Qualcomm elaborates on its theories of irreparable harm from immediate enforcement of FTC's antitrust remedies

Originally, Qualcomm asked Judge Lucy H. Koh of the United States District Court for the Northern District of California to set an extremely tight briefing schedule for the San Diego chipmaker's motion to stay the enforcement of the victorious Federal Trade Commission's antitrust remedies pending an appeal to the Ninth Circuit. If the court had adopted that schedule, Qualcomm would even have been prepared to waive its right to file a reply brief in a support of its motion.

But Judge Koh declined to give the FTC only a very few days for its opposition filing--and Qualcomm, though it still could have waived its right to file a reply brief, elected to file a reply brief yesterday (not a single day before the deadline) and counter not only what the FTC wrote but also the amicus curiae briefs submitted by LG Electronics and ACT | The App Association (this post continues below the document):

19-06-18 Qualcomm Reply Iso... by on Scribd

That reply brief is far more interesting--because it is a lot more specific especially on the question of irreparable harm--than the original motion. While I would categorize some of Qualcomm's reply arguments as non sequitur material and consider some others outright smokescreens, that reply brief does contain food for thought.

The first footnote is, however, almost a concession that a stay of the entirety of the FTC's remedies may have been too much to ask for:

"Should the Court determine that the irreparable harm Qualcomm would suffer as a result of provisions (1) and (2) of the injunction does not warrant a stay of the entire Order, Qualcomm respectfully submits that the Court should enter a partial stay of only provisions (1) and (2) of the injunction."

Accordingly, the reply brief focuses on the requirements to (re)negotiate agreements, to sell chips to unlicensed customers, and to extend exhaustive SEP licenses to rival chipset makers. Those requirements flow from the first two provisions of the injunction the FTC secured--the only ones with respect to which Qualcomm, according to the FTC and also in my observation, even attempted to make an irreparable-harm argument in its original motion.

As for any potentially renegotiated license agreements, Qualcomm insists that any harm could not be undone should Qualcomm prevail on appeal. Qualcomm labels as a "red herring" the FTC's argument that Qualcomm would still obtain "fair value" for its SEPs. Qualcomm says the problem is not that those new agreements would be negotiated without the well-known "No License-No Chips" kind of leverage, but "because of the need to negotiate in the shadow of an Order that declares—erroneously, in Qualcomm's view—that Qualcomm's typical licensing terms are unreasonable." The latter is, by the way, what I told CNN within less than 24 hours of the ruling.

Qualcomm is concerned about licensees stopping royalty payments "under valid contracts" (though Judge Koh's order obviously serves to invalidate many such agreements), "even if temporarily," and mentions Huawei as an example.

Then Qualcomm attacks the FTC's suggestion that Qualcomm could, after a successful appeal, seek "damages for any past infringement" against those who (at least temporarily) stopped royalty payments. Qualcomm states something indisputable: a license is a defense to an infringement claim as 35 U.S.C. § 271(a), the statutory definition of infringement of a U.S. patent, applies only to those who practice a patented invention "without authority."

Qualcomm is furthermore worried that the non-discrimination provision of its FRAND licensing commitment or "most favored" provisions in some of its license agreements could ultimately drive Qualcomm's royalties to the "lowest common denominator."

Qualcomm, with a declaration by one of its licensing executives (John Han), alleges that it would be impossible to prevent irreparable harm by agreeing only on "short-term or interim licenses" (as the FTC called them) or (again quoting the FTC) "contractual provisions that would mitigate or eliminate any long-term adverse consequences to Qualcomm").

All of that needs to be considered, but none of it is convincing. The appeal will take time, but we're talking about roughly a year. Negotiations, however, also take a fair amount of time. The FTC v. Qualcomm decision doesn't require Qualcomm to accept a specific set of terms within a short time frame lest the company be held in contempt. I believe it just comes down to how much of a risk Qualcomm is willing to take when betting on a successful appeal. If Qualcomm really was sure that it would prevail, then it could insist on contractual provisions that protect its rights, and there would not be any contempt sanctions before the Ninth Circuit decides. And what's practically totally impossible is that Qualcomm could not only be forced to enter into a license agreement on unfavorable terms with a first licensee and that a second licensee would then have enough time to also get a better deal (or an adjustment under a "most favored" clause) before the Ninth Circuit renders a decision. And even if the appeal surprisingly took longer, anything that happens as a result of a decision that is being appealed would hardly serve as a FRAND benchmark in any other litigation. I would expect any other case to simply be stayed in that event.

What Judge Koh could do now is provide some guidance to Qualcomm on what structural options it does have even if a stay is denied (such as that Qualcomm would not act in contempt of the injunction if it insisted on contractual provisions that protect its rights, including retroactive adjustments, in the event of a successful appeal). Maybe Qualcomm is primarily hoping to obtain such clarification while formally moving for a stay.

With a view to LG Electronics, which supports the FTC's opposition to Qualcomm's motion, Qualcomm contradicts LG's description of the state of negotiations between the parties. Qualcomm notes that it "continuously supplied chips to LGE, without any interruption, throughout the negotiations"--but if it intended to do so going forward, the injunction against its "No License-No Chips" tactics wouldn't make a difference. Qualcomm mentions "a written offer to enter into binding FRAND arbitration with LGE to try and resolve the dispute, which included an express guarantee of chip supply during the pendency of the arbitration, but LGE declined that offer." As I've explained on various occasions, including my FTC v. Qualcomm trial coverage, arbitration isn't necessarily fair. Without the right parameters, it can give an extremely unfair advantage to a patent holder making out-of-this-world royalty demands since the licensee can't counterbalance a supra-FRAND royalty demand by proposing a negative royalty.

Qualcomm also argues that a requirement to sell chips to unlicensed OEMs would have profound implications due to patent exhaustion. Qualcomm rejects the FTC's argument that Qualcomm should simply "price[s] its modem chips to reflect the fair value of its patents" (which, by the way, pretty much every other chipset makers does, and even Qualcomm does so in some other business areas than cellular modems). Qualcomm argues that it would either lose chip sales or its ability to fully monetize its SEPs "so long as other chip makers are not licensed and thus do not price into their chip offerings the cost of Qualcomm's patents, this would leave Qualcomm in the untenable position of either charging much more for its chips than do its competitors (and therefore likely losing the sales), or reducing its chip prices so that, once again, they do not reflect the fair value of Qualcomm's patents."

The passage I just quoted may very well be the weakest one in that entire reply brief. If its chipset makers aren't licensed, then this is an apples-to-bananas comparison as device makers (as many of them--and competing chipset makers such as Intel--testified in the FTC litigation) would still have to factor in the cost of licensing Qualcomm's patents.

Finally, and as we all know, Qualcomm dreads the notion of having to extent exhaustive SEP licenses to rival chipset makers. But Qualcomm's argument for a stay of that particular provision comes down to what Judge Koh has already rejected at the merits stage: the question of efficiency of multi-level licensing (licensing cellular SEPs to baseband chipset makers and other patents to device makers) versus component-level licensing. Qualcomm says that neither OEMs nor chipset makers would jump to pay royalties, so there would be disputes over whether certain patents are practiced by particular products or not. Qualcomm describes this as a risk of "obstruction and delay," but that holdout-style argument does not appear to be sufficient to make a case for irreparable harm. Other patent holders face those challenges all the time (as the FTC noted in its opening statement back in January).

In that context, Qualcomm also demands "adjudicative comity" (respect for other jurisdictions) because its settlements with China's NDRC and the Taiwan Fair Trade Commission did not involve a requirement to extend licenses to rival chipset makers. I don't understand the comity issue here: if additional parties get licensed, it doesn't frustrate any policy or decision by other antitrust agencies. If the NDRC or the TFTC settled their cases without such a requirement, why would it hurt them if, say, MediaTek obtained a license as a result of the U.S. FTC case? I can't think of any negative effects on competition in those markets.

Part B of Qualcomm's reply brief addresses the likelihood of success of its appeal, with an emphasis on the need for a court to determine that violations are "likely to reoccur" before the FTC can be granted the injunctive relief it successfully sought here. What is missing here is a proposal for how an antitrust offender in a dynamic market could ever be enjoined from some behavior since the court would always have to set some sort of cutoff date.

Part C, finally, makes a national security-centric public-interest argument, with a particular focus on the decision by the Committee on Foreign Investment in the United States (CFIUS) to block Broadcom's attempted acquisition of Qualcomm. The FTC's position was that the CFIUS decision was unrelated to the behavior at issue in the antitrust case, but Qualcomm points to the CFIUS's position that "[c]hanges to Qualcomm's business model [as a result of an acquisition by Broadcom] would likely negatively impact the core R&D expenditures of national security concern." I tend to agree with Qualcomm that the content of the CFIUS letter is significantly more helpful in the public-interest context of the motion to stay than the FTC acknowledged. However, the CFIUS did not block Broadcom's hostile takeover of Qualcomm in order to enable continuing antitrust violations.

What I found interesting is that, with reference to ACT | The App Association's amicus brief, Qualcomm's reply brief also refers to the European SEP policy debate and, specifically, the two competing CWAs (CEN-CENELEC Workshop Agreements). One of the exhibits attached to Qualcomm's reply brief is CWA1, which Qualcomm and similarly-minded companies support, while there is far broader and stronger support for CWA2.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

LG Electronics and industry group support FTC's opposition to Qualcomm's motion to stay enforcement

This is the second part of today's little trilogy of FRAND posts. Like the previous one, it deals with some Qualcomm antitrust litigation pending in the U.S. and involves third-party submissions (amicus curiae briefs).

Yesterday evening, the FTC filed its opposition to Qualcomm's motion to stay the enforcement of antitrust remedies pending its Ninth Circuit appeal. Qualcomm had unsuccessfully moved to shorten time. The FTC's opposition brief argues that the delay requested by Qualcomm "would adversely affect competition at a critical time, just as the cellular industry is transitioning to 5G technology" (this post continues below the document):

19-06-11 FTC Opposition to ... by on Scribd

The legal standard for an enforcement stay has four prongs. Two of them merge into one when the government (as in this case) is the opposing party, as the government itself can't be harmed, so the harm to third parties (consumers or other vendors) and the public interest are then essentially the same type of concern. The other factors are whether the moving party has made a strong showing that it is likely to succeed on the merits and irreparable harm to the moving party.

Obviously, Judge Koh is not going to agree with Qualcomm that the appeal is likely to succeed. That question will become more relevant when Qualcomm takes this motion to the Ninth Circuit after Judge Koh denies the motion in whole or in part.

As for irreparable injury to Qualcomm, the FTC points out that Qualcomm doesn't even attempt to make such a showing with respect to certain provisions such as a prohibition to impose antitrust-related "gag order" (that term doesn't appear in the FTC's filing) clauses on other parties. And to the extent Qualcomm claims there would be irreparable harm, the FTC naturally disagrees. With respect to license agreements Qualcomm would have to negotiate now (absent the stay it seeks) with third parties, the FTC notes that "Qualcomm and its counsel are entirely capable of negotiating (i) short-term or 'interim' licenses and (ii) contractual provisions that would mitigate or eliminate any long-term adverse consequences to Qualcomm of a license agreement concluded during the pendency of its appeal."

I've had some discussions recently, such as with a journalist just yesterday, on whether Qualcomm would be irreparably harmed by having to renegotiate existing agreements. What I've been telling people is that there certainly would be contractual ways to address any such concerns. For an example, a "condition subsequent" could result in the rescission of a new agreement in the event Qualcomm prevails on appeal, and in that case any previously-existing agreements could enter into force and effect again, even retroactively so as to enable Qualcomm to be made whole. Where there's a will, there's a contractual way.

The point that the FTC makes about the viability of short-term interim agreements is an important one. Based on what Qualcomm tells investors, it currently has an interim agreement in place with Huawei--and an amicus curiae brief filed yesterday in support of the FTC's opposition to Qualcomm's motion for an enforcement stay shows that there also is a provisional agreement in place between Qualcomm and LG, which will expire at the end of this month (this post continues below the document):

19-06-11 LG Amicus Brief IS... by on Scribd

LG tells the court about the status of its relationship with Qualcomm and outlines its concerns that an enforcement stay would enable Qualcomm to gain leverage over LG by using some of the very tactics Judge Koh held to be anticompetitive. In December, LG (re)joined the Korean antitrust case against Qualcomm. What makes its amicus brief in Northern California interesting from a cross-jurisdictional perspective is that Qualcomm is at risk of sanctions, even under Korean criminal law, for failing to comply with a KFTC antitrust order (Qualcomm wanted its enforcement to be stayed, but the Korean court said no). Once Judge Koh's order gets enforced in the U.S., there is an increased likelihood of the Korea Fair Trade Commission putting pressure on Qualcomm to comply with the Korean decision as well.

In addition to LG, ACT | The App Association, an industry body with corporate members of different sizes, also supports the FTC against Qualcomm's motion for a stay (this post continues below the document):

19-06-11 ACT Amicus Brief I... by on Scribd

ACT frequently partners with other industry associations to promote FRAND licensing principles. Yesterday's amicus brief notes that ACT, "together with another leading industry association [= the Fair Standards Alliance], [ACT] recently co-sponsored a CEN-CENELEC Workshop bringing together more than fifty small and large industry companies to document Core Principles and Approaches for SEP Licensing, particularly for 5G applications and industries." In a footnote, ACT links to the result of that European effort, the CEN-CENELEC Workshop Agreement 2 ("CWA2"), a document describing "Core Principles and Approaches for Licensing of Standard-Essential Patents." My next post (the third and final one of today's FRAND trilogy) will discuss CWA2.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

LG offered Nokia privateer Conversant less than 1% of the standard-essential patent license fees it demands--and even that turns out unwarranted

Privateering--the practice of large patent holders formally transferring patents to non-practicing entities that will assert them on their behalf (practically, those deals amount to agency-like arrangements in many cases)--is an issue that has been facing the mobile device industy for a number of years. Nokia and Ericsson are particularly active in that way.

A couple of particularly aggressive privateers--Unwired Planet (mostly fed by Ericsson) and Conversant (a Nokia patent assertion partner)--are parties to a UK Supreme Court proceeding I blogged about earlier this week. One of them, Conversant, was dealt a real blow last week by the Cour d'Appel de Paris--the appeals court for the Paris region, to which all patent rulings by the Tribunal de Grande Instance (TGI) de Paris are appealed. A panel of three appellate judges under Presiding Judge David Peyron ruled against Conversant's appeal of a TGI ruling on several standard-essential patent (SEP) assertions by Conversant (formerly known as Core Wireless) against LG Electronics (this post continues below the document):

19-04-16 French Appellate R... by on Scribd

Conversant's appeal related to a handful of patents. But for three of them, the appeals court held that Conversant failed to provide the information required to make an essentiality determination. While the appeals court declined to declare the French parts of the remaining three patents invalid, it also determined that EP0978210 on "connecting a multimode terminal to the network in a mobile communication system" nor EP0950330 on a "user terminal for mobile communications" are not standard-essential. With respect to EP'210, the court's claim construction is so narrow that the patent can be worked around by performing a measurement of signals periodically as opposed to only in situations of poor network coverage. In any event, the 3G/4G standard specifications say that such measurement should be performed, but also state that devices may simply not do so. EP'330 was found non-essential on two different grounds, either one of which would be sufficient on its own. There choice of high-level protocols (IPv4 and IPv6) is not explicitly required by the specifications of the telecommunications standard, and it's debatable whether IPv4 and IPv6 constitute alternative protocols as opposed to simply different versions of one protocol (the Internet Protocol = IP).

This French appeals court took the position that FRAND licensing obligations apply only to actually essential patents, not merely declared-essential ones. Courts in some other jurisdictions have taken a similar position, but there's an alternative approach according to which a patent holder's FRAND declaration applies to non-essential patents as well.

As a result of its holdings of non-essentiality, the French court declined to make a FRAND rate determination. What's interesting, however, is the enormous discrepancy between the parties' positions. Conversant was seeking a royalty based on the net sales price of an entire handset (the typical royalty base issue) amounting to 0.149% for 4G devices sold in the "principal markets" and 0.170% for 3G devices sold in such markets, with lower pecentages for China. Conversant claimed that this was consistent with Justice Birss's decision in the UK case Unwired Planet v. Huawei.

By contrast, LG offered (depending on markets and whether only 2G, the combination of 2G and 3G, or the whole package of 2G+3G+4G was implemented in a device) between 1.62 and 5.73 thousandths of a U.S. cent per device and per patent family. In order to make those numbers easier to understand, LG also calculated a dollar amount per one million devices from $16.2 to $57.3. Based on Conversant's own claim of owning 22 SEP families, this would in the most optimistic of all scenarios have amounted to 22 times $57.3 = $1,260.60 per one million devices.

Even if one assumed an average net sales price of only $100 per LG phone (which is a very low number), Conversant's own claim would amount to $0.149 per device, or $149K per one million devices--more than one hundred times the $1,260.60 per one million devices that LG offered.

Such discrepancies are not unheard of in the context of FRAND rate disputes. In April 2013, Judge James L. Robart of the United States District Court for the Western District of Washington awarded Motorola Mobility, in a FRAND case brought by Microsoft, less than one-twentieth of a percent of its original demand. Later that year, in the Northern District of Illinois, Judge James F. Holderman held that 19 WiFi patents belonging to a patent assertion entity named Innovatio IP Ventures were worth less than 10 U.S. cents per unit.

While Innovatio had hoped for a lot more than 10 cents per unit, the question is whether Conversant is ultimately going to get anything from the likes of Huawei and LG. Conversant's pathetic results in France are not going to impress the Supreme Court of the UK.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

After mixed Day 5 of FTC v. Qualcomm antitrust trial, irrelevant German ruling to be handed down later

[Update] The Mannheim Regional Court indeed threw out Qualcomm's complaint for non-infringement based on claim construction (the first of three possibilities I discussed further below). [/Update]

Day 5 of the FTC v. Qualcomm antitrust trial just concluded. It was the most eventful and interesting day of the first half of this bench trial. The morning and the early afternoon were a total disaster for Qualcomm, but toward the end Qualcomm had its strongest hour to date.

I usually write about these long and tiring trial days the next morning. I'll do so again, given that we learned some interesting numbers and other relevant facts, but here's a very short summary--and then I'll provide a preview of the Qualcomm v. Apple patent infringement ruling coming up in Mannheim at 9 AM local time there (midnight Pacific Time):

• The first witness this morning was Apple COO Jeff Williams. Some of what he said effectively nuanced what Qualcomm CEO Steve Mollenkopf said on Friday about Apple's alleged proposal to agree to exclusivity. Mr. Williams provided the court and trial watchers with interesting and credible information on various other issues. He was the first witness to be rudely interrupted by Keker van Nest & Peters' Eugene Paige, but in his low-key, friendly, unpretentious way drove all the important points home.

• The FTC staff then read into the record some testimony by an LG Electronics IP executive that showed, among other things, how Qualcomm bullied LG when it challenged in arbitration (which wasn't even remotely as threatening to Qualcomm's business model as a challenge in a court of law would have been) Qualcomm's licensing terms.

• Then came an FTC licensing expert, Richard Donaldson. Against his background of 31 years (!) of patent licensing work at Texas Instruments, and many years of consulting and expert testimony since he retired from TI, Mr. Donaldson explained how atypical the licensing terms Qualcomm imposes on licensees are, and he also explained that chipset-level licensing is as feasible as it is commercially viable.

  The aforementioned lawyer, Mr. Paige, cut off Mr. Donaldson's answers, and even though I think Mr. Donaldson could have given a tactically better answer to the question of whether TI sought to avoid the exhaustion of system-level (= device-level) patents through chipset licensing (he could have pointed out that this is a non-issue if a chip-level license deal involves only specified or otherwise clearly-defined chip-level patents), I think he dealt with Mr. Paige's onslaught very well. At some point Judge Lucy H. Koh intervened against those interuptions of the witness.

• After the lunch break (which was in the middle of Mr. Donaldson's testimony) Judge Koh came back to the issue of Mr. Paige's constant interruptions and told him not to cut off a witness "after two words." She called this "improper" (I couldn't agree more--it was extremely annoying) and warned that the next party to do so would lose two minutes of its trial time.

• The FTC played some testimony by Ericsson's licensing president Christina Petersson. While Ericsson is also very much into patent monetization, especially standard-essential patent (SEP) monetization, she said various things that seriously undermine some of Qualcomm's positions and defenses, such as with respect to Qualcomm's licensing terms being unusual (the only chipset-level outbound license deal Ericsson still has in place is with Qualcomm). Ericsson sought to position itself as a reasonable SEP licensor (I've repeatedly criticized Ericsson on this blog, but they're not the worst for sure) who understands every SEP holder has to consider he doesn't own the standard alone "in order for the system to work." In other words, Ericsson disagrees with Qualcomm's extreme demands because if everyone did that, the collective impact of royalty-stacking would be devastating. Ericsson even undermined Qualcomm's position with respect to chipset-level licensing, saying that despite the agreement it still has in place with Qualcomm, Ericsson continued to invest in research and development as well as standard-setting.

  With respect to LTE, Ericsson believes it has the strongest portfolio in the industry, with Qualcomm "definitively" weaker in Ericsson's opinion, and with some allegedly believing Nokia is also ahead of Qualcomm.

  We've now heard pretty much every significant industry player. No one is on Qualcomm's side in every respect. There are some who are 100% against Qualcomm, and some who at least disagree with Qualcomm on some key issues.

• Then came Michael Lasinski's testimony. He's another licensing expert testifying on the FTC's behalf. His background is impressive: a former president of the U.S. & Canada chapter of the Licensing Executives Society, and a former American Bar Association IP division chair. A couple of my Twitter followers immediately vouched for him when I mentioned him.

  After an otherwise awful day for Qualcomm, we saw a world-class performance by Cravath Swaine & Moore lawyer Gary A. Bornstein. He struck just the right balance between being assertive and respectful, and he managed to highlight a number of issues relating to Mr. Lasinski's methodologies. Question by question, Mr. Bornstein cornered Mr. Lasinski and forced him to concede limitations and shortcomings, and in one context even an outright contradiction. Mr. Bornstein won this fight by a wide margin, though Mr. Lasinski made a stronger showing initially than the other expert, Mr. Donaldson, on cross-examination.

  While the positions Qualcomm takes on economic expert testimony are way too demanding (no government agency or company in the world could possibly satisfy them), there are indications that Mr. Lasinski's analysis could be the, relatively speaking, weakest link in the FTC's chain. It remains to be seen tomorrow to what extent Professor Carl Shapiro's economic analysis renders those deficiencies less relevant.

• Apple contract manufacturer Wistron (which was spun off from Acer a long time ago) confirmed what others said about Qualcomm simply not making concessions on key licensing terms. He said they ended up agreeing on a huge upfront payment to Qualcomm, and in order to recoup that one as soon as possible, they couldn't work with other baseband chipset makers though there would been economically attractive options.

So there was a lot of shadow for Qualcomm, but also a silver lining for them with respect to Mr. Lasinski's methodologies.

After the first half of the trial (not counting the closing argument scheduled for February 1, 2019), I believe Qualcomm made the mistake of having too many cooks in the kitchen and partly the wrong cooks in certain places. The name of the game is not how many law firms you get involved. It's how effective they are, how "suitable to task" in tech lingo.

Cravath is Qualcomm's lead counsel against Apple, but the lead here in San Jose was given to Bob van Nest. Mr. van Nest himself has class and style, though he's primarily good at jury trials, and Judge Koh is the very opposite in terms of competence and professional coolness from a layperson jury. He's got a great reputation in this district, and Cravath is HQ'd in New York State.

But in retrospect I believe Qualcomm should have given Mr. Bornstein the lead here. He's been lead counsel in other high-profile antitrust cases. It seems to me that he's the smartest member of Qualcomm's trial team here, and generally all the Cravath lawyers here appear classier and more effective than the Keker van Nest lawyers apart from Mr. van Nest himself. There really is a very noticeable difference between one of the most reputable law firms in the country and a regional player good at misleading juries such as in the Oracle v. Google case, where they had a great jury strategy and benefited from a judge who made some key decisions against Oracle that the appeals court unanimously overruled in two different years. By contrast, even if Qualcomm loses (and I still think that's more likely than not to happen), I don't think anyone can blame Cravath.

The next news cycle related to Qualcomm's patents is only about six hours away. At midnight Pacific Time, or 9 AM Central European Time, the Mannheim Regional Court will announce decision, which can be a final judgment or a procedural order, on one of Qualcomm's German infringement lawsuits against Apple targeting Intel-powered iPhones. The patent-in-suit is EP2460270 on a "switch with improved biasing" ("biasing" in this context basically meaning that one voltage gets to control another).

I'm not going to stay up, or get up at midnight, for a nuisance lawsuit (which is all that this one is in practical terms), but I'm sure many will hear about the decision, so I'll quickly explain what may happen and why it's a pointless lawsuit in any event.

• If the court clears those iPhones of infringement, it will most likely be because the court, more or less sua sponte if I understood it correctly (I watched the trial a few months ago), developed a claim construction approach based on an unasserted parallel claim.

• The court might also stay the proceedings pending a parallel nullity action. The Swedish patent office provided an opinion according to which there's nothing inventive about that patent. And it did so on an independent basis, without any specific theory being presented to the examiner (just the prior art references).

• Even if the court refrains from deciding the case based on its great claim construction idea and also declines to attach weight to the Swedish patent examiner's analysis, and formally enters an injunction, so what? At trial it was undisputed between the parties, and mentioned in open court, that Pegatron, one of Apple's contract manufacturers, is licensed to the patent. So there wouldn't be any bottom-line impact on the availability of any iPhone model in Germany.

Among various strong points, the weakest point Mr. Bornstein made in his cross-examination of Mr. Lasinski related to a hypothetical question they had asked him in early 2018 about whether he'd consider Qualcomm's non-SEPs more valuable if Qualcomm obtained injunctions against Apple in foreign courts. We know that some injunctions have come down: two in China (over two patents), and two in Munich, Germany (over the same patent in both Munich cases, just targeting different Apple entities). The problem with Mr. Bornstein's attempt to leverage those decisions now is that those injunctions still don't give Qualcomm any serious leverage.

The Chinese patents-in-suit have, according to Aple, been worked around by iOS 12. We'll have to wait until it becomes clearer whether the Chinese court agrees, but given that those are non-standard-essential software patents, it's perfectly plausible.

The Munich decision affects only 3% of Apple's German sales of the iPhone 7 and of the iPhone 8: direct sales to end users through its 15 retail stores and its German online store. Even those 3% of the sales of the two oldest iPhone generations on sale in a market that generally isn't huge for Apple (significant, but far from substantial) aren't really lost because some will buy other iPhone models instead and others will simply buy those iPhone models from resellers.

Anyone can see on the Internet that the "enjoined" iPhone models are still widely available in Germany.

Even the best-case outcome of the Mannheim case up for a decision in about six hours would fall short of the minimal impact of the Munich injunction: the worst-case scenario for Apple, based on what was said at trial (and in the court's preliminary opinion militated against an antitrust issue int his case), would simply be that all German iPhones (of the affected generations) would have to be manufactured by Pegatron.

Another Mannheim decision is scheduled for February 19, 2019 in a case in which the court strongly suggested to Qualcomm to stipulate to a stay given serious doubts about the validity of the asserted claim.

In between those two Mannheim decisions, the Munich I Regional Court will rule (on January 31) on a bunch of lawsuits related to a patent family that Qualcomm is asserting against Apple's Spotlight search. iOS 12 contains a workaround based on what was discussed at trial.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

List of complainants over Qualcomm's conduct keeps growing as LG Electronics joins Korean antitrust action

While things slow down in Western countries between Christmas and New Year's Day, "Tis the season" has a different meaning in South Korea. Two years ago at this time of the year, the Korea Fair Trade Commission (KFTC) slammed Qualcomm with a fine. And now BusinessKorea reports that LG Electronics has joined the related antitrust lawsuit.

LG's decision is important since Samsung withdrew from the case last year following a comprehensive business agreement with Qualcomm involving patents, chipsets, and manufacturing. However, depending on how the FTC v. Qualcomm trial (scheduled to start on Friday, January 4) will go, Qualcomm may have to renegotiate its deal with Samsung anyway.

According to BusinessKorea, other complainants in Korea include Apple, Intel, MediaTek, and Huawei. MediaTek is mentioned from time to time in connection with Qualcomm's conduct, and one of my New Year's resolutions for this blog will be to find out at least a little bit more about the role they play. The fact that the name of this Taiwanese semiconductor company keeps coming up got me curious.

Meanwhile in Germany, where Qualcomm capitalized on the terrible "defendant's dilemma" laid out by the court, we may still have to wait a little before we know about a potential stay of enforcement of the injunction. Today is yet another public holiday in Germany (Second Christmas Day). Since the ruling came down on Thursday afternoon, the earliest time when Apple could realistically have filed an appeal and a motion to stay enforcement would have been Friday, December 21 (if they had already prepared an appellate brief in anticipation of what happened). But this is a high-profile case, with major economic implications, so maybe the appellate judges are already looking into this despite the Holiday Season. German judges are free to take case files home (it's all on paper though some courts, such as the Federal Patent Court, internally work with electronic documents to an increasing extent) and work whenever and wherever they please. The most fundamental question will be whether the appeals court affirms or reverses the lower court's agnosticism (the court stated in public that there may not even be an infringement).

It doesn't look like enforcement has already begun. Qualcomm firstly needs to post the bond or make the deposit (north of $1.5 billion in the aggregate of two injunctions, a fact missed by fake news media and clueless commentators) and on that basis serve the injunction on Apple. They said it would take a few days, so maybe enforcement will begin later this week.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

New deal with Samsung makes Qualcomm a little less isolated on the antitrust front

After the EU "grandslammed" Qualcomm with a $1.2 billion fine (joining the FTC and Asian regulators in holding Qualcomm's conduct illegal), Qualcomm has finally had some good news to report: just in time for its earnings call, Qualcomm announced a new five-year license agreement with Samsung. In addition to the joint press release with Samsung, Qualcomm issued a press release in which it mentioned that "Samsung will be withdrawing its interventions in Qualcomm's appeal of the KFTC decision in the Seoul High Court."

The most interesting question would be whether Qualcomm had to substantially lower its fees and prices in order to get this deal done with Samsung. I can't imagine that Samsung wouldn't have used its leverage from Qualcomm's overall situation, including Broadcom's hostile takeover bid. This is probably a pretty good deal for Samsung. However, Qualcomm presumably wanted to avoid doing a deal on terms that would undermine its credibility with a view to rate-setting decisions that courts in different jurisdictions will have to make. Apparently there was a set of deal terms that both parties considered beneficial, and it allows both of them to focus on other issues.

What else does this new agreement mean for the pending lawsuits and ongoing antitrust proceedings?

It's unlikely that Samsung would now, after complaining about how Qualcomm's practices "directly harmed" the Korean electronics giant in two strategic business areas, suddenly file amicus briefs in support of Qualcomm. After all, Samsung will need leverage again when renewing the current deal in a few years' time. So Samsung will most likely play a neutral part and sit by idly and silently as regulators on three continents, Apple, and possibly other device makers (rumor has it that Huawei stopped paying royalties last year) are squaring off with Qualcomm in different venues.

Samsung is Korea's largest corporation (accounting for roughly 20% of GDP), but not its only one. Presumably the KFTC will continue to defend its decision in court, and other companies (such as LG) may still be very interested in the process. However, South Korea is now a less relevant "theater" in the worldwide Qualcomm antitrust war. Qualcomm is still in trouble in the U.S., the EU, and Taiwan. And it remains to be seen what will happen in China if it's true that Huawei was the device maker that halted its royalty payments.

In a nutshell, Qualcomm has one enemy less, but still a huge pile of problems--and still no major ally in court or in the antitrust arena.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Google and Android OEMs apparently close to settlement with Rockstar over ex-Nortel patents

About a year after the Rockstar Consortium's Halloween 2013 lawsuits against Google and a host of Android device makers, and only days after a $188 million settlement between Rockstar and Cisco became known, the most likely outcome is now that Rockstar's pending cases against Google and various Android OEMs will be settled at a relatively early procedural stage.

Four days ago, Rockstar filed an unopposed motion in its Google case (over search engine patents, which is separate from the Android cases) for a 45-day stay, which was subsequently granted. The motion said the following about the current state of affairs:

"[O]n November 12, 2014 a binding Term Sheet was executed that settles, in principle, all matters in controversy between the parties. [...] [T]he Term Sheet is [being] reduced to a definitive agreement. [The 45-day stay] is necessary due to the complexity of the transaction and the number of additional parties whose claims are concurrently being resolved."

There are no additional parties to the case over search engine patents besides Rockstar, its NetStar Technologies subsidiary, and Google as the sole defendant. However, there are many parties to the Android cases (devices makers like Samsung, LG, HTC, and ZTE), making a comprehensive settlement involving not only search engine but also wireless patents the only plausible interpretation of that passage.

Absent a settlement, all of the key issues in the Android context would be resolved in the Northern District of California, the venue preferred by Google and its partners. In the declaratory judgment action in California, a report was filed in early November, saying that the parties engaged in court-ordered mediation but reached no settlement. However, it is possible that the mediation meeting nevertheless had a positive effect. It probably also helped the parties to know in which court the infringement and validity determinations would be made.

It would be out of character for Google to make a huge payment at an early stage of a patent litigation (though there's always the possibility of something happening for the first time in history). It's also unlikely that pretrial discovery has given the parties definitive clarity about the likely outcome. So I can't imagine that the impending settlement would be a win across the board for Rockstar. The two most likely scenarios are either a win-win (Google and its partners can put this thing behind them for an amount that's worth it while Rockstar can produce some revenues that help the acquirers of Nortel's patents offset some of their costs) or a set of terms under which Rockstar lets Google and its partners off the hook at a rather low cost. Should the latter be the case, then it would most likely be attributable to dwindling support for Rockstar's lawsuits among its owners.

While no single shareholder (not even Apple, which contributed most of the funding) will be singlehandedly in the position to tell Rockstar's management what to do, it's possible that a couple of shareholders have demanded that those cases be settled. Protracted and potentially acrimonious litigation could have resulted in negative publicity for Rockstar's owners (a key difference between Rockstar and "patent trolls" who have no affiliation at all with any operating company).

Also, Rockstar's management and/or shareholders may have found Google's proposed terms more acceptable than initially. After all, smartphone patent lawsuits typically don't give plaintiffs tremendous leverage.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Android partners Google and LG Electronics announce patent cross-license agreement

A press release just appeared on the LG Electronics website to announce a long-term patent cross-licensing agreement between the Korean company, which is one of the more significant Android device makers, and Google.

The announcement doesn't state a specific term. It says "[t]he agreement covers the two companies' existing patents as well as those filed over the next 10 years," which actually suggests that the term is well over 10 years (probably at least 12 years) since any patent filings made 10 years from now would not immediately result in an issued patent at the time.

While the agreement is described as covering "a broad range of products and technologies" and appears to be (without saying so) a zero-zero cross-license for the most part, it's hard to imagine that there would be no exclusions or restrictions. For example, Google won't have allowed LG to build a search engine that makes use of any of Google's related inventions, and LG would probably still want to collect royalties on Blu-ray Disc devices should Google ever build any (Blu-ray is a context in which LG has done some patent enforcement in recent years). But apart from specific areas, this agreement is certainly designed to ensure lasting patent peace between these two Android partners.

Between the lines, both companies' official quotes on the deal criticize those who have a greater focus on patent monetization or even try/tried to use patents for exclusionary purposes. Google and LG stress the focus on products and the related consumer benefits. It's like, "Make stuff, not war."

At the beginning of the year, Google announced similar deals with Samsung and Cisco. Samsung is the world's leading Android device maker. Cisco's interest was presumably more political. All of those four companies -- Google, Samsung, Cisco, LG -- have to defend themselves against patent assertions by the Rockstar consortium. Rockstar's owners include Apple, BlackBerry, Ericsson, Microsoft, and Sony; while Apple contributed most of the money to the 2011 purchase of former Nortel patents, it may not be responsible for Rockstar's lawsuits in any (other) way because of its limited voting rights.

Not only do those companies have a problem with Rockstar but those of them involved with Android (Samsung, LG, and Google, but not Cisco) also had or have issues with some of Rockstar's owners. Samsung and Ericsson settled last year, and Ericsson holds patents in fields relevant to Cisco's business (Ericsson's strategy is to collect royalties from device makers rather than chipset makers). Apple never sued LG and probably never will (at least not over the kinds of patents it unsuccessfully asserted against Samsung, HTC and Motorola in the past), but if it had been more successful against others, it might have done so at some point. Based on reports in the Korean press, LG is similarly unhappy about the Android-related patent license fees it pays to Microsoft as Samsung is. Last week Samsung asked a U.S. court to declare that it may terminate its Android/Chrome patent license agreement with Microsoft.

All of those companies have something to sort out with Nokia as well. Nokia is not a Rockstar shareholder but, with a view to patent assertions, it's clearly in the same camp.

I criticized Google's previous announcements of such long-term, presumably zero-zero (except in presumably some areas) patent cross-license deals as PR stunts. Today's announcement is part of the same campaign, but I have to adjust my position on this type of deal in light of the pathetic results of smartphone patent enforcement efforts by all of the major litigants (only about 9% had merit; only about half of the cases in which liability was established resulted in lasting injunctive relief based on interim results; and even where lasting injunctive relief was obtained, it didn't really matter commercially). Against the background of those results it's very difficult to recommend to any major industry player to accept license deals with massive balancing payments. Everyone should think hard and long before agreeing to make a huge balancing payment to someone who has not yet established in court, or may even have failed miserably to establish in court, their ownership of valid patents that can't be worked around at a rather low cost without serious impact on the market potential of a product line. I'm convinced that many or even most of the smartphone-related patent license deals that are currently in force would never have been made if companies had known a few years ago just how negligible the commercial impact of all those smartphone patent assertions by major players was ultimately going to be (I was very surprised, too).

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Rockstar attack on Android to be adjudicated in Northern California, not East Texas: Fed. Cir.

Google and several major Android device makers (such as Samsung, HTC, LG, ZTE, and ASUS) scored a procedural win today in the United States Court of Appeals for the Federal Circuit against a patent assertion entity jointly owned by Apple, Microsoft, Erisson, BlackBerry, and Sony. The appeals court handed down a decision in favor of Google's request for a writ of mandamus and instructed Judge Gilstrap in the United States Eastern District of Texas, whose unwillingness to move patent infringement cases out of his district is long-standing and well-document, to stay the proceedings in his court pending a declaratory judgment action in the Northern District of California that will practically dispose of all of the key issues, if not all of the issues, in the Texas case.

Statistically, defendants fare better in the Northern District of California with respect to pretrial decisions. In addition, jurors in that district are, on average, more tech-savvy than anywhere else in the country.

The order granting Google's petition was authored by Circuit Judge Kathleen O'Malley, the same judge who also wrote the opinion in the Oracle v. Google Android-Java copyright case. On Monday, Google appealed the appeals court's ruling on that one to the Supreme Court (which will in the first step have to decide whether to hear the case at all, which is not a given because the SCOTUS is too busy to hear all high-profile cases presented to it).

Nobody doubted that there was substantial overlap between the California and Texas cases. If one court had accepted to move its case out of its district, the risk of potentially conflicting decisions would have been eliminated. In April, the Chief Judge of the Northern District of California held that Rockstar's scare-and-run tactics against Android advanced Apple's strategic interests (though I give Apple the benefit of the doubt with respect to Rockstar's decision to bring widespread litigation over the former Nortel patents jointly acquired by its current shareholders and a former partner, EMC). The California case continued for that reason as well as for others. For Judge Gilstrap in Texas, it would have been out of character to transfer or stay the case he was presiding over, so the only way to resolve the conflict was for the appeals court to speak out on it.

Judge O'Malley is, at the philosophical level, one of the more right holder-friendly judges of the Federal Circuit--clearly more patentee-friendly than Chief Judge Sharon Prost, for example. She also tends to favor a broader scope of patent-eligible subject matter than some of her colleagues. But let there be no doubt about the balanced approach underlying her opinions in the Oracle case (where she agreed with Oracle on copyrightability but stopped short on resolving fair use as a matter of law) and now in this Google matter. I like both of those opinions--twice as many as Google is happy about.

Rockstar's arguments clearly didn't impress Judge O'Malley. One example is that Rockstar had added Google as a defendant to the Samsung case in Texas. The official reason was Google's involvement with the Galaxy Nexus. More than anything else, however, it was a transparent response to Google's previous declaratory judgment complaint in California. Rockstar wanted to get the benefit of the earlier-filed case. Judge O'Malley and her two colleagues on the panel weren't persuaded by this. They ultimately concluded that Judge Gilstrap had abused his discretion in denying a stay of the Rockstar actions in Texas.

The Federal Circuit found that Rockstar is basically run out of Canada, with only a minimal presence in Plano, Texas. By contrast, Google is undoubtedly run out of Northern California and has most of its Android records there. This reduces the burden on witnesses. Judge O'Malley and her colleagues focused on avoiding a waste of resources and chose a "flexible approach, including staying proceedings if the other suit is closely related that substantial savings of litigation resources can be expected."

One part of the decision that is particularly likely to be cited going forward disagrees with the Texas holding that this case was far outside the customer-suit exception (a rule that is rarely invoked so far and may be strengthened if some serious U.S. patent reform ultimately happens, which is more likely than ever should the Republican Party take control of the Senate) because of the fact that Android device makers are allowed to modify and customize the Android platform to a certain extent. The Federal Circuit has now found that the infringement allegations against the different Android device makers are more or less identical, showing that whatever flexibility they might have had regarding the Android platform didn't change the fact patterns to be adjudicated now.

Judge Gilstrap's decision was in no small part based on an all-or-nothing logic: consolidate everything in Texas or consolidate everything in California. The Federal Circuit now says it's more flexible, and in this case more appropriate, to just stay the Texas case in order to let the court in California resolve the issues pending there. In practical terms, this is very close to the effect of consolidation in California. Should none of the asserted patent claims be held both valid and infringed at the same time, Texas won't have anything left to do. Such an outcome is not at all impossible. Two of Rockstar's shareholders are among the five large organizations whose patent assertions against other major players I recently analyzed. Based on partly final and partly intermediate results, only about 9% of those 222 patent assertions (most of them against Android devices) had merit.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Android device makers must tread carefully when colluding to bring patent prices down

Last Tuesday an interesting order addressing the intersection of patent and antitrust laws came down in the Northern District of California in a case I didn't watch (hence the delay here). Judge Yvonne Gonzalez Rogers dismissed motions to dismiss that Samsung, Google's Motorola Mobility, HTC and patent aggregator RPX had brought against an (amended) antitrust lawsuit by "patent troll" Cascades Computer Innovation alleging anticompetitive cooperation between those defendants in licensing and purchasing negotiations involving U.S. Patent No. 7,065,750 on a "method and apparatus for preserving precise exceptions in binary translated code", which allegedly optimizes Google's Android mobile operating system.

The standard for a complaint to survive a motion to dismiss is not extremely high: there must be a legal theory, and the alleged facts must support it should they be true, which is a separate question. All well-pleaded allegations of material fact must be taken as true and construed in the light most favorable to the plaintiff, but they don't count if they're merely conclusory, unwarranted deductions of fact, or unreasonable inferences. So the hurdle is low, but there is a hurdle, and while I personally feel that the judge could and perhaps should have granted the motions to dismiss, the important lesson to learn from this is that companies colluding to bring patent prices and license fees down -- in this case, three leading Android device makers (which indirectly includes Google itself because it owns and controls Motorola) -- can be accused of and sued for antitrust violations.

Most antitrust cases addressed individual monopolies, the acquisition of monopoly power by illegal means, or alleged conspiracies for the purpose of inflating prices or keeping them artificially high by leveraging a collective monopoly. There is, however, also the notion of a monopsony: a monopoly on the buying side of a market (again, by one player or collectively by a group). Cascades alleges that the three leading Android device makers, all of them clients of patent pool firm RPX, conspired to monopsonize the market for Cascades' patent licenses at least with respect to the aforementioned '750 patent. Simply put, they told the patent holder that there would be a deal with all of them (through RPX) or none of them. At some point, LG Electronics (which allegedly has a 4% Android market share) and Philips (which is just about to enter the Android market) "broke from the RPX-driven conspiracy [after the filing of this antitrust lawsuit] and independently negotiated settlements with Cascades", says Cascades in its amended complaint.

The court proposes to stay the case (unless Cascades still dissuades it from that idea) pending an infringement proceeding in the Northern District of Illinois since the outcome of the infringement case would provide useful information as to the actual use and validity of the '750 patent. If this case gets stayed, the likelihood of a settlement prior to its resolution increases significantly. So we may never find out who wins the case. It would probably be desirable for the alleged conspirers to work out a settlement just to avoid an adverse ruling on the antitrust side; but they might also believe that this case has now reached a stage at which it's actually necessary for them -- at least for RPX -- to be cleared of any allegations of wrongdoing.

This is not the first time for RPX's business model to face criticism. In May 2011, the Gametime IP blog reported on a letter by security software firm Kaspersky to the FBI accusing RPX of racketeering. Three months ago PandoDaily published a lengthy article on RPX's business model that is anything but consistently flattering. Both these articles mention dealings between RPX and patent trolls. While RPX likes to portray itself as the antithesis to Intellectual Ventures, it interestingly faces the same allegation of divesting patents to trolls with the allegedly intended consequence of convincing third parties that signing up as clients of those firms is a smart choice for avoiding those attacks (though there are still plenty of other patents in the hands of trolls anyway).

I don't mean to engage in RPX-bashing here. I just wanted to point out that this firm portrays itself as a White Knight but doesn't have a clean white shirt in some people's eyes.

Cascades may be a typical troll, but despite the Federal Trade Commission's inquiry into deceptive practices by patent assertion entities, the rule of law (regardless of the political environment) is that it also deserves to be protected by competition law. It's unlikely to get help from antitrust authorities, but it can bring antitrust lawsuits as it did here, and a court of law is not swayed by lobbying: it simply looks at the merits of a case. Here's the order (this post continues below the document with further thoughts and some information concerning the new publishing rhythm of this blog):

13-12-03 Order Denying Motion to Dismiss Cascades Antitrust Complaint by Florian Mueller

Cascades' allegations -- again, at this stage it doesn't matter whether true or not -- are a plausible conspiracy theory to the judge, and the conspiracy part per se also makes sense to me, taking the allegations as true. Allegedly some parties, such as Google's Motorola, told Cascades that they weren't going to take a license (or, alternatively, buy the patent) individually but only as part of a group, through RPX. RPX approached Cascades and allegedly said that key RPX clients wanted "a global solution", and offered a price that it indicated was the best offer its clients would make.

While I can understand that the judge looked at this alleged behavior as well as alleged meetings between RPX and those companies to discuss a joint negotiation strategy as price-fixing by potential buyers, I'm troubled or at least unconvinced by this antitrust theory for mostly three reasons:

1. It would actually have been the most logical thing in the world for Google (not just its device-maker subsidiary, Motorola Mobility, as part of a group) to negotiate a global Android license on behalf of its ecosystem. The fact that Google didn't do that is not surprising giving its notorious reluctance to take licenses (though it is apparently willing to pay up for software patents asserted against Android through Motorola Mobility, which makes it appear rather hypocritical). But a company that takes better care of its ecosystem would do so, and in that case there would also be a single licensee. If that single licensee told its device makers that they don't need to take a license individually because Google will deal with this problem one way or the other (and indemnify them if necessary), that would not be an antitrust violation. It would be perfectly above board, but it could have a similar effect on Cascades' business opportunity with the Android ecosystem.

2. Antitrust matters are centered around a particular market definition. Here, the judge basically said that since Cascades alleged that its patent licensing opportunity is specific to Android, that's the market definition based on which to adjudge the motion to dismiss. But this patent is older than Android. It's a general acceleration technique for a bytecode machine. If it's even valid and actually infringed, then it must also be possible to work around this one without a noticeable degradation of product quality because other bytecode machines don't use this technique (otherwise Cascades would have more targets than Android device makers, resulting in a broader market definition that, in turn, diminishes the collective market share of the defendants). If it's easily worked around, then it's not too valuable anyway, raising doubts about whether those Android companies were really trying to bring the price of this patent down to a subcompetitive level or whether Cascades, as the Android camp claims, simply tried to overcharge.

3. When I read the order I wasn't sure that the judge had fully considered the differences between how patent licensing works compared to how actual products are sold. If the patent is valid and infringed (and let's assume it's not worked around too easily), Cascades can enforce it through infringement proceedings. It can seek injunctions and damages, and damages alone should be enough of a disincentive for someone who refuses to take a license on reasonable terms -- in theory at least. But you can't sue someone over not buying your product (unless a contractual commitment was made).

The bottom line is that I'm more sympathetic to RPX and those Android companies than the court's analysis, and I'd really like to see this adjudged by an appeals court. But the fact that this complaint has now, in its amended form, survived a motion to dismiss -- in a tech-savvy district -- must be considered by companies devising strategies to leverage their collective purchasing power when trying to license or acquire patents. The Android camp has a particular problem because Google (see bullet point #1 above) doesn't negotiate those global licenses on a basis that no one could reasonably allege to be anticompetitive, and because the platform exposes device makers to more infringement allegations than any other.

This blog's publishing rhythm

For more than three years, starting in early October 2010, I tried hard to provide rapid analysis of new developments in the "smartphone patent wars", not only but also (and most visibly) on this blog. I didn't even take a vacation during those first three years and was on alert 52 weeks a year. I have since taken a week off on two occasions, but apart from that I still reacted very quickly to breaking news and frequently dug up court filings before anyone else did, making some people wonder whether I ever sleep or whether I have cloned myself. This level of activity, however, required a degree of availability that precluded me from the pursuit of other opportunities, especially an app development project I believe in.

I have been weighing and exploring different options. Starting this week, I am no longer going to make the same effort as before to be the first, or at least among the first, to analyze and comment on new filings, rulings, and announcements, 24 hours a day, seven days a week, 52 weeks a year. Instead, I am now going to work on smartphone patent (and related antitrust) matters only on some days -- typically, Mondays and Thursdays, though this can vary in certain weeks (and there will be weeks off or weeks such as the week between Christmas and New Year's, where I'll spend only one day on this, not two).

Today I happened to be around when the European Commission published a speech by the EU's competition chief that contained some interesting comment on a likely need for Samsung to improve its settlement proposal. So I commented on it immediately. If the same thing had happened tomorrow, Tuesday, I would have waited until Thursday. If, however, something absolutely huge were to happen (say, an Apple-Samsung settlement or a Federal Circuit ruling on a major case), I would still act upon it immediately, any day of the week including the weekend, any time of the day or night as soon as I hear about it.

The benefit to me is that I know I can not just devote time to my own project on certain days of the week but that I can also concentrate on it without being constantly interrupted (see Paul Graham's blog post on "Maker's Schedule, Manager's Schedule").

I know that this will work fine for my consulting business while allowing me to create an app (which will have nothing to do with patents, by the way). And this blog, which is basically a byproduct of and promotional tool for that consulting business, will remain popular, I'm sure. A couple of years ago this blog mostly got attention when it reacted rapidly. By now, the most popular posts are actually Q&A documents and in-depth analysis that doesn't have to come out on the same day as, or the day after, an important event.

This will be my rhythm for the remainder of the year, and for going into next year. I can't look too far into the future, but this is the plan, so please don't be surprised if my commentary is no longer going to be as instant as it used to be for a few years. I'm confident that you'll still find interesting information here. And on certain days of the week, even breaking news.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|