Wednesday, December 29, 2021

InterDigital's German patent litigation campaign against OPPO: two cases filed in Munich, one in Mannheim

This is a quick follow-up to Monday's post on InterDigital v. OPPO:

I have been able to obtain the basic information that InterDigital has filed two complaints with the Landgericht München I (Munich I Regional Court) and one with the Landgericht Mannheim (Mannheim Regional Court). It is, however, difficult to obtain further information right now. In principle, the courts are operational, but many judges and their staff are on vacation. Also, I have not been able to find out more about InterDigital's filings in the UK and India yet.

InterDigital won a landmark anti-anti-anti-antisuit injunction ("A4SI") in Munich against Xiaomi earlier this year. Munich is now the #1 patent enforcement venue outside the United States, particularly when it comes to cases in which smartphones and connected vehicles are the accused products. The only potential risk factor is the appointment of a "dark horse" in the patent infringement context, Judge Lars Meinhardt, who will preside over the Munich appeals court's patent-specialized senate.

Mannheim continues to be very popular as well, as InterDigital's new complaint there shows--and from time to time there are interesting developments in Dusseldorf, such as a recent decision relating to standard-essential patent pools in favor of a defendant-counterclaimant (Turkish electronics maker Vestel) that I have yet to obtain a copy of so I can analyze and comment on it.

IAM has already reported and described that Dusseldorf ruling as "a significant setback for patent pools relating to the HEVC standard," though I believe there is actually one patent pool administrator whom the decision strengthens: MPEG LA, from whose HEVC pool some rather greedy patent holders broke away to form the Access Advance pool, a conduct that has the Dusseldorf court concerned. Again, I only have second-hand information on it for now (not just from IAM but from the Dusseldorf litigation community). I understand the ruling is well over 100 pages long, so it will probably take a few weeks (at least) until a redacted version becomes available.

FRAND decisions like in the Vestel cases are much appreciated by an industry seeking relief from ever more aggressive royalty demands, but they do lead SEP holders to avoid Dusseldorf and sue in Munich and Mannheim (and possibly even Hamburg, which I hear about more and more). There are no forcible venue transfers in Germany on forum conveniens or similar grounds, a fact that enables unfettered forum-shopping (and sometimes even judge-shopping by bringing follow-up complaints as "amendments" to complaints already pending before a particular panel, knowing that the new filing will be immediately severed but not reassigned unless a different division of a court already dealt with the patent previously).

For the avoidance of doubt, InterDigital is not among the SEP holders affected by the Dusseldorf rulings. The plaintiffs there are GE, Dolby, Philips, and IP Bridge. Another key defendant besides Vestel is Xiaomi, with various rulings scheduled for early next year.

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Alternative app store with improved security filed antitrust lawsuit against Apple in Florida, simultaneously alleging infringement of patent on reverse lookup of phone numbers

With Ericsson still not having announced (by the time I'm writing this) a renewal of its patent cross-license agreement with Apple, dozens of patent infringement complaints against Apple--in multiple jurisdictions--may be imminent as the license agreement is just about to expire. And other major standard-essential patent holders like Nokia and InterDigital haven't announced a renewal with Apple in many years, so there may be even more infringement actions to come in 2022.

Meanwhile, an unconventional but interesting lawsuit against Apple in the Southern District of Florida has gone largely unnoticed: Florida-based The Coring Company (not to be confused with this one) alleges that Apple

  • violates antitrust law by not allowing an alternative app store named App Place, which is designed to eliminate the malware problem (through source code review) while avoiding Apple's arbitrary censorship, and

  • through the distribution of apps with certain reverse phone number lookup functionality infringes U.S. Patent No. RE48,847 on a "post-page caller name identification system." To be clear, the patent holder does not claim to have monopolized all reverse lookups, but it overcame significant challenges to get a particular lookup method involving both internet sources and carrier databases. Apple is accused of infringement because of its distribution of apps that allegedly implement that technique--and for failing to remove those infringing apps after the patent holder put Apple on notice of the alleged infringements.

Furthermore, the complaint levels accusations against Apple's recently reported $275B investment commitment to China, as a potential class action. I'm going to focus on the antitrust and patent infringement parts here that are directly relevant to app developers.

The plaintiff--just founded this month--avers not to have any contractual relationship with Apple and, therefore, not be bound by the forum-selection clause in Apple's app developer agreement. Of course, Apple can nevertheless (and presumably will) request transfer of venue to the Northern District of California, but faces a higher hurdle this time.

The inventor of the RE'847 patent is Jeffrey D. Isaacs, who is also involved with the Coronavirus Reporter v. Apple case that Judge Edward Chen (Northern District of California) recently dismissed. The Coronavirus Reporter makers haven't given up though: they've appealed to the Ninth Circuit and are asking the district court for reconsideration (which is highly unlikely to happen). The Coronavirus Reporter case was originally filed in New Hampshire, but got transferred to California. That app developer, however, had signed Apple's developer agreement.

With respect to alternative app stores, the Florida plaintiff's "App Place" claims to be the best (in terms of most secure) app store ever made for iOS by requiring developers to submit the source code of their apps:

"They then have the choice to either have the code professionally audited by certified computer code examiners, like a patent examiner examines a patent application, or to distribute the app in compiled open source format, like Github has done for years for programmers. For many apps, distributing in open source is preferable as it gains trust amongst users, and in some cases, is the only way to prove secure “end-to-end” encryption and other data safety chain-of-custody proofs. This would enable an entire class of apps that is currently not possible on iOS, for example,a certified smart contract front-end. Other apps may keep their source code more closely guarded, and instead pay certified auditors to review the code, and transcribe in simple English the functionality of the algorithms. In either scenario, malware and surreptitious, unethical algorithms will never be passed on to an end-user in the App Place; the open source code will plainly reveal itself in user reviews, and/or the auditor will discover that the algorithm doesn’t function as specified in the developer app submission. Community monitoring of open-source forks would attribute them to original creators, and the App Place would direct ad revenues and in-app purchases accordingly. Hence, even in the open-source method, work product is protected."

The complaint claims that censorship would be a "non-issue in the App Place," eliminating "the subjective curation review by Apple" and focusing on objective criteria, though the specifics aren't really clear at the moment. I'm sure many developers would reject an open-source approach to app distribution, but some would embrace it. It is true that source code review by developers can identify security issues Apple's app review would fail to find. By not allowing such alternative approaches, Apple deprives users of potential benefits from competition--and it was actually Judge Yvonne Gonzalez Rogers herself (the very judge who ruled against Epic Games) who noted during the spring trial that competition might be good for security.

Apple is predictably going to argue that its own approach is, on the bottom line, still superior--but it won't be able to deny that source code review is an App Place feature that the App Store lacks. Apple doesn't let the market decide. That's the problem.

The patent infringement case is basically unrelated to the App Place antitrust issues, though the complaint attempts to establish some connection.

Epic's opening brief on appeal is due in late January. I intend to share some thoughts beforehand. I've concluded that the only objective worth fighting for on Epic's part is a single-brand market definition. If Epic won that one, the case might be remanded to the district court for a new ruling in light of such a game changer. Apple's web apps argument would have to be addressed again. The district court considered the availability of alternative ways of reaching customers, among them web apps, "dispositive" of Epic's Sec. 2 claim but didn't really elaborate. While Epic can also try to get a reversal even if the district court's market definition (mobile game distribution) was upheld, I believe Apple would be very likely to defend its victory in that case, as the district court made a number of holdings and findings that make the ruling hard to overturn on appeal unless there's a new market definition. I will elaborate on these thoughts soon, but thought I'd already share my high-level observations on this occasion. Epic's appeal will have to focus on potential game changers or it will get lost in a thicket of factual findings and legal holdings by the district court.

A single-brand market definition is the key to ending the Apple (and Google) app store tyranny. The Dutch competition authority (named ACM, Authority for Consumers & Markets) is tackling Apple's app tax in the specific context of dating apps (as per a complaint by Match Group, best known for Tinder), and defined the relevant antitrust market as follows (paragraph 13 of this PDF document):

"That is why ACM establishes that Apple enjoys a dominant position on the relevant market for appstore services on the mobile operating system iOS for dating-app providers. On this market, Apple is, to a high degree, able to act independently from dating-app providers, and to dictate the conditions regarding access to the App Store. After all, dating-app providers have no realistic alternative to the App Store, and consumers do not take into consideration the conditions for dating-app providers when selecting a smart mobile device."

Apple's smartphone market share in the Netherlands (26%) is far lower than in the United States, and the Dutch ACM very appropriately explains that mobile app developers are facing an Apple-Google duopoly (without using that term--at least I couldn't find in the summary).

Finally, here's the Coring v. Apple antitrust and patent infringement complaint from Florida:

21-12-15 9-21cv82235 Coring... by Florian Mueller

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Monday, December 27, 2021

BREAKING: InterDigital announces 4G, 5G, HEVC patent lawsuits against high-volume smartphone maker OPPO and its OnePlus, realme affiliates in UK, India, Germany


In a dedicated filing (dated December 22, 2021) with the United States Securities and Exchange Commission (SEC), patent licensing firm InterDigital (a publicly-traded non-practicing entity) has announced multiple patent infringement lawsuits against OPPO (one of the world's largest smartphone makers) and its OnePlus and realme affiliates in the UK, India, and Germany. OnePlus is famous for high-end Android phones.

According to the regulatory filing, InterDigital brought those complaints last week (December 20 and 22, 2021), just before the Christmas holidays, and is seeking injunctions (as well as unspecified other remedies, i.e., damages). The patents-in-suit have been declared essential to the 4G/LTE and 5G wireless standards and the HEVC video codec standard.

InterDigital's revenue stream consists of royalties on its many standard-essential patents (SEPs), though what sets it apart from the vast majority of other SEP NPEs (which buy up patents on the secondary market) is that it obtains SEPs itself through participation in standard-setting processes. It doesn't make its own devices, however. An InterDigital official once told me in a semi-public LinkedIn discussion that there was a time when they made one, but declined to provide further information when I asked for specifics (particularly unit volumes).

The announcement doesn't state a reason for those infringement actions, but there can be no doubt that it's simply a disagreement on license fees. OPPO is far from the first--and naturally won't be the last--SEP holder to reject InterDigital's royalty demands, and InterDigital has particularly sued Chinese companies on various occasions. Last summer, InterDigital won an infringement ruling in the UK against Lenovo. I'm surprised the parties haven't settled, but a FRAND trial will take place soon. At around the same time, InterDigital settled a long-running cross-jurisdictional dispute with Xiaomi and struck a license agreement covering its wireless patents up to 5G as well as its HEVC patents. The Xiaomi settlement obviously freed up resources in InterDigital's litigation department, so it was only a matter of time when the U.S. company would sue the next implementer. In 2020, InterDigital settled with Huawei.

That said, these are two well-matched litigants. While I first heard about OPPO only three years ago, I'm profoundly impressed with its strength in IP and IP litigation. The company is one of the top 10 filers of patent applications in the world, and like InterDigital it is an Avanci licensor, which is a meaningful validation of its portfolio.

OPPO's corporate website has a patent news page also shows that the company concludes license agreements with significant SEP holders all the time, such as recently with Sharp, against which OPPO clearly outperformed Daimler with respect to partly the same patents. Another recent agreement was struck with Sisvel, a major patent pool administrator and licensor.

OPPO is already defending itself vigorously against an onslaught by Nokia in Europe (where a court afforded limited deference to a future Chinese determination of global patent portfolio licensing terms) and Asia. OPPO is countersuing Nokia in China as well as three German courts. Against InterDigital, however, there is no way to assert patents as the company doesn't make products a patent holder could target.

While it's clearly a quantitative challenge to fend off dozens of Nokia lawsuits and defend against InterDigital in several jurisdictions at the same time, OPPO ships tens of millions of smartphones every quarter (with a global market share of now 10% according to Counterpoint Research) and manages thousands of patent applications per year. There is no reason to assume that it couldn't cope with parallel litigation with Nokia and InterDigital.

The combination of the license deals I read about on OPPO's website and the two major infringement campaigns it is currently dealing with suggests to me that this company is neither an unwilling licensee nor a soft target. There will be a license deal in the end, but in the meantime I'm sure OPPO will present InterDigital with a formidable challenge.

In related news involving other companies, it may just be a matter of days until we see patent litigation flare up again between Ericsson and Apple, with a license agreement set to expire this week and no renewal having been announced yet.

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Thursday, December 23, 2021

Mixed news for Apple: App Store accusers lose their most effective voice as Spotify's top lawyer Horacio Gutierrez joins Disney--but State of California may support Epic Games on appeal

Yesterday I saw on LinkedIn that Horacio Gutierrez is leaving Spotify. He served as Spotify's Head of Global Affairs and Chief Legal Officer for six years after a long and successful career at Microsoft where he was basically the #2 lawyer (and would easily have become #1, but Microsoft already has the one and only Brad Smith). Now he is joining Disney as General Counsel and Secretary (press release on BusinessWire).

Horacio and I didn't always agree. We've known each other for well over a decade, and about each other for even longer as we were on opposing sides of the European software patent-eligibility debate in the early to mid 2000s. Even when we were partly aligned, we weren't of exactly the same opinion. But as an app developer (currently working on a new app, not a game this time) I'm profoundly disappointed because this means the App Store-critical movement loses the most effective and forceful advocate it ever had. There are some other people I consider similarly important, but at least for now they are acting in the background.

Disney also faces the gatekeeper problem of mobile ecosystems (Apple's and Google's "vice-like"--maybe they meant "vise-like"--grip that the UK's competition authority called out this month), but at least for the time being and probably for the foreseeable future, they're nowhere near as antagonistic as Spotify. Apple's insatiable appetite for grabbing additional revenue streams by leveraging the monopoly power it enjoys in its single-brand aftermarket make it a possibility that Disney, too, will feel as threatened by the app distribution duopoly as Spotify, but it's not sure to happen, and not on the horizon for now.

Horacio's career move is a great opportunity for him, possibly a childhood dream-come-true, but leaves a gigantic vacuum. This is the second major loss for the Epic-Spotify-Tinder Coalition for App Fairness this month. The first blow was when the CAF was stigmatized as a lobbying front that saw an amicus curiae brief rejected by the most influential regional appeals court of the United States, the Ninth Circuit (despite the normally rather permissive practice when it comes to accepting such submissions).

Spotify, which has to compete with Apple Music on the exact opposite of a level playing field, was the first major app developer to make a strategic (in that regard, Epic has room for improvement) effort to instigate antitrust investigations and legislative initiatives targeting Apple's abuse of its App Store monopoply. Spotify launched a website--Time to Play Fair--that raised issues hardly anyone out there was aware of. I doubt they reached huge numbers of people, but certainly some of the powers that be. Constant dripping wears away the stone, while Epic's more "explosive" and dramatic approach apparently wasn't to Judge Gonzalez Rogers's liking and may not be viewed favorably by the appeals court either.

Horacio started writing letters to Apple in which he (rightly, in my opinion) accused Apple of antitrust violations and demanded a change of behavior. At some point, parts of the correspondence were leaked by the parties (first by Spotify, then by Apple) to the media. Those kinds of exchanges are a prelude to formal antitrust complaint. Spotify brought an EU antitrust complaint against Apple a few years after Horacio had joined. In 2020, the EU launched formal investigations, and this year handed down a Statement of Objections (SO), which is like a preliminary ruling. I'm concerned that it's "too little, too late" if competition enforcement limits itself to cases in which Apple directly competes with other companies, and Spotify is a subscription business, so any remedies might ultimately not benefit those of us who rely on in-app purchasing. My next app will have a subscription model, but also IAP offerings.

Shortly before the Epic Games v. Apple trial, the United States Senate held a hearing on mobile app stores and the need for supplementary legislation designed to specifically address those issues (on top of generally strengthening antitrust enforcement, which is also badly needed). Horacio was clearly the most persuasive panelist, owing to the unique combination of Spotify being a prime victim of Apple's misconduct and Horacio being so strong. He was authentic and sophisticated at the same time--it was really great to watch his performance. He apparently anticipated Epic's defeat when he stated clearly that litigation under current U.S. antitrust law was not going to bring about a solution, and especially not soon enough.

Epic's Tim Sweeney has also done great things. He apparently can't deal with people putting the finger in a wound for the sake of accurate analysis, which is why he unfollowed me on Twitter after I started explaining the narrow scope and uselessness of Epic's consolation-prize UCL injunction and predicted precisely what was going to happen (clarification of scope by district court and stay by appeals court). That's OK. I continue to like and share tweets of his that I agree with, and I wish him luck, but some mistakes have been made by Epic that the Fortnite maker can't correct anymore. In fact, Mr. Sweeney himself made a far stronger argument in some Twitter debates against Apple's "Progressive Web Apps" smokescreen than Epic did in court. It has helped and continues to help that Mr. Sweeney draws attention to Apple's behavior and double standards. But Horacio was the far better chess player in the competition policy arena and the kind of advocate who can convince politicians and regulators of the need to take action.

The Coalition for App Fairness needs a new strategic leader whose primary challenge it will be to make the CAF a credible voice of many developers even though there is no indication that anyone other than Epic, Spotify, and Tinder company Match Group has contributed substantial funding or has much of a say. It has to define its focus more broadly than just dealing with the 30% cut, and it also needs to find outside counsel capable of taking on Apple. As a motion to quash subpoenas shows, the CAF was at some point represented by the Kanter Law Group, the law firm of Jonathan Kanter, who is now the U.S. antitrust chief (official title: Assistant Attorney General, Antitrust Division, DOJ).

Let me also report on a new development in the Epic Games v. Apple appellate proceedings: the State of California will file an amicus curiae brief with respect to the California UCL injunction, but has explicitly indicated it may support Apple, Epic, or neither party, depending on what exactly the scope of Apple's cross-appeal is going to be. The briefing schedule is as follows:

"First cross appeal brief due 01/20/2022 for Epic Games, Inc.. Second brief on cross appeal due 02/22/2022 for Apple, Inc.. Third brief on cross appeal due 03/24/2022 for Epic Games, Inc.. The optional cross appeal reply brief is due 21 days from the date of service of the third brief on cross appeal."

Normally, this means a stakeholder supporting Epic would have to file in late January, and an Apple amicus would have to file on March 1. However, the state of California wants to await Apple's brief and then decide. Should it side with Epic, then it wants to support Epic's second appellate brief (which will be Epic's response to Apple's UCL cross-appeal). That makes sense and I'm sure the motion will be granted.

It's going to be a tough call for the State of California. On the one hand, Apple is the state's most important and iconic company (though all the worldwide noise around App Store monopoly abuse threatens to adversely affect Apple's image at least in certain circles). On the other hand, California is a progressive state that would like its state UCL to be strong and to have a broad scope. And if California had already decided to support Apple, the Golden State wouldn't have to request this extension as the motion changes nothing about the briefing schedule in that event (to support Apple, California would have to file by March 1 one way or the other). They need the extension only to preserve their ability to support Epic or neither party, which they'd normally have to do in late January. So it does look a little bit like Epic may actually get some support from the State of California for competition policy reasons, but if so, it would only relate to a secondary issue (anti-anti-steering). In an even better scenario for Epic, the State of California would make points in the UCL context that also have persuasive impact on the Ninth Circuit in connection with the (infinitely more important) federal antitrust claims.

Finally, here's the procedural motion by the State of California:

21-12-22 Motion by State of... by Florian Mueller

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Wednesday, December 22, 2021

Daimler takes Avanci patent license--all major German car makers now Avanci-licensed, but Volkswagen only up to 3G

Germany's leading business weekly, Wirtschaftswoche, has just been first (and I might still be second) to report that Daimler has finally taken a standard-essential patent (SEP) license from the Avanci pool, whose licensors include Qualcomm, Nokia, Ericsson as well as dozens of other companies from around the globe.

If you can't beat'em, join'em.

It was actually Avanci's approach of licensing the end product--the vehicle as opposed to a component thereof--which Daimler had originally rejected. As a result, the Nokia v. Daimler patent infringement dispute lasted more than two years and ended in a bilateral (just Nokia and Daimler) license agreement that was announced on June 1, 2021. Daimler had also brought an EU antitrust complaint (over Nokia's refusal to grant Daimler's suppliers an exhaustive SEP license) that it withdrew after the settlement.

Prior to settling with Nokia, Daimler had already taken bilateral licenses from Japanese electronics giant Sharp and non-practicing entity Conversant Wireless. All those companies--plus Japan's IP Bridge--had sued Daimler in Germany over patent infringements. And all of them are among the Avanci pool's more than three dozen licensors.

Piecemeal resolution--licensing one portfolio at a time--apparently turned out uneconomic, and litigation involves major uncertainty, so Daimler's decision-makers opted for a one-stop solution. In the alternative, I guess one Avanci licensor after the other would have wanted Daimler to take a bilateral license. If you're a Qualcomm or an Ericsson, why would you not want to get paid if Nokia does? If you're an Unwired Planet or Longhorn IP, why wouldn't you want to collect royalties if Daimler took a license from Conversant? Why would anyone condone an ongoing infringement while similarly situated patent holders are raking in license fees? Daimler avoided a lot of issues by signing a deal with Avanci. I've criticized Daimler on various occasions, but this pragmatic choice just makes sense under the current circumstances.

Of the three major German car makers, BMW was first to take a 4G Avanci license (in January 2017). In 2019, Volkswagen subsidiaries Audi and Porsche followed--and the following month, other car makers in the Volkswagen Group took a 3G license, but is now being sued by Acer because its license does not cover the 4G standard Volkswagen actually implements. The fact that the other major German car makers had accepted Avanci's car-level licensing model was held against Daimler in the German Nokia cases. Daimler's license deal will now weigh against other car makers' FRAND arguments. I'm thinking of Volkswagen's defenses against Acer but also about Ford, which is facing an infringement case brought by Sisvel as well as other lawsuits (IP Bridge, Longhorn IP) over its refusal to take an Avanci license.

Continental and Thales remain on the losing track

Some Daimler suppliers are still fighting against end product-level licensing. Continental (which knows a lot more about making tires than about patent licensing, litigation, and policy) continues to be a vocal critic of the Avanci model. These days it's hard to attend a FRAND/SEP webinar without someone from Continental expressing concerns. French industrial conglomerate Thales, whose primary competence it is to make high-speed trains, brought an antitrust case in Munich that is highly unlikely to get traction.

The likes of Conti and Thales can keep trying to tell courts and competition watchdogs that they should be granted an exhaustive component-level SEP license by Avanci's licensors, but judges and antitrust officials will see that their customer--Daimler--has determined that a car-level pool license is the way to go. Neither Thales nor Conti will be able to explain away that market reality.

Also, a Fifth Circuit opinion affirming the dismissal of Continental's U.S. case against Avanci and several Avanci licensors will come down soon. Conti's Delaware case against Nokia has been sent back from the federal court to the state court, which means that the case was basically just going in a circle for about a year--and the state court could still find that the case actually belongs in federal court (which in my opinion it does, as patent exhaustion is a theory under patent law, which is federal law, even if contractual questions are involved). It could also dismiss Conti's case, which is actually a fairly likely outcome.

Tout ça pour ça? Questioning the wisdom of Daimler's dispute with Nokia

This outcome does beg the question of why Daimler picked a fight with Nokia (and other Avanci licensors) in the first place. In the end, Daimler wasted millions and millions of euros on Quinn Emanuel's litigation services, only to be enjoined four times (two injunctions in Nokia's favor, one for Sharp, and one for Conversant) just over the course of a few months in 2020. If the Nokia dispute had continued, there would most likely have been several more injunctions, as some cases had been stayed but the patents-in-suit survived Daimler's validity challenges. Daimler could have had this outcome with pretty much any other German patent litigation firm (and they're all less expensive than QE), and could have taken an Avanci license in the first place without ever having to defend against SEP assertions by an Avanci licensor.

For a company that generally prides itself on cost efficiency, such a waste is unusual, if not unprecedented, and I wouldn't be surprised if some people were now struggling to justify the decisions they made a couple of years ago.

It's not that it's necessarily wrong to fight--because if you win, it's hard for others to argue with your success. Daimler wanted to bring down patent license fees. That's their job, just like it's the job of those people's counterparts at other companies to maximize their revenues. But then you have to play a game that you know how to win, and there was no sign of the people in charge of Daimler's Nokia cases being up to the challenge. They lacked the experience and the broad perspective that you need to win a war like that. I'm quite convinced that a company like Apple would have done a far better job by virtue of the strategic sophistication of its in-house litigators (who play this game more holistically and know how to get a better price-performance ratio from outside counsel). They also never figured out how to successfully influence Germany's patent reform process, despite the automotive industry's privileged access to politicians.

By comparison, major U.S. corporations value their in-house counsel a lot more. As a result, they bring in people who could easily be partners at some of the world's leading law firms. By contrast, the general perception in Germany is that if someone becomes in-house counsel, it's because they're not up to the way more lucrative challenge in Big Law. Going in-house is pretty much a point of no return in Germany, not a revolving door like in America. This doesn't mean that there aren't some very capable people in the legal departments of German corporations, but on average they're clearly nowhere near as sophisticated as their U.S. counterparts. That's also what I hear from patent holders of different sizes trying to work out deals.

For German legal departments, it's less about achieving results than justifying their decisions internally, such as by fooling their superiors into believing that something (such as German patent "reform") is a success story when it actually isn't. But at this stage Daimler's lawyers can hardly justify their waste of money on those Nokia, Sharp, Conversant, and IP Bridge cases. The negative ROI is all too clear.

German corporations treat legal departments are mere service providers. In major U.S. corporations, they have a strategic role and are a sparring partner for management in certain contexts. A great example is Brad Smith, who joined Microsoft as in-house counsel, ran its legal department for many years, and was then promoted to President (beyond still being the company's top lawyer).

Possibly the most important breakthrough for Avanci to date

For Avanci, Daimler's decision to take the pool license is a breakthrough. Its importance can hardly be overstated as other car makers are now going to be increasingly inclined to do the same, as opposed to betting on that non-starter called Licensing Negotiation Groups. Early last month, an Avanci executive mentioned new license agreements with Jaguar, Land Rover, and Aston Martin. And while neither Avanci nor Tesla ever confirmed it, there's a strong assumption of Tesla having taken an Avanci license, as multiple infringement actions brought by Avanci licensors against Tesla were withdrawn near-simultaneously.

Shortly after Nokia's settlement with Daimler, another--unnamed, but possibly Ford--car maker took a bilateral license. We may see similar effects now, but with respect to Avanci.

Meanwhile, the automotive industry is awaiting with interest the (delayed) announcement of Avanci's 5G pool rate.

Ramifications for Ericsson v. Apple

As I touched in a previous section on how Apple would have performed in Daimler's place, the iPhone maker is now going to be indirectly impacted by this in case it fails to renew its license agreement with Ericsson. Should we see another round of Ericsson v. Apple infringement cases in 10 days' time, Ericsson will benefit from Daimler's Avanci license in two ways. Apple famously makes a smallest salable patent-practicing unit (SSPPU) argument, and the momentum behind the Avanci pool--even though in a different industry--ups the ante for anyone arguing that SEPs should be licensed at the chipset level. And even though there are differences between these industries, the more traction Avanci has, the harder it will be for Apple with its huge margins to argue that it can't just pay Ericsson $5 per iPhone for its entire patent portfolio all the way up to 5G (for a reminder, Avanci has yet to announce its 5G rate, but the rate is expected to be substantially higher--for good reason--than the 4G fee).

Wirtschaftswoche's recent patent coverage

Today's Daimler-Avanci breaking news is actually the third patent-related Wirtschaftswoche story on patents within less than a week that is recommended reading for those who understand German and are interested in patent licensing and litigation. "WiWo" also researched the creepy story of dozens of jobs lost at a small family-owned company due to Germany's bifurcation regime (which allows injunctions to be enforced prior to a ruling on the (in)validity of a patent-in-suit). That article appeared in Friday's print edition, and was additionally uploaded to yesterday.

Also yesterday, Wirtschaftswoche reported on the Acer v. Volkswagen patent lawsuit. In that article, I am quoted as saying that Volkswagen should long have acquired a SEP portfolio (given that such patents are for sale from time to time) and needs to approach IP more strategically at the top level. To be clear, VW has a fully functional patent department, and they're ahead of others in their industry, but without C-level executives taking a stronger interest in IP and deciding not to make themselves dependent on other companies (such as Daimler) through slavish adherence to industry associations, they're not going to be match for wireless patent licensors. Volkswagen told the VDA (Germany's automotive industry association) point blank that they'd leave the organization unless it fully commits to electric mobility.

C-level interest in IP differs greatly between the automotive industry and Big Tech. Big Tech CEOs have subscribed to this blog and the related Twitter account, but I'm not aware of the top brass of automotive companies ever having subscribed to FOSS Patents.

As Daimler's Avanci license shows, the automotive industry has to come to terms with the fact that major wireless companies are now in the position to impose their preferred business models on car makers, no matter how much the auto industry may point to century-old traditions regarding their supply chains and what have you.

The battle over the business model is practically over. Daimler's legal fees are a sunk cost, and its financial controllers will be crying tears. What all car makers--above all, Volkswagen--need to reflect on now is how to achieve the best results possible under a framework that wasn't their first choice, but which has simply prevailed. They've all learned a few lessons in recent years--and they've paid their tuition fees. The problem they face is that the world around them is changing faster than their organizations can adjust. Increasingly they're going to face competition from companies that hold SEPs, such as Apple, Google, or Xiaomi. In times of transformation, leadership from the very top of those organizations is needed. Otherwise the only beneficiaries will continue to be patent litigation firms.

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Tuesday, December 21, 2021

New presiding judge for Munich Higher Regional Court's patent-specialized 6th Civil Senate: Judge Lars Meinhardt succeeds Judge Konrad Retzer

Munich is one of the world's most important patent litigation hotspots. Last month the new patent litigation division of the Landgericht München I (Munich I Regional Court)--the 44. Zivilkammer (44th Civil Chamber)--held its premiere hearing. Today I've been able to find out from the press office of the Oberlandesgericht München (Munich Higher Regional Court) who will succeed retired Presiding Judge Konrad Retzer of the 6. Zivilsenat (6th Civil Senate), which hears patent appeals from the lower Munich court but also some other IP and competition matters: Judge Lars Meinhardt.

Judge Meinhardt has not been mentioned on this blog before. You can find a picture and short bio (in German) here. He presided over the lower Munich court's 33rd Civil Chamber from 2012 to 2018. The 33rd Civil Chamber hears cases involving trademark, copyright, design rights, and unfair competition claims--all of which fields are adjacent to patent law. He then joined the 29th Civil Senate of the Munich appeals court, which has a similar focus. Apparently he also dealt with matters involving the professional code governing the work of patent attorneys.

Actually, my contacts in the Munich patent litigation community largely thought Judge Dr. Matthias Zigann (who presides over the lower court's patent-specialized 7th Civil Chamber) was the logical successor to Judge Retzer (who presided over the 7th Civil Chamber before he got promoted to the appeals court). But for whatever reason, Judge Meinhardt, whose positions on patent enforcement are unknown, has been picked. Judge Zigann, however, will undoubtedly have a key role with the Unified Patent Court, which will commence its operation next summer or so. In a way, that will be an even greater opportunity for him, though for Munich as a patent venue it would have been the best decision to guarantee a high degree of consistency between the lower court and the appeals court going forward. That may, however, be the outcome under Presiding Judge Meinhardt, too, as he will undoubtedly find out (if he hasn't already) what makes Munich such a popular venue for patent enforcement.

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Monday, December 20, 2021

Intellectual Ventures partner (or subsidiary) Liberty Patents sues Toyota, Subaru, BlackBerry over patent on software updates

When Intellectual Ventures predicted an "IP reckoning" for the automotive industry, it presumably had its enforcement action against General Motors, Toyota, and Honda (Eastern District of Texas) already prepared. Meanwhile, Sivel v. Ford and especially Acer v. Volkswagen have drawn even more interest in the automotive patent litigation arena. Automotive patent lawsuits get filed pretty much every week, and it now turns out that a patent previously assigned to Intellectual Ventures is being enforced in the Eastern District of Texas by a non-practicing entity with the patriotic name of Liberty Patents against Toyota, Subaru, and BlackBerry (this post continues below the document):

21-12-17 Liberty Patents v.... by Florian Mueller

I don't know whether Liberty Patents is an Intellectual Ventures affiliate or an independent third party that struck a deal with IV resulting in the assignment of 130 former IV patents according to RPX.

The patent-in-suit, over which Liberty Patents is seeking not only damages but also a permanent injunction (it won't expire before 2024), is U.S. Patent No. 7,493,612 on an "embedded system and related method capable of automatically updating system software." BlackBerry's QNX platform, Toyota, and Subaru provide over-the-air software upgrades. In Subaru's case, the complaint mentions the Subaru Crosstek with its STARLINK system, driver asisstance software, and "other systems that utilize the Automotive Grade Linux (AGL) platform" found in such vehicles as the Subaru Ascent, Forester, Impreza, Legacy, Outback, and WRX. The infringement allegations against Toyota also involve AGL, with a wide range of models being mentioned (such as the Toyota Camry, Avalon, C-HR, Corolla, GR Supra, Mirai, Prius, RAV4, and Sienna).

This Liberty Patents case is an example of non-standard-essential patents being asserted against the automotive industry. Another example would be a complaint by an entity named Aprese Systems Texas against Nissan in the Western District of Texas over U.S. Patent No. 8.732,697 on a "system, method and apparatus for managing applications on a device."

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Sunday, December 19, 2021

Apple's new complaint in Texas alleges Ericsson breached its FRAND commitment, but Apple's allegations have serious plausibility problems

Yesterday I reported on Apple's motion to dismiss a FRAND complaint Ericsson had brought in the Eastern District of Texas in October. Meanwhile I've also found out about a complaint Apple itself brought in the same district against Ericsson (this post continues below the document):

21-12-17 Apple FRAND Compla... by Florian Mueller

What Apple wants the United States District Court for the Eastern District of Texas to do is to declare that Ericsson--not Apple--breached its FRAND obligation, and to hold that a couple of Ericsson 5G patents are not standard-essential (nor infringed by Apple for any other reason). If Apple had decided to file an answer to Ericsson's complaint, it would have brought those claims as counterclaims. But Apple elected to bring a motion to dismiss instead of an answer (though it will have to answer if its motion to dismiss doesn't make the case go away). Therefore, Apple filed its own separate complaint, but it's clear that if both parties' claims survived any motions to dismiss, Apple's case would be consolidated into Ericssion's.

Apple is being consistent by saying that most of its own claims should be dismissed just like Ericsson's claims that they're modeled after, but should the court let Ericsson's case go forward, then the related claims by Apple also need to be adjudged.

I've read Apple's complaint, and have formed an opinion except on the technical questions of whether or not particular patents are essential. Apple's complaint is more about narrative than facts, more of a blame game than a meritorious action. For example, by alleging that Ericsson filed suit in Texas within six minutes of making Apple a licensing offer, Apple tries to make Ericsson look bad, like saying "look how litigious they are." But the very same complaint by Apple makes it clear that Apple has rejected, and was always going to reject, Ericsson's $5G/unit demand. And Apple's complaint itself states that the relevant licensing offer stated Ericsson's public position on reasonable royalties, which Apple has clearly disagreed with.

It's hard to see how Ericsson would breach a license agreement by taking legal action concerning a renewal, which means a potential new license agreement (as opposed to suing Apple over the infringement of patents while a license agreement is in force). And it's just absurd to allege that Ericsson breached its FRAND commitment that way. A narrative devoid of substance.

More than once, Apple's complaint argues that despite the transition from 4G to 5G, Apple should now get more favorable terms than in the past, and Apple's argument for a reduction is that it now holds five times as many cellular SEPs (mostly thanks to acquiring such patents, particularly from Intel) than it did last time. Sorry, but that's not an argument I can take seriously, and I don't think Judge Gilstrap will be impressed either. 5G rates will be higher in this industry than 4G rates used to be. Apple may not like that, but that's where the market is going. In that regard, Apple is merely being ignorant of a reality it doesn't like. But the crazy part is that Apple, with its huge volume (in $$ as well as units) compared to Ericsson, simply can't gain any non-negligible leverage form its own SEPs in light of the disparity I just mentioned. If Apple negotiated a cross-license with e.g. Samsung, then that might be a valid point. Not so here. Ericsson has negligible exposure compared to Apple.

As always, Apple tells its story of breakthrough innovations, and while Apple's impact on this industry is a fact, it's also clear that Apple is known for squeezing suppliers, taxing and tyrannizing app developers, and generally abusing its market power more shamelessly and ruthlessly than any company in this industry except, possibly, Google. I've said it on other occasions that what got Microsoft into antitrust trouble two decades ago was almost nothing compared to what Apple has been doing for more than ten years, and which is getting worse (such as Apple's power and money grab styled as a privacy initiative).

The CMA, which is the UK's competition authority, published a report on Tuesday that says Apple and Google hold a "vice-like" grip over the mobile ecosystem. The CMA might have confused "vice" for "vise." But it has a point for sure.

Apple is also known for paying ridiculously low standard-essential patent (SEP) royalties in the aggregate. While Apple has over and over again warned against "royalty stacking" (when the grand total of all SEP royalties paid by an implementer on a given product is so high it has serious economic implications), its own low royalty costs show that a new term needs to be coined to describe the opposite of royalty-stacking (I'll gives this some thought).

There's more that I could say about non sequitur arguments made by Apple, but that's for another day. Let me share just one more observation for now: Apple tries hard to distinguish its case from HTC v. Ericsson because the Fifth Circuit (the appeals court for, inter alia, the federal district courts in the Great State of Texas) sided with Ericsson in that important case, and that precedent bodes well for Ericsson's case against Apple.

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Saturday, December 18, 2021

New court filing by Apple makes 5G patent infringement litigation by Ericsson against iPhone maker ever more likely to start in two weeks

There's every indication right now that--short of an 11th-hour agreement--Ericsson and Apple are patent litigation-bound.

In early October, Ericsson brought a FRAND (not infringement) complaint against Apple in the Eastern District of Texas, with a license agreement still in force until the end of the year. While it may seem early to bring a case at that stage, Apple itself surprised Ericsson last time with some pre-expiration moves, and Ericsson just didn't want to lose the race to the courthouse this time around.

An anti-antisuit motion by Ericsson in the Netherlands became known shortly thereafter. I subsequently asked the three major German patent infringement courts whether they had any such action pending before them, but the answers were consistently negative (at least at the time I asked; I may soon have to inquire again).

Last night, Apple brought two motions in the Eastern District of Texas:

  • a motion to dismiss Ericsson's complaint, and

  • an unopposed motion to seal the former, as it contains "sensitive information relating to business operations, including information regarding license agreements."

I can't imagine that the motion would remain sealed in its entirety forever, but at the moment there's no protective order in place in that case. At some point Apple and Ericsson will have to content themselves with hiding only specific passages of the document from the general public.

It's obviously not inconceivable that Apple and Ericsson may be close to an agreement on renewal terms including Ericsson's 5G patents. It was high time that Apple somehow responded to the complaint, so they might have made the filing now even if the operating assumption was that the issues in that Texas case would never come to judgment. But in light of the Holiday Season and the impending expiration of the current license agreement, the likelihood of infringement litigation flaring up again between these two parties has increased from the vantage point of an external observer like me.

Apple's local attorney is Melissa Smith of Glliam & Smith, but Apple has enlisted some out-of-state rock stars I've previously seen in action for the world's richest device maker:

  • Fish & Richardson's Ruffin Cordell delivered opening argument for Apple against Qualcomm in 2019 (followed by Qualcomm's opening statement and a settlement). I thought he was very persuasive.

  • WilmerHale's Joseph Mueller has been involved with a variety of Apple cases over the years, such as the dispute with Samsung, where Mark Selwyn (from the same firm) was the global coordinator among outside counsel. I once saw him at the Mannheim courthouse, a venue I guess one just has to visit at least once in a lifetime if you work in international patent litigation--admittedly, connoisseurs of architecture would rather avoid it and cross the street where they'll find a beautiful castle.

The clock is ticking. 13 days left, and then we'll probably--though not necessarily--see a slew of infringement filings. Also, it won't take long now until Apple's license agreement with Nokia expires...

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Friday, December 17, 2021

Acer is not alone: licensing negotiation groups draw ever more criticism from academics, practitioners, and patent holders

At the start of this year, Nokia v. Daimler was the most significant automotive standard-essential patent (SEP) dispute. Summer had barely started when that one settled out. Now that the year 2021 is drawing to a close, Acer v. Volkswagen is the most "inspiring" automotive patent spat, at least judging by the traffic my previous post gets (though Sisvel v. Ford is a not-exceedingly-distant second).

Acer's complaint mentions the proposal of licensing negotiation groups (LNGs) as a pillar of Volkswagen's alleged hold-out tactics vis-à-vis the Avanci pool. It is the latest criticism of the LNG idea. In recent weeks, there have been at least two webinars on the subject, and I'd like to share some observations on them here.

The European Commission's expert group report on SEPs tosses out the idea of LNGs as Proposal 75, but let's not forget that the entire expert group report is not a Commission communication, as the Commission itself clarified on more than one occasion. Also, a key participant (Ericsson's Monica Magnusson) distanced herself from the report by means of a published dissent. Still, when a facial absurdity--given that it's fundamentally at odds with existing cartel law--appears as a "proposal" in something that is not formally but almost an official EU document, I can see why some are concerned, and why webinars are held (or blog posts written, as in this case) to discuss the thing. It's like people are standing in front of an aquarium and staring at some big sharks inside: in a way you rely on being protected by the thick glass between you and the predators, yet there's this thought of what would happen if--against all odds, but you never know--the glass broke...

4IP Council held a webinar on LNGs last month, and a recording is still available. The two panelists were Dr. Igor Nikolic, who is a Research Fellow at the European University Institute, and doctoral student Haris Tsilikas. They looked at LNGs strictly from a competition law perspective, but taking into account an important difference between physical goods and patent rights: while physical goods are simply not delivered to someone unless an agreement on the terms has been reached, implementers are typically already using the patented techniques.

Dr. Nikolic clearly took the position that LNGs are not merely anticompetitive by effect (though he has no doubts about the effects being very significant) but by object, which I would informally call "by design." For example, one major concern Dr. Nikolic raised (and which I had not brought in prior blog posts on the subject) is that competitors must share sensitive information in order to discuss pricing, and when you have large parts of an industry--if not even an entire industry--sitting at the same table and establishing a maximum price (which is what that Proposal 75 suggests), you're simply getting what is called price-fixing.

What would happen if the maximum price an LNG deems reasonable is below the SEP holder's demand, but the SEP holder's position is actually FRAND? Probably a group boycott...

As Dr. Nikolic noted, there is a tension between reducing transaction costs and forming a group that has monopsony ("purchasing monopoly") power. This is a notable difference from SEP pools, which by definition aggregate complementary patents, while the members of an LNG would normally be competitors.

Mr. Tsilikas accurately noted that EU competition law only recognizes efficiency gains as desirable if they are achieved without reducing (let alone eliminating) competition. He also made a good point when he stated a simple truth: while there is some talk about how small and medium-sized enterprises might benefit from participating in LNGs, the political push for LNGs is clearly not coming from SMEs.

Last week, Lexology/IAM hosted an online panel discussion of LNGs entitled FRAND Licensing: The Curious Incident of the LNG Concept. The title indicates an understandable disbelief concerning how an idea that flies in the face of everything we know about competition law could make it into a document like that expert group report.

Fraunhofer's patent and licensing chief Stefan Geyersberger and Sisvel president Mattia Fogliacco looked at the subject from the angle of organizations that are concerned with keeping the licensing process efficient. As Mr. Geyersberger noted, Fraunhofer has for a long time been contributing patents to pools in order to speed up the adoption of new technologies. Sisvel is a pool operator, but also an acquirer of patents--and it's been around for ages.

Some implementers may disagree with Mr. Fogliacco's rosy picture of how the SEP licensing process works at the moment ("innovation is not stifled at all") or with his unsurprisingly positive view of the two Sisvel v. Haier decisions by the Federal Court of Justice of Germany. But he made a number of points that I agree with. For example, it is indeed against common sense that implementers would gather and determine a (maximum) price without the actual owners of the relevant technology sitting at the table.

The most enlightening part of the Lexology webinar was Mr. Fogliacco's discussion of the important ways in which Sisvel's 2018 license deal with multiple implementers via RPX differs from the proposal of automotive LNGs. Apparently, various RPX customers (or "members" as it's sort of a club) asked RPX to work out a deal in order to explore economies of scale, i.e., group discounts reflective of reduced transaction costs. RPX is not an LNG--companies become RPX customers (or "members") for other reasons. There was no intent by RPX and its members to determine the maximum royalty level before working out a license agreement.

In other words, Sisvel-RPX was a voluntary group purchase transaction, which some were invited to participate in--and the process was conducted in the shadow of existing competition law, while certain automotive industry players would like to achieve an exemption from cartel law in order to be allowed to form LNGs, which would then be above the law in some rather significant ways.

What might be acceptable in the case of a cooperation between a few IoT startups (simply in light of market share thresholds--15% in the EU, 20% in the U.S.) is not necessarily desirable when large automotive companies join forces. As the European Commission recognized in one of its communications, joint purchasing by companies with a high market share in the aggregate typically doesn't even result in any savings being passed on to consumers.

While Sisvel and Fraunhofer raised fundamental concerns regarding LNGs, Sullivan & Cromwell partner Garrard Beeney didn't want to rule out the possibility of there being a place for LNGs (and the prerequisite modification of competition rules) in some contexts, provided that several requirements would be met and that certain safeguards would be put in place. For example, it is key to Mr. Beeney that an LNG can't organize a group boycott. While IoT companies may like the fact that Mr. Beeney is not categorically opposed to LNGs, the criteria he laid out are clearly not going to be met by the automotive industry.

Looking at the opinions expressed by the speakers at those two webinars, there was a consensus that the kinds of LNGs the automotive industry has in mind cannot be reconciled with competition law as it stands, and that a departure from long-standing principles of cartel law is not warranted.

What's next? I guess LNGs will rear their ugly head again in the first half of 2022, in the form of proposals and debates in different jurisdictions, but in a year from now, the idea will probably be considered to have gone nowhere, as it creates more problems than it could ever solve.

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Thursday, December 16, 2021

Acer sues Volkswagen over handful of 4G patents, decries VW's hold-out tactics against Avanci including 'licensing negotiation groups'

Intellectual Ventures predicted an "IP reckoning" for the automotive industry and did its part to turn this into a self-fulfilling prophecy (by suing GM, Toyota, and Honda). Just yesterday I reported on Sisvel v. Ford, and now I've become aware of the latest SEP enforcement action against a car maker: Acer, a Taiwanese device maker known to be a very reasonable patent holder (as that company is on the receiving end of patent suits all the time), is tired of Volkswagen's hold-out tactics vis-à-vis the Avanci 4G patent pool that offers a one-stop license to dozens of SEP portfolios. Acer has brought a patent infringement complaint against VW in the Eastern District of Virginia, which (as I'll show you further below) points to a couple of FOSS Patents posts:

21-12-15 Acer v. Volkswagen... by Florian Mueller

Some of you saw me at the short-lived Apple v. Qualcomm trial in San Diego in April 2019, and while I don't expect anyone to remember this, I used an Acer notebook for my live commentary from the overflow room. On the only occasion so far that I attended a patent trial involving Acer, they were being sued in Mannheim over WiFi SEPs, with the accused components being supplied by Broadcom. While Acer holds a number of standard-essential patents, it's primarily an implementer of standards, much more so than it is a patent enforcer.

So why does a peaceful and usually defensive company tell Volkswagen that "enough is enough" and bring an infringement complaint over five 4G standard-essential patents (SEPs)? The answer is in the complaint--and it's all about Volkswagen's Avanci license only covering 2G and 3G patents (as I noted in a post on Volkswagen's indirect license deal with Huawei), but not 4G SEPs (VW did, however, take a 4G license for some of its premium brands, namely Porsche and Audi, the latter of which is the corporate parent of, inter alia, Lamborghini).

Here are the sections of the complaint that expose Volkswagen's hold-out tactics (and we're now getting closer to the passage that points to FOSS Patents):

3. Plaintiff, through their licensing agent Avanci, LLC, has offered a license to the Patents in Suit on FRAND terms, and are prepared to grant a license agreement to Defendants’ infringing products on terms and conditions that are fair, reasonable, and non-discriminatory (“FRAND”). Plaintiff brings this action because Defendants have refused the FRAND offers of Plaintiff’s licensing agent, have refused to negotiate in good faith, but continue to sell products that practice, use, or otherwise comply with the standards covered by the Patents in Suit.

25. The Patents in Suit are part of a licensing platform that is managed by Avanci, LLC.

26. Plaintiff, through its licensing agent Avanci, has made a FRAND offer to Volkswagen AG to license the Patents in Suit as part of a license to the licensing platform managed by Avanci. This offer was on terms made to, and accepted by, other licensees who have taken licenses from the Avanci licensing platform. Notwithstanding the FRAND offer, Defendants have refused to license the patents for 4G LTE technology.

27. Specifically, Avanci first discussed a license with Volkswagen AG in 2016. Since that time, Avanci has had many meetings, phone conferences, and email exchanges with Volkswagen AG to discuss and explain Avanci’s 2G/3G and 2G/3G/4G license offers. Volkswagen AG concluded a 2G/3G license with Avanci in April 2019. Although Volkswagen AG affiliates Audi and Porsche also concluded 2G/3G/4G license with Avanci, Volkswagen AG did not execute a 2G/3G/4G license with Avanci at that time.

28. Over the past two years since signing the 2G/3G license agreement, and although Volkswagen AG has increasingly incorporated 4G connectivity into its connected vehicle line-up, it still has not concluded a 2G/3G/4G license with Avanci. Instead of signing a license on the same terms as others in the industry, Volkswagen AG has engaged in delay tactics, including efforts to create a “licensee negotiation group” including many companies in the auto industry to jointly negotiate more favorable licensing terms for Volkswagen AG and other participants in the group. See;;

FOSS Patents posts have been mentioned in various court filings over the years, not only but mostly in the U.S., but this may be the first time for FOSS Patents to be mentioned in a complaint. Here's a screenshot of that passage (click on the image to enlarge):

Let that sink in: for its high-volume brands, Volkswagen only has a license up to 3G, a standard that is already deprecated in some countries such as the country in which VW is headquartered, when in reality VW is already selling huge numbers of 4G-connected cars--and increasingly incorporates 5G into its products (I believe it won't take long before Avanci also announces its 5G rate). Acer decided not to tolerate that type of infringement after all those years, and turned to IP litigation boutiques Davidson Berquist Jackson & Gowdey (of Virginia) and TechKnowledge Law Group (of California). I wouldn't be surprised if other Avanci licensors were equally annoyed as Acer, so Volkswagen may face more 4G patent assertions soon unless it upgrades its license. Also, it would be a logical step for Acer to sue in Germany as well, and I'll try to find out more about that.

The complaint provides non-exhaustive lists of Volkswagen models that implement the relevant 4G techniques, such as VW ID4, Arteon, Atlas, Atlas Cross Sport, Golf, Golf GTI, Jetta, Passat, Taos, and Tiguan. Those types of cars may be less expensive than the average Porsche or Audi, but Avanci's 4G license costs $15 per unit, so there's no way Volkswagen could afford it only if a car costs $100K. As the complaint notes, "Defendants tout their communications technology marketed as Car-Net as including 4G LTE connectivity." According to the complaint, Car-Net "was introduced into Volkswagen cars at least as of the 2020 model year."

These are the five patents-in-suit:

Some of the relevant claims are product claims, making Volkswagen a direct infringer if the allegations are proven. Other claims-in-suit are method claims, raising the question of contributory infringement (as Volkswagen directs and induces its customers to infringe, provided that Acer is right about 4G essentiality).

In the U.S., Acer is not asking for an injunction at this stage but seeking damages for past infringement as well as "post-trial damages in the form of a counter-determined royalty" and, which is granted in the U.S. only under exceptional circumstances, a recovery of its legal fees. Should Acer sue Volkswagen in Germany, chances are that VW would be considered an unwilling licensee and, as a result, enjoined.

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New delivery rhythm for FOSS Patents emails: post by post, no longer a daily digest

Many of you follow my blog by means of an email subscription to new posts. I once had a conversation with a reader who had even forgotten that it's actually a blog, i.e., a website, and thought it was just an email newsletter :-)

In the summer I had to switch from FeedBurner, whose email notification service Google unfortunately discontinued, to All in all, migration worked well, but there were three practical issues:

  1. If I did multiple posts on a given day, there were no headlines at the start of the email. FeedBurner generated those when there were at least three posts on a given day (they should have done so for two posts as well, but doesn't do that at all). As a result, people who found the first post not to be of interest to them often failed to see the one below.

  2. When FeedBurner generated those emails, it used the latest version of a post, and I fix typos all the time. Most oof them I identify myself, but the posts are easier to read after publication than in "edit" mode, or readers point me to them., however, stores all new posts in a cache that it never seems to refresh. Only when I made corrections within a minute or two of the original publication of a post did I see those changes reflected in the emails.

  3. aggregates articles from multiple sources in a "newspaper" (a daily digest). What happened is that some readers who also subscribed to Professor Thomas Cotter's Comparative Patent Remedies blog missed my posts because his posts (if they went live on the same day) appeared at the top of those emails. I like Professor Cotter's blog, but I don't want my own posts to be hidden below his. Especially when multiple news sources are aggregated into a single "newspaper" email, there should be headlines at the top, and I've been telling this to the folks since the summer (their current multi-source newspaper format makes no sense, though with headlines it would be a nice idea). But they're not going to make that daily newspaper format work anytime soon, so I have opted for a workaround based on the features offers at this time.

I've changed two settings: you now get a separate email for every post (I promise to switch back to daily newspapers if and when finally provides headlines), and they won't go out immediately after publication but only when I hit an "approve" button in an email the server sends me. That gives me control over which version of a post actually gets sent out.

Single-post emails would have cluttered people's mailboxes in the first few years of FOSS Patents, when there were sometimes five or six posts on a given day at the height of the "smartphone patent wars." Now I typically do only one post on a given day, sometimes two, and only rarely three or more.

All going well, this new delivery method should already work for the emails with which this present post is delivered to my esteemed subscribers.

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Wednesday, December 15, 2021

Odd as it may seem, the name of that Alium patent pool indeed means 'garlic' in Latin: even with a single L

Reader engagement is a wonderful thing that I cherish and try to be receptive to. A recent blog post that only got an average level of traffic ( less than my subsequent story on Sisvel v. Ford and the previous one on Apple's strike against the credibility of the Epic-led Coalition for App Fairness--drew reactions from readers representing the entire spectrum of opinions concerning O-RAN's outlook. Two sentences triggered it all:

I have no idea why they chose the Latin word for garlic as the name for a telecommunications patent pool. If the pool smells from anything, it's from the apparent agenda of high-volume implementers seeking to devalue patents.

Now some readers said I got this wrong because "allium" with a double L is the Lain word for garlic. No, I was right.

The answer is that the original Latin word is "alium" with only a single L, and that was the correct spelling for several centuries until a second L got inserted about 2,000 years ago.

Here are some sources that vindicate what I wrote:

There also is a Wikipedia entry for an ancient city named "Alium" as the Latin translation of the Greek name "Alion." Even Wikipedia doesn't have much to say about that city other than it got mentioned in a couple of historical documents. Since it was a Greek city, the endonym is Alion, and Alium is merely an exonym that happens to be a homonym of "garlic." Place names can have funny meanings, which is why a certain Upper Austrian town was renamed "Fugging" earlier this year, greatly reducing the number of selfies taken before the place name sign.

I don't know why the patent pool was named "garlic" in Latin: maybe its founders didn't care to perform some due diligence on the chosen name (LMGTFY), which is not as critical as technical essentiality checks, or there is a hidden meaning there and they like spaghetti aglio e olio or they'll eventually relocate to Gilroy, CA, the Garlic Capital of the World where they even serve garlic ice cream--which is presumably not protected by a manufacturing patent licensed by MPEG LA or challenged by Unified Patents before the PTAB.

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