Friday, December 20, 2013

Nokia wins German injunction against HTC's Android-based devices over key USB-related patent

The Nokia patent noose keeps tightening around HTC's neck:

Judge Andreas Mueller ("Müller" in German), the Presiding Judge of the 21st Civil Law Chamber of the Munich I Regional Court, just announced a ruling in Nokia's favor. The court granted Nokia an injunction against HTC's Android-based devices infringing EP1246071 on a "method of configuring electronic devices", a key USB-related (but not standard-essential) patent.

HTC did not have much of an infringement defense, and failed to persuade the court from staying the infringement proceedings pending a parallel nullity (invalidation) action against this patent pending before the Federal Patent Court of Germany. I predicted this outcome based on how the trial had gone in September.

As an Android user I make use of the patented functionality on an almost daily basis. The patent does not cover all USB connections, but it does cover the automatic configuration of an appropriate driver on a desktop PC when a USB connection is established. I use a USB cable to connect my phone (presently, a Galaxy Mega 6.3) to my Windows desktop. Windows then offers several choices for the purpose of the connection. Most of the time I just want to access files (photos etc.) stored on the phone, using it like an external USB storage medium. Alternatively, I could run a synchronization program. Or a user might want to use a smartphone as a USB wireless modem. These different use cases require different device drivers, and depending on my choice, the right one will be activated (and, if necessary, installed in the first place). That's what this patent is all about. I can also select a default connection type, which will then be activated automatically.

Nokia did not accuse any Windows Phone devices in this action, which are presumably licensed by extension of Microsoft's patent arrangements with Nokia.

Even though this patent is of concern to all Android device makers, Google did not intervene.

Nokia can enforce this ruling on a provisional basis during the appellate proceedings. In order to enforce all parts of the ruling (including a recall of infringing devices from resellers), Nokia has to post a bond or make a deposit of approximately 50 million euros ($68 million).

Of all German patent judges I know, Judge Mueller and his panel are the most difficult ones to convince of an infringement theory. Other parties failed to win anything from that court, making Nokia's achievement all the more significant.

For formal reasons (not all of its claims succeeded), Nokia has to pick up 40% of the court fees. But this is strategically irrelevant. What Nokia needs is leverage over HTC in a major market (such as Germany) so as to obtain a settlement on its preferred terms. Nine months ago Nokia (represented by the same winning lead counsel, Bird & Bird's Christian Harmsen) already won a German injunction against HTC, but HTC just removed a feature and kept selling. It can also work around this patent, but the attractiveness of its Android devices to German consumers would likely be adversely affected. HTC can also ask the appeals court (the Munich Higher Regional Court) to stay enforcement, but such stays are granted in Germany only if a defendant demonstrates that it is more likely than not to succeed on appeal.

An injunction Nokia recently won against HTC in the UK over a hardware patent was stayed by the England and Wales Court of Appeal, but UK courts apply an equitable standard that is different from the German approach to injunctions as a remedy at law (i.e., pretty much an automatic consequence of a finding of infringement).

Last week the United States International Trade Commission (USITC, or just ITC) decided to conduct a routine review of a preliminary ruling that held HTC to infringe two Nokia patents and could lead to a U.S. import ban.

Nokia has more than 50 patents in action against HTC in seven countries on three continents. Most recently, a Nokia lawsuit against HTC in Paris, France and a complaint in Dusseldorf, Germany targeting Google Maps and Google Navigation became known.

[Update] Nokia has provided the following statement on the decision:

"Nokia is pleased that the Regional Court in Munich, Germany has today ruled that a number of HTC products infringe Nokia’s patent EP 1 246 071, which covers USB functionality in mobile phones.

Today's judgment is another significant milestone in our on-going dispute with HTC, enabling Nokia to enforce an injunction against the import and sale of all infringing HTC products in Germany, as well as to obtain damages for past infringement. This patent is also already in suit against HTC in the UK.

Nokia began its actions against HTC in 2012, with the aim of ending HTC’s unauthorised use of Nokia’s proprietary innovations and has asserted more than 50 patents against HTC in France, Germany, Italy, Japan, the Netherlands, UK and US. During 2013, HTC has been found to infringe Nokia patents in venues including the Regional Courts in Mannheim and Munich, Germany, the UK High Court and the US International Trade Commission."


[Update2] On Sunday, HTC told Focus Taiwan that its One series of smartphones was not found to infringe and is, therefore, not affected by the Friday ruling. I had mentioned that Nokia had not succeeded on all of its claims (hence had to pick up 40% of the fees). The finding of non-infringement by HTC's flagship phone is probably the explanation. I attended the announcement of the decision, but the detailed reasoning was provided only to parties' counsel, not to the general public. [/Update2]

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