Monday, September 23, 2013

Nokia wins preliminary ITC ruling against HTC's Android devices over two hardware patents

Administrative Law Judge (ALJ) Thomas Pender of the United States International Trade Commission (USITC, or just ITC) has issued a preliminary ruling on Nokia's May 2012 complaint against Taiwan's HTC. A short summary of the ruling has just been published on the U.S. trade agency's website; a redacted version of the full ruling will become available in a few weeks. Nokia is clearly on the winning track and now fairly likely (though today's initial determination is subject to a Commission review, which is scheduled to take four months) to win a U.S. import ban against HTC's Android-based devices over two of the three patents-in-suit:

These are wireless patents but they aren't standard-essential.

A third patent, which covers tethering and is considerably older than the other two patents-in-suit, was not found infringed (nor was it deemed to be practiced by Nokia's domestic industry products).

Throughout the course of the investigation Nokia had dropped several other patents, which complainants in ITC investigations are simply expected to do in order to enable the agency to stay on schedule.

Both parties can now petition the Commission, the six-member decision-making body at the top of the ITC, for a review of findings adverse to their interests. Nokia can try to prevail on a third patent while HTC will presumably challenge Judge Pender's findings with respect to the two patents he found infringed.

Nokia is presently making significant headway with its enforcement of non-standard-essential patents against HTC (HTC does already have a license to Nokia's SEPs, but not to any of its non-SEPs). On Wednesday HTC appeared to be on the losing track in a German lawsuit brought by Nokia over a USB configuration patent, in which the Munich I Regional Court plans to hand down a decision on November 8, 2013. On Friday, the Mannheim Regional Court cleared Nokia of infringement of a video codec patent asserted by HTC subsidiary S3 Graphics. A few hours later, Judge Pender at the ITC denied a stalling motion HTC had brought in the wake of the announcement of the Microsoft-Nokia deal. Now Nokia also has the upper hand in this crucial ITC proceeding. And it won a German injunction over a power-saving patent in March -- but HTC, which is extremely good at defending against patent infringement claims, succeeded in fending off various German Nokia lawsuits or at least getting them stayed.

On a worldwide basis (U.S., UK, Germany and Italy), Nokia has asserted approximately 50 different patents against HTC. Today's ruling relates to Nokia's first ITC complaint against HTC. It was recently allowed to add a patent originally asserted in the first one to the investigation of its second (spring 2013) complaint.

The dispute may soon reach a tipping point, or may already have reached one depending on HTC's assessment of the situation, and it won't take too long before HTC will opt to take a royalty-bearing non-SEP license from Nokia. Another target of Nokia's non-SEP enforcement, BlackBerry (then named Research In Motion) already recognized the strength of Nokia's portfolio and started to paid up last year.

A very meaningful validation of Nokia's patent portfolio was the recent 1.65 billion euro license deal the Finnish company signed with Microsoft. Licensing and litigation are the two areas in which a patent portfolio can prove its worth.

[Update] Nokia has issued a first statement: "Nokia is pleased that the initial determination of the ITC confirmed that HTC has infringed two of our patents. Local counterparts of one of these are also already in litigation against HTC in London, UK; Dusseldorf, Germany and Rome, Italy. We will reserve further comment until we have had the chance to study the judgment in detail." [/Update]

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