Wednesday, July 8, 2020

Apple, Intel must amend antitrust complaint against Softbank-owned industrial-scale patent troll conglomerate Fortress Investment

In November, Apple and Intel jointly filed a complaint that practically constituted an amended version of one previously brought by Intel against Softbank-owned Fortress Investment, a group that operates a number of patent troll firms such as what may be the most infamous patent troll in history, Uniloc. This morning a docket entry made an order by United States District Judge Edward M. Chen (Northern District of California) publicly known, but the actual document is sealed for the time being:

(UNDER SEAL) ORDER granting [111], [114] Motion to Dismiss. Plaintiff granted leave to amend. Signed by Judge Edward M. Chen on 7/7/2020. (afmS, COURT STAFF) (Filed on 7/7/2020)

This outcome--a dismissal, but with a chance for Apple and Intel to amend the pleadings--is consistent with what Law360 expected to happen based on a mid-June hearing.

Short of knowing what exactly the order says, I can't elaborate, but the decision per se warranted a post. It's a safe assumption that Apple and Intel will give it a new try, and Fortress will likely argue that even the amended pleadings are lacking and wanting. They may get support once again from Antitrust Assistant Attorney General Makan "Macomm" Delrahim, whose primary objective it is to strengthen the owners of weak patents--never mind if it involves siding with foreign and foreign-owned entities against some of America's most innovative and iconic companies (Make America Great Again, anyone?). However, "Macomm" won't have too many more months in office, judging by the polls (which I find very disappointing, though I can relate to many voters' disenfranchisement with the Trump Administration given what went wrong this year in a couple of extremely important contexts).

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Tuesday, July 7, 2020

Supreme Court affirmance of API copyrightability ever more likely--deference to jury (with respect to "fair use") is Google's last line of defense

For a few years I've limited my commentary on the Oracle v. Google Android-Java copyright case to procedural matters, without reiterating the reasons for which I believe the thousands of lines of Java API code asserted in that case are protected by copyright, and their use by Google was unfair. While I agree with Oracle on substance, I did publicly support Google's successful cert petition because I care about the key issues far more than about specific cases.

I'm going to continue to steer clear of arguing the issues. But I am still following the proceedings, and I have bad news for those who hated the Federal Circuit's copyrightability holding: with respect to copyrightability, it looks like Google is more likely than not to lose.

Due to the coronavirus crisis, oral argument was postponed on very short notice in mid-March, and later rescheduled for the next term (October 2020 at the earliest). Then, in early May, the following order was entered:

The parties are directed to file supplemental letter briefs addressing the appropriate standard of review for the second question presented, including but not limited to the implications of the Seventh Amendment, if any, on that standard. The briefs, not to exceed 10 pages, are to be filed simultaneously with the Clerk and served upon opposing counsel on or before 2 p.m., Friday, August 7, 2020.

This is about deference to the jury with respect to "fair use." The jury had found in Google's favor, so this is, per se, a potential Get Out of Jail Free card for Google, and apparently one that a group of law professors had raised in an amicus curiae brief. But it also means Google's non-copyrightability argument is struggling--or may already have failed definitively--to get traction with the top U.S. court for the second time in about six years.

That's simply because the second question ("fair use") won't be reached unless the first (copyrightability) is answered in the negative for Oracle. "Fair use" is a defense to infringement, and you can't infringe what isn't protected in the first place.

It's unclear how many justices proposed the request for supplemental briefing. It might have been only one, but it will have taken support from several others for this order to be entered. There is quite a possibility of multiple justices--potentially a majority--already having concluded that Google can't prevail on its non-copyrightability argument. The hearing was postponed on such short notice that many if not all of the justices are quite informed; at a minimum, their clerks had concluded their analysis at that stage.

If the Supreme Court answered the "fair use" question in Google's favor on the basis of jury deference, it might or might not discuss the standard for software copyrightability in detail. Whether the Federal Circuit's copyrightability holding would be affirmed explicitly or (by reaching "fair use") mostly implicitly, the copyrightability of API code would continue to be a reality in the United States.

In the same scenario (and I'm not suggesting that it's likely--the fact that the SCOTUS requests additional briefing doesn't mean it will necessarily agree with Google on jury deference), those opposing the protection of API code under copyright law wouldn't really make headway beyond this particular case (and even in that one, there'd simply be a remand to the Federal Circuit). It would be a procedural decision, centered around the standard of review, far short of agreeing with Google's "fair use" defense in its own right--and next time a different jury, ideally instructed by a different (more balanced) judge, might simply find otherwise. It wouldn't be precedential with respect to the substantive issue.

After Oracle won the first of two rounds in the Federal Circuit (with Orrick Herrington Sutcliffe's Joshua Rosenkranz as lead counsel), Google already requested certiorari, but the Supreme Court declined. That fact, combined with the May 4, 2020 order that implies copyrightability, suggests quite strongly that Google is facing an uphill battle in that regard.

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Thursday, July 2, 2020

European Commission circling above--and still failing to help resolve--patent licensing dispute over automotive components

Last week, MLex published a report by Khushita Vasant (not paywalled, though most MLex reports are available only to subscribers, which is why I rarely have the chance to link to them) on a "third round of questions" the European Commission's Directorate-General for Competition (DG COMP) expects automotive suppliers to answer sometime this week.

MLex says the questionnaire "also asks carmakers about 'have-made' rights in Nokia's license offers." An academic paper recently discussed the shortcomings of such "have-made rights", and I commented on it. The Bundeskartellamt (Federal Cartel Office of Germany) summarized the parties' positions, including Nokia's offer to grant "have-made rights," in its submission to the courts hearing Nokia's German patent infringement complaints against Daimler, but clearly wasn't persuaded that the availability of "have-made rights" would obviate the need for judicial clarification on the availability of a full component-level license affording suppliers freedom to operate.

On the one hand, it's a positive sign that Daimler's and its suppliers' antitrust complaints against Nokia are still being preliminarily investigated by DG COMP. On the other hand, the Commission's hesitance to launch formal investigations is in stark contrast to a variety of cases involving American companies (you name them).

In recent months I heard from various sources that Nokia's "have-made rights" and similar proposals were flatly rejected by automotive suppliers from Europe, America, and Asia in response to the previous round of questions. If the Commission had wanted to, it could have considered that feedback a clear indication just like in scenarios in which it performs a market test of potential remedies. Here, the market responded with an unequivocal thumbs-down, and there's no reason why that should be different this time around.

In the weeks and months ahead, three German courts will decide on the well-thought-out suggestion by the Federal Cartel Office to refer certain questions of EU antitrust law to the CJEU. Meanwhile, DG COMP will have to decide on whether or not to launch formal investigations of Nokia's conduct. Should the EU's top court ultimately find that Daimler's suppliers had been entitled to a full SEP license all along, DG COMP would look bad--in terms of a dereliction of duty--for not having taken action. I believe the proper course of action would be for the Commission to launch formal investigations, which the Commission could stay pending the CJEU ruling on the underlying competition issues.

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Monday, June 22, 2020

BREAKING NEWS: Federal Cartel Office of Germany asks regional courts to refer component-level standard-essential patent licensing questions to CJEU, disagrees with Nokia

BREAKING NEWS

One of the most well-respected competition enforcement agencies in the world, the German Bundeskartellamt (Federal Cartel Office), has dealt a major blow to Nokia's abusive standard-essential patent assertion campaign against Daimler and, by extension, Daimler's global suppliers. As a result, the Mannheim Regional Court has already postponed the ruling it was slated to announce tomorrow (June 23) to August 4, 2020.

On June 18, Joerg Nothdurft, one of the highest-ranking officials of the Federal Cartel Office, sent a 24-page fax to the Mannheim and Munich courts, outlining the antitrust agency's perspective on the question of component-level licensing. In what is comparable to a Statement of Interest by the DOJ in U.S. cases or an amicus curiae brief, the Federal Cartel Office moves to stay Nokia's SEP infringement cases against Daimler and to refer multiple outcome-determinative legal questions to the Court of Justice of the EU (CJEU) in Luxembourg.

The letter notes that two of Daimler's suppliers--Continental and Valeo--drew the office's attention to certain issues.

The Federal Cartel Office proposes to request the CJEU to opine on a set of specific legal questions:

  1. The first question is whether it constitutes an abuse of a dominant position under EU competition law to pursue injunctive relief against an end-product maker while refusing to fully license its suppliers.

  2. The second question relates to whether a SEP holder is "entirely free" to choose the target of an infringement action regardless of its position in the supply chain.

  3. The third question outlines specific cases in which the Federal Cartel Office is inclined to believe that suppliers are entitled to a license.

  4. The fourth and final question raises the issue of whether SEP holders are free to offer a license only to a particular level of the supply chain.

The Federal Cartel Office notes that the European Commission's Directory-General for Competition (DG COMP) has not yet decided whether to open formal investigations, but that its failure to do so does not suggest that Nokia's course of action is in compliance with EU antitrust law.

I interpret the Mannheim Regional Court's postponement of tomorrow's decision on very short notice as a sign that the court originally intended to order a Germany-wide sales ban, but is now forced to give this further thought. I cannot imagine that Judge Dr. Kircher is still going to enjoin Daimler. And if he did so, his injunction would be stayed by the appeals court in no time.

This development is the worst news ever for Nokia and its partners-in-crime (mostly the Avanci gang) in the automotive patent wars. Nokia's and its trolls' (as well as Sharp's) infringement campaign is going to grind to a halt now. The Court of Justice of the EU will decide. DG COMP may or may not launch formal investigations now, but in the event of a referral of those legal questions to Luxembourg, the Commission would most likely await the outcome before taking specific action against Nokia. I suspect that the Federal Cartel Office filed its amicus curiae brief with DG COMP's unofficial blessings.

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Wednesday, June 17, 2020

Dusseldorf Regional Court reinforces position on access to standard-essential patent injunctions: analysis starts with SEP holder's licensing offer

On Monday, the press office of the Landgericht Düsseldorf (Dusseldorf Regional Court) issued a press release on six Conversant v. Huawei and ZTE cases scheduled to go to trial tomorrow (Thursday, June 18, 2020). Of note, the court that adjudicates more patent infringement cases than any other European court (though most smartphone cases, including cases over cellular connectivity in cars, go to the rocket dockets in Mannheim and Munich) reiterates its position on the availability ofcinjunctions over standard-essential patents:

"Nach der Rechtsprechung des EuGH darf ein Unterlassungsanspruch aus einem standardessentiellen Patent, für das eine FRAND-Erklärung abgegeben wurde, nur geltend gemacht[] werden, wenn der Patentinhaber dem lizenzwilligen Benutzer zuvor eine Lizenz zu fairen, angemessenen und nicht diskriminierenden Bedingungen (FRAND) angeboten hatte."

My unofficial translation:

"According to CJEU case law [i.e., Huawei v. ZTE], injunctive relief over a FRAND-pledged standard-essential patent may only be sought if the patentee previously offered to the willing licensee a license on fair, reasonable, and non-discriminatory (FRAND) terms."

The above sentence reaffirms that the starting point of the FRAND analysis will be what the SEP holder demanded. Should the SEP holder have failed to discharge its FRAND duties, no injunction will issue.

The three leading German patent litigation venues continue to approach and adjudge this legal question inconsistently:

The legal test is extremely important, but let's not forget that a lot depends on how a test is applied. If the analysis begins with the SEP holder's offer, but even the most egregious of royalty demands are deemed to be FRAND-compliant, it won't really help. Conversely, if a court approaches a case like the Mannheim Regional Court's Second Civil Chamber in Nokia v. Daimler, but doesn't set the bar unreasonably high for the implementer of the standard, then the outcome may still be pro-competitive. That's why next week's Mannheim ruling will be a particularly interesting one to analyze.

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Monday, June 15, 2020

Without transparency in patent ownership, the Avanci pool borders on a scam operation that harms the IoT industry

Avanci isn't the first patent pool to employ a great deal of spin-doctoring, but its homepage is particularly "rich." Take the "Enabling the IoT" headline (that's one of the pages in its "Marketplace" section): baseband chipset makers undoubtedly enable the IoT, as do makers of connectivity modules that contain such chips and additional components, but Avanci refuses to grant them exhaustive patent licenses--which is an impediment (rather than conducive) to the further development and widespread adoption of IoT technologies

No less absurd is the claim that Avanci's pricing (leaving the question of component-level licensing aside for a moment) is fair, reasonable, and non-discriminatory (FRAND). Those of us following the Nokia v. Daimler litigation series know that Nokia makes a clearly supra-FRAND royalty demand (several times what Nokia gets per smartphone) and argues that it gets a similar amount as its share of Avanci's royalty income.

By far the most insane claim on Avanci's website is, however, the part where they talk about the "goal of bringing [...] transparency and predictability to the [licensing] process." Give me a break. On that whole damn website there's no such thing as a list of the patents you can license through Avanci. Nor do they publish their licensing terms. By contrast, there are patent pools such as this one (MPEG LA's AVC/H.264 pool) that do both: they publish their license agreements (including the fees), and they provide a patent list. The length of such a list is no excuse: they could upload a PDF that contains them all and/or provide access via a database query interface. Avanci's claim to be transparent is, sadly, an insult to human intelligence. That website is the epitome of intransparency. It couldn't realistically be any less informative.

Abusers like Avanci (and its worst members in that regard) give patent pools a bad name. I'd like to highlight two new academic papers in this context. First, Orrick Herrington &, Sutcliffe's John J. "Jay" Jurata and Emily Luken discuss the desirable and (in an increasing number of cases) undesirable effects of standard-essential patent pools in Glory Days: Do the Anticompetitive Risks of Standards-Essential Patent Pools Outweigh Their Procompetitive Benefits? That paper flags some very relevant concerns.

Second, with respect to the specific issue of transparency, three University of Bordeaux researchers just published a paper on Non-practicing entities and transparency in patent ownership in Europe that was funded by a lobbying group whose largest member, Google, neither practiced nor promoted transparency in patent ownership in the early to mid 2010s. They even made threats based on patents they claimed to hold but declined to disclose. Then, Google is nowadays also a member of the Fair Standards Alliance, though its then-subsidiary Motorola Mobility was one of a very few companies ever to be held liable for FRAND abuse (by the United States District Court for the Western District of Washington, affirmed by the Ninth Circuit). In a world in which we usually see the opposite trend (with ever more companies resorting to aggressive patent monetization after losing out in the marketplace), such defectors from the dark side are a welcome exception.

The paper on (the lack of) transparency raises the issue of patents being transferred in the middle of licensing negotiations without notice to a licensee. That's a serious issue, and one that Avanci badly needs to address.

If you negotiate an Avanci license today and sign a contract tomorrow, you may find yourself on the receiving end of litigation involving patents that you thought were part of your Avanci package until you found out that those patents were transferred without you having any way of knowing.

Some of Avanci's most important contributors engage in the ignominious practice of "privateering" (letting trolls assert parts of their portfolios on their behalf, with so-called patent "transfer" agreements often just reducing the patent assertion entity to a service provider and agency while the original patent holder is the main beneficiary in commercial terms).

So far, the victims of privateering were mostly smartphone makers like Apple. But while we're on the subject of the Internet of Things that Avanci falsely pretends to promote, it's worth noting that the IoT sector is increasingly impacted by privateering-style patent infringement suits.

Panasonic--an Avanci contributor--gave a bunch of LTE-related SEPs to a troll named Swirlate IP, which has brought five U.S. patent infringement complaints against the IoT industry over former Panasonic patents that the industry at large might have been led to believe were part of the Avanci pool:

A second Panasonic privateer, Nitetek, is suing ChargePoint in the Northern District of California.

Avanci offers a license to a portfolio of portfolios, but how many of those patents are "phantom patents" that have in reality already been assigned to trolls, which effectively results in double-dipping?

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Thursday, June 11, 2020

Sharp's blunt swords: two patents-in-suit against Daimler likely invalid, infringement cases got stayed

Last summer, five Sharp v. Daimler patent infringement cases (two of which were filed in Mannheim, the other three in Munich) became known through a filing in a U.S. Continental v. Avanci case. When the Munich I Regional Corut scheduled a couple of first hearings, I provided an update in September. Now it's time for a catch-up, as a couple of cases have been stayed and the other three are going to trial soon:

  • In its first-filed case against Daimler, Sharp is asserting EP2154903 on a "mobile communication system, base station device, and mobile station device" in Mannheim (case no. 2 O 46/19; complaint filed on 12 April 2019). As per a May 26, 2020 decision, that case has been stayed pending the resolution of a nullity action the infringement court deemed meritorious.

  • In the second Mannheim case (over EP2129181 on a "mobile communication system, base station apparatus and mobile station apparatus"; case no. 2 O 87/19), Sharp had no reasonable alternative to a stipulation to stay. Otherwise the case would have gone to trial later this month.

    So the current score is "two down, three to go."

  • The first Sharp v. Daimler Munich trial has been scheduled for July 23, 2020 (Seventh Civil Chamber; Presiding Judge: Dr. Matthias Zigann). The patent-in-suit is EP2667676 on a "base station device, mobile station device, and uplink synchronization requesting method," and the case no. is 7 O 8818/19. The complaint was brought on June 28, 2019.

    On the same day, the same court will also hold an additional trial in a Nokia v. Daimler case.

  • A couple more Sharp v. Daimler cases will be tried in Munich on November 3, 2020 and the following day (case no. 21 O 8609/19 over EP2854324 on a "communication system and mobile station apparatus" and case no. 21 O 9918/19 over EP2312896 on a "base station device, mobile station device and corresponding communication methods using carrier aggregation").

Sharp is a contributor to the abusive Avanci patent pool that makes supra-FRAND royalty demands and declines to license component makers. It's more of a gang than a pool, and its level of coverage (of the cellular SEP landscape) is far lower than Avanci likes to pretend, as I'll discuss in another post very soon.

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Tuesday, June 9, 2020

Neonode provided key prior art against Apple's slide-to-unlock patent and is now suing Apple in Texas over swipe-to-open and QuickPath swipe typing features in latest iPhones

The Neonode N1m smartphone didn't get much traction in the marketplace (with only a tiny number of units being sold in Sweden at the time), but it predated Apple's slide-to-unlock patent application, which is why it served as a key prior art reference in various disputes between Apple and Android device makers Samsung and Motorola Mobility. In a nutshell, the problem plaguing Apple's slide-to-unlock patent was that Apple itself had not invented slide to unlock per se, but merely the visual presentation ("slide-to-unlock image").

The Federal Court of Justice of Germany (the highest court to hear patent infringement and validity cases in that country) determined that the Neonode N1m rendered Apple's slide-to-unlock patent non-novel. Prior to the five judges on that panel, ten other European judges had reached more or less the same conclusion.

Neonode had filed for some patents of its own, and a U.S. legal entity brought a patent infringement complaint against Apple yesterday in the Western District of Texas (this post continues below the document):

20-06-08 Neonode v. Apple C... by Florian Mueller on Scribd

The patents-in-suit are

Neonode's complaint is pretty detailed. It summarizes the instances in Apple's previous U.S. litigations against Android device makers in which Neonode's prior art came up. It mentions that Apple declined to conclude a deal with Neonode involving the patents. And it details how the swipe-to-open and swipe typing (QuickPath) features in the latest iPhones (X and 11) and iPads allegedly infringe those patents.

Apple presumably had its reasons to reject Neonode's demands. Let's see how this infringement case unfolds. But after seeing the Neonode prior art mentioned in various Apple-Android disputes over the years, this is an ironic blast from the past.

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Sunday, June 7, 2020

Huawei, Samsung top list of companies with 5G-essential patents in Amplified/GreyB study--Huawei, Qualcomm have highest essentiality ratios

Today's IAM Sunday Supplement drew my attention to a June 2, 2020 article IAM summarized today as follows: "Essentiality analysis finds that so far just 26% of declared 5G SEP grants are core to the standard and claims Huawei, LG and Samsung lead the way." That article notes, among other things, that "[t]he researchers judged 34% of the Huawei patents they analysed to be ‘core’ patents – by far the best hit rate among the top six players." What is meant here by "hit rate" is the percentage of declared-essential 5G patents of a given company that actually come across as essential even upon closer look (click on the image to enlarge; this post continues below the image):

In a May 25 press release, Amplified (an analytics/AI firm) and GreyB (a company that provides patent-related services) announced their collaboration and claimed to have created the "best-in-class report on 5G SEPs." That appears boastful, but having looked at the preliminary report (PDF) more closely, there's no denying that the two companies went an extra mile:

As opposed to conventional studies that just employ statistical methods and data-mining algorithms to connect dots between different data sets (such as essentiality declarations and patent databases), Amplified's partner in this research project, GreyB, conducted a "manual" essentiality analysis of at least one patent for each of the thousands of declared-5G-essential patent families with at least one "live" (granted and not revoked or abandoned) patent. The report makes it clear that GreyB cannot and does not claim to have conducted a legal review: it's ultimately up to the courts to decide. And as I know in my capacity as a litigation watcher, patents are synonymous with legal uncertainty. There are very high reversal rates for claim constructions, infringement findings, and (in)validity determinations on appeal.

GreyB appears to have considerable expertise in the technical analysis of patents, so it's a reasonable assumption that the degree of accuracy with which they assessed the likelihood of a declared-essential patent being truly standard-essential is pretty much the same across the portfolios of all patent holders. In other words, there's no reason whatsoever to assume a bias for or against any particular company. I'm sure they deemed far more patents essential than the courts of law would. The estimated essentiality rate of 26% of all declared-essential patents (by all patent holders) is far higher than the percentage of SEP infringement cases in which the patentees prevail. A large part of the discrepancy may simply be attributable to the fact that the Amplified/GreyB study presumed all those patents to be valid as granted, which flies in the face of what I know from the litigation front.

Only two of the top six 5G SEP holders have an essentiality rate of or above 30%: Huawei towers above the rest with its 34% rate, followed by Qualcomm with 30%. LG performs poorest at 19%, and Ericsson second-poorest at 22%. As for Qualcomm's strong showing, that company has a reputation for instructing its patent attorneys to fight for an extremely broad claim scope, which is helpful in an infringement or (as here) essentiality context, but backfires when facing validity challenges. As for Huawei, I just remember that in their dispute with ZTE, they won one Mannheim case and the merits part of one of their two Dusseldorf cases (otherwise the court wouldn't even have referred Huawei v. ZTE to the Court of Justice of the EU). So their hit rate was also quite high in court (4G patents at the time). Qualcomm very rarely goes to court, and in their dispute with Apple they went to extreme lengths to avoid any judicial decisions on the merits of any of their SEPs. That's why Qualcomm's patents are untested, and Qualcomm's behavior in the Apple case didn't exude confidence to put it mildly.

Anyway, assuming for the sake of the argument that the findings are representative, I'd lke to show you the full version of the chart of which I previously showed only the headline and the bottom part. The column chart I omitted before has three columns per company: their declared-essential 5G patent families (gray); the analyzed patent families (yellow; they only looked at patent families with at least one granted member); and the red column (always the lowest for each company) is the subset of analyzed patent families that actually appeared valid when GreyB conducted its technical analyis. The order in which the patent holders appear is based on the top 6 ranking of patents per company that appeared essential in the analysis, and then the rest ("Others") is shown as an aggregate of dozens of other SEP holders (click on the image to enlarge; this post continues below the image):

The Amplified/GreyB study also contains a ring-shaped chart that shows the distribution of declared-essential 5G patents that passed the plausiblity test (click on the image to enlarge; this post continues below the image):

One takeaway from this is that three Asian companies lead the ranking of patents that passed GreyB's essentiality-related plausibility test: Huawei, Samsung, and LG. Another interesting fact is that Huawei alone holds almost as many actually-essential 5G patents as Nokia and Ericsson combined, though various people who are close to those Nordic companies have previously criticized other studies, suggesting or implying that the major Asian players owed their lead to a high rate of overdeclarations. The Amplified/GreyB study, however, can't easily be dismissed. The best is the enemy of the good, and for the time being--possibly even for a long time to come--that Amplified/GreyB study is the best of its kind. They will update it from time to time.

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Tuesday, June 2, 2020

Nokia-fed Avanci-aligned patent troll Conversant asserting two patents against Tesla in Mannheim: same patents in use against Daimler in Munich

It already became known in late April that Conversant Wireless, a patent troll that obtained patents from Nokia a while ago and contributes to the abusive Avanci patent pool, is suing Tesla in the Western District of Texas as well as in Mannheim, Germany. Meanwhile the Mannheim Regional Court's press office has thankfully been able to provide me with details on the two German Conversant v. Tesla cases:

  • The patent-in-suit in case no. 2 O 27/20 is EP2934050 on an "apparatus and method for providing a connection."

  • The patent-in-suit in case no. 2 O 57/20 is EP3300421 on a "slow mac-e for autonomous transmission in high speed uplink packet access (hsupa) along with service specific transmission time control."

Those two patents are among the ones Conversant is asserting agaist Daimler in Munich.

The two German Conversant v. Tesla cases are going to be adjudicated by the Mannheim Regional Court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher). From a FRAND perspective, the assignment of those cases to that particular division of the court is unfavorable to Tesla, given that the Second Civil Chamber--though it made a key adjustment--interprets the Court of Justice of the EU's Huawei v. ZTE ruling to the effect that an implementer's FRAND counteroffer is analyzed first, irrespectively of the fact that it (chrono)logically comes second and is merely meant to ensure a defendant won't employ unreasonable delaying tactics.

Another Avanci-aligned patent troll, Sisvel, recently stepped up its patent assertion campaign against Tesla.

The steady stream of new standard-essential patent (SEP) assertions against car makers is the result of regulatory authorites such as the European Commission having been indecisive regarding SEP abuse in an automotive context for too long. It's high time something happened in Brussels and/or elsewhere. And it still might.

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Thursday, May 28, 2020

Mannheim Regional Court's Second Civil Chamber updates position on standard-essential patent injunctions -- FRAND-compliant defendants in the clear

Access to standard-essential patent (SEP) injunctions in Germany remains in flux. This is the third post in a row to share news regarding the situation in Mannheim, the "diversity venue" du jour.

One week ago, I reported on the position taken by the Mannheim Regional Court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher) in a Nokia v. Daimler trial earlier that week. Effectively, Judge Dr. Kircher's panel told the parties (behind closed doors, but without insisting on confidential treatment of that part of the conversation) that the judges were going to reverse their Huawei v. ZTE-related approach of several years: they were going to start their analysis with the implementer's counteroffer.

Toward the end of yesterday's post on Conversant's quartet of patent infringement complaints against Daimler in Munich, I mentioned that in a Nokia v. Lenovo trial on Friday, the Mannheim court's other patent-specialized division--Presiding Judge Dr. Peter Tochtermann's Seventh Civil Chamber--had distanced itself from the other panel's stance.

Meanwhile I've obtained a copy of a clarifying order by Judge Dr. Kircher and his side judges Sender and Dr. Seibel, dated Monday, May 26, 2020, in that Nokia v. Daimler case. With a view to the defendant's leave to file a post-trial brief on FRAND, the Second Civil Chamber explains its current position on the legal framework as follows:

  • They still stand by the sequence of analysis they outlined last week and will focus on the defendant's (here, Daimler's) counteroffer first, unless Germany's top court for civil litigation, the Federal Court of Justice, were to decide otherwise at some point. (This makes it a possibility that they might not even follow such guidance by their direct appeals court, the Karlsruhe Higher Regional Court--with case law being weak in Germany, they wouldn't have to.)

  • But--and I can hardly overstate the extent to which I welcome this latest development--they have thought again about what the practical impact of a scenario in which both the SEP holder's initial offer and the implementer's counteroffer are deemed FRAND-compliant should be. In last week's trial, they indicated that even in the "FRAND vs. FRAND" case, an injunction would issue (which is the position of the Munich I Regional Court). Now, however, Judge Dr. Kircher's panel has stated in writing that the pursuit of an injunction by a SEP holder despite a FRAND counteroffer by the implementer might constitute abusive behavior under EU antitrust law and, therefore, be rejected by the court.

I have updated my chart accordingly (click on the image to enlarge; this post continues below the image):

This means that, apart from the procedural approach (which offer to analyze first), the only difference from the court's previous legal position is the bottom-right cell of the matrix: previously, non-FRAND behavior by the SEP holder would have resulted in a denial of injunctive relief without even having to look at the implementer's counteroffer; now, however, the SEP holder might get away with a FRAND violation, which would be practically "cured" by the implementer's failure to submit a FRAND counteroffer.

For the Nokia v. Daimler case at hand, this adjustment--it wouldn't be grossly unfair to say they backtracked a bit, but it's more appropriate to recognize and respect their diligence in having furthered their thinking--means that Daimler now has to convince the court that its offer was FRAND-compliant. Should the post-trial brief make a compelling case to that effect, Nokia will come out on the losing end as it (statistically speaking) almost always does in litigation.

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Wednesday, May 27, 2020

Nokia-fed Avanci-aligned patent troll Conversant stepped up litigation campaign against Daimler: now four cases pending in Munich

Nokia used to be the pride of Europe in its field, but it failed (as the saying goes, the higher you climb, the harder you fall), and a result, its patents have become not the, but certainly a scourge of Europe.

In October I discovered a German Conversant v. Daimler lawsuit because it was mentioned in a U.S. court filing. Nokia gave Conversant a package of cellular standard-essential patents (SEPs)--a practice commonly referred to as "privateering" that anybody in Brussels trying to dissuade the European Commission from enforcing EU antitrust law against Nokia should be ashamed of.

By now, Conversant has brought at least three more cases in Munich (and maybe others in different fora):

  • The first one I became aware of is over EP2934050 on an "apparatus and method for providing a connection" and was filed on August 13, 2019. The original complaint (case no. 21 O 11384/19) merely sought an accounting of Daimler's sales of infringing products, but Conversant could add--and by now might have added--a request for injunctive relief anytime (the patent is set to expire in early 2021).

    The case will go to trial on September 23, 2020 before the 21st Civil Chamber (Presiding Judge: Tobias Pichlmaier).

These are the three new cases and the hearing dates I'm aware of (I have yet to find out whether those are first hearings--as I believe--or already trials):

  • Case no. 21 (<= that's the number of the chamber, i.e., court division) O 17752/19 over EP3300421 on a "slow mac-e for autonomous transmission in high speed uplink packet access (hsupa) along with service specific transmission time control" (hearing date: November 25, 2020)

  • Case No. 21 O 17753/19 over EP3267722 on a "fixed hs-dsch or e-dch allocation for voip (hs-dsch without hs-scch/e-dch)" (hearing date: December 2, 2020)

  • Case no. 7 (= Presiding Judge Dr. Matthias Zigann's division) O 17751/19 over EP1797659 on a "slow mac-e for autonomous transmission in high speed uplink packet access (hsupa) along with service specific transmission time control" (hearing date: December 2, 2020)

This further escalation of the Avanci-Daimler dispute shows that the problem wouldn't go away even if Daimler felt forced to settle after a decision such as the one that may come down in Mannheim next month. The issues needs to be addressed. The European Commission has been waiting and waiting and waiting--but its hesitance has not helped in the slightest.

As I just mentioned Mannheim, I have meanwhile learned that Presiding Judge Dr. Peter Tochtermann of the Mannheim Regional Court's 7th Civil Chamber (Presiding Judge Dr. Holger Kircher's division is the 2nd Civil Chamber) held a trial on Friday in a non-automotive case, and from what I hear, that division still has the same perspective on FRAND as before, thereby declining to perform the same about-face as Judge Dr. Kircher's panel. Case law works has merely persuasive weight in Germany, so--unlike in Common Law jurisdictions--inconsistent decisions by the same court on the very same legal question would not be unheard of (no stare decisis doctrine). While I'm unaware of a high-profile question of patent law that would have been decided differently by judges of the same German court, I have read about cases in other fields of law. In one such case, the owners of different condominiums in the very same building in the Northern Bavarian city of Nuremberg brought lawsuits over the very same issue (no difference in facts or law), and one judge found for a plaintiff while another judge did the opposite.

It will be interesting to watch how this SEP injunction issue settles out before the Karlsruhe Higher Regional Court, provided that an appeal is brought and adjudicated prior to a poor mistreated defendant feeling forced to cave.

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Thursday, May 21, 2020

Mannheim court reverses position on FRAND defense: standard-essential patent injunctions become readily available again

On Tuesday, the Mannheim Regional Court held a trial in a Nokia v. Daimler case (case no. 2 O 34/19 over EP2981103 on an "allocation of preamble sequences") and announced the most colossal about-face I've seen from a court so far on a key question of patent law:

Presiding Judge Dr. Holger Kircher of the Mannheim court's 2nd Civil Chamber explained to the parties and intervenors that he and his side judges had concluded their court's application of the Court of Justice of the EU's Huawei v. ZTE standard-essential patent (SEP) injunction decision had been erroneous for several years. They were now going to interpret the CJEU opinion differently, with severe implications for those defending themselves against SEP injunction requests in that court.

For the time being, I'm not going to comment on the technical merits, though a Tier 2 (= indirect) supplier to Daimler disclosed to the court its implementation of the relevant part of the cellular standard in question and it appears to be clearly non-infringing, given that patent law is all about using specific means to achieve a result, as opposed to the result viewed in isolation. Also there appears to be a very strong case for impermissibly-added subject matter, which would render the patent invalid. But let's focus on FRAND.

In Huawei v. ZTE, a case referred to the CJEU by the Dusseldorf Regional Court, the EU's top court wanted to prevent both holdup (SEP holders obtaining supra-FRAND royalties against the backdrop of an injunction) and holdout (implementers using delaying tactics as opposed to negotiating license terms with SEP holders in good faith). Therefore, injunctions shouldn't be available as long as good-faith negotiations are ongoing, but mere lip service to negotiation wouldn't suffice. The key paragraph that sums up the CJEU's position on both parties having to act in good faith (with the initial obligation of making a FRAND-compliant licensing offer falling upon the SEP holder) is paragraph 71 (click on the image to enlarge; this post continues below the image):

That one is the final paragraph of the relevant part of the CJEU's ruling. It's the answer to the most important parts of the questions the Dusseldorf court had raised. It states clearly that, for (chrono)logical reasons, the SEP holder must make a FRAND offer "prior to bringing that action," and the implementer is expected to respond diligently and without delaying tactics to that offer, which means it has to make a FRAND counteroffer. FRAND is a range, so both the SEP holder's offer and the implementer's counteroffer can be FRAND at the same time.

There are 2x2=4 possible combinations of FRAND and non-FRAND positions taken by the parties on the licensing terms they would accept (click on the image to enlarge; this post continues below the image):

What the CJEU meant was that only one of the four combinations would lead to an injunction. The SEP holder would not get one if it failed to discharge its FRAND licensing duty, and if both parties made offers within the FRAND range, the SEP holder wouldn't be entitled to an injunction either as it could simply accept the implementer's counteroffer (or negotiate further to find some common ground in between).

What the Mannheim court explained on Tuesday is that the test would, from now on, focus on the implementer's counteroffer. Judge Dr. Kircher and his colleagues have recently decided to interpret para. 66 of the CJEU's decision to that effect:

66. Should the alleged infringer not accept the offer made to it, it may rely on the abusive nature of an action for a prohibitory injunction or for the recall of products only if it has submitted to the proprietor of the SEP in question, promptly and in writing, a specific counter-offer that corresponds to FRAND terms.

We'll get to the interpretation of that paragraph in a moment. The net effect is that a SEP holder could get away with a FRAND violation if the court isn't convinced that the counteroffer is FRAND. Instead of one of the four FRAND/non-FRAND combinations resulting in an injunction, all but one would (click on the image to enlarge; this post continues below the image):

That approach is materially consistent with, and may very well have been inspired by, the Munich I Regional Court's recently-published SEP guidelines.

But is that really a correct interpretation of Huawei v. ZTE?

It's a highly problematic approach to say the least.

Paragraph 71 is the one that really matters. It refers to all previous paragraphs, such as para. 66, as "the foregoing considerations" and then states a rule.

It's not just about whether para. 66 would be considered way too important. It also takes para. 66 out of context in another way: para. 66 discussed a scenario in which "the alleged infringer [does] not accept the offer made to it." It says "the offer", not just "any offer." And "the" offer is previously defined as an offer on FRAND terms.

Focusing on the implementer's (counter)offer turns the CJEU's case law on its head. It used to be the German Orange-Book-Standard approach to place all the burden on the implementer. But then came the CJEU (in Huawei v. ZTE and basically said (in other words): "No, firstly the SEP holder has an obligation under the antitrust laws, but if it discharges its FRAND duties, then we're not going to tolerate holdout tactics by the implementer. The implementer can keep negotiating, but within reason."

Arguably, the new (but actually not so new) Mannheim stance on SEPs is even worse than Orange-Book-Standard was, given that in the old days defendants were at least able to avert an injunction by making a licensing offer that relegated the determination of royalty amounts to a future judicial proceeding (they still had to post a bond or make a deposit).

The problem is clear. The impact can be disastrous. But how can this be fixed?

If an injunction comes down (the decision will be announced on June 23), Daimler can appeal it to the Karlsruhe Higher Regional Court. That appeals court could stay the enforcement of the injunction rather swiftly and set the record straight.

Regulatory authorities such as the European Commission and Germany's Federal Cartel Office could make filings with the Mannheim court, or with the appeals court in Karlsruhe. The courts would be free to disagree, but less likely to disagree with, say, DG COMP than with Daimler.

Theoretically, a solution could also come from the legislature. However, the German patent reform process is much ado about (pretty much) nothing due to the ineptitude of those pushing for injunction reform to make lawmakers understand what benefits an economic majority. They've foolishly wasted time and energy within existing industry organizations instead of just simply forging a strong cross-sectoral alliance and taking matters into their own hands while the window of opportunity to influence the political opinion-forming process was open. Now that window is closed, not in formal but in practical terms.

The new un-FRAND-ly development in Mannheim is shocking, and I believe there will be some resistance by industry. For the sake of innovation, and in the ultimate interest of consumers, I can only hope that it will be forceful, intelligent, timely, and effective.

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Tuesday, May 19, 2020

Munich I Regional Court won't adjudicate Nokia v. Daimler case tomorrow, schedules new trial for 7/23: stay looms large

The Nokia v. Daimler patent ruling (patent-in-suit: EP1671505 on a "redundancy strategy selection scheme") that the Munich I Regional Court had originally scheduled for tomorrow has been postponed.

Instead of announcing a decision tomorrow, the court has reopened the proceedings and scheduled another trial date for July 23, 2020. On that additional trial date, the focus will be on validity. Based on what I've heard about the order, Nokia now has to overcome a significant hurdle: it needs to dissuade the court from staying the case pending the parallel invalidation proceedings.

More than three months have passed since the original trial in this case. It speaks to the court's diligence that the judges identified a need for an additional court session in order to carefully analyze Daimler's invalidity defense. With so much at stake in the wider dispute, it would have been unfortunate if a rush to judgment had resulted in an enforceable injunction over a patent that shouldn't have been granted in the first place (at least not in the form in which the European Patent Office granted it).

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Monday, May 18, 2020

Patent troll Sisvel files second case against Tesla in Delaware, asserting nine standard-essential patents from Nokia, LG, and BlackBerry

The automotive patent wars are heating up. On Wednesday, a key Nokia v. Daimler decision is going to be handed down in Munich. Meanwhile, Nokia's partners in crime are pretty active, too. Three weeks ago I reported on patent infringement complaints brought by a Nokia-fed troll, Conversant, against Tesla in the Western District of Texas and in Mannheim, Germany. In that post I also mentioned other pending litigation by contributors to the infamous Avanci patent pool against Tesla:

  • a lawsuit by Foxconn-owned Sharp in Japan, and

  • a case brought by patent troll Sisvel in the District of Delaware over former Nokia patents.

The latest news is that Sisvel stepped up its campaign on Friday (May 15, 2020) by filing a second Delaware complaint against Tesla (this post continues below the document):

20-05-15 DED20cv655 Sisvel ... by Florian Mueller on Scribd

The co-complainants are Sisvel and one of its subsidiaries, named 3G Licensing.

The prayers for relief do not include injunctive relief for the time being. It's just about money.

These are the nine patents-in-suit, all of which were declared essential to certain cellular standards (3G and 4G):

  • U.S. Patent No. 7,979,070 on "mobile equipment for sending an attach request to a network" (a former Nokia patent that was declared essential to the 4G/LTE standard)

  • U.S. Patent No. 8,600,383 on an "apparatus and method for making measurements in mobile telecommunications system user equipment" (a former BlackBerry patent declared essential to the 4G/LTE standard)

  • U.S. Patent No. 8,189,611 on a "system and method for resolving contention among applications requiring data connections between a mobile communications device and a wireless network" (another former BlackBerry patent declared essential to the 4G/LTE standard)

  • U.S. Patent No. 7,215,653 on "controlling data transmission rate on the reverse link for each mobile station in a dedicated manner" (a former LG patent declared essential to the 3G standard)

  • U.S. Patent No. 7,319,718 on a "CQI coding method for HS-DPCCH" (another former LG patent declared essential to the 3G standard)

  • U.S. Patent No. 7,661,625 on a "method of scheduling an uplink packet transmission channel in a mobile communication system" (a third former LG patent declared essential to 3G)

  • U.S. Patent No. 7,580,388 on a "method and apparatus for providing enhanced messages on common control channel in wireless communication system" (a fourth former LG patent declared essential to 3G)

  • U.S. Patent No. 7,869,396 on a "data transmission method and data re-transmission method" (a former LG patent declared essential to 4G/LTE and temporarily assigned to Thomson)

  • U.S. Patent No. 8,971,279 on a "method and apparatus for indicating deactivation of semi-persistent scheduling" (a patent filed by Thomson Licensing claiming priority to a patent originally filed by LG; declared essential to 4G/LTE)

So this is a typical "privateering" case, with operating companies--especially a couple whose core business (handsets) failed miserably--having transferred patents to a patent troll for the purpose of extracting royalties from makers of innovative products.

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Munich court to hand down key Nokia v. Daimler patent decision on Wednesday (5/20)

This morning, a spokesman for the Munich I Regional Court ("Landgericht München I") confirmed to me that the 7th Civil Chamber (Presiding Judge: Dr. Matthias Zigann) is still on schedule to announce a decision in a Nokia v. Daimler standard-essential patent (SEP infringement case on Wednesday (May 20) at 10 AM local time. The trial was held in early February, and the original ruling date was postponed by about six weeks.

"Decision" doesn't necessarily mean final judgment; the case could also be stayed or the proceedings might be reopened. So what are the most plausible possibilities?

  • A finding of non-essentiality (Nokia's infringement theory is based on the specifications of the UMTS standard) appears very unlikely. Should it happen nevertheless, the complaint would be rejected. Nokia would likely appeal.

  • At trial time it looked pretty much like the court was going to find in Nokia's favor on all counts and order an injunction against Daimler. Most observers still expect that to happen, and I'll prepare a blog post for that event (because there's a sufficient probability to warrant such preparation on my side), but I'm a bit of an outlier because I'm far from convinced. The passage of time might have worked against Nokia. The court might have had second thoughts in the meantime, given that Nokia's case is deficient in more than one way.

  • The most obvious weakness of Nokia's case is the patent-in-suit itself. It's not realistically going to be deemed valid as granted once the Federal Patent Court of Germany looks at it. In most cases in this industry, settlements occur before the Federal Patent Court gets to decide, but this case is more likely than the average case to reach that point.

    Statistically, the Munich court stays only about 10% of its cases, while 80% of all patents-in-suit turn out invalid. That's a huge discrepancy. Injustice of the worst kind. But every once in a while, even the Munich court stays a case, and this patent--I repeat--is a particularly weak one.

  • The court could also identify a need for further FRAND analysis. In this regard I'd like to refer you to a previous post on this case, entitled How many times can a patent holder violate EU antitrust law in a single litigation? (Nokia v. Daimler)

Getting back to the scenario of an injunction, however unjustified it would be, it wouldn't be a general sales ban: Daimler would still be allowed to sell cars in Germany that come with telematics control units (TCUs) from Harman (a Samsung subsidiary). Nevertheless, Daimler argues that the financial impact of not being allowed to sell cars with non-Harman TCUs would amount to 4.5 billion euros.

What many people don't know is that it's easier in Germany to obtain a patent injunction than to persuade a court to impose contempt sanctions. The standard of proof would be higher: at the contempt stage, Nokia would no longer be able to base its infringement theory on a comparison between the patent claims and the specification of the standard.

An injunction could be lifted before it has any commercial impact whatsoever, depending on what the appeals court finds. Given the fundamental flaws of Nokia's case, and the possibility of one or more antitrust authorities taking action in the meantime, that's fairly possible.

But an injunction could set off a massive news cycle in Germany. Theoretically, that could benefit the camp pushing for patent injunction reform, but as I explained before, the pro-reform movement in Germany is so ridiculously incompetent (and the worst part is they don't even know how bad they are) that even the most spectacular German patent injunction ever (or at least in a long time) probably wouldn't change the political dynamics. But one never knows.

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Thursday, April 30, 2020

Nokia's patent assertion tactics conflict with von der Leyen's environmental and Vestager's industrial policy goals

Daimler brought its EU antitrust complaint against Nokia in 2018, and the Euporean Commission is still dragging its feet while another court decision (Nokia v. Daimler, scheduled for May 20) is around the corner. Just for a few seconds, let's imagine an alternative universe in which the target of the complaints would have been a cellular SEP holder like Qualcomm, InterDigital, Huawei, or LG--as opposed to Nokia. Those organizations, especially the American ones, might already have been fined by now, or at a minimum they'd have received a strong Statement of Objections (SO). But Nokia and, by extension, Ericsson benefit from such an obvious and indefensible kind of protectionism that this situation threatens to wreak havoc to the EU Commission's credibility as a competition watchdog on the global stage.

So Daimler's and its suppliers' tough luck here is that shrinking Nordic companies are above EU law in the eyes of some people in Brussels--according to what I've heard from a variety of sources, Nokia can also count on French commissioner Thierry Breton, who has a telecoms background that appears to be infinitely more important to him and his cabinet than the importance of the automotive industry to Europe as a whole and his native France. As an EU commissioner, he's supposed to focus on the European interest, which he is apparently not doing; and as a French appointee, there is a natural expectation in his country that he would keep French industrial interests in mind as opposed to personal preferences or loyalty conflicts.

But instead of regretting Daimler's and its suppliers' (politically, not legally) wrong choice by complaining about Nokia first, the Commission should also look at it from another angle: Nokia self-servingly seeks to leverage its increasingly-devalued patent portfolio without giving a damn about the EU's economic interests and the Commission's overarching policy goals.

  1. There's a simple reason for which Nokia decided to sue Daimler prior to any other automaker on this planet and previously bullied Volkswagen and BMW--two rather cowardly organizations--into Avanci license agreements of limited scope. That reason is Germany's unbalanced patent litigation system. While it's obvious that a patent holder like Nokia would firstly go after premium car makers in order to establish high royalty amounts, those three German corporations aren't the only ones operating in that segment. Nokia could have sued some non-European brands first, but preferred to go to Germany because an injunction in that country would give them maximum leverage over a company with major manufacturing operations and logistics centers in that country.

    As I mentioned in previous posts, Germany won't make more than a negligible modification to its patent injunction regime. Nokia is lobbying very actively for the status quo. In fact, I personally participated in a WebEx conference in which Nokia's chief in-house litigator, Dr. Clemens Heusch, lobbied the German parliament to ensure patents would remain superstrong in Germany.

    By milking and suing European companies that are falling behind in terms of digital technologies and need resources to confront some fundamental challenges, Nokia makes it harder for EU Commission EVP Magrethe Vestager to achieve her vision of "A Europe Fit for the Digital Age."

  2. As automotive supplier Continental publicly stated in March, Nokia's refusal to provide the prereqisite degree of legal and financial certainty to everyone in the supply chain has already prevented innovation from happening--digital innovation that in some cases has direct environmental impact.

    By impeding digital and environmentally-friendly innovation on the part of automotive suppliers like Continental, Nokia's patent licensing tactics run counter to both Commission President Ursula von der Leyen's "EU Green Deal" and Commission EVP Magrethe Vestager's "A Europe Fit for the Digital Age" policies.

  3. As I reported yesterday, the Avanci patent pool/platform, whose primary purpose it is to advance Nokia's (and Ericsson's, Qualcomm's etc.) agenda of refusing to license component makers, has singled out Tesla as its next target for its patent attacks. It doesn't even matter whether those parties explicitly coordinated their lawsuits or simply act uniformly because of a shared strategic interest. Either way, they've decided to gang up on Tesla like a clan of hyenas.

    While Nokia itself isn't suing Tesla yet, Nokia patents are being asserted against Tesla by Sisvel as well as Conversant, with the latter being a Nokia front no matter how much Nokia disowns its privateer. And even Nokia itself apears to have bullied Tesla before based on what I hear (and what I conclude from what was discussed in the closed-door part of a Nokia v. Daimler trial in Munich).

    Many patent holders (this also applies to owners of non-standard-essential patents) consider Tesla a perfect target: they believe it may be somewhat soft because it's a small organization regardless of its market capitalization being about as high as the aggregate of the caps of VW, BMW, and Daimler; and they know that Tesla is a company everyone's watching closely in the industry.

    By choosing Tesla its next strategic target after those German car makers, Nokia--directly and indirectly--attacks the most innovative company in the automotive sector (which even invests big-time in Europe) instead of letting Tesla focus on what it's best at: eliminating automotive emissions and keeping up the pressure on the car industry at large to abandon combustion engines.

    Targeting Tesla after Daimler creates another conflict between Nokia's opportunistic patent monetization tactics and Commission President von der Leyen's EU Green Deal policy agenda.

Nokia is being very inconsiderate, so the Commission should take off its velvet gloves, focus on the actual issues, and just disregard the countries in which the different parties are based. Europe doesn't even own 15% of all 5G patents, so from a strategic point of view, patent abuse by non-EU companies poses a several times greater threat than whatever Nokia and Ericsson are doing.

That said, it would of course be desirable for Europe to slow down Nokia's and Ericsson's demise, or to enable them to grow again. But there's a right way and a wrong way to do it. Condoning SEP abuse is a bad deal for Europe on the bottom line.

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Wednesday, April 29, 2020

Avanci conflict with Tesla escalates as Nokia-fed patent troll Conversant sues Tesla in Texas and Germany

Avanci, which usually refers to itself as a licensing "platform" though its lawyers also described it as a "pool" in at least one U.S. court filing, offers a license to cellular SEPs held by a group whose key members are notorious standard-essential patent (SEP) abusers such as Nokia and Ericsson as well as some trolls they fed with patents. Various additional patents have been contributed by numerous organizations, such as Deutsche Telekom, that elected to come in for convenience and lack the strategic sophistication and foresight to realize the Avanci approach (of refusing to extend licenses to component makers) runs counter to their interests.

One Avanci member, Foxconn-owned Sharp, sued Tesla in Japan last month, requesting the Tokyo District Court to impose an import ban. Sisvel, a patent troll and Avanci member, sued Tesla in the District of Delaware in December over former Nokia patents. Yet another Avanci member, Nokia, may have an interim agreement with Tesla in place as an unnamed American car maker "X" was referenced in the public part of a Nokia v. Daimler trial in Munich in February; should Tesla have been that mysterious U.S. company, then they actually provided a fair amount of information that Daimler presented to the Munich court while the courtroom was sealed. And now we're witnessing an all-out Avanci v. Tesla patent litigation campaign as Conversant Wireless Licensing is asserting various Nokia patents against Tesla in two complaints filed in the Western District of Texas last week (this post continues below the two documents):

20-04-24 TXWD20cv323 Conver... by Florian Mueller on Scribd

20-04-24 TXWD20cv324 Conver... by Florian Mueller on Scribd

Conversant previously filed some German SEP lawsuits against Tesla as well:

"After no further communication from Tesla, on or about February 26, 2020, Conversant filed patent infringement complaints against Tesla, Inc. and its German subsidiary Tesla Germany GmbH before the Manheim [sic] Regional Court in Germany."

The correct spelling of the German city name is, of course, Mannheim. There are a few towns named "Manheim" in the U.S., but anyone who's ever driven from O'Hare Airport to downtown Chicago has seen "Mannheim Road".

I'm trying to find out how many cases Conversant brought in Mannheim, and what the patents-in-suit are. I just emailed the Mannheim Regional Court's spokesman before writing this post. At this stage the Mannheim court can't provide case and patent numbers, but I hope this will change in the months ahead.

The combination of Sharp and Conversant suing Tesla in different jurisdictions is the usual bulling with which Avanci is trying to coerce Daimler into a SEP license agreement on supra-FRAND terms while the likes of Nokia and its trolls refuse to license automotive suppliers, an issue that I hope Tesla will raise as well. Tesla is far more of a digital company than Daimler and therefore may be vertically more integrated with respect to cellular data communications, so it wouldn't surprise me should Tesla not buy telematics control units (TCUs) from the likes of Continental, but even Tesla won't make its own baseband chips. In contravention of its FRAND licensing obligations, Nokia licenses only end-product makers.

With respect to component-level licensing, a new academic paper was published yesterday in reply to a write-up by Nokia's outside counsel (which also mentioned this blog because of a recent post).

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