Saturday, December 7, 2019

Super Mario company paved the way for BMW and Daimler's invalidity defense against a Broadcom patent

There was a time when a video game console manufacturer like Nintendo and car makers like BMW and Daimler were technologically so far apart that one could hardly have imagined the same patent would get asserted against those three organizations. But times have changed, and a patent on programmable texture processing (a computer graphics patent) can now be alleged--whether with or without merit--to read on game consoles as well as car navigation systems (or other computing technology incorporated into a modern automobile).

There also was a time when Broadcom was more interested in making products than asserting patents, and often filed pretty good amicus curiae briefs advocating reasonableness in patent enforcement (particularly, but not only, with respect to standard-essential patents). That, too, has changed.

Time is ticking away for some very old Broadcom patents on the verge of expiry. Last year, however, Broadcom forced the Volkswagen group into a billion-dollar settlement, exploiting the sad state of affairs of German patent law, where injunctions are granted--mnst of the time over patents that would later be held invalid--without an eBay v. MercExchange-like proportionality analysis. One of Europe's best patent judges believes Germany is in breach of EU law for that reason, and at a conference I recently organized in Brussels, a lawyer said the European Commission could, if it wanted, fine Germany for infringement of an EU directive.

The latest insanity--Germany-wide patent injunctions obtained by BlackBerry against Facebook and its WhatsApp and Instagram subsidiaries over four different (most likely invalid) software patents--shows that this situation is unsustainable, and I'm confident that change will come. Germany's patent infringement judges unanimously oppose reform, but they're not going to be the ones to decide. At the most, they can influence the unelected officials at the ministry of justice, but the German legislature will make the actual decision and is going to be a million times more interested in strengthening the German economy and protecting German jobs and consumers than in attracting lots of patent troll litigation to the country. There won't be a single party in the German parliament that would support the status quo. The judges are going to lose this battle.

Getting back to Broadcom's efforts to shake down the German automotive industry, it doesn't look like what worked against Volkswagen is too likely to work out the same way against BMW and Daimler--partly because time is not on Broadcom's side, and partly because Broadcom faces more resistance this time around.

Before Broadcom sued BMW and Daimler over EP1177531 on a "method and system for providing programmable texture processing," they also asserted that patent against Nintendo. The company known for video game consolers and for iconic game franchises like Super Mario and Pokémon was alleged to infringe that patent. But Nvidia then brought a nullity action (a complaint seeking invalidation of the patent by the Federal Patent Court of Germany), and Nintendo's lawyers from the Bardehle Pagenberg firm (which often defends BMW as well) convinced the Mannheim Regional Court that the patent was likely going to be annulled because an Nvidia chip sold before the patent's priority date already came with the technique the patent purports to cover.

Of Germany's leading patent infringement venues, the Mannheim Regional Court is by far and away the most responsible one when it comes to staying infringement actions over likely-invalid patents. Daimler will defend itself against a Nokia SEP case in Mannheim on Tuesday (December 10) as the court just confirmed to me on Friday.

Broadcom filed an interlocutory appeal against the order to stay the Nintendo case, and it remains to be seen what the appeals court--the Karlsruhe Higher Regional Court, where Judge Andreas Voss ("Voß" in German) presides over the patent-specialized division--will decide. The Mannheim court stayed the cases against BMW and Daimler for the same reason as in the Nintendo case, but reminded the parties in its order to stay the case against Nintendo and the pending interlocutory appeal.

A Broadcom subsidiary named Avago has meanwhile lodged some patent infringement complaints against BMW and Daimler. Daimler will have until January 22, 2020 for its answer to the complaint. But the patent is set to expire a few months later. So Broadcom/Avago may never actually get to enforce an injunction. The timeline in the case against BMW remains to be seen. Avago interestingly brought a lawsuit against BMW in Hamburg, a venue in which I have so far not watched a single patent infringement case. While patent infringement suits can be brought in any federal district in the United States, Germany designates specific courts, and almost all patent cases are filed in Dusseldorf, Mannheim, and Munich. It's not unheard of for someone to file in Hamburg (or Frankfurt, Berlin, or Nuremberg), but it's highly unusual.

I asked BMW for further information on those cases, and after telling me they referred my inquiry to the spokesperson in charge of this topic, I never heard back. Daimler declined to provide any information other than expressing the view that the complaint is meritless. So I had to tape some other sources.

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