Tuesday, February 26, 2019

Mannheim Regional Court stays Qualcomm patent infringement suit against Apple: patent-in-suit likely invalid

The real showdown between Apple and Qualcomm will take place in San Diego starting April 15, with Apple stressing antitrust, FRAND and patent exhaustion arguments while Qualcomm seeks to emphasize various contracts it used to have or still has in place with Apple and its four contract manufacturers. But in addition to that one, infringement cases are pending in multiple jurisdictions (U.S., Germany, China) because Qualcomm hoped to gain leverage over Apple ahead of the San Diego trial. False hopes, as we know by now.

Today the Mannheim Regional Court (in German: Landgericht Mannheim) ordered a stay of the case in which Qualcomm is asserting the German part of its European patent EP3036768 on a "layout construction for addressing electromigration" against Apple. The infringement proceedings are stayed until a decision by the Federal Patent Court of Germany on Apple and Intel's nullity complaint (or any alternative resolution of the validity action). In their efforts to get that Qualcomm patent invalidated, Apple and Intel are represented by patent attorneys from Samson & Partner, for whom this order to stay the case is a victory, at least for the time being--as it is for defendants' lead counsel in this litigation, Hoyng Rokh Monegier's Klaus Haft.

At the October trial (see my report), Presiding Judge Dr. Holger Kircher had already suggested that counsel for Qualcomm stipulate to a stay, given that Qualcomm was seeking to differentiate its amended claim (after the original claim turned out to be indefensible) through a claim limitation devoid of any technical substance. They added a chip layout element that has nothing whatsoever to do with the stated goal of the patent, which is to reduce electromigration. Four months earlier, Quinn Emanuel's Dr. Marcus Grosch had stipulated to a stay of another Mannheim case, but declined to do so again.

It's very unusual for the Mannheim court to make a decision well over four months (actually, almost five) after a trial. However, in this case the reason was that the court had serious doubts about the validity of this patent anyway, but rather than stay the case immediately, the court wanted to give the parties more time so that further progress in the parallel nullity action could be made. In German infringement proceedings, the courts deciding on the infringement complaint estimate the chances of a parallel nullity action. In this case, the presiding judge had expressed hopes (at trial time) that Qualcomm might stipulate to a stay a little bit later, but if Qualcomm had done so, the court wouldn't have had to announce a decision today.

Qualcomm's first six patent assertions against Apple in Germany (technically nine, but four of those patents are from the same family) have been a failure. Two of the three Mannheim cases got stayed, and one got thrown out in January due to non-infringement. In Munich, one case got thrown out, one resulted in an agnostic ruling that Apple has worked around at Intel's expense, which in turn raises antitrust issues, and the set of Munich cases involving those four patents from one family has been dismissed in part, with the rest likely being stayed soon (and in any event, iOS 12 contains a workaround).

With this kind of a track record, it's easy to understand, but rationally impossible to support, Qualcomm's preference for royalty determinations by courts or arbitration tribunals that would be based just on the number of patents the chipmaker holds as opposed to actual findings that valid patents are infringed and not exhausted (and can't be easily worked around).

At least four more German patent assertions by Qualcomm against Apple are pending. The Munich I Regional Court will hold a first hearing next month in an antenna patent case. Mannheim trials in three other cases have been scheduled for May 28, July 9, and October 8.

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