For HTC this is further confirmation from the German courts that it is infringing Nokia patents and an injunction is already in force there against products infringing Nokia's power management patent. With over 40 more Nokia patents in suit against HTC in Germany, the UK and the US, it is time for HTC to end its use of Nokia's technology and compete using its own innovations."

Infringements of invalid patents don't matter, but any of these patents at issue in the various stayed Nokia v. HTC cases can come back with a vengeance if the Federal Patent Court (whose decisions are appealable as a matter of right to the Federal Court of Justice) upholds the asserted claims in late 2014 or in 2015.

The court dismissed the third auto-save lawsuit, in which Nokia asserted a divisional of the EP'077 patent, EP1601167, against ViewSonic. In my trial report I had already mentioned that the court thought the EP'167 patent was too narrow to be infringed (while EP'077 was considered too broad to be likely to be valid). Nokia can appeal the dismissal to the Karlsruhe Higher Regional Court.

As I recently wrote, Nokia's patent enforcement against HTC and ViewSonic is progressing, but this is not a slam dunk. Things take time, and HTC and ViewSonic are defending themselves very well so far. Still, the only logical outcome is for both (and for various other industry players) to take a license to some of Nokia's non-SEPs as well.

The next Nokia v. HTC trial will take place in Mannheim on Friday. This is Nokia's second VP8-related case. In the first one, an infringement has apparently been identified, and the court's focus is now on whether to order an injunction or stay the case pending a parallel nullity action.

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