Ford Motor Company settles seven patent disputes in one go by taking Avanci license to 49 SEP portfolios: Munich injunction may have been major catalyst, but just one factor

Precisely four weeks after Avanci announced a 4G standard-essential patent (SEP) license agreement with General Motors, the patent pool firm has just announced a license deal with Ford. Both companies are "Motown" icons, and between the two of them make about 10 million cars (GM: 6 million; Ford: 4 million) per year. But the backdrop of those license agreements couldn't be much more different. GM signed without any prior litigation. By finally taking a license, Ford Motor Company puts a number of patent infringement cases behind it: seven out of Avanci's 49 licensors were asserting patents in the District of Delaware, the Eastern District of Texas, and in Munich.

As a result, Avanci has now licensed 41 automotive brands and 65 million vehicles. All well-known U.S. car makers with the sole remaining exception of Chrysler (a Stellantis brand) are Avanci-licensed. It's never been officially confirmed for Tesla, but it would not just be a statistical anomaly--more like paranormal--if several Avanci licensors had withdrawn their U.S. and German cases against Tesla near-simultaneously as a result of bilateral agreements (and no other Avanci licensor has since filed suit against Tesla).

I'll share my observations on two aspects of this announcement. First, on the role that the recent Munich injunction may have played. One should neither under- nor overrate it. Second, I'll comment on the different schools of thought in the automotive industry with respect to Avanci's one-stop licensing offer.

Munich court makes patent holders money--but Ford had any number of reasons to sign

Just last week, it turned out that Presiding Judge Dr. Matthias Zigann (Munich I Regional Court, Seventh Civil Chamber) had told a mobile device maker that implementers must "promptly" seek a SEP license upon receiving an infringement notice--lest they be enjoined. While Ford didn't act quite as swiftly as Judge Dr. Zigann recommends, it is interesting to see today's announcement less than two weeks after Judge Dr. Zigann and his panel had entered the aforementioned injunction in IP Bridge v. Ford (one of various recent SEP wins for the Wildanger firm).

As a result of Ford's Avanci license, that injunction won't ever have to be enforced. When the news broke (on this blog first), Ford's stock price went down by about 3%--an overreaction in my view as it was always clear that Ford could--and at some point responsibly would--take an Avanci license. Chances are that this caught the attention of the company's C-level execs.

Presumably the Munich injunction was a catalyst more than anything else. It would never have come down if Ford had decided at the outset to resolve this situation through licensing rather than to provoke litigation through continued infringement. At no point was there a clear endgame for Ford (other than taking the pool license). How was protracted litigation going to save the company money? Did they expect to get a better deal by negotiating bilaterally with roughly four dozen Avanci licensors? They faced dozens of patent assertions in the U.S. alone, and additional injunction were looming large in Germany.

GM's decision to avoid such litigation altogether may also have been part of the consideration: that's what they call benchmarking.

Munich will continue to be an automotive patent litigation hotspot. For patentees seeking leverage from injunctions, it's a great venue. I guess a number of SEP holders will take note of IP Bridge v. Ford and how quickly the dispute got settled after the injunction. All of that makes sense, but let's not forget about the broader picture, which is that continued infringement litigation simply wasn't going to be profitable for Ford. A road to nowhere.

Two schools of thought: Daimler/Ford/Tesla v. General Motors/Volkswagen

To date, three car makers have taken Avanci licenses after initially appearing to be prepared to embark on multi-year litigation: Daimler, Tesla, and now Ford. By contrast, General Motors took a license without litigation (as did others, such as BMW, before it), and Volkswagen was an early adopter, but for its volume brands it had only licensed 3G despite actually implementing 4G--a problem it solved in March after a couple of lawsuits had been filed (but long before any trial, let alone decision).

There is no indication whatsoever that Daimler, Ford, and Tesla ended up saving money on the bottom line. Their litigation expenses must have been huge, with Daimler clearly having overspent. So, Ford is not alone, and at least it pulled the plug at a time when litigation costs could have exploded.

In light of the Daimler disaster I actually adjusted my views of what Avanci is all about. Also, I never subscribed to Continental's conspiracy theories, and have been clear about that for almost three years.

At a recent Auto IP & Legal World Summit in Frankfurt, Avanci executive Laurie Fitzgerald explained Avanci's role to the audience. She said that Avanci's terms already represent a compromise: numerous patent holders agreed to a set of terms based on which Avanci can offer a pool license to automakers--and obviously a pool administrator always needs to work with licensors so the pool as a whole won't price itself out of the market.

The result of that exercise is then not just a set of financial terms (in Avanci's case, it's totally transparent: they publish their rates on their website) but actually an entire license agreement that implementers can opt to sign. They don't have to: they can--if they so choose--pursue bilateral licensing. They can risk infringement litigation, as Daimler, Tesla, and Ford have. The pool license is an option, not an obligation. But there is a pattern here: companies either don't want to license at all, or they take the one-stop license. I'm not aware of any car maker that would have entered into numerous bilateral license agreements. Pools are all about efficiency gains (see also my recent post on the implications of Via Licensing's exit from the wireless patent pool business).

Continental v. Avanci: GM, Ford license deals further weaken Conti's position

Next week, Avanci's response to Conti's petition for rehearing en banc of a Fifth Circuit panel decision dismissing the automotive supplier's antitrust complaint against Avanci is due. There was no shortage of reasons for the Fifth Circuit to reject that petition anyway, but now that GM, Ford, and Tesla have all taken an Avanci license, it's going to be even harder for Conti to get a U.S. federal appeals court interested in a case that hasn't gone anywhere in almost three years.

Conti's case is another example of wasteful litigation--not as costly maybe as some of those infringement disputes, but Conti brought it proactively and has nothing to show.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

By signing up General Motors, Avanci patent pool reaches milestone with over 50 million connected cars licensed: agreement struck without prior litigation

Less than two months after Volkswagen upgraded its Avanci standard-essential patent (SEP) license to 4G for all of its brands, the patent pool firm has announced a new license agreement with General Motors, the largest U.S. car maker with about 6 million vehicles sold per year between its Chevrolet, Buick, GMC, and Cadillac brands. According to the press release, Avanci has now licensed a total of 37 automotive brands and "[m]ore than 55 million connected vehicles on the world's roads."

To the best of my knowledge, no infringement litigation by any of Avanci's licensors--four dozen SEP holders including some of the largest ones such as Ericsson, Qualcomm, and LG--was pending, so this agreement resulted only from negotiations. If any enforcement action had been needed, GM's exposure in Germany would have been rather limited: GM sold its European brands (Opel, Vauxhall) to PSA Group a few years ago, and its remaining brands are basically operating in a small niche of the European automotive market (for instance, Cadillacs are available through a very few dealerships).

GM has traditionally been very interested in connectivity. Its OnStar subsidiary has been focusing on subscription offerings (such as in-vehicle security and emergency services) for more than a quarter century. It's possible that GM's success in generating incremental revenues from such services gives that company a different perspective on the cost of a pool license ($15 per car is the published rate) vs. the value that automakers can derive from connectivity.

While GM is the first U.S. automaker with whom Avanci has announced an agreement, Tesla was presumably the first one to have taken a license (that's still kept under wraps) as I noted in a recent post. Ford, which makes approximately four million cars annually, is currently defending against SEP infringement actions by five Avanci licensors, one of whom (Korea's Sol IP) just amended its complaint in the Eastern District of Texas by throwing in 16 more SEPs (on top of the previously asserted 5). I have no idea what Ford's envisioned endgame is...

Avanci's GM deal does not fit the narrative of some of the patent pool's detractors who say or suggest that only premium brands from Europe accept its licensing terms. The licensees increasingly include volume brands as the two most recent deals (Volkswagen's 4G upgrade followed by today's GM announcement) show. At last week's Auto IP & Legal conference in Frankfurt, a Continental IP executive said Avanci had yet to offer terms that the automotive industry at large would accept, a demand that is unsupported by the increasing diversity of the licensees and the fast-growing number of licensed vehicles. Conti can't stop the tide as far as I can see.

The German automotive supplier mostly known for its tires is desperately trying to revive its failed U.S. antitrust complaint against Avanci and some of its key licensors such as Nokia. What the automotive supplier wants the United States Court of Appeals for the Fifth Circuit to do is basically to rearrange deck chairs on the Titanic: even if the rehearing en banc modified the panel decision, Conti's case is doomed one way or the other because Avanci's licensors all remain free to license their SEPs to anyone, including to suppliers like Conti or even higher up in the value chain if they so choose. Such deals are not just a theoretical possibility: they have indeed happened (case in point, Sharp's agreement with Huawei).

Avanci and Nokia filed an unopposed request for a 30-day extension to respond to Conti's petition for rehearing en banc, with a major part of the reason being other obligations of their outside lawyers. Avanci is still being represented by Winston & Strawn's Jeffrey Kessler,

Avanci and Nokia filed an unopposed request for a 30-day extension to respond to Conti's petition for rehearing en banc, with a major part of the reason being other obligations of their outside lawyers. Avanci is still being represented by Winston & Strawn's Jeffrey Kessler, who has an amazing track record in antitrust also in a sports context. I recently commented on one of his sports cases because Apple had (prematurely) cited it.

The fact that America's largest car maker accepted Avanci's license terms without litigation may bear some weight with U.S. courts, not only when Conti is the plaintiff but also when Ford is the defendant and criticizing the Avanci model.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Another patent lawsuit against Ford discovered -- and a great automotive IP conference taking place in Frankfurt next week

There has been steady progress concerning automotive patent licenses, but there's still some debate--and enforcement litigation. Further below I'll tell you about an upcoming automotive IP conference, which will take place in Frankfurt, Germany, next week. You can click here to go straight to the part about that conference, but first some news from the patent litigation front (below the conference banner).

MiiCS v. Ford: fifth Avanci licensor to sue Ford

By now there are at least five Avanci licensors (out of 49) asserting 4G standard-essential patents against Ford Motor Company. In addition to actions brought by Sisvel (Delaware and Munich), IP Bridge (Munich), Longhorn IP subsidiary L2 (Delaware), and Sol IP (E.D. Texas), I've found out from the Munich I Regional Court today that a patent licensing firm named MiiCS is suing Ford there (case no. 7 O 14689/21; Presiding Judge: Dr. Matthias Zigann). A MiiCS v. Ford trial will finally take place on February 2, 2023. It may play a role that the patent-in-suit (EP2667676 on a "base station device, mobile station device, and uplink synchronization requesting method") has come under significant invalidation pressure as a result of OPPO's defense against Sharp, which previously owned the patent and obtained and enforced an injunction against Daimler over it. OPPO and Sharp have since settled, but other defendants may still benefit from the headway OPPO made.

I must say that I'm increasingly skeptical of how Ford seeks to defend itself against those patent infringement lawsuits. Not only does its Qualcomm-related patent exhaustion defense fail a plausibility test, but I've also learned from a couple of SEP holders that Ford has tried to pressure certain automotive suppliers among Avanci's licensors to use their influence to get the aforementioned five (if not more) complainants to withdraw their lawsuits. Bullying of that kind is not the behavior of a willing licensee--and appears unlikely to solve the problem.

Auto IP Conference in Frankfurt (April 26 and 27, 2022)

For many years, Frankfurt used to be the venue of automotive trade show IAA. Now the city in the heart of Germany has an automotive IP conference that already drew an interesting audience (car makers, automotive suppliers, and patent holders) last year. This year's AUTO IP & LEGAL World Summit on April 26 and 27 (Tuesday and Wednesday of next week) is sponsored by OpSec Security, Avanci, patsnap, Questel, Meissner Bolte, Nokia, and IPlytics. You can download the brochure from this webpage, but let me say which sessions I believe are going to be of particular interest to this blog's audience:

• Uwe Wiesner, the chief patent counsel of Volkswagen (which recently upgraded its Avanci license to 4G for the entire group), will give the opening keynote on automotive patent licensing and make "proposals for a balanced licensing process."

• Shortly thereafter, Mr. Wiesner will join Nokia's litigation VP Dr. Clemens Heusch and Continental patent counsel Dr. Roderick McConnell as well as IPlytics CEO Tim Pohlmann and Meissner Bolte partner Philipp Rastemborski for what could be a lively panel debate on FRAND litigation and licensing negotiations.

• Conti's Head of IP/SEP Dr. Michael Schloegl ("Schlögl" in German) will deliver a presentation on "best practices, negotiations, and the changing SEP ecosystem," followed by an update on "progress in the implementation of the EU's IP Action Plan" by DG GROW official Elena Kostadinova.

I've secured a discount promo code for my readers, so if you plan to register, please use this link and you'll get a better rate. There could hardly be a more interesting juncture in the automotive patent licensing and litigation context for a conference to be held. While many 4G licensing issues have yet to be sorted out, car makers are increasingly implementing 5G.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Neo Wireless expanding patent enforcement campaign to automotive: actions filed against Ford, Honda, VW, Nissan, GM, Tesla, Toyota with five U.S. district courts

This is the third standard-essential patent (SEP) post in a row. The previous ones discussed patent assertions by some unnamed MPEG LA licensors against their former partner Samsung and some rather interesting developments surrounding Nokia v. OPPO/OPPO v. Nokia.

Non-practicing entity Neo Wireless LLC put itself on the map of U.S. patent litigation through its mid-January filings against Apple, LG, and Dell. As Apple Insider reported, the infringement allegations in the complaint against Apple alleged that Neo Wireless held patents essential to the 4G/LTE and NR/5G cellular telecommunications standards.

Neo has now filed a slew of lawsuits against car makers:

• Eastern District of Texas

  • General Motors Company

  • Tesla

  • Toyota

• Eastern District of Tennessee: Volkswagen Group

• Middle District of Tennessee: Nissan

• Southern District of Ohio: Honda

• Western District of Missouri: Ford Motor Company

The Eastern District of Texas has tremendous expertise in adjudicating patent disputes; the other districts--with the greatest respect--don't. It will be interesting to see whether any venue transfer motions will succeed and/or whether any of those cases will get consolidated.

Neo is not an Avanci licensor, and will likely seek damages that on a per-patent basis dwarf the cost of Avanci license. Some automakers already have that problem with Intellectual Ventures, which is asserting a mix of standard-essential and non-standard-essential patents (1, 2).

Only one of the defendants is a publicly-known Avanci licensee: Volkswagen. Tesla has been rumored to be one ever since multiple enforcement actions by Avanci licensors were withdrawn near-simultaneously in different jurisdictions. The other defendants are presumably among the companies Member of the European Parliament Alfred Sant had in mind when he asked the European Commission three questions concerning the distortion of competition because of some car makers having taken an Avanci license while their competitors from outside of Europe largely haven't.

The asserted patents largely overlap between the different cases, but are not always the same. For example, four of the six patents-in-suit against Toyota are also among the five patents asserted against Apple, but two are not.

The claimed inventions were apparently made by Chinese individuals, but Neo Wireless is a U.S. entity. There was or is another company named Neocific that temporarily owned some or all of those patents.

Finally, here are two sample complaints: the E.D. Tex. one against Toyota and the W.D. Mo. lawsuit against Ford.

22-03-29 Neo Wireless LLC v... by Florian Mueller

22-03-29 Neo Wireless LLC v... by Florian Mueller

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Ford's patent exhaustion defense to Sisvel's Delaware claims fails plausibility test: time hasn't stood still since 2008 Qualcomm-Nokia deal, others' similar defenses went nowhere

In early February, Ford filed its answer to patent licensing firm Sisvel's Delaware complaint, which is just one of several cases brought by Avanci licensors against the iconic U.S. automaker (case in point, IP Bridge is increasingly likely to obtain a Munich injunction against Ford next month). The part that stood out from Ford's Delaware submission was the claim that the former Nokia assets among the patents-in-suit were exhausted under a 2008 Qualcomm-Nokia license agreement that predated the 2012 transfer of those patents to Sisvel.

Two weeks later, Sisvel replied to multiple exhaustion-related paragraphs from Ford's counterclaims as follows:

"Paragraph [...] contains conclusions of law to which no answer is required, To the extent that an answer is required, Plaintiffs deny the allegations in Paragraph [...]. Plaintiffs are without knowledge or information sufficient to form a belief as to the truth of the remaining allegations in Paragraph [...] and deny same."

Sisvel obviously doesn't know what exactly the Qualcomm-Nokia agreement says. Neither do I. But it is possible, just based on publicly accessible information, to make the reasonable inference that Ford's supposedly dispositive get-out-jail-free-card (with respect to some--not all--of the patents-in-suit) is just a Hail Mary pass:

• Ford's theory is more of a fishing expedition than based on reliable facts. The wording is already odd: "[T]he assignment of the [...] patent to Sisvel in 2012 was subject to the July 2008 agreement between Nokia and Qualcomm" (emphasis added)

  If the assignment was "subject to" an agreement, that one would have been the transfer agreement between Sisvel and Nokia. What Ford means to imply here, but can't really claim, is that a certain encumbrance traveled with the transferred patents. But what encumbrance are they talking about? They don't seem to have any information beyond a 2008 press release that says "Nokia has agreed not to use any of its patents directly against Qualcomm." One can deduce from that passage that Nokia didn't grant Qualcomm a license. But everything else is unclear.

• According to the press release, it was a 15-year deal. But the assumption that Nokia and Qualcomm would never have amended their 2008 agreement despite earth-shaking subsequent case law such as TransCore (a 2009 Federal Circuit decision according to which an unconditional covenant not to sue triggers exhaustion), and despite Nokia later exiting the mobile device business, flies in the face of all I know about industry practice and from following the FTC v. Qualcomm and Apple v. Qualcomm antitrust cases in granular detail. It is a typical human fallacy to assume that something (here, the Nokia-Qualcomm agreement) forever remains static. It's even worse when people believe that one factor is static while others are dynamic, only because that particular combination of static and dynamic elements would benefit them.

  As one of the attendees of the 2019 FTC v. Qualcomm trial in San Jose, I know that Qualcomm reacted to case law developments by changing the structure of its agreements.

• If Ford was right, Nokia's licensing business couldn't possibly be as successful as it is given Qualcomm's market share. Sophisticated hardball-playing licensees like Apple wouldn't have paid nearly as much as they have. The best example may be the 2011 Nokia-Apple agreement, which fell into place only a few months after Apple's February 25, 2011 "Transition Agreement" with Qualcomm. It became known as a result of certain antitrust cases (such as this European Commission decision) that Apple agreed to buy all of its 4G/LTE chipsets from Qualcomm until the end of 2016. What triggered that spring 2011 settlement was the threat of two Mannheim injunctions (a hardware patent and one targeting the App Store), which had nothing to do with Qualcomm's chipsets. But the royalty was largely justified with the strength of Nokia's cellular SEP portfolio. Even when Apple renewed the Nokia deal in 2017, it was still using Qualcomm chips, though no longer exclusively. Analysts estimated that Nokia was making approximately $1 per iPhone. A huge upfront payment was made.

• Another way to look at it is that it wouldn't make sense for Qualcomm to support Avanci (as a licensor) if it could simply provide car makers with a license to the largest portfolios in the Avanci pool through the sale of its chipsets.

• The Qualcomm-Nokia agreement has come up in various other patent disputes over the years. Never once has an exhaustion defense centered around that particular agreement succeeded, no matter the jurisdiction.

  More than ten years ago I personally attended a preliminary-injunction hearing in Paris where Samsung was denied a PI because of a patent exhaustion defense by Apple involving Qualcomm chipsets. But that was about the Qualcomm-Samsung (not Qualcomm-Nokia) agreement, and part of the discussion there was whether Samsung had the right to terminate that agreement with respect to (only) Apple. Also, it was not a full trial: just a denial of a PI. That case is an outlier, and again, about a different Qualcomm contract.

  By contrast, every single defense according to which Nokia's patents were exhausted by Qualcomm's chips has failed:

  HTC tried this in the ITC and the England and Wales High Court (over non-SEPs, but exhaustion doesn't work differently for SEPs than for non-SEPs). This amicus brief by HTC in the Lexmark case (in which the Supreme Court expanded the concept of patent exhaustion in cross-border scenarios) summarizes its failure in the UK (before Justice Richard Arnold). The full October 2013 decision is available here. On May 2, 2013, the ITC's Administrative Law Judge Thomas B. Pender entered Order No. 13 in investigation no. 337-TA-847 of a Nokia request for an import ban on HTC products. That order was the equivalent of a summary judgment in district court and threw out HTC's exhaustion defense because it was meritless even when viewed in the light most favorable to HTC. In those U.S. and UK decisions, the extraterritorial nature of the sale was dispositive. HTC settled with Nokia right before a final ITC decision, which shows that HTC presumably expected to lose.

• The German SEP case at this stage is Sisvel v. Haier, and the regional appeals court in Dusseldorf (which did not make the famous final decision; that one was handed down by the Federal Court of Justice) dismissed Haier's patent exhaustion defense. The redacted version of the decision (in German) doesn't name Qualcomm, but it's anyone's guess.

  The same conclusion was reached by the Karlsruhe Higher Regional Court in a Sisvel v. Wiko case (English translation published by Kather Augenstein, a law firm whose clients include Ericsson).

The bottom line is that in order for Ford to prevail on its patent exhaustion defense in the Sisvel Delaware case, it would have to be way smarter than smartphone makers including but not limited to Apple, who paid for a license to Nokia's patents despite using Qualcomm chips, and it would have to benefit from the Supreme Court's expanded patent-exhaustion doctrine under the 2017 Lexmark decision, presupposing (unrealistically) that Nokia and Qualcomm never amended their 2008 agreement--of which it is not even clear whether it ever could have helped Ford.

There were rumors in Germany that Volkswagen was going to raise a similar defense in Acer v. Volkswagen (not involving former Nokia patents, but another Qualcomm agreement). However, VW upgraded its Avanci license to 4G and thus never answered to the complaint: the complaint has been voluntarily dismissed.

The Ford case and the rumor about VW's plans show that the topic will surface from time to time. I don't have hard evidence that they're all wrong, but there's a mountain of indicia pointing in the direction of meritlessness.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Japan's IP Bridge appears close to license agreement with OPPO, but Ford still holding out: 4G standard-essential patent disputes in Munich

The most interesting news from last week's Munich trials in a couple of 4G patent cases brought by Japan's national patent licensing firm IP Bridge was that Apple has apparently settled and taken a license.

Trials involving two other defendants still went ahead before the Munich I Regional Court's 7th Civil Chamber (Presiding Judge: Dr. Matthias Zigann). Those 4G implementers are high-flying Chinese smartphone maker OPPO (case no. 8133/21) and iconic U.S. car maker Ford (case no. 7 O 9572/21).

I have been able to obtain further information from the court on those proceedings:

• After the court's introductory explanation of the questions of fact and law in the case, OPPO and IP Bridge stipulated to an adjournment. Their next trial date is March 18, 2022. I'm not sure they'll actually show up then: when parties agree to an adjournment, especially in response to essential guidance from a court, they make use of that extra time to negotiate a settlement. What I don't know is how far apart the parties' positions are, but IP Bridge is a relentless enforcer and would hardly swallow a three-week delay if there wasn't hope that they can work it out.

• With Ford, the situation looks less promising. While the courtroom was sealed (my guess is they were discussing Ford's FRAND defense, unless Ford made a non-infringement argument that involves technical secrets), it turned out that neither party had sufficiently addressed a particular--unspecified--aspect of the case. The court made counsel aware of that oversight. It turned out impossible to clarify that part during the on going proceedings. As a result, court and counsel agreed that an adjournment was warranted. The oral proceedings will continue on April 22. Both parties have been granted leave to file pleadings until then.

  Unlike the situation between IP Bridge and OPPO, the IP Bridge v. Ford situation is, on the face of it, still highly adversarial. Never say never: they might also make use of the additional time to work out a deal. The court obviously didn't provide any information to me on what the parties appear inclined to do next. But an adjournment that resulted from finding out that they tried in vain to make up for a mutual oversight on the spot (maybe because some documents weren't available) most likely means they just agreed to disagree. For lack of an inside track, I'm just trying to assess the situation based on those procedural facts, including that both requested leave to provide further briefing.

  Ford is currently defending against patent infringement actions by (at least) three Avanci licensors: L2 Mobile Technologies, a Longhorn IP subsidiary, is suing Ford in Delaware, as is Sisvel, some of whose patents-in-suit in a Delaware case Ford claims to be exhausted under an old Nokia-Qualcomm contract. Sisvel is also asserting patents against Ford in Munich.

  This is just an anecdote, but OPPO, while it is (for now) Ford's co-defendant against IP Bridge, is also a contributor of many SEPs to the Avanci pool. As a result, OPPO stands to benefit--in the form of royalty collection--if IP Bridge prevails and Ford elects to take an Avanci license rather than numerous bilateral licenses.

  Just yesterday, Avanci scored a major victory over automotive supplier Continental as the United States Court of Appeals for the Fifth Circuit added insult to injury from Conti's perspective: not only did the appeals court grant effective affirmance to a decision by the United States District Court for the Northern District of Texas to throw out Conti's ill-conceived case based on conspiracy theories rather than actual harm, but it even held Conti wasn't entitled to a component-level FRAND license as it's sufficient from a pragmatic point of view if its customers are licensed and Conti itself isn't barred from making standard-conformant products.

  Times are tough for car makers who shirk their responsibility to take licenses by pointing SEP holders to their suppliers. Avanci's resounding victory in the Fifth Circuit is an endorsement of the patent licensing policies of companies like Qualcomm, Ericsson, and Nokia, who believe the most efficient point in the supply chain for licensing SEPs is the end product--whether we're talking about smartphones or connected cars.

  In this environment, hold-out tactics are not a promising strategy for Ford. The judicial tide is going in the opposite direction. Not only--but also--in Munich.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Automotive industry submissions to DOJ on standard-essential patent policy at odds with realities of cellular SEP licensing

The Biden Administration has received more than 1,000 responses to its draft policy paper on standard-essential patent (SEP) enforcement, 167 of which have been published. The rest was either confidential or, in many cases, just duplicative.

It's important to understand the significance of a policy statement by the U.S. federal government and many individuals' and organizations' desire to influence its content, but it's equally key to realize that the outcome is not going to constitute binding precedent. Even if there had been 10,000 or 100,000 responses instead of 1,000+, I'd still just reiterate my belief that the draft document is centrist, meaning it's neither the end of the world for SEP holders nor a breakthrough for implementers that would immunize them against injunctions. Let me quote a passage from Professor Michael Carrier's submission to the DOJ:

"The proposed statement [...] offers a balanced approach that considers the potential abuses on both sides of the table, offers an elaborate framework for good-faith negotiation, and sets forth a strongly supported approach to remedies."

I'd also like to highlight one other submission that I consider pretty balanced and centrist: the one by the High Tech Inventors Alliance. The HTIA's members like Microsoft, Oracle, and Intel invest heavily in R&D, hold many patents including lots of SEPs, but they're also large-scale implementers. They know both sides of the equation. I just don't fully agree with the idea of a bright-line rule that the ITC should never ever impose import bans on SEP-infringing products: "There is no excuse for allowing ITC exclusion orders to inflict anticompetitive harm on American consumers." I would agree that the bar should be reasonably high for a SEP-based exclusion order, but there can be circumstances that justify such import bans.

The final point in the HTIA's submission is consistent with something I've been saying, just that I approached the same question from a different angle: no matter what the U.S. will do, there are other jurisdictions in the world and SEP holders will enforce their rights elsewhere if they have to. However, U.S. governments traditionally advocate robust patent enforcement in trade talks, regardless of which party is in power. It wouldn't be easy to thread the needle by encouraging other countries to weaken SEP enforcement on the one hand while accusing some countries of free-riding on U.S. innovation in a non-SEP context. That said, I applaud the HTIA for taking a global perspective, as SEP enforcement is global (that's why this blog has a multi-jurisdictional focus).

The global nature of SEP policy explains why the DOJ has received submissions from predominantly foreign automotive companies. One of them, Honda, made a joint submission with Tesla, and Ford, which is as American as it gets, made one of its own. But those two submissions are clearly outnumbered by what the Japan Automobile Manufacturers Association (JAMA), the European Association of Automotive Suppliers (CEPLA, a French acronym), the German Association of the Automotive Industry (VDA), and Germany's Continental filed.

One common mantra of those automotive industry submissions is that SEP holders should not be entitled to an injunction against a car maker whose suppliers are willing to take a license on FRAND terms. That is the question that, on the other side of the Pond, the Dusseldorf Regional Court referred to the European Court of Justice in Nokia v. Daimler, but which never had to be answered because Daimler took a car-level license (which is also a way of answering (or obviating, if you will) the question).

Just yesterday I discovered a U.S. court filing according to which Volkswagen appears to be in the process of finalizing a patent license deal with either Acer or, more likely, the Avanci pool--in any event, at the end-product level. Interestingly, Licensing Negotiation Groups (LNGs), a VW-led initiative I criticized last summer (1, 2, 3), were apparently not needed for VW to close its 3G license deal a few years ago and to make so much progress toward a 4G license now. LNGs don't come up in those automotive industry submissions to the DOJ either, which I attribute to two factors: LNGs are more of a cartel law than SEP enforcement question, and the idea has no traction at this stage.

Neither the Obama Administration nor the Trump Administration took a position on component-level vs. end-product-level licensing of SEPs. It's hard to see why the Biden Administration should, and appears unlikely that it would, address that narrow question in a broad SEP enforcement and licensing context.

Car makers will get better results from licensing than from lobbying.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Ford responds to Sisvel's Delaware complaint with denial of actual 4G compliance, claims Nokia patents exhausted under Qualcomm contract

Ford is fighting a multi-front war against a couple of Avanci licensors:

• In December, European patent licensing and pool administration firm Sisvel sued Ford in the District of Delaware over patents declared essential to the 4G/LTE standard. The parties stipulated to an extension of time for Ford's answer to the complaint. The new deadline passed yesterday, and after this introductory part I will show you and discuss Ford's responsive filing.

• Sisvel has never asserted standard-essential patents exclusively in the United States without also doing so in Europe. And indeed, the Munich I Regional Court confirmed to me the pendency of two German Sisvel v. Ford SEP enforcement actions.

• Japan's national patent licensing firm IP Bridge is suing Ford in Munich as well. Interestingly, IP Bridge has also lost its patience with Volkswagen, which unlike Ford has a 3G Avanci license for its high-volume brands (but actually needs a 4G license).

So here's yesterday's answer by Ford to Sisvel's Delaware complaint (this post continues below the document):

22-02-03 Ford Answer to Sis... by Florian Mueller

Ford's lawyers definitely did a thorough job. They've identified a minor (though repeated) oversight on Sisvel's part, alleging in the complaint that on certain dates Ford received information regarding certain patents that Sisvel actually acquired only later. But that's not going to be dispositive.

There are three aspects of Ford's defense strategy that I find interesting and will keep on eye on as the litigation unfolds:

1. Ford's consistent answer to Sisvel's representation that "[Ford] advertises [a given product] is compliant with the 4G cellular network standards" is: "Denied."

   Ford says so even though its advertisements apparently do mention 4G. So Ford is saying what Judge Andreas Voss ("Voß" in German), then sitting on the Mannheim Regional Court and now on the Karlsruhe Higher Regional Court, once told a defendant to an IPCom lawsuit: "First you say the patent doesn't read on [3G] UMTS, then you say 'we're not really doing UMTS.'" Different parties, different (newer) standard, but same thing here: Ford "denies that its Accused Instrumentalities [are] necessarily infringing [a given] patent" (emphasis added) because "Sisvel relies solely on 3GPP specifications without any substantiation that the accused modem chipsets practice the specific sections of the standard on which Sisvel relies on to alleged infringement by those modem products."

   It's a "Show me, I'm from Missouri" defense that rejects infringement contentions based on a mapping of the asserted patent claims to the specification of the standard. It may also have to do with Ford's strategy for denying that it received a proper infringement notice.

   In Germany, that won't work for Ford at the merits stage, but if Sisvel obtained a Munich injunction based on the specification of the standard, it would still have to prove at the enforcement stage (when seeking contempt-of-court sanctions) that an actual infringement occurred.

2. Ford's answer to the complaint does not elaborate on, but hints at, a supply-chain licensing-based defense:

   "16. To the extent suppliers to Ford of any accused (i) baseband chipset, (ii) Network Access Device incorporating a baseband chipset, or (iii) Telematics Control Unit ('TCU') incorporating a Network Access Device make or sell products conforming to the applicable cellular standards, the ETSI IPR Policy requires a license be made available to those makers and sellers, i.e., the supply chain."

   The answer to the complaint doesn't specifically allege that Sisvel denied such a license to suppliers, but Ford's requested judicial declaration that "Sisvel has breached its contractual obligations under the ETSI IPR policy to license the Patents in Suit, on FRAND terms" is broad and vague, so the supply-chain licensing question may come up. (Note, however, that Ford does not mention the Avanci pool at all.)

3. Ford raises a very specific supply-chain-based patent exhaustion defense concerning the '803, '443, and '070 patents, which belonged to Nokia until they were assigned to Sisvel in 2012. In July 2008, however, Nokia entered into a "15-year agreement" that involved a covenant not to sue, which Ford says exhausted those patents under Quanta with respect to "a Qualcomm baseband modem chipset installed in a Ford vehicle." And the answer to the complaint says that all TCUs on Ford production vehicles "use Qualcomm baseband modem chipsets and associated binary files."

   Sisvel does not claim that the two remaining patents-in-suit (from LG and BlackBerry) are exhausted under a contract with Qualcomm.

Patent exhaustion may also play a role in Acer v. Volkswagen. Many if not all of Volkswagen's cars come with components from LG that incorporate Qualcomm baseband chips. VW's answer to Acer's complaint (in the Eastern District of Virginia, the "rocket docket" for U.S. patent cases) is due on Monday (February 7).

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Sisvel suing Ford Motor Company over two 4G standard-essential patents in Munich; Ford's answer to Delaware complaint due tomorrow

This morning, a spokeswoman for the Landgericht München I (Munich I Regional Court) has been able to answer my question about any pending Sisvel v. Ford patent infringement cases:

• Sisvel v. Ford-Werke GmbH (Ford's German subsidiary), case no. 44 O 16987/21, over EP3041304 on "transmission methods and apparatuses in tdd-fdd combined system" (originally filed by Shanghai Langbo Communication Technology Co Ltd; two years ago, IAM reported on a larger transaction involving that Chinese research lab and Sisvel)

• Sisvel v. Ford-Werke GmbH, case no. 44 O 17132/21, over EP2248383 on a "method and apparatus for indicating deactivation of semi-persistent scheduling" (originally filed by Thomson)

The case numbers indicate that both Sisvel v. Ford cases in Munich have been assigned to the new 44th Civil Chamber under Presiding Judge Dr. Anne-Kristin Fricke, who replaced Presiding Judge Dr. Georg Werner yesterday as he moved on to head the court's equally patent-specialized 21st Civil Chamber.

In mid-December, Sisvel's patent enforcement action against Ford Motor Company in the District of Delaware became known. The parties stipulated to an extension of time until tomorrow (February 3, 2022) for Ford to answer, or otherwise respond to, the complaint.

It would have been out of character for Sisvel to enforce SEPs only in the U.S. and not also in Europe, and there, above all, in Germany, where it has already made history with two Sisvel v. Haier cases--case law that will come into play here as well unless they settle.

In another case brought by an Avanci licensor--in that case, Japan's IP Bridge--the Munich court will hold a hearing in three weeks unless the Federal Patent Court of Germany annulled the patent two weeks ago (haven't been able to find out yet, but will know soon).

A subsidiary of Longhorn IP, a Texas-based non-practicing entity and Avanci licensor, is suing Ford in the District of Delaware.

It is, frankly, a mystery why Ford prefers litigation in Delaware and Germany over an Avanci license, especially given Daimler's example. Maybe its upcoming responsive filing in the District of Delaware will shed some light on its rationale.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Japanese patent licensing firm IP Bridge is suing Ford Motor Company in Munich over former Panasonic SEP

On the first of the month, L2 Mobile Technologies LLC, an entity affiliated with non-practicing entity Longhorn IP (named after the official state large mammal of its home state of Texas), sued Ford Motor Company over patent infringement in the District of Delaware (Courtlistener docket overview).

Ford is not the most willing licensee among car makers. With Nokia, it once entered into a short-term license agreement that was more of a standstill agreement, and provided material to Daimler for use in its (meanwhile settled) dispute with the Finnish wireless company. Ford may prefer to lock horns with Longhorn over signing up for a license quickly, but whether that is an economically wise decision is in the eye of the beholder.

I've now been able to find out, thankfully, from the press office of the Munich I Regional Court that there is at least one standard-essential patent (SEP) action pending against Ford in Germany (and I guess it's not even the only one). In case no. 7 O 9572/21, a patent licensing firm that belongs to the Japanese government, IP Bridge, a hearing has been scheduled for late February. The patent-in-suit (EP2294737 on "control channel signalling for triggering the independent transmission of a channel quality indicator") was originally obtained by Japanese electronics maker Panasonic, which declared it essential to 4G/LTE. The same patent has previously been asserted against Taiwanese smartphone maker HTC and possibly other defendants.

Both Longhorn IP and IP Bridge are contributors to the Avanci SEP pool. Ford could kill not only two but literally dozens of birds with one stone by taking an Avanci license. This, however, does not conversely mean that Avanci itself, which doesn't hold patents and thus lacks standing to assert them, is responsible for these infringement cases in any way. IP Bridge, which is also suing Daimler, and Longhorn are licensing firms who have to deliver. They have to make deals that generate licensing income: whether they acquire patents and need to recuperate that investment and/or have a royalty-sharing agreement with those who assigned those patents to them, it's their job to sign deals and if that's not possible without going to court, they have to sue. There is no plausible theory under which Avanci would control them; much to the contrary, Avanci can only do business on terms that licensors and licensees deem acceptable. Ford seems to be extremely difficult to please, though.

Car makers can't just infringe the Avanci licensors' patents forever. If they don't take a pool license, they need bilateral licenses. If they're unwilling to do either type of license deal, it's only a matter of time until SEP holders sue them--and Ford now has to ask itself how it wants to try to persuade the courts in various jurisdictions, particularly Germany and the UK, of its willingness to take SEP licenses on FRAND terms...

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|