The dispute between Nokia and HTC continues, though recent developments suggest that Nokia has the upper hand and that a royalty-bearing license deal will be the ultimate outcome.
Today the Wall Street Journal reports that HTC is working with Qualcomm to modify a chip in its HTC One smartphone in order to steer clear of infringement of the two Nokia patents that an Administrative Law Judge of the United States International Trade Commission (USITC, or just ITC) deemed infringed in a preliminary ruling that was issued last week and would, if affirmed, result in a U.S. import ban. Should HTC, with Qualcomm's help, be able to keep selling its flagship product in the U.S. despite an ITC exclusion order, then there would be considerably less pressure on the Taiwanese device maker, which litigates very effectively, to settle in the short term. The relevant patents aren't standard-essential, so they can be worked around in principle. At this point it's unknown what technical options HTC and Qualcomm have, and whether any workarounds would come with performance reductions or other degradations noticeable to end users.
I recommend that Wall Street Journal article to all those who believe (mistakenly) that the scope of ITC exclusion orders is limited to the exemplary infringing products accused in an investigation.
Simultaneously with its first ITC complaint against HTC in May 2012, Nokia also filed a couple of Delaware lawsuits. In one of them, HTC yesterday brought a motion for judgment as a matter of law (JMOL), asking the district court to declare U.S. Patent No. 6,647,370 on a "system and methods for scheduling and tracking events across multiple time zones" invalid because it covers an abstract method. This case won't go to trial in well over a year. It's quite early for such a motion, but HTC moves for "judgment on the pleadings" and argues that "[t]he outcome of this motion does not turn on the construction of any claim term at issue". It considers any further discovery, and even claim construction, a total waste of time.
The patent was not originally filed, but only acquired, by Nokia. It was applied for by Starfish Software, whose founder Philippe Kahn (known for having founded Borland) is one of the named inventors.
HTC's motion describes the patent as "directed to the abstract idea of changing the times of appointments on a calendar depending on time zone", giving the example of someone who has a 4 PM appointment on the East Coast but if his calendar is on Pacific Time because he's traveling on the West Coast, then the time would appear as 1 PM. HTC's key argument is that this is a very old concept that doesn't become patentable only because it's implemented in a computer. Pointing to a Wired article ("Nov. 18, 1883: Railroad Time Goes Coast to Coast"), HTC believes that time zone-dependent schedules are 130 years old:
"Time zones and scheduling according to different time zones were known as far back as 1883, when North American railroads adopted five standardized time zones to end the confusion of dealing with thousands of local times. Ever since, people have been converting scheduled times between different time zones in their heads or with pencil and paper."
Viewed in isolation, the language of claim 1 of this patent does indeed appear rather abstract:
"1. In a system having a processor, a method for displaying a plurality of event information items, including appointments, that each includes an associated time, wherein the times associated with the event information items are according to different time zones, the method comprising: accepting, from a user, an entering of an event information item of the plurality of event information items according to one of the different time zones; converting by the system the times associated with the event information items into times according to a particular time zone, wherein the particular time zone differs from the one of the different time zones; providing a calendar view suitable for displaying at least some of the event information items using the particular time zone, wherein the calendar view includes time slots that each have an associated time label; and displaying the event information items using the times according to the particular time zone."
That claim is a typical example of a basic real-world concept that doesn't become patentable only because the claim mentions a "system having a processor". But this is just the broadest claim of the patent, not its only one. Other claims add more specific technical elements such as a "global positioning satellite signal". And a claim has to be read against the background of the specification. Large parts of the specification are indeed as basic and abstract as HTC claims, while other parts are not. The specification contains some high-level source code from Starfish Software's "EarthTime.TM" module. Still, even a detailed description of a preferred embodiment doesn't turn an abstract concept into a patentable technical invention.
Nokia is asserting approximately 50 different patents against HTC in the U.S., UK, Germany, and most recently also Italy. There are many highly technical patents among them, such as the ones HTC now wants Qualcomm to work around so it can keep selling the One. The '370 patent is an outlier among the patents Nokia has asserted against HTC (and other defendants) so far. I've seen Nokia assert other broad patents (particularly in Germany), which is what many litigants do at some point. But even the broadest patents Nokia asserted elsewhere were less abstract than the '370 patent. Nokia's best shot in the short term may be to convince the court that it's too early for a ruling and that it's better to await, at a minimum, the court's claim construction.
HTC cites to cases (including high-profile appeals such as Bilski and CLS Bank) in which patents were invalidated under § 101 because they were considered to claim abstract concepts. No doubt that a challenge based on abstraction can succeed. But especially CLS Bank v. Alice is a case that shows how difficult it can be for courts to draw the line between computerizations of abstract ideas and true inventions. The Federal Circuit opinion certainly doesn't provide the degree of clarity that HTC would like to have. If the Delaware judge relies primarily on CLS Bank, then anything's possible...
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