Friday, February 28, 2014

IPCom's $2.2 billion lawsuit against Apple thrown out by German court: no infringement found

Two different chambers (panels of judges) of the Mannheim Regional Court just announced a total of three rulings on standard-essential patent (SEP) infringement cases brought by IPCom, a patent licensing firm based in the Munich area that acquired the wireless patent portfolio of Bosch years after the latter had exited the car phone market and is now monetizing it. Today's decisions are, without a doubt, a setback for IPCom's enforcement efforts:

Two lawsuits against Apple, including one involving a €1.57 billion ($2.2 billion) "partial" damages claim, and one against HTC (a company IPCom has been suing for about six years) were dismissed because the court concluded that Apple and HTC didn't infringe a certain IPCom patent family by implementing the 3G/UMTS standard. It's a given that IPCom will appeal, but Apple, HTC, Nokia (or soon Microsoft, which is in the process of buying Nokia's wireless devices business), Ericsson, Vodafone and others will likely continue to challenge the validity of the related patents in different fora. This will go on for some more time, unless someone settles, which Deutsche Telekom did last year but others appear to be less interested in.

The patents-in-suit in the cases dismissed today, both going back to the same original application and entitled "access of a mobile station to a random access channel in dependence of its user class", are European patent EP1841268 (called the "#100A" patent and at the heart of the gazillion-dollar suit against Apple) and German patent DE19910239 (also asserted in the case against HTC that was adjudged simultaneously with the two Apple cases, except that claims against 4G/LTE devices were severed and not adjudicated today). This patent family relates to priority access to channels for emergency responders. The claim construction issue underlying all three of today's rejections involves a claim limitation that contains the word "bit", which both patent-specialized chambers of the court (in fact, this court has adjudicated far more wireless patent cases than any other court in the world) interpreted literally because otherwise the claim scope, which was narrowed by a recent post-grant decision by the European Patent Office, would not be distinguishable from earlier versions of the claims that referred, more generally, to "information".

This conclusion comes as no surprise. I attended the two Apple trials earlier this month and just didn't blog about them because I had an exclusive arrangement with a law firm interested in research on SEP enforcement. I am, however, free to blog about the non-FRAND aspects of this matter, and I prepared this post on the train this morning from Munich to Mannheim because I anticipated this outcome. Having watched numerous cases over which the same judges, Judge Dr. Kircher (Apple cases) and Judge Voss ("Voß" in German; HTC case) presided, it made sense to me that they'd ensure the difference between the broader term "information" and the narrower term "bit" be given meaning.

Ahead of the Apple trial I had listed the names of many German law firms involved with disputes over IPCom's "#100A" patent. With today's decisions, the law firm of Freshfields Bruckhaus Deringer continues its (truly impressive) defensive winning streak on Apple's behalf. Attorneys-at-law Dr. Frank-Erich Hufnagel and Wolrad Prinz zu Waldeck und Pyrmont already fended off seven Samsung lawsuits in Germany (not definitively because some were stayed and others are on appeal, but for the time being), five of them over SEPs. In the IPCom cases as well as at least one Samsung case over a patent involving a complicated mathematical formula, Dr. Arno Risse ("Riße" in German) also made very significant contributions to the effort. On Apple's behalf, this team is undefeated. At this month's IPCom trial, Apple's legal team furthermore included patent attorneys from the Munich-based firm of Samson & Partner, with the firm's founder, F.R. von Samson-Himmelstjerna, and Dr. Tobias Stammberger also representing Nokia against IPCom.

As counsel for HTC, Hogan Lovells's Dr. Martin Chakraborty has literally fended off dozens of German patent infringement lawsuits.

IPCom is working with lawyers from multiple firms on these cases. In its Mannheim litigations, Quinn Emanuel's Dr. Marcus Grosch is on board. He's the undisputed number one among Mannheim-based patent litigators. Just yesterday, he achieved the invalidation of a Microsoft patent (a decision Microsoft's counsel said they would appeal today). In the original version of that post, written at the end of a long day, I mistakenly said he represented HTC in today's cases. HTC is a Quinn Emanuel client in the United States, but not in Germany.

Another Quinn Emanuel client, Samsung, works with this firm in the U.S. as well as on some of its German cases and took a license to the Bosch wireless patent portfolio many years ago for a limited amount of money (long before IPCom acquired those IPRs).

Samsung, Apple, Microsoft, Google and others wrote an(other) open letter to European Union decision-makers this week warning against a growing problem in Europe with so-called patent assertion entities (PAEs). I, too, believe that more work needs to be done on the rules of procedure of Europe's future Unified Patent Court.

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