Tuesday, November 8, 2022

ITC judge orders Apple (in dispute with Ericsson) to disclose what it pays to ACT | The App Association, describe relationship; another ITC judge construes some claim terms in Apple's countersuit over mmWave patents

This post discusses recent orders by the Administrative Law Judges (ALJs) of the United States International Trade Commission (USITC, or just ITC) who preside over the investigations of (a) one of Ericsson's three ITC complaints against Apple and (b) Apple's sole countercomplaint. In the former case, a discovery dispute has been resolved; in the latter, a Markman (claim construction) order has been entered (direct link).

Apple must "explain its historic and current relationship with" ACT, FSA, and disclose direct or indirect financial contributions over the last five years

Fortunately, this fall is not a good season for astroturfing.

First it became known that ACT | The App Association, which falsely claims to represent the interests of small app developers (and IoT product makers), receives the vast majority of its funding from Apple. It's not an app developers' association, but an Apple Association. It's the most cynical and appalling type of astroturfing when an organization claims to represent the victims of a large corporations' abuse of market power.

Then several influential Members of the European Parliament formally complained to the European Commission over violations of transparency rules by other organizations, including the so-called Computer & Communications Industry Association, which is actually a Cash & Carry Industry Association that Apple has recently joined.

And on October 24, ALJ Bryan F. Moore handed down a discovery order in the investigation of Ericsson's SEP complaint against Apple. The public redacted version became available only yesterday:

ITC Inv. No. 337-TA-1299, Order No. 18: Granting in Part Complainants' Motion to Compel and Commission Investigate Staff's Motion to Compel

This is the key passage:

Regarding the Fair Standards Alliance and ACT | The App Association, Apple shall explain its historic and current relationship with these organizations, and state the amount Apple pays or otherwise describe its “direct or indirect financial contributions or payments . . . over the last five years.” Apple shall further supplement its interrogatory response to respond to parts c-f of Interrogatory No. 131 regarding these parties. Apple shall further provide any non-privileged documents or communications exchanged between Apple, or Apple’s attorneys, and ACT | The App Association, the Fair Standards Alliance regarding the submitted public interest statements. Apple shall produce these documents and supplement these responses by October 31, 2022.

Interestingly, ALJ Moore found that Apple had reasonably complied with discovery requests regarding some other parties supporting its public interest arguments. He also determined that Apple did not have to make disclosures regarding parties it asked to file public interest statements, but who declined to do so. It's just with respect to ACT and the FSA that Apple was stonewalling.

It's actually fair and important to make a fundamental distinction between those two organizations. FSA is what it is, and doesn't pretend to be anything else, while ACT | The App(le) Association is an astroturfing operation.

Not only did Apple refuse to answer Ericsson's questions but even the Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff") had to bring a motion to compel Apple. The Staff reinforced its motion after Apple stated its opposition.

Apple had something to hide with respect to ACT, but by now, thanks to the Bloomberg article that revealed where ACT's funding actually comes from, the facts are clear. The ITC should ignore ACT's public interest statement in support of Apple. If anything, Apple could be sanctioned for misleading the agency by claiming that small app developers are concerned (ideally, another U.S. government agency would also look into how ACT benefited from the Paycheck Protection Program that was intended to keep small businesses afloat).

Mixed results for Apple and Ericsson: claim construction order in the investigation of Apple's countercomplaint

Apple is countersuing Ericsson in the ITC over three mmWave patents. ALJ Monica Bhattacharyya is presiding over that investigation (no. 337-TA-1302).

Yesterday she handed down her Markman (claim construction) order:

ITC Inv. No. 337-TA-1302, Order No. 18: Construing Certain Terms of the Asserted Claims of the Patents at Issue

In some context she agrees with Apple, in another with Ericsson. And she leaves various questions open with a view to the evidentiary hearing, which will take place in a month (December 5-9, 2022). With a view to who will win or lose, the order seems more inconclusive than other claim construction orders I've seen.

Last time I checked, Ericsson wasn't challenging those three mmWave patents through IPR (inter partes review) petitions with the PTAB, while Apple has filed dozens of PTAB petitions against Ericsson patents, ten of which have failed.

Apple is also countersuing Ericsson in Germany. The Mannheim Regional Court--which will conduct an Ericsson v. Apple SEP trial today (about six hours after this post)--heard the first one of Apple's countersuits last month, and it doesn't look like Apple will gain leverage from that one. It's not easy for Apple to find patents that Ericsson can be plausibly alleged to infringe, and there's a huge discrepcancy between the parties' exposure to patent infringement lawsuits simply due to unit volumes.