Thursday, August 4, 2022

2 out of 3 for Ericsson as ITC judge allows amended infringement argument, denies eHealth- and Watch-related Apple motion, but declines to throw out patent misuse defense: non-SEP case

The smallest one of Ericsson's three USITC cases against Apple--investigation no. 337-TA-1301--is also the nimblest, which is attributable not only to its scope, but equally to Administrative Law Judge (ALJ) Cameron Elliot's efficiency and decisiveness.

The case, which for the avoidance of doubt doesn't involve standard-essential patents (SEPs), shrank this week as Ericsson dropped all of the asserted claims of one of the originally three patents-in-suit, and most of the asserted claims of another patent-in-suit. That was unsurprising in light of a claim construction order that identified indefiniteness issues with some claim limitations. And it was equally unsurprising that ALJ Elliot granted that (obviously unopposed) motion.

There have also been other developments that I'd like to summarize briefly. Two of them are good news for Ericsson, while Apple has avoided an early-stage dismissal of its "patent misuse" defense:

  • Ericsson can now amend its infringement contentions (as well as its technical domestic industry contentions, which involve the same questions as infringement, but not with respect to Apple's products--it's actually about what Ericsson's licensee Samsung does in the U.S. market). This represents an opportunity for Ericsson to optimize its arguments with a view to the upcoming evidentiary hearing (i.e., trial) in light of the aforementioned claim construction order., which particularly highlighted that, with respect to one of the patents, the case will hinge on a "Make-Before-Break" question (meaning whether one connection does or does not have to be terminated before the next one is established).

    Apple vehemently opposed Ericsson's motion, saying that the iPhone maker would be OK with the mere addition of "citations to late-produced evidence," but alleging that Ericsson "now seeks to add evidence thatw as timely produced" and would amount to "untimely new theories," or as Apple also calls it, "a do-over."

    For now, the order granting Ericsson's second motion for leave to supplement its infringement and technical domestic industry contentions is sealed. Apple's unsuccessful opposition is the only publicly accessible source of information on this, for the time being.

  • Apple also wanted to amend something: its tentative list of evidentiary hearing witnesses. But ALJ Elliot found that no good cause had been shown.

    Apple sought to bolster its public interest argument against the entry of an import ban (in the event an infringement of a valid patent is shown) with testimony from Dr. Richard Milani, Chief Clinical Transformation Officer and Vice Chairman of the Department of Cardiology at Ochsner Heath System, and Dr. Patrick Reardon, Adjunct Professor of Surgery at Texas A&M College of Medicine, and Chief of Foregut & Minimally Invasive Surgery at Houston Methodist Hospital.

    Those witnesses from the healthcare sector submitted declarations according to which an exclusion order concerning the iPhone and the Apple Watch "would have major negative implications on public health in this country by greatly hindering patient care and medical research in critical areas." The doctor from Houston wrote: "If these Apple products were excluded from the United States, it would have a strong negative impact on patient care and would harm patients."

    ALJ Elliot didn't buy Apple's claim that it turned out at a relatively late stage that those healthcare professionals would submit declarations. Apple "was able to identify at least eleven other third[ ]parties who appear to be listed for public interest purposes. [...] It is also unlikely, as Ericsson suspects [...], that Drs. Milani and Reardon approached Apple out of their own volition without any outreach first from Apple. And if there was prior outreach, that timing would greatly affect the evaluation of Apple’s diligence and timeliness in filing the present motion."

    Furthermore, ALJ Elliot doubts the "probative value of the testimony expected to be offered" by those witnesses, as they highlight the Apple Watch, "but Ericsson suggests this particular product is unaccused of infringement in this Investigation." Those witnesses also wouldn't add a lot of new information by duplicatively "extolling Apple devices’ ability to collect health data for review by professionals."

  • What worked out better for Apple was its opposition to Ericsson's motion to strike the iPhone maker's "patent misuse" defense. Unfortunately, the order keeping the defense alive for the time being is sealed. Four months ago I already commented on that "patent misuse" theory, which comes down to saying that Ericsson abuses non-SEPs in order to secure a SEP license--but that turns the concept of "tying" on its head, as it would only be an issue if Ericsson used SEPs in order to force Apple to take a non-SEP license.

    I'll read with interest why ALJ Elliot declined to toss that defense, but I still doubt that Apple can ultimately prevail on it.

In other Ericsson v. Apple news, Apple's allegation of a human rights violation in Colombia (related to a 5G iPhone/iPad sales ban over a SEP) should be adjudged in a matter of days. Even Breitbart, which is famously skeptical of Big Tech's political leanings and intentions, has meanwhile reported on it (quoting this blog).