Friday, February 18, 2022

Texas court schedules Apple v. Ericsson (FRAND countersuit) trial for July 2023; USITC institutes investigations of three Ericsson v. Apple complaints, delegates public interest

A couple of days ago, it became known that Judge Rodney Gilstrap scheduled an Ericsson v. Apple FRAND trial in the Eastern District of Texas for June 2023. That scheduling order did not make it seem too likely that Ericsson's case would be dismissed for lack of subject-matter jurisdiction despite Apple's motion. Apple's procedural proposal was to firstly hold a case management conference--and Apple also had a more ambitious schedule in mind.

The next day, Apple filed two sur-replies: one in opposition to Ericsson's motion to dismiss Apple's later-filed FRAND case (possibly because Apple interpreted the scheduling order in a similar way as I did and was looking for ways to keep its motion to dismiss alive), and one opposing Ericsson's motion to amend its October 2021 FRAND complaint with additional claims relating to Apple's conduct (the original ones were just about Ericsson's own behavior). The issues raised in those sur-replies are interdependent as Apple's argument against Ericsson's proposed amendment to its original complaint would moot Apple's original motion to dismiss, while Apple's argument against Ericsson's proposed amendment is that you can't amend a complaint over which the court lacked jurisdiction to begin with, but if Ericsson's earlier-filed case stays alive, Apple has to bring its FRAND claims as counterclaims to that one.

I have not yet found a public redacted version of one of the sur-replies, but I have uploaded (to Scribd) Apple's sur-reply in opposition to Ericsson's motion to file a first amended complaint. That sur-reply is an attempt to broaden the range of circumstances under which a court denies an amendment to a complaint.

On Thursday, Judge Gilstrap also entered a routine scheduling order in Apple v. Ericsson (FRAND countersuit) according to which that trial would start on July 10, i.e., shortly after the Ericsson v. Apple trial, which starts in early June, would presumably conclude (this post continues below the document):

22-02-17 Scheduling Order A... by Florian Mueller

Given that Apple's FRAND complaint was filed about 2.5 months after Ericsson's original case, Apple would get a shorter time-to-trial than Ericsson. But it makes sense given the extent to which the issues in those cases overlap. The question is whether there will be a separate Apple v. Ericsson FRAND trial at all, as its FRAND claims may become counterclaims. There are also declaratory-judgment claims targeting three Ericsson 5G patents in Apple's case, and it's possible that those would then be put before a jury in July 2023. Apple is probably relieved that a scheduling order has also come down in its own case (as opposed to the court firstly evaluating whether that case would go forward at all in the proposed form), but the hurdle for Apple to become the plaintiff in a unified Ericsson-Apple FRAND case is still very high.

There is also some procedural progress in Washington, D.C. at the United States International Trade Commission ("USITC" or just "ITC"). As I expected two days ago, the ITC instituted investigations of Ericsson's three ITC complaints (U.S. import ban requests) against Apple, and I do not have the slightest doubt we'll see an investigation of Apple's countercomplaint instituted any moment now, too.

Ericsson's standard-essential patent (SEP) complaint (no. 337-3595) has been assigned investigation number 337-TA-1299 (PDF); non-SEP complaints nos. 337-3596 and 337-3597 have been assigned investigation numbers 337-TA-1300 (PDF) and 337-TA-1301 (PDF).

The SEP case (337-TA-1299) has been assigned to Administrative Law Judge (ALJ) David P. Shaw. I vaguely remember how he joined the ITC as a "newbie" in 2011; by now he has a great deal of experience in patent law. The first of the two non-SEP cases (337-TA-1300) has been assigned to ALJ MaryJoan McNamara, who like ALJ Shaw has a social-security background, and was appointed four years after him. No assignment of the third Ericsson case (second non-SEP case) has happened yet.

In all three of these cases, the Commission (the U.S. trade agency's top-level decision-making body) has elected to delegate the building of a factual record on any statutory public-interest issues to the ALJs (who will then also write a recommendation on the extent to which the public interest weighs against an exclusion order; the actual decisions are still made by the Commission itself). According to official ITC statistics, the Commission delegated the public-interest record-building part to ALJs in about 16% of investigations that started last year. However, it hardly ever changes anything about the outcome. Unless I missed something, it's been several decades since the Commission itself decided against an import ban for public-interest reasons. The factual record developed by the ALJs is, however, also available to the United States Trade Representative (USTR), to whom U.S. presidents typically delegate their Presidential veto power over ITC exclusion orders. Apple had the benefit of a Presidential veto in 2013 when Samsung won an ITC ruling over a SEP.

I venture to guess the Commission will also delegate the public-interest part to the ALJ who will preside over the investigation of Apple's countercomplaint against Ericsson. Most people in the information and communications technology industry would presumably concur with Ericsson that mobile base stations raise far more serious public-interest issues than smartphones with a view to potential substitutability.

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