Reading Ericsson's late-Friday filings in the two FRAND cases in the Eastern District of Texas creates a bit of a High Noon feeling: a duel is in the air. Just a courtroom duel, fortunately.
May I refer you to my Wednesday post on Apple's reply in support of its motion to dismiss Ericsson's (earlier-filed) case, which also contains a table that juxtaposes the parties' procedural preferences. It's fascinating to see this dispute unfold, with both parties playing the game at the highest level, but with Ericsson possibly having devised a strategy that Apple--no matter how hard and smart it tries--may not be able to thwart.
I'm currently looking at--and will soon comment on--another multi-jurisdictional SEP dispute involving jurisdictional questions, but in that one, the preliminary result of my analysis is that the net licensee takes a more principled position on how to put the matter to rest. In Ericsson v. Apple, however, there's one totally transparent and reasonably consistent party (Ericsson's $5 per-unit royalty was even disclosed ex ante), but Apple has to bend itself out of shape.
There's a sideshow going on because Apple alleges that Ericsson had seemingly consented to just having the Texas court set the license fee, but Ericsson brought infringement actions in various jurisdictions, also including preliminary injunction requests in Brazil and the Netherlands. On Thursday, Ericsson told the ITC that it never waived its right to enforce its intellectual property rights. In the Eastern District of Texas, Ericsson has now filed a sur-reply to the aforementioned reply brief by Apple, in footnote 4 of which Ericsson rejects "Apple's attempts to cast Ericsson as the villain" and calls Apple "an unlicensed infringer" (this post continues below the document):
The sur-reply pokes some holes into Apple's efforts to get Ericsson's earlier-filed case dismissed (so Apple would be in the privileged position if acting as plaintiff). Ericsson outlines various reasons for which Apple's motion would fail, one of which is that Apple challenges the district court's subject-matter jurisdiction (Rule 12(b)(1)) but raises issues that actually go to the substance of the case (Rule 12(b)(6)). Ericsson explains once again why it had the right to ask the Texas court to bless its FRAND rates, and that the Texas court itself had allowed such claims in a couple of other cases (the first one being PanOptis v. Blackberry) without requiring a DJ plaintiff to firstly wait for the other party to take action. At a more abstract level, Ericsson points to Supreme Court case law (MedImmune) according to which a DJ plaintiff need not "destroy a large building, bet the farm, or (as [in MedImmune]) risk treble damages and the loss of 80 percent of its business before seeking a declaration of its actively contested legal rights." And there are contradictions not only between Apple's own later-filed FRAND complaint and its motion to dismiss Ericsson's complaint (which Apple actually acknowledges, which is why its own complaint came with a footnote according to which certain claims were dependent on whether the court would allow Ericsson's case to go forward) but also between the positions Apple takes now and the ones it took in its last dispute with Ericsson seven years back.
Apple's motion to dismiss would be mooted by the court allowing Ericsson's first amended complaint, but Ericsson's sur-reply now argues that based on Apple's reply, "its motion to dismiss can also be denied on the merits."
At the same time as Ericsson filed the sur-reply to Apple's motion to dismiss, it also commented again on Apple's request for an early case management conference. In a related notice of filing, Ericsson unequivocally declares itself "available to discuss the issues relating to both Ericsson’s first-filed case and Apple’s second-filed case, in the presence of the Court, as soon as next week, or at the Court’s convenience." That's what I meant by a High Noon feeling.
While Ericsson tacitly declines Apple's invitation to propose a case schedule, it does propose a FRAND roadmap that would require the parties to serve certain FRAND-related disclosures on each other in the coming days, and to meet and confer on that basis. Ericsson's roadmap also mentions an "in-person Scheduling Conference" in Texas a possibility.
This creates an interesting challenge for Apple. Ericsson is ready, willing, and able to formally exchange the parties' positions on FRAND, accelerate the process, and provide an improved basis on which the Texas court could determine how to proceed. Just like Ericsson didn't have to follow Apple's example and submit a case schedule, Apple is free to come up with excuses for rejecting Ericsson's roadmap--however, in that event Apple undermines its credibility as a willing licensee not only in Judge Gilstrap's eyes but also those of judges in other jurisdictions. Finally, here's Ericsson's proposed roadmap for exchanging FRAND disclosures, which may inspire similar proposals by other litigants in SEP cases in Texas, other U.S. federal districts, and even other jurisdictions:
Share with other professionals via LinkedIn: