Ford is fighting a multi-front war against a couple of Avanci licensors:
In December, European patent licensing and pool administration firm Sisvel sued Ford in the District of Delaware over patents declared essential to the 4G/LTE standard. The parties stipulated to an extension of time for Ford's answer to the complaint. The new deadline passed yesterday, and after this introductory part I will show you and discuss Ford's responsive filing.
Sisvel has never asserted standard-essential patents exclusively in the United States without also doing so in Europe. And indeed, the Munich I Regional Court confirmed to me the pendency of two German Sisvel v. Ford SEP enforcement actions.
Japan's national patent licensing firm IP Bridge is suing Ford in Munich as well. Interestingly, IP Bridge has also lost its patience with Volkswagen, which unlike Ford has a 3G Avanci license for its high-volume brands (but actually needs a 4G license).
So here's yesterday's answer by Ford to Sisvel's Delaware complaint (this post continues below the document):
Ford's lawyers definitely did a thorough job. They've identified a minor (though repeated) oversight on Sisvel's part, alleging in the complaint that on certain dates Ford received information regarding certain patents that Sisvel actually acquired only later. But that's not going to be dispositive.
There are three aspects of Ford's defense strategy that I find interesting and will keep on eye on as the litigation unfolds:
Ford's consistent answer to Sisvel's representation that "[Ford] advertises [a given product] is compliant with the 4G cellular network standards" is: "Denied."
Ford says so even though its advertisements apparently do mention 4G. So Ford is saying what Judge Andreas Voss ("Voß" in German), then sitting on the Mannheim Regional Court and now on the Karlsruhe Higher Regional Court, once told a defendant to an IPCom lawsuit: "First you say the patent doesn't read on [3G] UMTS, then you say 'we're not really doing UMTS.'" Different parties, different (newer) standard, but same thing here: Ford "denies that its Accused Instrumentalities [are] necessarily infringing [a given] patent" (emphasis added) because "Sisvel relies solely on 3GPP specifications without any substantiation that the accused modem chipsets practice the specific sections of the standard on which Sisvel relies on to alleged infringement by those modem products."
It's a "Show me, I'm from Missouri" defense that rejects infringement contentions based on a mapping of the asserted patent claims to the specification of the standard. It may also have to do with Ford's strategy for denying that it received a proper infringement notice.
In Germany, that won't work for Ford at the merits stage, but if Sisvel obtained a Munich injunction based on the specification of the standard, it would still have to prove at the enforcement stage (when seeking contempt-of-court sanctions) that an actual infringement occurred.
Ford's answer to the complaint does not elaborate on, but hints at, a supply-chain licensing-based defense:
"16. To the extent suppliers to Ford of any accused (i) baseband chipset, (ii) Network Access Device incorporating a baseband chipset, or (iii) Telematics Control Unit ('TCU') incorporating a Network Access Device make or sell products conforming to the applicable cellular standards, the ETSI IPR Policy requires a license be made available to those makers and sellers, i.e., the supply chain."
The answer to the complaint doesn't specifically allege that Sisvel denied such a license to suppliers, but Ford's requested judicial declaration that "Sisvel has breached its contractual obligations under the ETSI IPR policy to license the Patents in Suit, on FRAND terms" is broad and vague, so the supply-chain licensing question may come up. (Note, however, that Ford does not mention the Avanci pool at all.)
Ford raises a very specific supply-chain-based patent exhaustion defense concerning the '803, '443, and '070 patents, which belonged to Nokia until they were assigned to Sisvel in 2012. In July 2008, however, Nokia entered into a "15-year agreement" that involved a covenant not to sue, which Ford says exhausted those patents under Quanta with respect to "a Qualcomm baseband modem chipset installed in a Ford vehicle." And the answer to the complaint says that all TCUs on Ford production vehicles "use Qualcomm baseband modem chipsets and associated binary files."
Sisvel does not claim that the two remaining patents-in-suit (from LG and BlackBerry) are exhausted under a contract with Qualcomm.
Patent exhaustion may also play a role in Acer v. Volkswagen. Many if not all of Volkswagen's cars come with components from LG that incorporate Qualcomm baseband chips. VW's answer to Acer's complaint (in the Eastern District of Virginia, the "rocket docket" for U.S. patent cases) is due on Monday (February 7).
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