Tuesday, November 24, 2015

Privateering: UK court holds Ericsson patent valid, essential to LTE in case against Huawei, Samsung

In March 2014, Unwired Planet sued several smartphone makers over various patents it had "acquired" from Ericsson. Actually, "acquired" misses the key commercial point here. In April I took a closer look at the related arrangements and couldn't help but conclude that this was just a pseudo-sale of patents and simply an act of what is commonly referred to as "privateering."

The first decision relating to Ericsson's (technically, Unwired Planet's) infringement claims came down yesterday in the England and Wales High Court. Judge Colin Birss held that EP2229744 on a "method and arrangement in a wireless communication network" is valid (and in the UK) and "infringed by wireless telecommunication networks which operate in accordance with the relevant LTE standard," or more specifically, "essential to standard 3GPP TS 36.322 release 8 version 8.8.0."

This decision came down against Huawei and Samsung's challenges to this patent. According to Bloomberg, "Samsung said it was confident it had not infringed Unwired Planet's patents." I don't know whether this means Samsung will appeal and/or whether Samsung will argue that its own implementations of the LTE standard don't make use of the technique covered by the patent in Judge Birss's opinion.

If the patent was ultimately deemed valid as well as infringed by Huawei and Samsung's LTE devices, there might be equitable defenses (relating to privateering) and there almost certainly would be a debate over what constitutes a FRAND royalty for that patent and possibly some other patents. Privateering and FRAND are the two issue heres that I'm going to be more interested in. Those two parts are intertwined, especially because Ericsson once made a promise not to demand more than a certain royalty rate for all of its LTE patents--a promise Ericsson may have circumvented by "selling" some patents to a privateer like Unwired Planet.

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