Wednesday, October 12, 2022

Ericsson seeks summary judgment against Apple's most important claim in Texas; asks ITC for sanctions against Apple for late production of source code it had for years

If you wish to go straight to the part on summary judgment motions in the Eastern District of Texas, please click here.

Ericsson and Apple will square off in Germany next week (Mannheim Regional Court, Apple v. Ericsson patent infringement trial on Tuesday, October 18). In the U.S., several cases are also going to go to trial in the not too distant future: a FRAND contract case in the Eastern District of Texas will be tried in December, and the evidentiary hearings (i.e., trials) in various Apple-Ericsson ITC investigations are scheduled to take place in the coming months (the first one is just weeks away now).

That's why there is now a flurry of pretrial motion practice. As I noted in my most recent post on Ericsson v. Apple, Apple's motions to dismiss didn't have a high hit rate. Also, its procedural maneuvering in Texas--where Apple wanted its later-filed countersuit to become the leading case, and tried to deprive the Fifth Circuit of appellate jurisdictions through declaratory-judgment claims it wanted to drop as soon as that scheme failed--went nowhere earlier this year. However, since the previous post on that dispute there have been a couple of presumably smaller wins for Apple:

  • In the second Ericsson-Apple ITC investigation (the larger one of Ericsson's two non-SEP cases), Administrative Law Judge (ALJ) MaryJoan McNamara has now allowed Apple to submit a "third-party" declaration by a Caltech researcher out of time. What Ericsson complained about was primarily that the same researcher had previously served as Apple's expert witness on the same prior art question, so he shouldn't be deemed an independent witness now. While that declaration will now be admitted into the record, Ericsson has nevertheless made its point that it's not a disinterested third-party witness testifying, but someone who owes Apple a favor. We'll see how much credibility that testimony is afforded in the end.

  • In the smaller one of Ericsson's two non-SEP cases before the ITC, ALJ Cameron Elliot has granted in part an Apple motion that took aim at the expert testimony of former ITC commissioner Ronald Cass (he left the ITC 30 years ago) on public-interest questions. That order, too, is sealed for the time being, so it's unclear to what extent Apple's motion succeeded, except that it's only a partial win. In three other ITC investigations, Mr. Cass also testified on such questions, and it's not the first time that parts of his testimony get stricken because they represent legal opinions. Again, we don't know yet what parts are at issue here. If the basis to strike those parts was just that they were legal opinions, Ericsson may nevertheless have achieved the effect that the argument was made, even if some of it may not be deemed expert testimony.

There's also some news from the investigation of Ericsson's SEP infringement complaint--a motion for discovery sanctions against Apple. That case is particularly important, and the ITC staff sided with Ericsson on claim construction, which increases the likelihood of the case ultimately turning on FRAND questions.

The staff also took practically the same position as Ericsson on the need for Apple to come clean on its financial support of so-called third parties who submitted public-interest statements at the pre-institution stage. ALJ Bryan Moore granted a related motion to compel. Meanwhile it's become publicly known anyway that ACT | The App Association is actually ACT | the Apple Association: most of its funding comes from Apple. It's really problematic when an organization that is little more than the extended workbench of Apple's lobbying department pretends to represent third parties (small app developers, though there is no indication any of them ever had to pay membership dues).

As I wrote yesterday in a post on Epic Games v. Apple (after I found out about the composition of the Ninth Circuit panel, which bodes well for Epic), Apple should even be sanctioned for the amicus curiae brief that ACT submitted in that case. Now, Ericsson isn't requesting that, though I wish they would do it later (once the record of that ITC case shows that ACT is an astroturfing Apple puppet). What Ericsson is actually complaining about is that Apple allegedly produced at a very late stage--which complicated things for Ericsson given some procedural deadlines--some source code (the amounts are redacted, but one can deduce from the non-redacted parts that Ericsson must consider it a very significant quantity) that Apple's counsel allegedly knew about before, and that Apple had had for years according to Ericsson's motion:

October 11, 2022 public redacted version of Ericsson's September 28, 2022 motion for discovery sanctions against Apple

It will be interesting to see how Apple seeks to justify that it withheld that allegedly relevant source code for some time--and even more so, what the ITC will do should there have been some wrongdoing.

Now let's head over to the Eastern District of Texas.

Chief Judge Rodney Gilstrap is presiding over a FRAND case as well as a declaratory-judgment case that was severed from Apple's FRAND countersuit for good reason. By the way, I recently corrected a number of posts in which I mistakenly inserted a middle initial. The judge's correct name is J. Rodney Gilstrap, though--and usually he is referred to as Rodney Gilstrap, period. I don't know how it happened, but I made the mistake once and then consistently repeated it. Fortunately, that clerical error is unrelated to the issues in the case. And even more fortunately, a blog can't held to the same standard as judicial decisions (I found almost 300 typos and similar errors in the Epic v. Apple ruling, also including Apple's long-form name and Tim Cook's title).

Late on Tuesday by Central Time, Apple and Ericsson filed a slew of pretrial motions with Judge Gilstrap's court. All of them are sealed, so for now only the headlines are publicly accessible. Most of those motions are about striking and precluding testimony. But there are also some motions for summary judgment:

  • The potentially most impactful one is Ericsson's Motion for Summary Judgment on Apples Counterclaim Count IV (Declaration of FRAND Terms For Ericsson's Global Cellular SEP Portfolio). It comes as no surprise to me: from the beginning I expressed my view that Ericsson would likely attack that Apple claim on the basis that U.S. courts don't make global FRAND declarations unless both parties request them. All that Ericsson wants is a binary holding according to which it discharged its FRAND obligations. In other words, it wants its $5 (or $4 if Apple had seized the opportunity of an early-signing discount) per unit blessed.

    If this motion succeeds (and there is no precedent under which the outcome could be any other), Apple won't get what it really wants: a royalty determination somewhere in the middle between the parties' positions.

  • The parties have filed dueling motions for summary judgment on the question of whether Ericsson breached the 2015 license agreement. Apple argued from the earliest stage of this litigation that Ericsson should not have filed its FRAND action in the Eastern District of Texas (which it did in October 2021, a few months prior to the expiration of that license agreement) at that stage. It should have let the old agreement expire. Ericsson wants the court to find that it was within its rights to bring a FRAND case over negotiations of a subsequent license agreement; Apple wants the court to hold Ericsson in breach. Apple's position on this question definitely didn't fly at the early stage of the litigation when Apple unsuccessfully sought to restructure the case on that basis.

  • there is also an Apple motion for "summary judgment that the parties prior license agreement granted Apple rights and freedom to operate under all of Ericsson's declared 5G patents." When they signed that agreement, 5G was on the horizon, but 4G was the practically relevant generation of the standard. In an ITC case, Ericsson accuses Apple of having acted in bad faith at the time by refusing to grant Ericsson a license to its own patents that would later become essential to 5G. I can't analyze Apple's motion for summary judgment until a public redacted version becomes available, though.

  • What would be pretty much the same as a summary judgment is the Rule 44.1 "Determination of Foreign Law Law that the ETSI IPR Policys FRAND Contract Does Not Require Granting a License or Other Rights to Implementation Patents" that Ericsson is seeking. But this is such a clear case--of course the ETSI FRAND declaration doesn't relate to non-SEPs in any way--that I'm surprised Ericsson even has to bring a motion over that question.

I'll do a follow-up when I've had the chance to read public redacted versions of those sealed motions.