Friday, July 12, 2013

Court tosses some of Nokia, Huawei and ZTE's FRAND counterclaims against InterDigital

On Friday the United States District Court for the District of Delaware held a hearing on InterDigital's motion(s) to dismiss numerous FRAND counterclaims brought by Nokia, Huawei and ZTE in the cases that resulted from mirror complaints to ITC complaints filed in January of this year. The primary target of these new actions is Samsung, but as far as FRAND is concerned, it's almost colluding with InterDigital, so the motion(s) addressed on Friday relate only to FRAND counterclaims by Nokia, Huawei, and ZTE.

The written order on the motions to dismiss came down after the hearing, at which Judge Andrews stated the reasons. The document itself does not state any reasons. The result is that most FRAND counterclaims were dismised with leave to amend, and some without a chance for a do-over. The outcome is reasonably good for InterDigital, which benefits from any delay and can better defend itself if counterclaims must be brought with greater particularity.

InterDigital previously defeated a motion for an expedited FRAND trial ahead of an infringement trial (and, which was the plan, before an ITC ruling).

Here's an overview of the Friday results:

  • Huawei and ZTE (the two Chinese companies, which are suing each other in Europe, brought an identical set of counterclaims)

    • Dismissed with leave to amend:

      • I (breach of contract)

      • II (breach of contract -- third party beneficiary)

      • V (declaratory relief -- InterDigital has not offered or granted Huawei/ZTE licenses on FRAND terms)

      • VI (declaratory relief - determination of FRAND terms)

    • Dismissed without leave to amend:

      • III (equitable estoppel)

      • IV (waiver of right to enjoin)

      Estoppel and waiver are theories that other judges have found to be appropriate affirmative defenses, but not suitable for counterclaims. The dismissal of a counterclaim is not equivalent to the dismissal of a defense based on the same theory.

  • Nokia

    • Dismissed with leave to amend:

      • I (breach of contract -- specific performance; here, Nokia was/is trying to win an injunction preventing Interdigital from pursuing its ITC case)

      • II (breach of contract -- damages)

      • III (plead in the alternative -- declaration regarding the appropriate FRAND terms and conditions for InterDigital's combined asserted patents or U.S. declared essential patents)

      • V (plead in the alternative - breach of implied contract)

      • VIII (plead in the alternative -- declaration that InterDigital has failed to offer FRAND license terms)

    • Dismissed without leave to amend:

      • IV (plead in the alternative - declaration that InterDigital is promissorily estopped from seeking an exclusion order against Nokia at the ITC based on the alleged use of its U.S. declared-essential patents)

      • VI (California unfair competition law)

      • IX (plead in the alternative -- declaration that Nokia has an implied license to practice the combined asserted patents or InterDigital's U.S. declared-essential patents)

      • X (plead in the alternative - equitable estoppel)

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