Additional standard-essential patent assertions against Stellantis (multi-brand car maker) and Nissan discovered in Munich

Apple chose the Munich I Regional Court as the venue for the first standard-essential patent (SEP) assertion in its history, and it seems that Avanci licensors enforcing their rights against unwilling licensees among automakers are now focusing 100% on Munich.

In May, the Munich I Regional Court's Seventh Civil Chamber (Presiding Judge: Dr. Matthias Zigann) granted Japan's IP Bridge an injunction against Ford Motor Company's German subsidiary, and the fact that Ford didn't make a FRAND counteroffer to the Avanci pool licensing offer was sufficient for Ford to be deemed an unwilling licensee. If Ford had made such a counteroffer, it might not have helped either (with Ford's subsequent decision to take the pool license, the Avanci rate has now been accepted by roughly half the market), but by failing to even give it a try, Ford was simply bound to lose. This means Avanci licensors enforcing their rights in Munich don't have to make a bilateral licensing offer: they can point to the availability of an Avanci license covering more than four dozen SEP portfolios (up to 4G for now).

Last month I picked up a couple of press releases by Longhorn IP that announced Munich SEP assertions by its L2 Mobile Technologies subsidiary

• against Fiat Chrysler, the centerpiece of the Stellantis multi-brand automotive group, over EP1768330 on a "method and apparatus for handling timers during reestablishing transmitting sides in wireless communications systems" (case no. 21 O 5048/22), and

• against Nissan over EP1852995 on a "method and apparatus of handling a variable of a RLC reset procedure during receiver-side-only re-establishment in wireless communication system."

I've now found out from the court's press office the case number of the L2 v. Nissan case: it's 21 O 6233/22, meaning that it has been assigned to the 21st Civil Chamber under Presiding Judge Dr. Georg Werner. The L2 v. Fiat Chrysler case will be heard on March 15, 2023, and L2 v. Nissan two weeks later (March 29, 2023).

A couple of Japanese patent licensing firms that are Avanci licensors are now also suing Stellantis and Nissan in Munich. Those cases have been assigned to the Seventh Civil Chamber (Presiding Judge: Dr. Matthias Zigann):

• MiiCs v. Nissan:

  • Case no. 7 O 5635/22 over EP2129181 on a "mobile communication system, base station apparatus and mobile station apparatus" (hearing date: October 27, 2022)

    That patent previously belonged to Sharp, which asserted it against Daimler in Mannheim, but due to the court's doubts concerning the patent's validity, Sharp stipulated to a stay. However, the patent is now coming back with a vengeance. The Mannheim court wouldn't have reached the validity part if it hadn't been inclined to deem the patent infringed.

  • Case no. 7 O 5636/22 over EP2667676 on a "base station device, mobile station device, and uplink synchronization requesting method (hearing date to be determined)

    That patent, too, previously belogned to Sharp, which successfully asserted it in Munich against Daimler.

• IP Bridge v. Opel (a German car maker that belongs to Stellantis):

  • Case no. 7 O 4500/22 over EP2294737 on "control channel signalling for triggering the independent transmission of a channel quality indicator (hearing date: March 30, 2023)

    That former Panasonic patent has already given IP Bridge leverage over various companies, most recently Ford.

Cases over patents that have previously been deemed standard-essential by the Munich court are slam dunks. Theoretically one could always come up with an incredibly strong argument that hasn't previously been raised, but the odds are very long against that. Plus, as I mentioned further above, the Munich court doesn't appear to expect Avanci licensors to make a bilateral licensing offer as the pool license is widely accepted by the market.

Given those facts, what are the decision makers at Stellantis and Nissan hoping to gain from litigation? There are the examples of Daimler, Tesla, and Ford, all three of which wasted many millions on litigation against Avanci licensors only to end up taking the license anyway (in Tesla's case it was not confirmed, but near-simultaneous settlements spoke a clear language). There are also companies like General Motors that saved those costs in the first place by taking a license prior to any litigation. What kind of advice are Stellantis and Nissan getting? That kind of resistance just strikes me as odd. If they don't settle, they're going to be enjoined. "Insanity is doing the same thing over and over and expecting different results"--that saying was even quoted by a U.S. Supreme Court justice.

While Munich is the SEP injunction hotspot, there are also some interesting non-SEP cases to be discovered in that venue. On Thursday (July 14, 2022), the court's Seventh Civil Chamber (Presiding Judge: Dr. Matthias Zigann) will hold a K.Mizra v. Niantic trial over a client-server technology patent that is being asserted against the company making and operating the Pokémon GO massively-multiplayer mobile game. That's one of the non-SEP cases I'm definitely following with great interest.

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L2 Mobile Technologies claims Qualcomm chips in Ford, Lincoln cars infringe 3G standard-essential patents originally obtained by ASUSTeK

Ford Motor Company appears to have a history of standard-essential patent (SEP) hold-out. It was unwilling to take an actual long-term license from Nokia a few years ago, so the parties entered into what was more of a standstill than license agreement. Last week I found out about an IP Bridge v. Ford infringement action in Munich. An injunction looms large, and just today Germany's chief patent judge said that a recent amendment to the patent injunction statute was merely "a clarification and consolidation of the case law". One of his side judges told another audience that any proposals to soften patent enforcement should be directed to the legislature. Therefore, Ford can expect to be enjoined in Germany unless it agrees to take a FRAND license or is cleared of infringement of any valid SEP.

Three weeks ago, L2 Mobile Technologies, a subsidiary of a Texas-based non-practicing entity named Longhorn IP, sued Ford in the District of Delaware over a handful of 3G SEPs (this post continues below the document):

21-10-01 L2 Mobile Technolo... by Florian Mueller

L2 announced the complaint on its website, on which it also recently reported a favorable validity determination on one of its Chinese patents and, about six months earlier, an infringement lawsuit against Google. Against Ford, L2 is not seeking an injunction, at least not at this stage, but treble damages. In order for such willfulness enhancement to be awarded, L2 must prove an objective and a subjective prong. The latter is about whether Ford actually had knowledge of its infringements of these patents. It appears that the underlying theory is based on Ford's decision not to take an Avanci pool license:

ATTEMPTS TO LICENSE FORD

17. L2MT is a member of the Avanci LLC patent pool. On information and belief, Avanci LLC made Ford a FRAND offer to patents that are essential to the 3G wireless communications standard. On information and belief, Ford declined to take a license to the Avanci LLC patent pool.

The Avanci pool contains the cellular SEP portfolios of dozens of companies, a number of which are way bigger than L2. If L2 prevailed on this objective-willfulness theory, all car makers with significant U.S. sales would have to be extra cautious when rejecting an Avanci licensing offer as they might be liable for treble damages when any Avanci licensors sue them in the United States.

A willful infringer and an unwilling licensee are the same type of market actor, just from different angles. In Germany, courts increasingly deem implementers unwilling licensees if they decline to take a pool license. Therefore, I wouldn't be surprised if a U.S. court considered Ford a willful infringer of any patents in the Avanci pool that the iconic car maker hasn't licensed bilaterally either.

L2's infringement allegations involve Qualcomm chips. Qualcomm is an Avanci contributor as well, but apparently does not have a license from L2. The patents-in-suit were originally obtained by ASUSTeK, a subsidiary of Taiwanese device maker ASUS, and later assigned to a non-practicing entity named Innovative Sonic (also based in Taiwan). That one brought some infringement litigation many years ago, such as against BlackBerry, and in 2018 joined Via Licensing's LTE pool. Via welcomed Innovative Sonic as an innovative leader. Somewhere along the way, Innovative Sonic assigned a bunch of former ASUSTeK SEPs to L2. Maybe Qualcomm had a cross-license in place with ASUSTeK, but Innovative Sonic and L2 obviously never needed a license or chipsets (which wouldn't be available without taking a license first) from Qualcomm.

These are the patents-in-suit:

1. U.S. Patent No. 7,266,105 on a "method for determining triggering of a PDCP sequence number synchronization procedure" (PDCP means Packet Data Convergence Protocol)

2. U.S. Patent No. 8,179,913 on a "method and apparatus of handling variable of RLC reset procedure during receiver-side-only re-establishment in wireless communications system" (RLC means Radio Link Control)

3. U.S. Patent No. RE47,200 on "preventing shortened lifetimes of security keys in a wireless communications security system"

4. U.S. Patent No. 8,054,777 on a "method and apparatus for handling control PDUs during re-establishing receiving sides in a wireless communications system" (PDU means Protocol Data Unit)

5. U.S. Patent No. 8,064,460 on a "method and apparatus of delivering protocol data units for a user equipment in a wireless communications system"

The complaint correctly describes these patents as 3G-related. However, its third paragraph confuses 2G (GSM) and 3G--an unusual (but merely clerical) error in a wireless SEP complaint:

"The wireless communications devices in Ford's connected vehicles comply with the GSM wireless communications standard. This standard is also referred to as the '3G' wireless communications standard."

The costs of patent infringement litigation in the U.S. add up, and in the German IP Bridge case, Ford faces the threat of an injunction. It could take an Avanci pool license, but so far appears to have been opposed. It can also enter into bilateral license agreements.

Avanci itself doesn't hold patents and can't assert them, nor does it have the power to direct its licensors to enforce. Patent pools always have an obligation to inform their contributors (licensors) of any license agreements they conclude, and normally also keep them updated as to ongoing negotiations. For example, if Ford had been close to signing a deal with Avanci, L2 and IP Bridge would presumably have known and might then have waited instead of suing. But ultimately those companies are in the licensing business, and they can't let all car makers get away with unlicensed use forever. By suing Ford, they send out a clear message to others.

No coordination is needed for an independent patent holder to decide to sue the same entity after someone else decided to do so. Those companies do not mean to drive Ford out of business; they merely want to get paid. The more patent cases a given company has to defend against, the greater the incentive to settle at least some of them. A company like Apple or Samsung has to deal with numerous NPE cases in parallel, so one more wouldn't make a difference--but Ford is much smaller, and has much less expertise in the field of cellular SEP litigation. To me it just seems a logical choice that companies holding patents in the same field (regardless of whether they're even contributors to the same pool) would be more inclined to sue someone who is already embattled than pick another target.

For that reason alone, I would not attribute to malice (such as conspiracy) what can be adequately explained with natural litigation choices--and which Ford may have had coming because it apparently passed on licensing options of any kind, be it the Avanci pool or bilateral licenses such as with Nokia. Also, Qualcomm is a far bigger contributor to the Avanci pool than L2 (in fact, Qualcomm's portfolio dwarfs L2's), so the mere fact that L2's case against Ford accuses Qualcomm chips of infringement makes it impossible to imagine that Avanci would have orchestrated anything here.

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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...

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