Saturday, April 23, 2022

Tesla, Toyota, Honda finally file correct amicus brief--which doesn't say that Tesla is presumptive Avanci licensee

Just a quick follow-up to my previous post, which was about Tesla, Toyota, and Honda's failure to file their own amicus curiae brief (in support of Continental's petition for rehearing en banc of the dismissal of its "antitrust" case against Avanci, Nokia, and others), and also addressed the fundamental shortcomings of some other filings.

Tesla, Toyota, and Honda have meanwhile been allowed to submit a brief, and they finally uploaded their own brief as opposed to Thales's (this post continues below the document):

22-04-20 Tesla Et Al. ACTUA... by Florian Mueller

What the brief doesn't say is that Tesla is an Avanci licensee. Now, I don't have definitive knowledge of that. But IAM deduced from the near-simultaneous voluntary dismissal of multiple U.S. patent infringement lawsuits by Avanci licensors against Tesla that those cases were all settled in one fell swoop by taking a car-level 4G license from Avanci. The parallel German cases were also dismissed. And since then, no infringement action by any of Avanci's licensors (a total of 49 companies) against Tesla has become known. As an Apple lawyer once famously said, "I'm old enough not to believe in coincidences anymore." It's not impossible, but practically inconceivable, that Tesla wouldn't have taken an Avanci 4G license--that just hasn't been publicly announced, and all 49 Avanci licensors have apparently honored the NDA that is presumably in place.

It's somewhat strange that Tesla files an amicus brief against a patent pool from which it has a license--a license that bailed it out of multiple infringement actions. Tesla would have been free to pursue bilateral licensing instead.

The arguments in the brief add nothing to what the other amici had said before.

That's not the only mystery related to the amicus briefs filed in that case. A group of professors--including some I actually respect a great deal--made a filing one day ahead of the deadline, but should actually have taken that time to correct some typos and other mistakes that come across as hasty, if not sloppy, making me wonder whether the academics even knew what they were signing (this post continues below the document):

22-04-19 Professors' Ac... by Florian Mueller

The heading of the first section is... well... creative:


There's also a redundancy between the first two footnotes:

"1 Undersigned counsel for amici curiae certify that this brief was not authored in whole or in part by counsel for any of the parties. No party or party’s counsel contributed money for the brief. No other person contributed money that was intended to fund preparing or submitting the brief." (emphasis added)

"2 This brief is submitted under Federal Rule of Appellate Procedure 29(a). This brief was not authored in whole or in part by counsel for any of the parties. No party or party’s counsel contributed money that was intended to fund preparing or submitting the brief. No other person contributed money that was intended to fund preparing or submitting the brief." (emphasis added)

They also say the brief was "opposed" without stating who opposed it (there are multiple appellees here) and why...

The professors' brief does Conti the favor of elaborating on something that footnote 1 of its petition already stated briefly. The professors seek to reinforce Conti's point with the following passage:

"Moreover, based on a review of ETSI public records, Continental Automotive GmbH (CAG), the parent company of Plaintiff-Appellant, is a full member of ETSI and a CAG representative currently serves on ETSI’s Board of Directors. While CAG is not the named Plaintiff-Appellant in this case, Plaintiff-Appellant is ultimately owned by CAG. Thus, for all practical purposes, Plaintiff-Appellant is a member of at least one relevant SSO."

In antitrust cases it's key to pick the best plaintiff from the start. Footnotes in en banc petitions and amicus briefs don't make a party a plaintiff at this stage of proceeding.

I was wondering from the start how Conti seriously thought (and I'm also saying this with a view to its Delaware case against Nokia) that a U.S. subsidiary could somehow secure a global license for a Hungarian Conti subsidiary. Conti's corporate structure is a jungle of nth-degree subsidiaries. If they think that's cool or smart (as opposed to just unnecessary bureaucracy), that's their choice. But they have to streamline things in antitrust enforcement or they'll run into standing issues like here.

The professors' footnote 15 also makes a point that doesn't withstand scrutiny: with respect to the panel's mentioning of Broadcom being a Qualcomm competitor when those two companies had their seminal FRAND dispute, they say "at least one licensor member of Avanci (LG Electronics) is a direct competitor of Continental in the market for TCUs." But LG joined Avanci only a couple of months ago, making it an irrelevant fact in this case, which they conveniently (euphemism intended) omit.

Even if one took that fact into consideration now, it actually serves to show that even automotive suppliers believe that car-level licensing is workable and that Avanci's terms aren't an issue. Chances are that Conti itself would be an Avanci licensor if it had invested in the kind of research and development that is required to build a SEP portfolio. But Conti's management lacked the competence and foresight to make that investment while there was a window of opportunity with a view to (for instance) 4G. Instead, they wanted to free-ride on other companies' R&D spend. LG has the benefit of being not only a licensee but also a licensor of SEPs. Avanci itself is not a cross-licensing club, but LG can sometimes cross-license directly with other companies, and for the purposes of its internal financial planning LG can offset some of its automotive division's inbound licensing costs with revenues from outbound licensing. But that's not the result of foul play. It's because LG invested in that area, unlike Conti, a company that is more than 150 years old and better at making tires than at contributing to telecommunications standards, so it's trying to devalue other companies' SEPs instead of respecting them.

The Fifth Circuit will almost certainly figure out what's going on. The question is just whether those alarmist amicus briefs by automotive companies and "Apploturfers" will result in the waste of time that a rehearing en banc of that fatally-deficient "antitrust" case would represent.

Share with other professionals via LinkedIn: