Technically on the same calendar day as Nokia's spectacular win of a second anti-antisuit injunction injunction ("AAII") against automotive industry supplier Continental, its lawyers filed, on behalf of all defendants (the Avanci patent pool, Nokia, Sharp, and a couple of patent trolls Nokia fed with patents) a motion to dismiss Continental's FRAND/antitrust complaint in the Northern District of California (this post continues below the document):
In very general terms, I already commented on some of Avanci's previously announced theories two weeks ago. Also, the fact that Judge Lucy H. Koh denied Avanci's motion to stay discovery suggests to me that Avanci's preview of the motion to dismiss didn't immediately make her feel that this case was a waste of time.
The question here that is most relevant to the information and communications technology industry at large, apart from the overarching objective of Continental's complaint (to obtain a component-level license on FRAND terms), is whether patent pool firms like Avanci, which don't hold patents in a formalistic sense but are key in bringing companies together and getting them to combine their leverage and to coordinate their behavior, can be held liable. Avanci is a SEP pool with a focus on IoT, but there's plenty of similar organizations such as MPEG LA.
I would encourage the decision-makers at major ICT companies and industry bodies (many of whom are known to read this blog) to strongly consider supporting Continental on that "pool-firm liablity" question, be it through amicus curiae briefs or background advice. Such involvement may be particularly important because, quite frankly, Nokia's litigation skills (and let's not forget that Qualcomm is also an Avanci member) are world-class, while there's light and shadow with respect to Continental. The U.S. antisuit motion and the related reply brief left a lot to be desired (while no one can blame Continental's outside counsel in Germany for the anti-antisuit situation, which was a total surprise to everybody and where they face a court that aspires to make the Eastern District of Texas pale by comparison; plus, I think they may very well prevail on appeal). By contrast, Continental's opposition to Avanci's U.S. venue transfer motion was perfect; it could serve as a textbook example for how to deal with this frequent type of situation, and one can see that a lot of thought as well as hard work went into it.
The various questions raised by the motion to dismiss also include the one of whether Sharp was properly served. Continental Automotive Systems, Inc. (the Detroit-area Continental subsidiary that is the plaintiff in NorCal) disputes that the first Munich AAII has been properly served under the Hague Convention--but now that Nokia has an injunction in place against the German parent company of the Continental group (though a few degrees removed from the U.S. entity, which could make it hard to establish contempt of court if they do their part but any single one in the chain of subsidiaries refuses to comply), service may be less of an issue there. Still, it's interesting that an Avanci member now raises a service question, too.
Motions to dismiss can dispose of some claims, though it's unlikely that an entire multi-claim complaint like the one in question would be dismissed. It's also possible that Continental's lawyers have to address some shortcomings through bringing a second amended complaint (the current one is already the first amended one). I actually thought two years ago that the FTC might have to make some limited improvements to its complaint against Qualcomm, but Judge Koh didn't reach that conclusion. However, Continental is a different case, and the need to amend the complaint again could cause some delays, though the October 2021 trial date is so far off that it might still be kept even in that scenario.
The issue of pool-firm liability is really very important, and while my policy position is clear (such firms should be liable for the behavior they cause and coordinate), I'll probably talk about this in greater detail only after Continental and, hopefully, one or more amici curiae have done the prerequisite case-law search and opposed the Avanci-Nokia motion. It appears that apart from some paywalled websites I'm the only one to write about this case at the moment, so I at least wanted to share the motion here quickly, even prior to forming an opinion on the liability issues.
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