Saturday, September 17, 2022

Ericsson apparently accuses Apple of having acted in bad faith in 2015 by refusing to license its own patents that would later become essential to 5G

A few days ago, Apple submitted to the United States International Trade Commission (USITC, or just ITC) a rebuttal report by its expert on French law in which I found an interesting hint at one of the positions apparently taken by Ericsson in the FRAND context. If Apple's French law expert Professor Rémy Libchaber accurately portrays what Professor Jean-Sébastian Borghetti wrote in his report, Apple refused in 2015--when the parties were negotiating their previous license agreement, which expired earlier this year--to grant Ericsson a license to Apple's future patents--particularly those that would later become essential to the 5G standard, which was still in development.

This means the 2015 Ericsson-Apple license agreement wasn't a full cross-license. It sounds like Ericsson's patents were captured more comprehensively than Apple's. Professor Libchaber says Professor Borghetti described as a case of bad-faith conduct in FRAND licensing negotiations involving an ETSI standard "when a party knows that a patent owner normally issues ETSI FRAND Licensing Declarations subject to the obligation to reciprocate and negotiates with that patent owner a license for his patents that will become essential in relation to a future standard, yet to be developed, but refuses to grant cross-licenses on his own patents that will become essential in relation to that same standard."

Apple's expert addresses this allegation because Ericsson's expert apparently argues that Apple may have forfeited its entitlement to a FRAND license under French law: "in practice, bad faith on the part of the potential licensee therefore has the effect of suspending the patent owner’s obligation to negotiate in good faith towards a license on FRAND terms."

I doubt that what Ericsson's expert said suggests any intent on Ericsson's part to act in bad faith at this stage, or not to grant a license. But if Apple indeed refused to include its future 5G patents last time, then this may have implications for the current negotiations involving patents essential to the same standard.

We may hear more about this theory if and when the FRAND case in the Eastern District of Texas goes to trial in December. Also, there'll be an Ericsson v. Apple SEP trial in Mannheim in November, and on December 21 (though a postponement may prove necessary) the Munich I Regional Court plans to hold an Ericsson-Apple FRAND hearing. The German courts will probably seal the courtroom for that part of the discussion, while most of the Texas trial will presumably be held in public.

The next news from the SEP case at the ITC will presumably by the Administrative Law Judge's decision on Ericsson's and the ITC staff's motions to compel Apple to disclose the nature and stature of its relationship with entities that submitted public-interest declarations, especially ACT | The App(le) Association. The decision could have been made already, but it can't be found on the public docket yet.