Settlement pressure on HTC is increasing significantly after Justice Arnold of the England and Wales High Court ordered an injunction against various HTC devices based on EP0998024 on a "modular structure for a transmitter and a mobile station", a mobile phone hardware patent that he found valid and infringed by HTC'various HTC products including its current Android-based flagship, the HTC One, in an October 30 ruling.
The injunction is "final" as far as the High Court is concerned, but Justice Arnold granted HTC permission to appeal ("albeit on more limited grounds than HTC had sought permission in respect of") and a stay of the injunction "pending the judgment of the Court of Appeal". HTC has until 4 pm UK time on December 6 to apply to the Court of Appeal for permission to appeal against Justice Arnold's "refusal of a wider stay".
Nokia is asserting this patent against HTC in several countries and issued the following statement on the decision:
"Nokia is pleased that the UK High Court has imposed an injunction on certain HTC products found in October to infringe a Nokia patent. The injunction is stayed until December 6 to allow HTC time to appeal. Pending the appeal, HTC has undertaken not to ship any more of the infringing products into the UK, except the HTC One which it may continue to sell until the conclusion of any appeal. If HTC does not succeed on appeal, the injunction will take effect on all infringing products. Nokia is also claiming financial compensation for the infringement of this patent."
Nokia just received good news yesterday in the United States, where Microsoft's acquisition of Nokia's wireless devices business received fast-track clearance from antitrust regulators. I understand that the European Commission's Phase 1 review will also conclude this week, and I would be very surprised if this procompetitive transaction wasn't also cleared immediately in the EU -- the only logical outcome unless antitrust law is suddenly turned on its head.
Patent licensing will be a substantial part of Nokia's revenue opportunity after the closing of the Microsoft deal, and the dispute with HTC is an important one because Nokia faces an unwilling licensee of its non-standard-essential patents. It's SEPs are already broadly licensed. Its non-SEPs are not, so there is potential upside for investors in that regard. From an enforcement point of view both categories of patents present different challenges. HTC will only take a royalty-bearing license from Nokia at a point at which the latter has substantial leverage. Otherwise HTC will continue to defend itself in court.
Nokia is suing HTC in six countries on three continents (US, UK, Germany, Netherlands, Italy, Japan) and gaining more and more leverage, which is why we may see a settlement even before the end of the year. In the United States, Nokia won a preliminary ruling at the ITC over two patents, and the result could be a U.S. import ban against HTC's Android-based devices. Some organizations have raised public interest concerns in that regard, but if the ITC upholds the liability findings, an import ban is going to be almost inevitable. And on Friday (December 6), the Munich I Regional Court will announce a ruling on a German Nokia v. HTC case over a USB-related patent (not a SEP, but it appears rather powerful). At the September trial Nokia appeared to be on the winning track. I will also attend the Friday announcement.
The decision mentions that, according to evidence adduced by HTC, various other companies (Apple, BlackBerry, Google/LG, Samsung and Sony) "are also marketing phones (or, in Sony's case, a tablet) containing infringing chips in the UK".
Finally, here's today's order:
If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.
Share with other professionals via LinkedIn: