Friday, May 13, 2022

Apple keeps trying to duck infringement claims over three Ericsson 5G patents in Eastern District of Texas: reply brief

Whether in a policy context like the IEEE's standard-essential patent (SEP) policy or in litigation, I often find that Apple will say anything that it believes may advance its agenda--or will even have astroturfers say it. It strikes me as add that one of the most admired companies in history lacks the self-respect to choose its arguments more wisely.

In the multi-jurisdictional 5G SEP dispute with Ericsson, there's now been a pattern of Apple contradicting itself. One might even say that the only thing consistent about Apple's tactics is that they're constantly being inconsistent. Whether one agrees or disagrees with Ericsson's royalty demands (which is for the courts to decide in the end, unless the parties can reach an agreement), Ericsson's actions are straightforward. They have SEPs and non-SEPs that Apple isn't currently licensed to (as the previous contract expired in mid-January), and that's why they're enforcing their intellectual property rights in different venues, all of which have mechanisms in place to protect implementers against so-called patent hold-up. By contrast, Apple will tell one thing to the court in the Eastern District of Texas and another to courts in foreign countries, only to get Ericsson's cases there stayed. Apple even conflated SEPs and non-SEPs (by suggesting that a SEP rate-setting action could dispose of Ericsson's non-SEP assertions, though there is no general entitlement to a non-SEP license) or turned the antitrust concept of tying on its head. That's just not the way to build and maintain credibility with courts and commentators.

The self-contradiction I have to highlight now is that Apple itself challenged three Ericsson 5G SEPs through declaratory-judgment claims back in December, but after Judge Rodney Gilstrap perfectly reasonably severed the FRAND claims from that case (and incorporated them into Ericsson's earlier-filed FRAND actions as compulsory counterclaims), Apple was no longer interested in pursuing its own requests for declaratory judgment. Apple's DJ claims forced Ericsson to bring compulsory counterclaims of infringement (in the alternative, Ericsson would have had to "pull a Qualcomm" and just give up on those patents by not bringing compulsory counterclaims, thereby effectively giving Apple a free license). The only surprise here was that Ericsson didn't take Apple up on its offer to stay those DJ claims but is now exuding maximum confidence in those patents--which Apple thought were Ericsson's weakest 5G declared-essential patents--and insisting that the claims be resolved. By not opposing the stay, Ericsson could have avoided a waiver.

Now, Apple has replied in support of its motion for a stay, and I'll share some observations below the document:

22-05-12 Apple Reply ISO Mo... by Florian Mueller

Two of Apple's three reply arguments are about remedies: Ericsson is allegedly neither entitled to monetary relief because Apple will obtain a license anyway (based on a FRAND claim it brought in the very same complaint as the DJ claims, so this is nothing new) nor can it get an injunction (because Ericsson itself, a looong time ago, opposed an ITC import ban over SEPs, which falls far short of setting binding precedent).

The third item is that Apple describes as "incorrect" Ericsson's suggestion that Apple brought the DJ claims just to give the Federal--not Fifth--Circuit appellate jurisdiction. That is something that I already identified as Apple's transparent tactical objective long before Ericsson said so. It's just too obvious. Now Apple says it "filed the -460 Action with both FRAND-based and patent-based claims because it believed that the merits of the patent claims were relevant to determining a FRAND rate," but as the court severed the claims and the two-way FRAND case "is set for trial first," Apple says "it will be far more efficient to stay the -460 Action pending resolution of the -376 Action."

The implausible part here is that, given the size of Ericsson's portfolio, a sample of three patents that Apple itself handpicked could hardly ever have been relevant to the FRAND rate. Whether Apple would have prevailed on all three DJ claims, or Ericsson on all three of those patents, or something in between would have been the outcome, I can't see what productive purpose those determinations would ever have served.

Also, given that either decision can be appealed and no one can predict today how long it will take for a case to be really resolved, it is still quite possible that the licensing situation remains unclarified at the time a patent infringement decision becomes enforceable.

When Judge Gilstrap denied Ericsson's (somewhat unusual) motion to confirm Apple's commitment to be bound by the court's FRAND decision, he clearly said that Apple, by its own representations, would remain free not to take a license from Ericsson. So Apple's reply in support of its motion to stay the three-patent infringement case looks a little bit like a motion for clarification or even reconsideration of Judge Gilstrap's recent order. We'll see whether he takes the bait or is getting tired of this.

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