Saturday, January 28, 2023

Sony caught lying, possibly to EU antitrust chief Margrethe Vestager: Microsoft makes clearest public statement yet on 'parity' aspects of ten-year Call of Duty offer

Under merger laws as they stand, Microsoft's purchase of Activision Blizzard King (NASDAQ:ATVI) falls far short of what a regulatory agency could block: there is no theory of harm to competition itself. Sony is capitalizing on some antitrust enforcers' purely political concern over one of the world's largest tech companies buying one of the world's leading game makers. And in doing so, Sony appears to be lying to regulators and/or the media. That's a serious accusation, but Microsoft made it in public a few hours ago: Microsoft's communications lead Frank X. Shaw wrote on Twitter that he "hear[d] Sony is briefing people in Brussels claiming Microsoft is unwilling to offer them parity for Call of Duty if [it] acquire[s] Activision." According to the Microsoft spokesman, "[n]othing could be further from the truth":

That's really a clear-cut definition of parity that would be justiciable if ever necessary:

  • timing,

  • content,

  • features,

  • quality,

  • playability, and

  • any other aspect of the game.

I'm not totally surprised. In November I noticed an untruthful representation made by Sony in a UK filing: they said Microsoft was being investigated over its cloud software licensing practices, but no regulator has launched formal investigations (even if Sony had known something at the time that I didn't, by now it would certainly be public). There may or may not be investigations further down the road, but Sony claimed so just on the basis of someone having brought a complaint.

Mr. Shaw or his Brussels-based colleagues must have heard, directly or indirectly, from persons who were told by Sony that Call of Duty on the PlayStation might somehow be degraded--relative to CoD on the Xbox--when Microsoft is in charge. The word "people" indicates a plurality of persons, and that also makes sense because I believe Microsoft would not bring a public accusation of lying based on a single person's claim without having obtained corroborating information.

But what kind of "people" is Sony lying to?

It must be one or both of the following options:

The latter is more plausible than the former, but neither can be ruled out given that this revelation comes on the heels of that EC-Sony high-level meeting.

Journalists are more likely to confront Microsoft with what Sony said. There could have been conversations in which Microsoft told reporters that the deal was going to ensure total parity between the PlayStation and Xbox versions of Call of Duty, and then some journalists said "but Sony told us the opposite."

It isn't inconceivable, however, that what Sony said in the meeting with the EU's antitrust chief somehow leaked. More than ten years ago I had a meeting with one of Mrs. Vestager's predecessors at the Berlaymont (the EC's main building in Brussels) about another tech merger. The commissioner had one member of her cabinet and one of the two co-leads of the case team on her side of the table; we were also three. After the meeting, we talked to outside counsel for two other parties opposing the deal. Nothing leaked, but it was a small meeting and the fact that it took place wasn't reported in the media.

What weighs against the hypothesis of Sony having lied to Mrs. Vestager is that the Commission's Directorate General for Competition (DG COMP) presumably has a copy of the ten-year license offer in its case file. Anything Mr. Ryan said could be verified by just reading the proposed contract. However, Mrs. Vestager herself will probably not read an entire license agreement: she's in charge of competition enforcement and digital industry policy, and can't read each and every document from a merger case. So it's possible that Sony lied to her, hoping that even if the case team told her that the deal was clear on parity, some sliver of doubt would remain.

There can be no doubt that the ten-year license agreement came up during the Wednesday meeting. At this stage, where the European Commission was reported by MLex and others to be preparing a Statement of Objections (SO), Mr. Ryan was not going to give Mrs. Vestager a tutorial on what a video game console is. This is the stage where remedies matter (even if there is actually nothing to be remedied in the first place).

Here's the comment with which I shared the news of that meeting:

It's interesting that the original prediction of the SO being handed down this week did not pan out. I have no doubt that when MLex reported it, it was indeed the Commission's internal schedule, though anything can always change before a formal decision is adopted.

Wednesday would have been the day for the vote: that is the day the College of Commissioners meets every week except during the European Parliament's Strasbourg plenary weeks (which this week wasn't). Instead of a vote on the SO, what happened was Mrs. Vestager's meeting with Sony. It might have been Sony's last chance to convince her that the commitments offered by Microsoft do not satisfactorily address the issue.

Another thing happened on Wednesday. Politico's Samuel Stolton reported, based on information from four unnamed sources, that DG COMP is "planning to open an antitrust probe into Microsoft over its video and messaging service Teams."

There is obviously no factual link between the merger and that unilateral-conduct topic. It's a coincidence that both topics are on the agenda at around the same time. But it could be that the Commission will simply make a rational and pragmatic decision about the Activision Blizzard deal while deciding to investigate Salesforce subsidiary Slack's Office-Teams tying allegations. Again, it would be a coincidence, but it would show that the Commission is not giving Microsoft any preferential treatment, just that the Activision Blizzard deal simply doesn't raise issues, especially not when a hard and fast ten-year license agreement can serve as a de facto structural remedy.

On Thursday, Bloomberg reported that, according to a former U.S. antitrust official, the FTC rushed to its in-house court in December with its Activision Blizzard complaint in order to discourage the EC from striking an agreement with Microsoft. I don't know whether this is true (the Capitol Forum disagrees), but it could be. There definitely are interdependencies between regulatory processes, as evidenced by what Microsoft's counsel said at the first hearing in the FTC case and indicated by the postponement announced by the Commerce Commission of New Zealand. But Washington doesn't remote-control Brussels.

Bloomberg reporter Nick Turner jokingly called this an "America first" policy: first in a chronological sense (first to file), but obviously not in a policy sense. Prior to Lina Khan becoming FTC chair, it would have been unthinkable for a U.S. government agency to pursue the objective of derailing a merger U.S.-U.S. merger that raises no legal issues, and to try to use foreign competition authorities for that purpose.

I doubt that Mrs. Vestager, her aides and her services (i.e., DG COMP) were amused when they heard of that Bloomberg article. The FTC-DG COMP phone call that the article references undoubtedly took place; even the Capitol Forum does not dispute that fact. But the notion of an FTC in-house lawsuit serving to influence the Commission's independent decision on whether certain merger commitments are more than good enough to facilitate clearance is a bit of an insult. I'm sure the Commission won't be influenced either way: neither will it engage in a race to the bottom in terms of who is prepared to ignore the applicable legal framework to a greater extent than their peers, nor do I think the Commission will grant clearance just to prove its independence after the Bloomberg article.

In my observation, some of the reports on the EC-Sony meeting implied that it was a win for Sony to get that audience. But the opposite is possible: it could be that the meeting was held to give Sony one last chance to show why a justiciable PlayStation-Xbox parity commitment for what is an eternity in this industry should not be accepted. Sony may have failed to make that showing, and then there might not even be an SO. We will find out soon.

In other Microsoft-ActivisionBlizzard news, Sony filed a new agreed (with Microsoft) motion for an extension of time (PDF) to bring a potential motion to quash or limit Microsoft's subpoena. Further to the first extension, the deadline would have been on Friday (January 27). It has now been pushed back further to Wednesday (February 1). All that we can conclude from this is that the parties are still talking, but that they apparently find it hard to reach an agreement. Sony may have more problems with the truth than most people would have thought. They must have something to hide.

Microsoft's Twitter thread about the nature of the ten-year offer and Sony lying about it creates an interesting situation. Sony either has to contradict--which could lead to further public discussion, possibly even the publication of the entire agreement (with or without some of the commercially relevant numbers redacted)--or, by remaining silent, Sony fails to dispute that it lied. What makes all of this even more serious is that potentially Mr. Ryan himself was lyin'. But who--other than a liar--would not refute that kind of allegation?

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Wednesday, January 25, 2023

36 states, Epic Games, Match Group allege Google had 'culpable state of mind' when auto-deleting relevant Google-internal chat messages: Google obviously denies

It's getting really serious now in the Google Chats discovery dispute that is part of the Google Play Store antitrust litigation in the Northern District of California (the plaintiffs are Epic Games, Match Group (Tinder), three dozen state AGs, and some consumer class-action plaintiffs). For a recap:

The following screenshot shows the first part of the Google-internal policy at issue (Google Chat Retention Policy; click on the image to enlarge):

Judge James Donato approved the parties' proposed briefing schedule for the Google Chats discovery dispute. The two post-evidentiary-hearing briefs, answering specific questions about what to make of the evidence and what remedies to potentially impose, were due yesterday (Tuesday, January 24). By coincidence, that was the day the United States Department of Justice and eight state AGs filed a second Unite States et al. v. Google antitrust lawsuit (in that case, over ad tech), so some governmental plaintiffs dealt Google two blows on the same day.

Either side is allowed to file a response on Friday (January 27), and the next hearing over the issue will be held on Tuesday (January 31).

Given that there will be another round of briefing, it may be a bit early to predict the outcome, but I'll share my observations based on what I've read so far and what I infer from the court's case management decisions:

I doubt that Judge Donato will ultimately have no problems with Google's conduct. The company argues that it produced millions of documents and seeks to downplay the importance of what was not preserved, but it apparently can't deny the most important allegations the diverse group of plaintiffs has made.

It looks to me like this is now mostly about two questions:

  • The Latin term for the first question--whether Google acted with a culpable state of mind--is mens rea, but this here is not a criminal case. The plaintiffs jointly (which is rather meaningful) take the firm position that Google did act with a culpable state of mind. It did mean to deprive the plaintiffs of relevant evidence. Google disputes this and suggests that it had other reasons for auto-deleting internal chats, and points to long-standing practice.

  • If Google is held responsible, what should the consequences be?

    • The plaintiffs ask the court to instruct the jury that it's not going to see all the evidence that is relevant, and "should infer that Chat messages destroyed by Google would have been unfavorable to Google in this case."

    • Google says there wasn't really much prejudice (if any) to plaintiffs, and the remedy must be proportionate. It proposes--without actually submitting a specific wording--a "neutral" instruction. Google would then like to present evidence about the chat issue in hopes of persuading the jury that it acted diligently and correctly--and would then like to leave it to the jury to draw whatever conclusions from this mess.

There is no question that what the plaintiffs propose would substantially up the ante for Google in the jury trial in the fall. It's not like a "terminating sanction" that ends the debate: the jury is going to hear and see plenty of other evidence, and won't necessarily assume that the deleted chats prove everything wrong that Google says. But there are contexts in which an adverse inference instruction could tip the scales, such as the question of whether Google's "Project Hug" was about maintaining its Android app distribution monopoly through anticompetitive agreements with the likes of Activision Blizzard King. Some court filings related to Epic Games and Match Group's motion to amend the complaint referred to some evidence that "Project Hug" was about the Google Play Store more than anything else, and triggered by fear of Epic-style defections; I'll talk about that in another post one of these days. Now, if the jury additionally has to assume that Google executives may have said in internal chats that it was all about maintaining the Android app distribution monopoly, that would pave the way for a finding of a per se violation of Sherman Act Section 1. That's just one (but rather important) example.

Was Google's systematic deletion of chat messages so outrageous as to justify such punishment? Let's see what the responsive filings say before the weekend. In another disovery dispute (over a less problematic issue, though), Google came away unscathed in the District of Columbia last year.

I remember at least one mandamus petition by Google ahead of a major trial in the Northern District of California, and wouldn't be surprised if Google immediately appealed an adverse inference instruction to the Ninth Circuit (though appeals courts generally prefer to hear appeals of final judgments, which is why in 2020 the Federal Circuit rejected a mandamus petition over such sanctions), but we're not there yet.

Here are the two post-evidentiary-hearing briefs with all the (public) exhibits:

In Re Google Play Store Antitrust Litigation (case no. 3:21-md-2981-JD, N.D. Cal.): Plaintiffs' Responses to Minute Order Questions

In Re Google Play Store Antitrust Litigation (case no. 3:21-md-2981-JD, N.D. Cal.): Defendants' Brief in Response to the Court's Questions Regarding Preservation of Chat Messages

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Tuesday, January 24, 2023

DOJ and eight state AGs file antitrust lawsuit against Google, demanding divestiture of key ad tech assets

The United States Department of Justice has done today what media reports indicated yesterday: the DOJ, together with the attorneys general (AGs) of eight states (in alphabetical order: California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee, and Virginia) filed an antitrust lawsuit over Google's ad tech. The key remedy sought by the governmental plaintiffs is this:

"Order the divestiture of, at minimum, the Google Ad Manager suite, including both Google’s publisher ad server, DFP, and Google’s ad exchange, AdX, along with any additional structural relief as needed to cure any anticompetitive harm"

At this stage, I just wanted to share the complaint, but it will take me some time to form an opinion. I've heard a lot of negative things about the ad tech sector in general, and an ongoing EU antitrust investigation into Google's ad tech may give rise to a Statement of Objections this year, but to pursue a break-up as a remedy is extremely--or in some people's opinion, exceedingly--ambitious.

The new complaint was filed in the Eastern District of Virginia (which is well-known in the patent litigation community for its "rocket docket"), while the 2020 United States et al. v. Google case over Google's search engine practices is pending in the District of Columbia.

United States et al. v. Google ad tech complaint (case no. 1:23-cv-108, E.D. Va.)

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New Zealand regulator postpones Microsoft-ActivisionBlizzard decision from February 3 to April 28

The New Zealand Commerce Commission (NZ ComCom or NZCC) has pushed back its deadline for a decision on Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI) from February 3, 2023 (next week's Friday) to April 28, 2023.

This does not tell us anything about what the decision will ultimately be. It appears to me that in the current environment, New Zealand's antitrust agency prefers to wait and see what will happen in other jurisdictions, particularly with a view to potential remedies such as a ten-year Call of Duty license to Sony. The NZCC has now sort of synced its schedule with those of at least two other jurisdictions:

  • In November, the European Commission extended its deadline to April 11, 2023.

  • The UK Competition & Market Authority's statutory deadline is April 26, 2023.

  • Some other jurisdictions such as Australia and China are also widely expected to reach decisions either later this quarter or during the second quarter, but no precise dates are known.

I published a timeline chart two weeks ago, which I intend to update as soon as Judge Jacqueline Scott Corley of the United States District Court for the Northern District of California has set a new schedule for the briefing process concerning some class-action lawyers' motion for a preliminary injunction. In a week from today, Microsoft and the plaintiffs will propose a schedule (they may or may not agree on the same filing deadlines) further to a recent court order. Microsoft promised Judge Corley not to close the deal before March 31 at the earliest. That fact may also have been part of the consideration when the NZCC decided on the postponement announced today.

The competition authorities of four countries have already granted unconditional clearance to the transaction. In chronological order: Saudi Arabia, Brazil, Serbia, and Chile (where a survey of Call of Duty gamers produced some interesting results).

In the United States, Microsoft is entitled to discovery of third parties with relevant information--above all, Sony--both in the Federal Trade Commission's adjudicative proceeding as well as the private antitrust litigation in San Francisco. Yesterday a Sony motion became public. It indicates that Sony is obstructing Microsoft's request for documents and/or fact witnesses. On Friday (January 27), Sony will bring a motion to quash or limit Microsoft's subpoena unless some solution can be worked out in the meantime.

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Apple increased U.S. lobbying spend by 44% in 2022, steeper hike than any other Big Tech company--and engaged in astroturfing on top of it all

For my esteemed readers, Apple's lobbying activity is relevant with a view to mobile ecosystem regulation and/or (depending on a given reader's priorities) patent policy. CNBC reports that "Apple ramped up its lobbying spending last year, increasing its total for the year by 44% compared to 2021, according to public disclosures." For 2022, Apple disclosed a total D.C. lobbying spend of approximately $9.4 million. Is that new total--which still trails behind a few other Big Tech companies--a meaningful number? Absolutely positively not.

Let's please take all of those disclosures with a grain of salt. Total transparency in lobbying is utopian. A lot of what's going on in the industry is in a gray area and not strictly lobbying.

While those transparency rules capture only a subset of the actual spend, one can still infer something from relative changes, based on the--unfortunately unverifiable--assumption that a company's degree of transparency hasn't changed too much during the same period.

On the subject of plausibility, in Apple's case it's easy to see that 2022 was a critical year: Apple sought and managed to dissuade Congress from adopting the Open App Markets Act (OAMA). I still believe the OAMA can be resuscitated. In principle, even the Republican House majority acknowledges that something must be done to protect app developers against the abuse that is happening on a daily basis. But Republicans would rather not empower the federal government too much, especially not with Lina Khan at the helm of the FTC. In a Wall Street Journal opinion piece, former Attorney General William Barr (appointed by, but never in thrall to Donald Trump), argues against an overhaul of the antitrust laws, yet he is right that "case-by-case antitrust litigation alone won't rein in Big Tech" and that "a coherent response to the multifaceted problems caued by Big Tech's dominance" is needed.

In Europe, App Store-specific rules are going to make an impact, though in 2024 at the earliest: the EU's Digital Markets Act (DMA) takes time to be implemented, and in the UK, similar legislation often referred to as the DMU (the Competition & Market Authority's Digital Markets Unit, which will enforce the envisioned law) is also approaching fast (meanwhile, Apple is challenging--on a basis I consider reasonable--a market investigation reference by the CMA). But the U.S. is Apple's largest market, and since Apple unilaterally imposes on app developers a forum-selection clause in favor of the Northern District of California--where it then argues that it is immune under the Foreign Trade Antitrust Improvements Act (FTAIA)--there is another reason for which it is the single most important jurisdiction for Apple.

Enforcement in jurisdictions such as Brazil has the potential to make a difference. For example, I believe that South Korean lawmakers, who pioneered mobile app store legislation (which is separate from the antitrust enforcement action against Apple in the same jurisdiction), encouraged other legislatures (such as in the EU) to take similar steps. Also, we need initiatives--regulatory as well as legislative, and litigation, too--in all of the major markets because chances are that Apple will not stop its abusive conduct wherever it is not required to do so under the law. Google, by contrast, may at some point prefer to have one set of rules around the globe, though it's definitely not there yet.

Apple's U.S. lobbying spend is not limited to the federal level. They also had to fend off various state law initiatives concerning the App Store as well as the right to repair. The numbers CNBC's article refers to are exclusive of state-level lobbying.

But even at the federal level, Apple spends a whole lot more than that sub-$10M amount. ACT | The App(le) Association alone has a budget of about $10M per year and is largely funded by Apple as Bloomberg's Emily Birnbaum uncovered. Some of that is obviously spent at the state level and in Brussels. Nevertheless, it shows what is actually being spent on lobbying.

Some of the soft costs are also huge. Reportedly, Tim Cook had a number of meetings on Capitol Hill. If one looked at all of the hard and soft costs involved, his meetings alone have likely cost Apple more than the $9.4 million they reported.

It's time for some serious federal antitrust enforcement action against Apple. The DOJ may want to wait for the Ninth Circuit opinion in Epic Games v. Apple, which could be very helpful with a view to market definition, but whoever loses will appeal that decision to the Supreme Court and, potentially, petition for a rehearing en banc before doing so.

The DOJ is claimed to be about to file a second Google lawsuit, which will focus on ad tech (the first one will go to trial later this year). I'm not against that, but I'm not enthusiastic either because I don't like the optics of Google being sued for a second time before Apple gets slapped, whic his why I said the following on Twitter:

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Monday, January 23, 2023

Sony doesn't want to provide documents and/or witnesses Microsoft requested in Federal Trade Commission adjudicative proceeding regarding its Activision Blizzard deal

On Wednesday, I wrote that Sony may live to regret the market definition and theory of harm it espouses in connection with Microsoft's acquisition of Activision Blizzard King (NASDAQ:ATVI), and that "the top three priorities for third-party interrogatories and depositions will be Sony, Sony, and Sony." Today it turned out that Sony--despite all of its efforts to lobby regulatory authorities over the deal--is indeed uncomfortable with its obligations as a highly relevant third party to the Federal Trade Commission's in-house adjudicative proceeding as well as the private antitrust lawsuit in the Northern District of California that is going forward in parallel.

On Friday, Sony Interactive Entertainment made a filing with the United States Federal Trade Commission's in-house court that just became public:

The filing says Microsoft served a subpoena on Sony on January 12, which according to Sony did not name the proper recipient and was not properly served, so Microsoft revised it and served Sony again last Tuesday (January 16). Sony would have had only until January 20 (Friday) to file a motion to quash or limit, or to otherwise respond to, the subpoena. That was the date Microsoft stated in the original subpoena as well as in the revised one. Sony understands, however, that Microsoft is fine with giving Sony a one-week extension, i.e., until this week's Friday, January 27. Therefore, Sony brought a motion for an extension of time that it described as unopposed ("agreed motion").

The fact discovery cutoff date in that adjudicative proceeding is April 7. Some of the time between now and that cutoff date may have to be spent on the resolution over this discovery dispute.

The motion notes that "[n]egotiations between [Sony Interactive Entertainment] and Microsoft as to the scope of [Sony Interactive Entertainment]’s production and a discovery schedule are ongoing." This tells us two things:

  1. Microsoft has apparently requested documents from Sony that the latter--the only vocal complainer over the transaction in question--isn't willing to provide without a fight. Alternatively or additionally, there could also be disagreements over Sony executives whom Microsoft's lawyers would like to depose.

  2. As the motion notes, the purpose of the extension is for the two companies to try and work it out (if not in whole, then at least in part). Should those efforts fail to result in a complete agreement on the scope of the discovery Microsoft's lawyers can conduct of Sony's business, Sony apparently intends to file--on Friday--a motion to quash or limit the subpoena. In that case, we'll get an idea as to what parts of Microsoft's subpoena Sony is unwilling to comply with.

Microsoft is the first-named defendant to the FTC's in-house complaint. It is part and parcel of Microsoft's fundamental rights as a defendant to be allowed to take discovery of third parties. All the facts must be put on the table in order for Administrative Law Judge (ALJ) D. Michael Chappell in Washington (and soon also United States District Judge Jacqueline Scott Corley in San Francisco, at some point with the assistance of a jury) to be able to make the right decisions.

If Sony doesn't like that, it can always cut things short by accepting the ten-year Call of Duty license that Microsoft has publicly offered. Without a single vocal complainer left, competition authorities would presumably not be interested in attempting to block the deal.

Sony's own business model is "fair game" for discovery in this context. Sony is essentially alleging that Microsoft would do with ABK's games what Sony is doing all the time with other games: Sony acquires studios to have more first-party titles, and enters into exclusive agreements over third-party titles or particular features of such titles (for example, Call of Duty - Modern Warfare II comes with various "exclusive benefits" for PlayStation gamers).

In connection with Microsoft-ActivisionBlizzard, Sony is just a third-party complainer and not directly exposed to any risks. But Sony finds itself on the receiving end of antitrust actions from time to time, such as the PlayStation You Owe Us class action in the UK. Some of Sony's dirty linen may get washed in public when those Activision Blizzard cases go to trial--and come back to haunt Sony.

Lawyers from the Cleary Gottlieb firm--the most senior one of whom appears to be D. Bruce Hoffman, a former Director of the FTC's Bureau of Competition--brought the motion on Sony's behalf. Cleary also made a filing for Sony with the UK Competition & Markets Authority (CMA). I have a lot of respect for that firm. I'm not surprised Sony retained Clearly, whose antitrust practice group has been adverse to Microsoft on various occasions, even including an EU case about 20 years ago. It's just that even the best lawyers can't make a case out of thin air, and can't help their clients avoid all of its discovery-related obligations.

Given that Sony doesn't want all of the facts about its own content-centric strategy to be discussed in public trials, and that there are no signs of Sony ever having reacted constructively to Microsoft's ten-year licensing offer, I strongly suspect that we will see a motion to quash or, more likely, limit the subpoena. The scope of that motion may, however, very well be narrowed a bit by the talks that are being held these days.

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Nokia announces 5G patent license agreement with Samsung: details unknown, 'multi-year period'

Nokia just announced a new patent cross-license agreement with Samsung. The previous agreement expired "at the end of 2022" according to Nokia's press release; the new contract term starts on January 1, 2023, and "Samsung will make payments to Nokia for a multi-year period."

The last announcement of a Nokia-Samsung renewal was about four years ago. Prior to that one, the parties agreed to have the financial terms set by an arbitration panel (which is what Samsung recently agreed upon with InterDigital). So far, Nokia and Samsung have always been able to avoid infringement litigation.

Nokia's press release contains the following quote from Jenni Lukander, President of Nokia Technologies:

"Samsung is a leader in the smartphone industry, and we are delighted to have reached an amicable agreement with them. The agreement gives both companies the freedom to innovate, and reflects the strength of Nokia’s patent portfolio, decades-long investments in R&D and contributions to cellular standards and other technologies."

In September, Mrs. Lukander gave a presentation in New York City, explaining Nokia's IP strategy (particularly also its growth strategy) to financial investors and analysts. She said that Nokia was facing the need to renew various license agreements in the fiscal quarters ahead. Certainly Samsung was a major item on the list, and that one has been crossed off in a positive way for Nokia.

Samsung is known to negotiate hard, but constructively. It is interesting to see that the parties kept negotiating for another three weeks after the expiration of the previous agreement instead of resorting to litigation. By contrast, Nokia sued OPPO a couple of days after the previous license agreement expired in mid-2021.

In December it became known that Samsung recently (and silently) extended its patent license agreement with Huawei, a company that has become a net licensor without even treating patent licensing as a strategic business area.

What is unknown is when Nokia's current patent license agreement with Apple will expire. From industry circles and analysts I've heard different views. According to some people, the agreement would have expired last summer, but Nokia's numbers don't suggest that Apple stopped paying. Currently, the most likely dates of expiration would be the end of this year or the middle of next year, given that the last renewal was in mid-2017 (and the related agreement had expired at the end of 2016).

The biggest renewal problem that Nokia is facing as we speak is the situation with OPPO. Nokia has recently lost more decisions than it won. Where Nokia has leverage, OPPO has left the market; where OPPO sells large numbers of phones, Nokia lacks leverage so far. Nokia accuses OPPO of hold-out, and OPPO gave Juve Patent the following quote:

"OPPO has committed to enter into a licence with Nokia on the FRAND terms that the Chongqing court will set in the ongoing rate setting proceedings between the parties. Nokia has so far been unwilling to renew its licence with OPPO on fair and reasonable terms. However, OPPO hopes that Nokia will now fully engage with the Chongqing proceedings and confirm that it will honour its FRAND undertaking by similarly committing to enter into a licence on the terms set, in order that this dispute can be brought to an end."

Nokia is also embroiled in litigation with vivo, another Chinese smartphone maker that has a limited presence in Europe and largely serves other geographic markets.

The terms on which Nokia agreed with Samsung are unknown, and Samsung's gadgets have a higher average price than OPPO's and vivo's products, which is why I can't tell whether the agreement announced today will impact Nokia's negotiations with OPPO and vivo, such as the Chinese FRAND determination case that is underway in Chongqing.

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Sunday, January 22, 2023

Burgeoning IP and antitrust jurisdiction: Brazil's Superior Court of Justice allowed Ericsson to enforce preliminary injunction against Apple over FRAND-pledged standard-essential patent

The dispute between Ericsson and Apple that got settled last month has put two Latin American jurisdictions on the standard-essential patent (SEP) litigation map:

Here's the original decision (in Portuguese):

December 6, 2022 ruling on internal appeal ("agravo interno") in Ericsson v. Apple by Brazil's Superior Tribunal de Justiça (unanimous decision by Reporting Judge Antonio Carlos Ferreira, Presiding Judge Raul Araújo, and Judge Marco Buzzi)

A recording of the STJ ruling is available on the court's YouTube Channel (starting at 29:39).

Little was known about the Brazilian proceedings during the course of last year. About a year ago, I reported on the fact that some PI motion(s) had been filed, and followed up when Apple mentioned in a U.S. court filing that Ericsson was also seeking a PI against a Brazilian Apple distributor.

The fact that the Brazilian STJ decision was rendered three days prior to the global Ericsson-Apple settlement is certainly interesting, but there also was a Texas trial underway, so I believe it was one relevant factor that informed the parties' positions (but obviously not the only one). Looking beyond this particular dispute, it is fair to say that Latin America is an increasingly interesting continent for technology law (IP and antitrust), and Brazil is an up-and-coming jurisdiction for technology disputes:

  • The reasoning behind the Brazilian STJ's decision was that Apple should not be allowed to continue to infringe Ericsson's patents without paying any royalties. A court in Rio de Janeiro had granted a PI over a 5G patent (Reporting Judge: Claudio Dell'Orto), requiring Apple to either leave the Brazilian market or to make payments in accordance with the prior global patent license agreement (apparently $200 million per year). But on a Sunday on which Brazil's most recent presidential elections began (October 2, 2022), enforcement was stayed. Licks Attorneys--the firm that according to my research has represented patent holders in all (23) information and communications technology patent infringement cases in Brazil so far--kept on fighting and got an unusually soon hearing date (December 6).

    The key rationale on the STJ's part was that there is no reason why PIs should not be granted over SEPs (with the FRAND pledge being deemed a matter of contract law that does not weigh against injunctive relief), and to encourage negotiations. Ericsson never wanted the Brazilian courts to set a royalty: it sought to stop infringement until a new agreement would be struck.

    Under the STJ's decision, Apple would not have been required to make royalty payments based on its global use of Ericsson's patent portfolio, but would have had to compensate Ericsson for the use of its patents in Brazil (to the tune of $3 per device, with the concomitant inconvenience of having to make royalty reports). In other words: no more hold-out. Damages owed at the very end of infringement litigation were not considered an adequate remedy.

    That reasonably IP-friendly judicial philosophy contrasts with what you find in some other jurisdictions. For instance, a Dutch court denied Nokia a PI against OPPO, and the same judge had previously denied Ericsson one against Apple even over a non-SEP, based on a balancing of the hardships.

    That said, it's not a cakewalk for plaintiffs: a PI is granted only if there is a strong prima facie showing of a likelihood of success on the merits. The threat of an injunction does, however, bring infringers to the negotiating table.

  • On Thursday I reported on a decision by Brazil's antitrust authority (CADE) to open formal investigations of Apple's App Store terms and policies further to a complaint by MercadoLibre (Mercado Livre in Portuguese) and another regional e-commerce company, Clique.

  • In October, I was favorably impressed with CADE's well-reasoned decision to grant unconditional clearance to Microsoft's acquisition of Activision Blizzard.

Getting back to Ericsson v. Apple, there was also a 4G PI that likely would have become enforceable in the wake of the STJ decision in the 5G case. And on the day of the STJ decision (December 6), a Rio de Janeiro district court entered a PI against Apple over two non-SEPs.

Three other information and communications technology patent holders also obtained PIs in Brazil: DivX (against Netflix and Amazon), Philips (against TCL), and G+ Communications against Samsung. In a procedurally unusual case, Disney sought a declaratory judgment of non-infringement against DivX (apparently out of fear of being enjoined there), but a settlement fell into place shortly thereafter.

An injunction that VoiceAge EVS obtained against HMD in Brazil was mentioned in a post on that dispute last year.

Sophisticated patent holders increasingly bet on Brazil, and I have a hunch that it won't be long before this blog will learn about the next interesting complaint or decision in that jurisdiction.

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Apple argues foreign app developers cannot bring antitrust lawsuits ANYWHERE on Earth: developer agreement requires suing in California, but FTAIA allegedly immunizes Apple

In the previous post I acknowledged that Apple has a reasonable basis to challenge the UK Competition & Market Authority's market investigation reference over mobile browser engines and cloud gaming. But in some other respects, Apple is the Evil Empire, extremely unreasonable, and acts in highly abusive ways.

A class-action lawsuit brought by French publishers over the way Apple's App Store terms and policies affect them puts Apple's utter unreasonableness on full display. Apple unilaterally imposes a forum-selection clause on app developers: Northern District of California. But when foreign developers actually sue there, as do those French media companies, Apple argues that the Foreign Trade Antitrust Improvements Act (FTAIA) bars such claims.

As Epic Games CEO Tim Sweeney once mentioned in a tweet I haven't been able to find again (search is an area in which Twitter has huge room for improvement, and using Google to search Twitter is also suboptimal), Apple's position taking in different jurisdictions often amount to denying liability under the antitrust laws of any jurisdiction. Epic filed lawsuits in the U.S. (where a Ninth Circuit panel is now working on its decision), UK, and Australia, and Apple then moved to dismiss or stay the foreign cases in light of the California action, but in California argued that any remedies could not apply to foreign markets.

If one thinks it through, Apple's positions across jurisdictions are just another expression of the neofeudalist attitude of an arrogant and abusive organization that knows no shame: the tyrannical dictator forces developers to sign agreements that bar them from suing anywhere other than in the Northern District of California, and then tells foreign developers serving foreign target markets that they have no rights under the antitrust laws of the United States "because FTAIA".

In the end, only entities who are not bound by Apple's unilaterally-imposed developer agreement would be able to bring antitrust cases in foreign jurisdictions: competition authorities and, maybe, consumers.

Heads I win, tails you lose. Or: What's mine is mine, what's yours is mine, too. That behavior, in and of itself, constitutes an abuse.

The case (Société du Figaro et al. v. Apple) was already filed in August (in the Northern District of California), Apple responded with a motion to dismiss in October, and as I suggested at the time, the complaint was subsequently amended:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), December 2, 2022: Plaintiffs' First Amended Class Action Complaint for Violations of the Sherman Act, California Unfair Competition Law, and California Cartwright Act

On Friday, Apple renewed its motion to dismiss:

Société du Figaro et al. v. Apple (case no. 4:22-cv-4437-YGR, N.D. Cal.), January 20, 2023: Defendant Apple Inc.'s Motion to Dismiss Plaintiffs' Amended Complaint

Apple describes "plaintiffs' purely foreign claims" as "[t]ransactions between French developers and foreign consumers, made on foreign App store storefronts, in foreign currency, and through a foreign (non-party) Apple entity" as "foreign nonimport commerce, not subject to any FTAIA exception."

Apple says "short shrift" should be given to the French publishers' argument involving the developer agreement's U.S. choice-of-law provision. Apple points to a Second Circuit decision (Lotes Co. v. Hon Hai Precision Industry, the latter being Foxconn, Apple's largest contract manufacturer) where the holding was that a party to such an agreement "remain[s] free to argue that, under the FTAIA, the Sherman Act does not apply to or regulate the conduct at issue in this case."

The 2nd Cir. decision is not binding in the 9th Cir., and therefore not on Judge Yvonne Gonzalez Rogers. One can reasonably disagree with it. But this is just one of several arguments made by the French publishers as to why the FTAIA does not bar their U.S. federal lawsuit with respect to foreign sales.

Those companies also offer their apps to U.S. consumers, but presumably their U.S. revenues are minuscule compared to the ones in France and other French-speaking countries and regions. So the FTAIA would not dispose of the entire case, but if Apple prevailed on its FTAIA argument, it would render the litigation commercially insignificant.

I plan to comment on the other elements of Apple's motion to dismiss as the briefing process unfolds. Apple really doesn't want to deal with litigation over its pernicious App Tracking Transparency (ATT) framework, and argues that the French publishers still don't get market definition right and, in any event, lack standing to challenge ATT. As for the market definition underlying the publishers' App Store claims, Apple expressly reserves the right to oppose their single-brand market definition, but does not raise that question at the motion-to-dimiss stage. What I think may be the focal point of the discussion at the motion-to-dismiss hearing is Apple's argument that the settlement in the Cameron v. Apple developer class-action litigation resolved the key issues, and now the same law firm (Hagens Berman) is suing Apple again, but with different plaintiffs (and now even challenging the reduced 15% app tax).

I'm one of those developers who consider the Cameron settlement's terms extremely unsatisfactory. The French publishers' case has more potential because that's a group of reasonably large and sophisticated plaintiffs who are not going to settle for a Cameron-style set of terms.

By the way, one developer wrote a letter to Judge YGR earlier this month, complaining that even though he's clearly a member of the class and is entitled to "a substantial sum" per the outcome of the Cameron litigation, he was not contacted about the settlement:

Cameron et al. v. Apple Inc. (case no. 4:19-cv-3074-YGR, N.D. Cal.), January 6, 2023: letter from Lionheart Software LLC

It's unknown whether this was just an oversight or clerical error affecting a single developer or whether there's a more fundamental problem.

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Apple apparently argues 'shall' means 'must' in appeal of UK antitrust authority CMA's decision to investigate mobile browsers and cloud gaming based on allegedly elapsed deadlines

On Friday the UK Competition Appeal Tribunal (CAT) published a summary of application (PDF) of Apple's January 18, 2023 appeal of the November 22, 2022 decision of the UK Competition & Markets Authority (CMA) to make a market investigation reference (MIR) into the markets for mobile browsers (particularly browser engines) and for the distribution of cloud gaming services. The court also announced that the initial case management conference would be held on Tuesday, January 24.

Apple's appeal on procedural grounds is not unreasonable, and I say so even though I

For as much as I'd like to see the CMA fend off this challenge to its MIR decision, this appeal could go either way.

The court summarizes Apple's sole ground of review ("... the MIR Decision [...] is ultra vires") as arguing that none of the following statutory requirements have been met:

"Apple contends that in circumstances where the CMA has published a Market Study Notice ('MSN'), sections 131A and 131B of the Act require that (i) any proposal for a market investigation reference must be made, and consultation on that proposal must begin, within six months of the date of the publication of the MSN; (ii) the CMA is required to issue its final report on the market study within 12 months of the MSN; (iii) the final report must state any decision to make a market investigation reference pursuant to section 131 of the Act, the reasons for that decision, and such information as considered necessary to facilitate an understanding of that decision; and (iv) where a market study report contains a decision to make a market investigation reference, the reference must be made at the same time as the publication of the final report." (emphases added)

In the quoted passage, I highlighted the words that indicate hard and fast deadlines.

If that statutory interpretation is right, then it has to be applied to the following facts summarized by the court:

The CMA

  • launched a mobile ecosystem market study on June 15, 2021,

  • gave notice of a decision not to make a market investigation reference on December 14, 2021 (and on the same day published an Interim Report that mentioned the decision not to investigate further),

  • on June 10, 2022 published a Final Report, "taking account of representations made to it after the [Interim report] and after the CMA itself having conducted further analysis" and launching a public consultation as to a potential MIR, and

  • made the MIR decision on November 22, 2022.

So let's compare the deadlines based on Apple's interpretation to the actual dates of the procedural events:

Procedural
milestone
Deadline
according
to Apple
Actual
date
Market study noticeN/AJune 15, 2021
Final report on market studyJune 14, 2022June 10, 2022
Market investigation referenceJune 14, 2022November 22, 2022

The dispute about whether the deadline for the final report on the market study was met turns on what one believes to be indispensable elements of that report. In the court's summary, Apple argues that the final report must state any MIR decision, the reasons for that decision, and further information that facilitates an understanding of the decision. Here, the final report came first, and the MIR came later.

The statute (Sec. 131B of the Enterprise Act 2002) consistently uses the term "shall" with respect to what the CMA is supposed to do ("shall ... within", "shall ... contain").

So what shall we make of that? Has Apple "shall"-shocked the CMA or is its whole argument an empty shell?

The Bar and Bench website says:

"Shall is one of the most corrupted and litigated words in the language of the law. Over 100 pages in the encyclopaedia of Words & Phrases are devoted to a summary of more than 1,300 precedents from common law jurisdictions interpreting shall! This misuse or abuse of shall extends to legislation and private legal documents in equal abundance."

Apple is not the first party to litigate over the meaning of "shall" nor will it be the last.

Cornell Law School's Legal Information Institute first describes "shall" as a pretty strict term in the United States:

"Shall is an imperative command, usually indicating that certain actions are mandatory, and not permissive. This contrasts with the word “may,” which is generally used to indicate a permissive provision, ordinarily implying some degree of discretion."

But it points to precedent from Illinois according to which it really depends on the context:

"[W]hen used in a statute, the term ‘shall’ does not have a fixed or inflexible meaning and may be given a permissive or directory interpretation depending on the legislative intent. If a statutory provision using the term ‘shall’ merely directs a manner of conduct to guide officials or is designed to secure order, system, and dispatch in proceedings, it is generally 'directory'."

The law firm of Allen & Overy reported on a Court of Appeal (for England & Wales) decision acccording to which "shall" is merely an expression of the parties' intention at the time of contracting.

Another British law firm, Ashurst (which represents UEFA in the European Superleague Company EU antitrust case, successfully so far), published a highly instructive overview of how UK market studies and market investigations work, and appears to give the statute a similar interpretation as Apple's counsel from Gibson Dunn does:

"Unless the CMA has issued a market study notice, it is not bound by statutory time limits nor does it have any of the compulsory information gathering powers when conducting work under its general review functions."

Put differently, if a market study notice was issued (such as in this case), the CMA would be bound by statutory time limits according to Ashurst.

That is a defendant-friendly interpretation that presupposes a legislative intent of giving the targets of a market study legal certainty after hard and fast deadlines.

It's "legit" for Apple to ask the Competition Appeal Tribunal to rule on this question of statutory interpretation, and clarification would indeed be helpful. That said, the iOS browser engine monopoly must be broken and all cloud gaming providers should be free to offer their services to iPhone and iPad users without having to submit each game to Apple's arbitrary app review and being subjected to an excessive app tax.

A market investigation lowers the hurdle for the CMA: it doesn't have to prove wrongdoing, just adverse effects on competition (abbreviated as AEC, which in other antitrust jurisdictions, however, stands for "as efficient competitor") and has greater powers to impose remedies. Otherwise a conventional antitrust investigation of Apple's conduct would be required, and Apple would have to be shown to have abused a dominant position in the relevant market. Apple would like to deprive the CMA of its more powerful tool, and essentially argues that the CMA has deprived itself of that tool by failing to abide by the applicable statute.

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Friday, January 20, 2023

Microsoft promises U.S. court not to close Activision Blizzard deal before March 31; judge sets schedule accordingly instead of ordering formal stay; preliminary injunction hearing on March 23

Lawyers for Microsoft have formally made the commitment to a U.S. federal judge that their client would not consummate the purchase of Activision Blizzard King (NASDAQ:ATVI) before March 31, 2023 at the very earliest, which must be attributable to the fact that competition regulators in several key jurisdictions have not yet cleared the transaction and that at least one of the necessary approvals is still going to be outstanding in late March.

In a recent court filing, Microsoft said the UK review deadline of April 26, 2023 was sufficient in its own right to ensure that the deal would not close before late April. But the fact that a competition authority has until a certain date to render a decision does not mean that it could not grant clearance anytime, especially if an agreement on specific commitments by the acquiring party paves the way for a consent decree. Microsoft's stipulation not to consummate the transaction before March 31 is, however, legally binding. In a totally hypothetical scenario in which all regulators would greenlight the deal tomorrow, Microsoft could go back to the court and ask for a new schedule under the changed circumstances, but that does not appear likely:

MLex reported yesterday that the European Commission will issue a Statement of Objections (SO) next week, and while they are talking about remedies, the EC won't grant clearance based on commitments by Microsoft until some time after the SO. MLex also believes that the UK Competition & Markets Authority (CMA) won't accept commitments before its provisional findings, which are slated for later this month or early February. So there are some procedural milestones between now and early February, including that Microsoft will have to respond to the SO and the provisional findings, and it takes time to formalize any commitments even after a philosophical agreement. In particular, competition authorities like to conduct a market test, meaning that they ask other market actors. In this case, Sony is the only vocal complainer, though it's actually complaining of its own business model and will increasingly find itself on the receiving end of public and private antitrust enforcement as a result of its opposition to Microsoft-ActivisionBlizzard. If Sony gave competition authorities negative feedback to any proposal, though a hard and fast 10-year license agreement would be tantamount to a structural remedy, the regulators would want to explain in a formal clearance decision why it was not reasonable for Sony to say no.

All of that takes time, and that's why Microsoft's lawyers apparently were in a position to tell the United States District Court for the Northern District of California that the deal foreseeably won't close before the last day of March. The deal has a formal deadline a few months later, which the parties could extend (but it would require some negotiation).

This is the procedural context of the "not before March 31" commitment:

Judge Jacqueline Scott Corley, who is based in San Francisco, held a hearing yesterday on Microsoft's motion to stay a so-called gamers' (more accurately, lawyers') lawsuit over the transaction. A dial-in option for the general public was not offerered, but will be available for the February 2 Status Conference in the same case.

In my commentary on the plaintiffs' opposition to the motion to stay, I mentioned the discretion that federal judges enjoy in such situations. It's not binary (grant or deny), but there is wide latitude in how to manage the case. Formally, the motion was denied, but practically, it has decelerated that private antitrust action--which just piggybacks on the FTC's in-house lawsuit--to a certain degree.

The motion for a preliminary injunction will be heard on March 23. Before the case was reassigned to Judge Corley, that motion hearing was scheduled for February 10. Upon reassignment, Judge Corley vacated that one and scheduled a case management conference for March 23. At that point I wrote:

"... I doubt that the PI hearing will be held on an earlier date than the initial case management conference (March 23). Maybe they'll both take place on the same day."

Bingo. The PI hearing has indeed been scheduled for March 23, 10 AM Pacific Time. By January 31, the parties must propose a briefing schedule for the PI motion (under the original one, Microsoft's opposition brief would have been due today, January 20), and briefing (including an optional but expected reply brief) must be completed by March 9, giving the court two weeks to read the briefs in advance of the March 23 PI hearing. After the hearing, the court then has a week to rule on the PI motion before the earliest possible closing date based on yesterday's stipulation--and it may actually have even more time if at least one of the prerequisite regulatory approvals is ensured to take longer. The question may very well come up at the PI hearing, and maybe Microsoft will then do the court the favor of stipulating to a slightly later date than March 31 based on what will be known by then about the regulatory proceedings in various jurisdictions.

In addition to a PI briefing schedule, the parties' January 31 filing will also have to outline a discovery plan. It will formally be a joint statement, but my guess is that they won't be able to agree on much more than the briefing schedule and will have divergent views on how and when to go about discovery.

The FTC has so far not seen a need to seek a PI. Its in-house adjudicative proceeding does not prevent the merger from closing.

This is the order on the motion to stay and the next deadlines and hearing dates:

DeMartini et al. v. Microsoft Corp., case no. 3:22-cv-08991-JSC (N.D. Cal.): Order Following January 19, 2023 Hearing

Subsequently, court staff set a new deadline (for the Joint Status Report due by January 31) and a new Status Conference (February 2, 1:30 PM Pacific Time, to be held via Zoom). After that one, I'll update my timeline chart.

In the meantime we'll hear from Brussels (according to MLex) and possibly also London.

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Thursday, January 19, 2023

Dutch court denies Nokia motion for preliminary injunction against OPPO over two standard-essential patents previously deemed valid and infringed

In the earth-spanning patent dispute between Nokia and OPPO (see my battlemap, which visualizes cases pending on three continents), OPPO has recently had more reasons to celebrate than Nokia (such as in Indonesia: 1, ), with the exception of a UK infringement ruling that entitles Nokia to a London FRAND trial.

Today the Rechtbank Den Haag (The Hague District Court) published a January 11 order denying a Nokia motion for a preliminary injunction against the Dutch legal entities that distribute OPPO and OnePlus smartphones in their country.

Interestingly, the issue here was not whether the patents-in-suit are valid or infringed. It was about FRAND and the balance of hardships.

The procedural backdrop is that a German OPPO entity--after an unfavorable Mannheim judgment--brought a declaratory judgment action in the Netherlands over two Nokia SEPs from the same patent family: EP2981103 and EP3220562 on an "allocation of preamble sequences.". The purpose was presumably to win a finding of invalidity that might have persuaded the Karlsruhe Higher Regional Court to stay the enforcement of the injunction. In order to get that technical decision at the earliest opportunity, the German OPPO entity even waived its FRAND defense as that part would have delayed the proceedings.

Nokia counterclaimed and prevailed in that Dutch case. Technically, OPPO was enjoined, but only a German legal entity as opposed to the Dutch distribution companies that sell OPPO and OnePlus devices.

In order to make an actual impact on OPPO and OnePlus's Dutch business (though the volume of OPPO and OnePlus phones sold in that market may be small anyway), Nokia filed a motion for a preliminary injunction against the companies actually operating in the Dutch market, pointing to the merits decision from the case OPPO had started.

But in that new proceeding, OPPO did raise a FRAND defense.

Seven months ago I wrote that "patent holders should forget about Dutch courts for preliminary injunctions" in light of an Ericsson v. Apple non-SEP decision by Judge Edgar Brinkman, which was almost eBay-like: the harm to Apple outweighed the one to Ericsson in Judge Brinkman's opinion.

Nokia is a courageous litigant. It takes its chances and can deal with potential losses. Not only with the benefit of 20/20 hindsight it appears bold to seek a PI over a SEP from a judge who last year denied one over a non-SEP on balance-of-hardship grounds, given that you can't just tell a SEP implementer to work around. I'm sure Nokia knew that it was not going to be easy.

The parties made some FRAND arguments according to the ruling. Nokia described the OPPO corporate group as a whole as an unwilling licensee engaging in hold-out, while OPPO claimed to have taken reasonable positions and accused Nokia of hold-up.

Judge Brinkman held that the complexity of the FRAND defense (though he was well aware of what his colleagues in Germany had concluded) didn't lend itself to a PI proceeding, and he said Nokia's business model at least with respect to SEPs is just about collecting royalties. Judge Brinkman noted that Nokia could still get paid later on, such as through a damages award, and found that OPPO had provided sufficient collateral. Bycontrast, OPPO would have been forced out of the Dutch market if he had entered a PI. Therefore, Judge Brinkman did not see that the requirements for preliminary relief were met.

Nokia had a fallback position in the form of a conditional injunction that would have been in force unless and until OPPO would have accepted an accelerated arbitration procedure for making a global FRAND determination (and on top OPPO would have had to make interim payments based on Nokia's royalty demand).

Paragraph 4.15 is probably the one Nokia is least happy about: it suggests that OPPO would also prevail in a full-blown main proceeding if Nokia took the same positions.

The Dutch court did not reach FRAND per se, nor did it elaborate on the technical arguments after having concluded that Nokia was not entitled to a PI.

In other Nokia-OPPO news, a spokesman for the Mannheim Regional Court has confirmed to me that an OPPO v. Nokia trial over EP3672346, which is valid according to a preliminary opinion by the Opposition Division of the European Patent Office, is slated for June 6, 2023.

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Call to vote: FOSS Patents article nominated for Antitrust Writing Awards by Concurrences and George Washington University

I am humbled and honored to announce that one of my articles has been nominated for Concurrences and George Washington University Law School's 2023 Antitrust Writing Awards. As a result, I would be grateful if you could vote for the article in case you believe it deserves your support.

The article first appeared here on FOSS Patents, and was republished by Concurrences under the following headline: The US Court of Appeals for the Fifth Circuit Holds That Standard Essential Patent Holders May Choose to Only License End-Product Makers (Continental / Avanci).

You can find the "VOTE FOR THIS ARTICLE" box below the abstract on the following page:

https://awards.concurrences.com/en/awards/2023/business-articles/the-us-court-of-appeals-for-the-fifth-circuit-holds-that-standard-essential

Whoever may win, this nomination has already exceeded my expectations. By now, FOSS Patents is indeed at least as much of an antitrust blog as it is an intellectual property blog. FRAND-pledged standard-essential patents (SEPs) are at the intersection of both fields of law. But I also comment on competition cases that are not centered around patent licensing and enforcement, such as in my previous post on the opening of a Brazilian antitrust investigation into Apple's App Store practices. I am, of course, thinking about the best approach for the future to these two topics and have some ideas, but it's too early to share them. Again, your vote will be much appreciated, provided that you feel the article provided a useful summary of the Fifth Circuit panel opinion in Continental v. Avanci. By now that dispute is over as Conti refrained from seeking cert.

The voting period will end on March 14th.

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