Sunday, July 7, 2019

Nokia privateer Conversant keeps on losing: UK court declares patent invalid due to added matter

Conversant, a privateer asserting former Nokia patents against different industry players (though Nokia denies any economic interest or revenue share in Conversant), has suffered some significant setbacks lately in France (against LG) and the United States (against Apple). On Thursday (Independence Day), it also lost a UK case (this post continues below the document):

19-07-04 Conversant v Huawe... by on Scribd

Justice Richard Arnold of the England & Wales High Court (EWHC)--see this post on a panel speech he gave in Munich a few months ago--has ruled that EP1797659 on a "slow Mac-E for autonomous transmission in High Speed Uplink Packet Access (HSUPA) along with service[-]specific transmission time control" is invalid due to added matter. HSUPA is a 3G protocol. Huawei's primary invalidity contention was that the claims of the '659 patent were amended pre-grant so as to read onto a particular technology in HSUPA called Uplink DRX (DRX = discontinuous reception) by adding matter into the claim beyond the content of the application as filed. Under Art. 123(2) of the European Patent Convention, such additions are not allowed, and patent claims containing such added matter are invalid.

According to the judgment, Huawei "dispute[d] essentiality, and hence infringement, and counterclaim[ed] for revocation on the grounds of added matter, obviousness and insufficiency." With the added-matter allegation having been found to be meritorious, it's game over for this Conversant patent in this UK court.

In an attempt to piggyback on that terrible Unwired Planet precedent (which Justice Birss, not the far more balanced Justice Arnold, is responsible for), which the Supreme Court of the UK agreed to hear, Conversant is seeking a global FRAND rate determination against Huawei in the UK. But apart from whether the related appeal (which Justice Arnold was well aware of, but which did not prevent him from holding a purely technical trial last month anyway) will succeed (I hope and believe it will), Conversant needs to prevail on the merits of at least one patent claim in order to have a basis for claiming anything, be the regional scope global, multinational, national, regional, or local.

So where does Conversant's overall patent assertion campaign against Huawei stand?

It all stated in July 2017. The original claim form alleged that Huawei was infringing four Conversant patents:

  • EP1031192 on "packet radio telephone services";

  • EP0978210 on "connecting a multimode terminal to the network in a mobile communication system";

  • EP'659, which the judgment shown and discussed above has disposed of; and

  • EP1878177 on a "fixed HS-DSCH or E-DCH allocation for VoIP (or HS-DSCH without HS-SCCH/E-DCH without E-DPCCH)".

The first decision had to be made on Huawei and ZTE's jurisdiction challenge. Justice Henry Carr heard that challenge in early 2018. He held that there was no irreparable harm that Huawei and ZTE would suffer from the denial of a stay, however, provided that Conversant would be precluded, by way of a stipulation, from later claiming that Huawei and ZTE submitted to UK jurisdiction by continuing on the technical side. Conversant agreed, so the case continued.

In April 2018, EP'210 expired, and EP'192 had only six months left. Against that background, Justice Carr scheduled two technical trials: a "Trial A" for EP'177, and a "Trial B," further to which the judgment by Justice Arnold that is shown and discussed above came down.

Back then, Justice Carr already had a certain premonition. He stated that in the event of Conversant losing both of those trials (A and B) over allegedly standard-essential patents that had not yet expired, "then it [would be] very unlikely that a FRAND hearing [would] proceed."

With Conversant having lost Trial B (over EP'659), its fate now depends on Trial A. In fact, Conversant even agreed to delay entry of partial judgment, which means it can't immediately appeal the added-matter ruling.

Trial A was originally going to be about just one patent--EP'177--but Conversant amended that one further and injected two divisionals (EP3267722 and EP3197206) into the Trial A proceedings. In order to do so, Conversant had to bring the UK equivalent of a U.S. motion for leave to amend a complaint, which Justice Birss (who held a case management conference) granted.

An interesting detail regarding the three Trial A patents is that Conversant claims EP'177 and EP'722 are essential to LTE, while EP'206 is allegedly essential to UMTS. Originally, Conversant's UMTS patent in this dispute was EP'659, but that's the one that was just held invalid due to added matter.

Conversant is running out of ammo. Time is not on its side either. How come it doesn't fare better with those former Nokia patents? Maybe Conversant's management and investors simply lacked the knowledge they'd have needed to understand what they were buying. But it's also possible that Nokia itself overrated the relevant portfolio.

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