Monday, March 7, 2022

Thales case against Avanci and Nokia to go to trial in Munich on September 21: outcome will likely mirror Continental v. Avanci (5th Cir.)

In October I found a discovery request by French industrial conglomerate Thales against patent licensing firm InterDigital, which pointed me to a Thales v. Avanci and Nokia antitrust complaint filed with the 37th Civil Chamber of the Munich I Regional Court. I later also spotted a discovery request by Thales against Ericsson in the Eastern District of Texas.

The case is all about claiming that SEP holders, including the Avanci pool (which does not actually hold patents of its own, but facilitates a pool license), violate EU antitrust law by declining to extend exhaustive component-level licenses to automotive suppliers. The Munich court had actually taken an unequivocal position on that question in the Nokia v. Daimler cases.

Thales filed the complaint with the court's antitrust-specialized 37th Civil Chamber, but it was reassigned to the patent-specialized 21st Civil Chamber. When the reassignment happened, Judge Tobias Pichlmaier was the 21st Civil Chamber's Presiding Judge. By now he's at the helm of the 37th Civil Chamber, so it's like he and that case were going in opposite directions and crossed paths somewhere in the middle. Judge Pichlmaier's successor as the 21st Civil Chamber's Presiding Judge is Judge Dr. Georg Werner.

Theoretically, Judge Pichlmaier could even sit on the 21st Civil Chamber by designation (in that case, as a side judge, which would diminish his authority) when this case is heard, but he may not find it all that interesting. We'll see.

I've since tried to find out about when the case would go to trial. Last week the Munich court still couldn't confirm anything. When the court can't confirm the pendency of a case or a trial date so many months into the proceedings, the answer is usually an issue with service of process, which in turn may have to do with delays of deposits to made by non-EU plaintiffs (with a view to the potential future recovery of legal fees). With Thales being based in the EU, the latter cannot be the reason, so it's a mystery why it's taking so long. But that case as a whole is peculiar to be honest.

So I asked around. A Nokia spokesperson confirmed they have been served. The case is slated for trial on September 21, 2022 at 1 PM.

The reason I was checking on the status of that Thales case again is that last week's Fifth Circuit opinion in Continental v. Avanci addressed the fundamental question of whether there's any issue, much less an antitrust issue, with some SEP holders deciding to license end-product makers, i.e., car makers. The Fifth Circuit held that Conti had no standing, thus didn't even have to reach the question of antitrust standing, let alone the actual antitrust claims. The United States District Court for the Northern District of Texas had already decided the case against Conti for lack of antitrust standing and for the deficiencies of its Sherman Act theories.

Thales needs to seriously think about whether its Munich case is worth pursuing at all. It's a strategically lost position that doesn't get stronger by different entities raising the same issues against (at least in part) the same defendants in different jurisdictions--actually, in this case even in a jurisdiction (Munich) that has spoken out on the subject.

Some automotive companies are defiant. I've also seen a statement by Conti according to which they vow to fight on--but do they seriously believe they're going to make an impact anytime soon? I sure don't.

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