Monday, June 20, 2022

Further escalation in Ericsson v. Apple 5G dispute: UK patent infringement complaints filed by Ericsson on June 6

UK court records show a couple of Ericsson v. Apple filings: on June 6, Ericsson--represented by the law firm of Taylor Wessing, which has offices in numerous European countries (and beyond Europe)--filed with the High Court of Justice for England & Wales (still frequently referred to as the "EWHC")

  • case no. HP-2022-000013 (defendant: Apple Retail UK Limited) and

  • case no. HP-2022-000014 (defendants: Apple Retail UK Limited, Apple Distribution International Limited, and Apple Inc.).

Both cases are identifiable as "Part 7" claims (patents and registered designs) and have been assigned to the Patents Court. The patents-in-suit are not known, so I don't know yet whether we're talking about standard-essential patents. Probably that's the case, but don't know yet.

The UK filings apparently came on the heels of the recent failure of a mediation effort in the Eastern District of Texas. While parties are free to make additional filings during mediation talks, they don't want to be seen as making hostile moves at a time when everyone should be constructive.

This month, the Optis v. Apple FRAND trial started in London. By coincidence, some of the patents-in-suit originally belonged to Ericsson. As I noted in the Optis context, there's considerable risk for Apple that additional UK FRAND case law--resulting from Apple's failure to strike a deal with the Optis/Unwired group--could complicate its defenses against much larger patent holders. With Ericsson's filings, that risk is clearer than before. Also, Apple is not known to have agreed on renewals yet with Nokia and InterDigital, two other major patent holders with a track record of enforcing their rights in the UK.

Apple also has to deal with a regulatory inquiry into its App Store-related terms, policies, and practicies in the UK. I mentioned the Competition & Market Authority's (CMA) market investigation (scope: mobile browsers and cloud gaming) in two recent posts (toward the end of this one, and then again in the middle of a post on a new German investigation).

There actually is a connection between apps and SEPs that ever more people have figured out: Apple claims to hold IP that is essential to making iOS apps, and wants 27% of in-app purchasing revenues (with exceptions relating to only a minuscule part of the relevant royalty base) even if it doesn't process payments (in which case it wants another 3%, which is roughly what third-party payment processors charge). In the Ericsson v. Apple FRAND litigation in the Eastern District of Texas, Apple doesn't want Ericsson to conduct discovery of certain App Store issues. Ericsson has already brought two motions to compel, and with respect to the first one, Judge Gilstrap scheduled a motion hearing for early July.

In parallel to the Texas FRAND case, Ericsson is pursuing U.S. import bans, and made some reasonably meaningful progress in that regard.

So far, Ericsson is known to have brought patent infringement complaints against Apple in (at least) a half-dozen jurisdictions: United States (ITC and district court), Germany, the Netherlands, Brazil, Colombia, and now the UK, where Ericsson would firstly have to prevail on the technical merits of at least one SEP before a FRAND injunction trial would be held. It's rather likely that the dispute will actually reach a settlement point because of earlier developments in other places, such as the USITC or Germany. But Ericsson's filings demonstrate to Apple that the noose is tightening in multiple jurisdictions. At some point, the patent injunction hammer will come down somewhere.

Unless there are any unknown filings, the half-dozen of countries I listed before is still a few jurisdictions short of the nine countries in which Nokia is suing OPPO (plus OPPO is countersuing in a tenth, China). Comparing Nokia's and Ericsson's jurisdictional choices, I actually think Spain--and there, particularly the Barcelona trade court (Juzgado de lo mercantil no. 5)--would be an interesting one to consider. I've recently looked at various Spanish patent rulings, and it's a jurisdiction with greater potential for obtaining patent injunctions than most litigants appear to be aware of--an underexploited opportunity, but that's another story.

Apple and Ericsson are not only negotiating (with no result yet, but sooner or later they'll work out a renewal and back royalties) and litigating, but also rivals in the patent policy arena. While Ericsson, Nokia, and Qualcomm are the three most important players seeking to dissuade the European Commission's Directorate-General for the Internal Market (DG GROW) from weakening SEP enforcement in the EU, Apple is the key player constantly pursuing the devaluation of SEPs, now also with an IoT argument that is parroted by Apple-funded astroturfers. IoT is an important growth area, but as Huawei's brand new agreement with Nordic Semiconductor and a previous agreement between Nokia and Nordic show, this is not the time for regulatory intervention--especially given that there's hardly any SEP litigation over IoT end products--as the market may find more and more solutions all by itself.

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