Nokia's choice of software patents asserted against Daimler exposes pretext for refusing to license automotive suppliers

PaRR's EU antitrust reporter Khushita Vasant received information from two sources according to which a third round of mediation talks--after the first two, held in January and February, failed--might take place between Nokia and Daimler as well as many (though not all) of its suppliers of telematics control units (TCUs). Knowing how these things work, I guess the situation is now simply one in which the European Commission remains hesitant, for purely political reasons, to take action, and is playing for time, as is Nokia, whose patent portfolio is going down the tubes with every month that passes.

Commissioner Margrethe Vestager is even way tougher than her famous predecessor in office "Steelie Neelie" was when it comes to enforcement against U.S. companies, but (so far, so bad) soft as a jellyfish on Nokia. She and Nokia might just hope that the patent infringement ruling scheduled by the Munich I Regional Court for April 9, 2020 would scare Daimler into a settlement. It's hardly a coincidence that the rumored new round of mediation talks has the same target date...

Regardless of that latest disgraceful development, I was taking a closer look at Nokia's ten patents-in-suit against Daimler from the perspective of whether there is a scintilla of doubt about Nokia acting abusively by refusing to license Daimler's TCU suppliers. There is not.

As Daimler's lead counsel in the German infringement cases accurately noted last fall, cellular standard-essential patents (SEPs) cover techniques that are essentially embodied in the baseband chip. From a car maker's vantage point at the bottom of the supply chain, that's a tier 3 product, which gets incorporated into a (tier 2) network access device (NAD; one might also call this a connectivity module, which in turn resides in a TCU (tier 1). In other words, TCUs already contain a whole lot more hardware than is actually needed to exhaust the patentee's rights by licensing the upstream.

The European Commission employs an elite of public servants. There's no way the Commission's experts wouldn't have figured out during all of that time since Daimler's 2018 (!) complaint that Nokia's allegation of a TCU not actually practicing the standard is, euphemistically so as to avoid an analogy to bovine excrements, a pretext.

The Golden Rule of patent law: the name of the game is the claim. "Claim" in the sense of a patent claim, not a claim in terms of a (mis)representation.

The patent claims determine the scope of protection a patent enjoys. When looking at the claims of Nokia's patents-in-suit, and even when looking at the specifications (whose sole purpose in litigation is to help interpret the claims), it becomes clear that Nokia's patents don't cover end products such as a car (quite often, the Nokia-Daimler dispute is misleadingly referred to as a "connected vehicle" dispute, though none of Nokia's wireless SEPs have anything to do with what sets cars apart from phones).

In fact, seven (70%) out of Nokia's ten patents-in-suit against Daimler are even officially declared to be software patents (which the remaining three are as well, as I'll explain in a moment). That is so because they come with computer program claims--patent claims covering software without any hardware being required to infringe. As a former anti-software-patent campaigner, I'm particularly sensitive to this, and I believe the European Patent Office granted those claims in violation of the European Patent Convention, but they do come in handy now as they belie Nokia's anti-antitrust-enforcement narrative. You can find the claims toward the end of each patent specification, and I'll give an example of one program (in terms of software) claim per patent:

• claim 5 of EP2797239 on "a method and a telecommunication device for selecting a number of code channels and an associated spreading factor for a CDMA transmission"

• claim 15 of EP2087626 on "additional modulation information signaling for high speed downlink packet access"

• claim 15 of EP2981103 on an "allocation of preamble sequences"

• claim 7 of EP2286629 on a "method and apparatus to link modulating and coding scheme to amount of resources"

• claim 8 ("computer-readable storage medium comprising software instructions" is a computer program by any other name) of EP2145404 on a "method and apparatus for providing control chanels for broadcast and paging services"

• claim 31 of EP1929826 on an "apparatus, method and computer program product to request data rate increase based on ability to transmit at least one more selected data unit"

• claim 22 of EP2087629 on "a method of transmitting data within a telecommunications system"

The software that controls data transfers over a cellular model resides in a baseband chip. That's the mastermind of the whole operation. It determines what is sent out via the antenna, and it interprets what is received.

All ten of Nokia's patents-in-suit against Daimler could also be called "protocol patents": they describe how two ends of a wireless connection communicate--what A has to tell B to cause B to do something, or vice versa. It's like I say "hello, how are you?" and you respond "fine, how are you?"

That kind of communication is, of course, implemented in software (it already has been for a very long time).

There's nothing in those Nokia's patents that has to do with superior hardware. I ran full-text searches over the patent specifications, and looked closely at the device (or "apparatus") claims to identify any references to the types of hardware components that Nokia claims aren't part of TCUs:

• Eight (80%) out of the ten patents-in-suit contain not a single occurrence of at least one the following words: antenna, microphone, loudspeaker, power.

• EP'626 refers to "antenna weights" and mentions the presence of an electrical power source (without claiming to invent anything new relating to electrical power supply). The patent covers bits (zeroes or ones) that are sent and received, and the apparatus claims don't require any specific hardware but merely refer to "means for interpreting ... bit[s]" and "means for coding." That, too, is a typical software patent.

• DE'446 (the German equivalent of EP'234) only mentions "power" in the sense of "power control" as a numerical parameter. Here, again, it's instructive to look at the apparatus claims, which as opposed to claiming specific hardware relate to a "medium access control layer configured to encapsulate packets."

• The means-plus-function structure found in EP'626 and EP'234/DE'446 is also found in the other patents. Nokia's patent attorneys obviously optimized those claims for scope, and that's why they don't claim specific hardware elements such as an antenna, but instead focus on functionality. However, as long as there isn't a need for some very specific (and inventive!) hardware, but it merely suffices that something be around to do a certain job, the baseband chip as the controller of the data transfer operation is where the claimed inventive steps are implemented.

Those ten patents are the ones Nokia's litigators--among the very, very best in the industry--selected from the company's huge portfolio because they thought they'd be their strongest weapons. We could look at dozens or even at hundreds of additional cellular SEPs owned by Nokia or other companies, and the findings would be materially consistent with this sample of ten Nokia "star" patents.

It's time to get real. There's no justification for not licensing automotive suppliers, especially not under the CJEU's Huawei v. ZTE case law.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

BlackBerry wins German patent injunctions against Facebook, WhatsApp, Instagram over four (most likely invalid!) software patents

Sueddeutsche Zeitung (SZ), a Munich-based newspaper, reported yesterday evening on a set of Germany-wide patent injunctions that BlackBerry--once a smartphone maker, now basically a patent troll--just obtained against Facebook and its WhatsApp and Instagram subsidiaries over a total of four different patents covering chat features.

The injunction is provisionally enforceable. If BlackBerry posts a bond or makes a deposit, it can enforce the injunctions at this stage, though Facebook can appeal to the Munich Higher Regional Court and is, in parallel, challenging the validity of those patents before the Federal Patent Court of Germany. But Facebook has already told the media that the affected services--Facebook Messenger, WhatsApp, Instagram--wouldn't go out of service in Germany: workarounds have been prepared, so the related features would have to be removed.

BlackBerry sued Facebook (with a focus on Facebook Messenger rather than the social media stream) and those two subsidiaries over five different patents, which I listed earlier this year and will list again further below.

The Munich I Regional Court has now handed down injunctions over four of the five patents. These are the five BlackBerry patents-in-suit, some of which they claim to be infringed by only one or two of Facebook, Instagram, and WhatsApp, and some of which they claim are infringed by all three (note that the injunctions BlackBerry just won relate to patents #1, #2, #3, and #5 on the list, but not #4, as explained further below):

1. EP1734728 on a "method and apparatus for switching between concurrent messaging sessions" (first hearing held on 01/10/2019)

   accused functionality: showing two chat histories in parallel

2. EP1633114 on a "system and method for maintaining on a handheld electronic device information that is substantially current and is readily available to a user" (first hearing held on 01/17/2019)

   accused functionality: automatically identifying user profiles containing partly identical data

3. EP1746790 on a "method of sharing an Instant Messaging history" (I attended and reported on the related first hearing)

   accused functionality: sharing messages from the chat history

4. EP1540495 on a "method and system for displaying group chat sessions on wireless mobile terminals" (first hearing: 02/28/2019)

   accused functionality: displaying chat history while text is being edited

5. EP2339799 on an "IM contact list entry as a game in progress designate" (first hearing: 02/28/2019)

   accused functionality: chatting during gameplay

BlackBerry has so far prevailed on all of them but the fourth one ("method and system for displaying group chat sessions on wireless mobile terminals"), over which even the Munich court had sufficient validity doubts that BlackBerry felt forced to further narrow the claims during trial. In that case, no immediate decision was possible (for due process reasons), and instead, there will be another trial over that one on March 12, 2020. If BlackBerry persuades the court not to stay, then it may win again.

I am stunned that the court didn't stay all five cases over serious doubts concerning the validity of those patents. When I looked at the claims of the patents-in-suit earlier this year, I quickly concluded that they'd all be highly likely to be annulled by the Federal Patent Court of Germany (which also happens to be based in Munich, which is sort of the Capital of the Patent Movement, at least for Europe). That's partly because software as such isn't patent-eligible in Europe. While the courts rarely ever invalidate a patent as a whole on that basis, they do exclude any non-technical features from their novelty and non-obviousness analysis--and it's hard to see how anything novel or inventive could be found in those patent claims that isn't just software stuff without a technical effect. I already operated a chat service (as part of an online gaming network) in the 1990s and wrote an IRC client in 2000, so I know a lot of the prior art from hands-on experience.

What I have been able to find out is that BlackBerry, represented by Quinn Emanuel (a great firm that has not so great clients at times), had to narrow multiple patent claims-in-suit during the infringement proceedings just to address the court's concerns over non-novelty. There are two problem with German patent infringement courts in the context to grant or deny a stay pending a nullity action. First, they apply an unreasonably high standard (and the "guru" from the Dusseldorf appeals court who has been promoting that high standard for many years more aggressively and fanatically than anyone else recently made dozens of employees of a small company lose their jobs--with Quinn Emanuel again on the enforcing side--over a patent subsequently held invalid). Second--though in many cases that's even more important than the standard--they take only non-novelty (anticipation) arguments seriously and largely refuse to consider obviousness contentions (lack of inventive step) for no good reason (if they can rule on infringement without appointing expert witnesses, they certainly could also assess the existence of absence of an inventive step, but they just don't want to).

The Munich I Regional Court orders stays in only about 10% of all cases, and I have the impression the number is far below 10% for this year. That's a huge problem considering that the vast majority of all patents in this industry turn out invalid once they're challenged before the Federal Patent Court. In fact, not a single one of all the patents asserted in the cases I covered in detail survived a nullity trial (but many never reached that point due to earlier settlements).

I hope Facebook will keep on fighting. They do appear to be determined not to feed the troll. By striking down these patents, even if it takes years, they can teach the German patent judiciary--except for Mannheim, where you find by far the most responsible German patent infringement court--an important lesson. The federal government is drafting a reform bill, and reform is needed so badly that it will likely be enacted even before Facebook's nullity actions against BlackBerry are resolved.

If your company, too, would like to push for patent injunction reform in Germany, please contact me at fosspatents@gmail.com. I'm already in touch with many companies from a variety of industries--and of all sizes--who have enough of this crap resulting from a broken system, and as a former European Campaigner of the Year (2005; an award I won against Bono and which went to a pope and to Governor Arnold Schwarzenegger in other years) I know a thing or two about patent legislation. I'm convinced a more eBay v. MercExchange-like regime in Germany is achievable, and far more cases than now should get stayed in the future.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Munich I Regional Court schedules additional June trial over Qualcomm's four zombie patent lawsuits against Apple

Four of Qualcomm's eight Spotlight-related patent infringement actions against Apple in Munich were dismissed in January for non-infringement, while the proceedings relating to the other four cases (two lawsuits per patent targeting different Apple entities) were reopened because Qualcomm had not yet had the opportunity to argue that a panel of three examiners at the EPO's Opposition Division erred when they preliminarily agreed with Apple and Intel that those patents are invalid.

I checked again with the press office of the Landgericht München 1 (Munich I Regional Court) and was told yesterday that "for the time being" the court scheduled another trial session for June 13, 2019. The parties already argued (non-)infringement at a first hearing as well as a trial last year, so presumably the sole focus of the additional June session will be on (in)validity.

Five and a half month later, on November 26, 2019, the EPO's opposition panel will hold a hearing and make its decision (click on the image to enlarge; this post continues below the image):

In German infringement proceedings, defendants' ability to argue invalidity is limited. As opposed to a full invalidity defense, there is bifurcation: full invalidity challenges must be brought in separate fora (the EPO for "young" patents, or the Federal Patent Court of Germany), and the courts deciding on infringement will, at best, stay a case pending the resolution of a parallel invalidation proceeding. The decision on a request for a stay is based on limited analysis as opposed to a full trial. In practical terms, obviousness arguments are hard to prevail on; stays are usually based on indications of non-novelty.

However, when a competent forum deems a patent invalid, its findings bear significant weight with the infringement court. A credible invalidity opinion from a forum within the European Patent Organization (the international organization running the EPO) often has the practical effect of reversing the burden of proof, requiring the patent holder to persuade the court that the related findings are either not well-reasoned or, should a patent not be young enough that the EPO can revoke it Europe-wide, are based on a legal standard that German courts don't apply to the German parts of EPO patents.

Here, the EPO's opposition panel took a preliminary position, with the actual hearing taking place later this year. A preliminary holding like this obviously has significantly less weight than a final (but appealable) revocation decision. But it was important enough to warrant a reopening of proceedings.

Qualcomm isn't going to gain any leverage from those Spotlight (a search feature) cases anyway as iOS 12 contains a workaround. Any "win" would be purely symbolical, as would any potential damages. But Qualcomm is facing huge problems in its patent infringement actions against Apple, which is presumably the reason why it keeps spending a lot of money on cases that won't result in any serious leverage. Qualcomm is desparately trying to prove that its patents (in these cases, non-standard-essential patents) have value, and to portray Apple as an infringer--even when there's already a workaround in place.

Maybe Qualcomm will stipulate to a stay so the Munich court won't have to hold the mid-June trial session and write up an order to stay the case. Given that the EPO will decide only five and a half months later, it's hard to imagine (though I have no idea of what Qualcomm told the court as to why it believes the EPO got it wrong) that Qualcomm will be able to dissuade the court from staying the cases. It's also very, very likely that the EPO will revoke those patents, in which case Qualcomm will have to appeal the Opposition Division's decision to a Technical Board of Appeal. All of his is taking time, but those cases are pretty clearly going nowhere.

Later this month a first hearing in a later-filed Munich Qualcomm v. Apple case over an antenna patent will be held.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

BlackBerry seeking German patent injunction against WhatsApp's message-forwarding feature: validity is primary--but not only--issue

I'm temporarily back to Germany for app development-related reasons, and seized the opportunity to return to the Munich I Regional Court for the first time since the envelope-tracker injunction Qualcomm obtained late last year through procedural shenanigans.

Today the Seventh Civil Chamber (Presiding Judge: Dr. Matthias Zigann) held a first hearing in a BlackBerry v. WhatsApp & Facebook case that is part of a set of eight Munich patent infringement actions--over five different patents--against Facebook and its WhatsApp and Instagram subsidaries. The patent-in-suit discussed today: EP1746790 on a "method of sharing an Instant Messaging history."

It's undoubtedly a pure software patent, and Judge Dr. Zigann noted, diplomatically, that such patents are "at the margins of the scope of patent-eligible subject matter." However, the focus of first hearings in Munich is on claim construction and infringement analysis (so the parties can prepare accordingly for the second hearing, which is normally a decisive trial), not on validity.

Not only does the patent have a subject-matter problem but BlackBerry's lead counsel in this action, Quinn Emanuel's Dr. Jesko Preuss ("Preuß" in German), communicated right at the start of the hearing their decision to narrow the asserted claims by way of an additional claim limitation. Such claim amemdments are always an indication of a problem with distinguishing overbroad claims from the prior art. I believe the claims are still invalid, but BlackBerry and QE apparently believe that the narrowed claims are more defensible.

Facebook's lead counsel in this litigation, Freshfields Bruckhaus Deringer's Dr. Frank-Erich Hufnagel (frequently mentioned on this blog because of his representation of Apple in numerous other cases), wasn't impressed. The court even noted sua sponte that the additional claim limitation--requiring that the recipient of a forwarded message from a chat history not be the same as the one from whose chat it is copied--may contradict dependent claim 5. While this wasn't discussed, as a WhatsApp user I immediately realized that this modification means BlackBerry wouldn't have an infringement theory for the WhatsApp feature that allows one to copy a message (or its beginning in case it's long) when replying to a particular message from the history. Now it's exclusively about forwarding messages to a third party.

Judge Dr. Zigann noted that paragraph 10 of the patent specification mentions the possibility of performing a standard "copy and paste" operation for messages from a chat history, though it describes that approach as "woefully inadequate as well as cumbersome." As a matter of fact, the copy-and-paste option was widely used years before the priority date of that patent (July 20, 2005). I remember copying and pasting chat messages in 2000 using ICQ (then the leading instant messenger, and also mentioned in the patent specification) and in 2001 using mIRC, then (and possibly still) the most popular Internet Relay Chat (IRC) client. Old documentations of those (and other) tools should still be available in some Internet archives. Discussion boards also prove what I just said:

• forums.mirc.com: When UTF support (= support for many more special characters than in ASCII) was added, users discussed the practical implications, and copying and pasting came up.

• forums.techguy.org discussed in 2001 how to save ICQ chat histories, and "Daddad" proposed just copying and pasting them.

Therefore, if BlackBerry seeks to defend the patent (which it is trying for now, though I really can't imagine that it would win a case over such a junk patent), it will have to push for a claim construction that gives the patent some technical meaning while still allowing an inventiveness theory.

In the early part of the two-hour hearing, Dr. Hufnagel voiced concerns over Judge Dr. Zigann's remark that a defendant should always focus on the top three invalidity contentions. While the court would allow filing more of then, the defendant should assume that only the top three (as indicated by the defendant)--or, as he conceded the number was arbitrary, maybe also four or six--would get a lot of attention, but the court lacks the time to entertain an infinite number of invalidity contentions. Dr. Hufnagel said that is really weak and has technicity problems, an issue with an inadmissible extension of subject matter, and additionally is anticipated by ten prior art references, a defendant should be able to seek a stay (pending parallel invalidity proceedings) based on more than, for instance, a hard limit of three contentions. Judge Dr. Zigann said that if an invalidity argument beyond the most important few was overwhelmingly strong, it would impress the court at any rate.

Dr. Hufnagel's concern is particularly understandable in light of bifurcation and the enforcement gap: instead of a full invalidity defense, German patent infringement proceedings don't come with an invalidity defense in a narrow sense as defendants can merely seek a stay based on an analysis that rarely results in a stay for obviousness considerations (it's typically just about novelty, or admissibility issues). But infringement cases are adjudicated way faster, so patent holders often get to enforce injunctive relief in Germany and then force a defendant to settle. As a result, any invalidity challenges must be withdrawn, and the patent will survive, regardless of how week it may be.

Facebook's motion for a stay will be discussed in detail at the mid-September trial. Patent attorneys from Samson & Partner (a patent firm that also frequently represents Apple) will then explain how they're challenging the patent in the Federal Patent Court of Germany. Today, Facebook's lawyers Dr. Hufnagel and Dr. Sonja Mross ("Mroß" in German) primarily argued non-infringement in accordance with Munich procedures.

Facebook argues that WhatsApp doesn't practice the claim limitation of "wrapping said message history into a file object based on the selected transmission mode for sharing said message history with said selected recipient" for three distinct, independent reasons:

• WhatsApp doesn't perform certain steps in the sequence shown in a flowchart (Fig. 2 of the patent specification). Here, the court has an inclination for the time being, and BlackBerry unsurprisingly agrees, that no particular sequence of those operations is claimed.

• WhatsApp doesn't perform the wrapping operation baed on the selected transmission mode. The patent is about potentially emailing a message history or sharing it through other channels, but in WhatsApp you always just forwarded a message from one WhatsApp installation to another. Here, the court has an inclination for the time being, and BlackBerry naturally agrees, that even if just one transmission mode is used, the patent is still infringed.

• Based on the patent specification, Facebook argues that the patent expects the wrapping operation to preserve the entire look & feel of a message history, while WhatsApp just forwards the text. Here, the court has an inclination for the time being, and BlackBerry unsurprisingly agrees, that "look & feel" is not explicitly claimed.

Some discussion also arose over the meaning of an "IM communication session," with Facebook arguing from a user-interface angle while the court tends to view a "session" as a duration as opposed to a particular window or set of windows (and BlackBerry, obviously, agrees with the court).

In other words, the court favors a broad claim construction. I venture to guess that Facebook is confident it can show a reasonably high likelihood of the patent being invalidated even with a narrow construction. But come the actual trial in September, I wouldn't be surprised to see Facebook make a "squeeze" argument where a broad interpretation of one or claim limitations is an indispensable requirement for BlackBerry having any infringement argument, but then there would be prior art references over which the claimed invention isn't novel (or maybe there is something novel, but if a novel element is clearly not technical in the sense of European patent law, that's also the end of the story).

What BlackBerry is doing here is the equivalent of buying some lottery tickets. Those lottery tickets aren't cheap, though the fact that no QE partner represented them today shows that at least this particular case here is not one they'd want to bet the farm on. They just hope that maybe one of those Munich cases will present enough of a threat to Facebook that BlackBerry can cash in. But the overall BlackBerry-Facebook dispute has been going for almost a year, and it may take another year or two. Since patents on software "as such" aren't allowed in Europe, I really can't see why BlackBerry should be able to collect any patent royalties on anyone's European revenues with patents of this kind.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

BlackBerry suing Facebook and its WhatsApp and Instagram subsidiaries over five European software patents in Munich

As the former director of the European NoSoftwarePatents campaign I always find it shocking what kinds of patents the European Patent Office (EPO) grants despite the exclusion of "programs for computers as such" from the scope of patentable inventions according to Article 52 of the European Patent Convention (EPC).

Post-grant reviews often do away with those patents, but rarely ever on the basis of Art. 52 EPC per se. What typically happens is that the Federal Patent Court of Germany or other courts of competent jurisdiction categorize some claim limitations as "non-technical" and purposely ignore them in their novelty or inventiveness analysis. Whatever little remains then is often anticipated by, or at the very least obvious over, the prior art. But, unfortunately, efficiency gains (reduced data volumes, increased processing speeds, economic use of screen space etc.) often serve as an excuse for circumventing Art. 52 EPC.

Tomorrow the Munich I Regional Court will hold a first hearing in one of eight BlackBerry v. Facebook/WhatsApp/Instagram cases over a total of five different patents--all of them pure software patents. Patents on "programs for computers as such."

In March 2018, BlackBerry sued Facebook as well as its WhatsApp and Instagram subsidiaries in the Central District of California (= L.A., though geographically it would be SoCal). Facebook's VP of Litigation and Deputy General Counsel, Paul Grewal, issued the following statement:

"Blackberry’s suit sadly reflects the current state of its messaging business. Having abandoned its efforts to innovate, Blackberry is now looking to tax the innovation of others. We intend to fight."

The fact that Facebook still isn't paying BlackBerry any royalties is a good sign. Don't feed the failed-business-turned-troll!

Mr. Grewal used to serve as a United States Magistrate Judge in the Northern District of California. Over the years this blog mentioned him quite often, most notably in connection with Apple v. Samsung discovery and (un)sealing disputes as well as his mediation effort with Oracle and Google, a case that he realized just had to go to trial.

While there has been some media coverage of BlackBerry's U.S. litigation against Facebook (and a countersuit by Facebook), I haven't been able to google any articles on the eight Munich lawsuits, even though a couple of first hearings have already taken place there. This is the list of patents and first hearing dates:

1. EP1734728 on a "method and apparatus for switching between concurrent messaging sessions" (first hearing held on 01/10/2019)

   accused functionality: showing two chat histories in parallel

2. EP1633114 on a "system and method for maintaining on a handheld electronic device information that is substantially current and is readily available to a user" (first hearing held on 01/17/2019)

   accused functionality: automatically identifying user profiles containing partly identical data

3. EP1746790 on a "method of sharing an Instant Messaging history" (first hearing: tomorrow = 02/14/2019)

   accused functionality: sharing messages from the chat history

4. EP1540495 on a "method and system for displaying group chat sessions on wireless mobile terminals" (first hearing: 02/28/2019)

   accused functionality: displaying chat history while text is being edited

5. EP2339799 on an "IM contact list entry as a game in progress designate" (first hearing: 02/28/2019)

   accused functionality: chatting during gameplay

This is another series of Munich cases in which Quinn Emanuel is asserting patents on behalf of a patent monetization-focused client against a Freshfields client. QE is representing Qualcomm against Apple in a series of German infringement cases, and Freshfields is defending Apple. Here, QE is suing Freshfields client Facebook on BlackBerry's behalf.

The BlackBerry company was named Research In Motion (RIM) when it filed the related patent applications. The irony is that "Research In Motion" is structurally similar to the names of many patent trolls, but the company was actually focused on making products at the time and itself the target of lawsuits brought by trolls, with the NTP case (settled for $612.5 million) being the most well-known example, while it's now named BlackBerry, but far more interested in patent monetization while its namesake products became pretty irrelevant a long time ago, thanks to the iPhone and Android.

I was in frequent contact with RIM in 2006, shortly after the costly NTP settlement that happened on the eve of what would most likely have been a U.S. injunction. I remember that they were the first company (of many) to tell me about the problems they had with Qualcomm, and that they were really happy about the Supreme Court's eBay v. MercExchange ruling (on patent injunctions) that year. But times have changed, and now they're asserting software patents against Facebook and its two most famous subsidiaries as if Article 52 of the European Patent Convention didn't exist.

In addition to suing companies like Facebook directly, BlackBerry engages in privateering. Last week, PatentlyApple reported on a declaratory judgment action brought by Apple against a troll named "Fundamental Innovation Systems" that wants (but hopefully won't get any) license fees from Apple over a dozen former RIM/BlackBerry patents.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

After more than 7 years of suing, Apple and Samsung finally call a truce

Apple v. Samsung, the longest-running patent dispute that this blog has consistently covered from Day One to Settlement Day, has come to an end--one day and one month after one of multiple jury verdicts. Within about eight minutes (!) of Apple and Samsung notifying the court of a settlement and seeking dismissal, Judge Koh signed the proposed order (this post continues below the document):

18-06-27 Order of Dismissal of Apple v. Samsung by Florian Mueller on Scribd

I'm torn between saying "Good riddance!" or, quite the opposite and in Spanish, "Fue bonito mientras duró." ("It was nice while it was ongoing.") This dispute raised some important issues and contributed to the evolution of patent case law, but the part related to design patents was going in circles. Apparently the parties thought so as well, at this point. At long last.

This megadispute gave rise to some of the highest-quality legal work (on both sides) one could have had the privilege to read. Apple's original complaint told a coherent and compelling story of the alleged infringement of a multiplicity and wide variety of intellectual property rights. No one should write a multi-IPR complaint without at least reading that complaint once, for the purpose of inspiration.

But Samsung's lawyers delivered a first-rate answer to that complaint, and the mantra of that pleading was one of the best passages I ever read in a court filing:

"The Samsung Defendants admit that they have not ceased competing with Apple notwithstanding Apple's efforts to avoid such competition."

The complaint and the answer to the complaint laid out the fundamental question underlying the dispute: Was Samsung competing lawfully--or had it gone too far? Or, conversely, was Apple taking action against theft or simply trying to eradicate competition the thermonuclear way?

There was and there is no general answer, except that the impact obviously ended up being far from nuclear. One has to look at one patent (or other intellectual property right) at a time, and jurisdiction by jurisdiction.

Samsung managed to fend off many accusations, in multiple jurisdictions. It countersued, mostly over standard-essential patents (SEPs), and in that context I criticized it far more harshly than in connection with the alleged or adjudicated infringement of design or software patents. Fortunately, Samsung is now a proponent of reasonableness in SEP licensing and enforcement. Case in point, it signed an open letter to U.S. Assistant Attorney General Delrahim earlier this year--alongside a few industry bodies and dozens of companies, including... Apple!

Apple has clearly proven that it's prepared to enforce its intellectual property rights. Vigorously. Persistently. Patiently. And Samsung has shown that it's a formidable defendant.

Let's not underestimate the effect this will have had on other parties. Who knows whom else Apple might have had to sue over design patents if it had not demonstrated in its dispute with Samsung how it responds to (alleged) design patent infringement? Who knows who else might have picked a fight with Samsung if Samsung hadn't mounted such a strong and tireless defense as in the Apple case?

Normally, those companies strike license deals, and when they wind up in court, they typically settle reasonably early. Somehow, it took them a lot longer in this case. And now either one of them has a dispute going that looks like it could become the next long-running one: Apple with Qualcomm, and Samsung with Huawei.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

USPTO holds key claims of core Twitter patent invalid: Indian inventor was first

Yesterday the United States Patent and Trademark Office had bad news for a particularly broad member of Twitter's key patent family, U.S. Patent No. 9,088,532 on a "device[-]independent message disribution platform." As I reported in March, the '532 patent is being reexamined based on a patent application by independent Indian inventor Yogesh Rathod as well as a couple of other prior art references. The reexamination requested related to claims 1-3, 8, 9, 13-15, 17, 20, and 21, all of which are being reexamined. In a (first) Office communication since opening the reexamination proceedings, the USPTO has held all of the reexamined claims invalid, challenging Twitter to persuade the examiner that its patent claims should be upheld. Here's the Office communication (this post continues below the document):

18-06-08 USPTO Rejection of Twitter Core Patent Claims by Florian Mueller on Scribd

All of the claims under reexamination have been found to have been anticipated by Yogesh Rathod's international patent application. In addition, all claims but one (claim 17) are deemed non-novel in light of U.S. Patent Application with publication no. US 2011/0289574 by three Northern Californian inventors (Mark Hull, Randall Farmer, and Ellen Perelman).

Note that rejection rates are very high at this stage of proceeding. Some examiners simply reject all challenged claims in their first action in order to challenge the patentee to make the strongest case possible in defense of the patent in question. Some patent claims are rejected multiple times before finally being confirmed by the USPTO.

That said, things are looking bleak for Twitter's patent claims. To salvage those claims, Twitter would have to

• overcome the non-novelty holding with respect to two different patent applications (Yogesh Rathod's application and the application by Mark Hull et al.); and then

• additionally overcome any obviousness argument (the first Office action already notes that, even if one disagreed on non-novelty, a person of ordinary skill in the art could combine either one of those references with a third patent application, publication number US 2007/0105536, by George Tingo.

As for the commercial implications, let me refer you to my March post.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

From software patents to Apple's tax case, the European Commission has been a premier source of fake news

The political establishment on both sides of the Atlantic still can't deal with the fact that Donald Trump won because voters rejected corrupt, incompetent and unprincipled "all talk, no action" politicians for all the right and left reasons. One of the transparent attempts to delegitimize a historic victory for common, hardworking and law-abiding people is centered around so-called "fake news." Very worryingly, we may even see legislation in Germany and other parts of Europe aiming to impose fines on social networks for not playing their part in the political establisment's censorship efforts led by a future equivalent of what George Orwell already envisioned to be a "Ministry of Truth" in his novel "1984." I'll take a closer look at such Orwellian initiatives some other time.

In reality, the political establishment in Europe, which has been committing treason against European citizens for some time and continues to do so, just hates the fact that the truth about its failures spreads virally. They say that "fake news" about crimes commmitted by "refugees" leads people to vote for "populists," but there simply are cases of rape committed by so-called "refugees" on a daily basis in Germany, and those cases are not merely reported by anti-establishment websites but by reputable, local newspapers. Those articles go viral on Facebook, but "viral" isn't necessarily "fake." The victims range from young children (8-14 years of age) over men in their thirties to women in their seventies or eighties. Those numerous incidents just don't make it into national news because leftist journalists don't want the truth to come about how misguided their ideology is and because politicians don't want citizens to realize how terrible the situation has become, much less in a pre-election year.

The Austrian government replied to a parliamentary inquiry about rape cases involving "asylum seekers" and stated 91 suspects in the first nine months of 2016. Considering that Germany has about ten times the population size of Austria and, just in terms of a power of ten, also about ten times as many "asylum seekers," this means a couple of cases per day in Germany. If politicians don't like those news, they have to change their migration policies, but instead of protecting citizens against crimes, they complain about "fake news" and seek to regulate social networks.

If anyone truly wanted to drain the "fake news" swamp in Europe, Brussels would be a good place to start. While I agree with the European Commission on some issues and disagree on others, I view the institution's public statements with utmost skepticism and believe Brussels-based journalists are all too often misled by what comes out of the Berlaymont building.

Just a few examples of EU Commission "fake news":

EU software patent directive: the CII lie

In 2002, the EC proposed a "directive on the patentability of computer-implemented inventions." It claimed back then and throughout the years of the legislative process (which ended when the bill got thrown out by the European Parliament in 2005, which is exactly what I had been campaigning for) that patents on "computer-implemented inventions" weren't software patents. The examples that the supporters of the proposal gave all the time were about computer-controlled washing machines, automated braking systems, and airplanes. They said that the whole plan was only to ensure that innovations in those fields could be patented but software patents? No, they said that our movement was totally wrong since software "as such" was going to be excluded.

It was nothing but a damn lie. A damn lie propagated by the Commission, by the equally-mendacious national governments of the EU member states, large corporations (also including their industry bodies, of course), the European Patent Office (with respect to its credibility, let me just refer you to Dr. Roy Schestowitz's great work concerning what is going on there), and patent attorneys in private practice.

What frustrated us the most was not even that those who directly or indirectly stood to gain from software patents were dishonest. That was very bad for sure, but the worst part was that news agencies and the general press kept propagating those lies--not merely in the form of quotes but in ways that portrayed the Commission position as the truth and our position as an opposing view by "open source" people. And when we talked to them, they often just referred us to what the European Commission was saying--no matter how much of a lie it was.

With only one exception, the Brussels-based journalists who covered that legislative process weren't particularly sharp. By comparison, I met far more receptive and intelligent people a few years later in connection with some competition cases. But, to be fair, it wasn't easy for the general press to figure out something at the complex intersection of law, technology, and economics. The proposed directive appeared to focus on "technical" inventions except that its definition of what is "technical" was purely tautological. It also didn't help that we had some lunatics in our movement who pursued a radical anti-IP agenda. Still, reasonably intelligent and committed journalists could have figured things out if they had made an effort:

• The easiest-to-understand indication that should have given anyone except the most obtuse people pause was SAP's public support (at government roundtables, conferences, etc.) and its claim (which it even made in an advertisement in a Brussels publication shortly before the decisive vote) that the proposed directive would provide SAP with protection for its innovations. SAP never made washing machines, automated braking systems, airplanes, or any other hardware. There you had a pure software company saying that this directive would afford it patent protection.

• While the Commission's original 2002 proposal did not allow so-called "program claims," a clause that allowed patent claims of "a computer program, characterized by [...]" kind made its way into the proposal as the European Council (where the governments of the member states meet and decide) got involved, but the Commission nevertheless kept saying the directive wasn't going to result in patents on software "as such". A patent claim defines the scope, and anyone who practices what the claim describes is an infringer. If the claim is on a "computer program," then it's obviously a software patent claim (and not a washing machine claim). For example, if the software that optimizes the fuel consumption of an airplane is covered by a program claim, then it's also infringed by a flight simulator that uses the same formula.

Unitary patent propaganda: first published, then taken down

Last year, the IPKat blog dismantled the Commission's ridiculous propaganda for its unitary patent package (including the Unified Patent Court). Then the Commission pulled its statement, almost certainly due to the IPKat's competent criticism.

Juncker: "When things get serious, you have to lie"

The Euro currency is one of the EU's top three failures. Economists had warned politicians that a common currency was doomed to fail without a common fiscal and economic policy, but Mitterrand wanted the euro in order to prevent Germany from becoming too powerful after reunification and Kohl just wanted to make history no matter what damage this would do in the long run.

In connection with the EU's sovereign-debt crisis, Commmission president and former Eurogroup chief Jean-Claude Juncker said: "When it becomes serious, you have to lie." You can read this in Bruno Waterfield's article, and the quote has been widely reported by other media as well.

So how can anyone trust the Juncker Commission anymore? I, for one, can't.

This YouTube video featuring Juncker may be part of what certain politicians would like to ban as "fake news."

Apple's "state aid" tax case

When the Commission's Apple tax ruling becomes public, I'll look at it in detail, but even before all details are known, it's already clear that the Commission can't really be trusted in this context.

The first issue I have is that the Commission has tried to manufacture a "state aid" case. Article 107 of the Lisbon Treaty defines "state aid" as follows:

"any aid granted by a Member State or through State resources in any form whatsoever which distorts or threatens to distort competition by favoring certain undertakings or the production of certain goods"

There is no distortion of competition here. I would agree with the Commission if this were a case of Ireland giving Apple subsidies that Apple would use to undercut its competitors. However, Apple has never undercut anyone. It took almost ten years after the launch of the iPhone for a company not to undercut Apple (Google, with its Pixel phone).

It's not competition that the Commission is concerned about. All major tech companies do the same. There's a populist agenda in play here.

The following claim by Commissioner Vestager fails to pass even the most basic plausibility check:

"[T]his selective treatment allowed Apple to pay an effective corporate tax rate of 1 per cent on its European profits in 2003 down to 0.005 per cent in 2014."

Nobody has ever denied that Apple paid approximately $400 million in Irish taxes in 2014 (Tim Cook disclosed that number in a radio interview on September 1, 2016). So, obviously, Apple's overall tax rate was a whole lot higher than 0.005%. Otherwise Apple would have had to generate profits in Ireland of 20,000 times $400 million, which would be $8 trillion!

Again, I'll try to find out more, but so far this looks like just as ridiculous as saying that a proposed piece of patent legislation doesn't cover software "as such" when SAP said it did.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Google-SAP cross-license agreement announced: is SAP once again critical of software patents?

Google has previously announced various patent cross-license agreements, with partners including (but not limited to) Samsung and Cisco. Not with Apple and Microsoft, though: those announcements merely related to the withdrawal of lawsuits, not to actual license agreements.

Today, Google and SAP have announced "a long-term patent cross licensing agreement that covers a broad range of products and technologies."

It's not unprecedented for SAP to agree with Google in the context of patents. SAP has previously joined Google in supporting Samsung against Apple's pursuit of injunctive relief over patents covering (certain aspects of) minor features. But today's announcement contains a rather interesting quote from SAP's chief IP counsel:

"We are proud to announce this important agreement with Google, a global leader in technology," said Tony DiBartolomeo, Chief IP Counsel, SAP. "Giving talented engineers and developers the freedom to build great products is key to promoting innovation. Patent cross-license agreements like this one increase freedom to operate and prevent distractions from unnecessary patent litigation. And, like Google, SAP welcomes similar discussions with like-minded companies."

The second sentence ("Giving ...") appears to imply that software patents restrict the freedom of talented engineers and developers to build great products, and are, therefore, an impediment to innovation. The third sentence proposes cross-license agreements as means of increasing "freedom to operate" and calls patent litigation unnecessary and a distraction from innovative activity.

That's clearly a much more critical view of (software) patents than merely supporting the philosophy of Justice Kennedy in the eBay case that injunctions over minor features would give patent holders undue leverage.

SAP is living (in an abstract sense) proof that innovation in software, contrary to what many patent professionals claim all the time, is not dependent on patent protection. When SAP came out of nothing and became the most significant non-American software company, software patents weren't available--neither in the U.S. nor in Europe. For a long time SAP had no software patents, and even a while after it started filing for some, it had less than a handful.

Based on what I once heard from credible sources, Hasso Plattner, SAP's former CEO, was philosophically opposed to the notion of patenting software. But SAP may have felt forced to play the game everyone else was playing, and at some point, SAP's management believed its in-house patent attorneys that software patents were strategic assets for the company. I saw SAP patent attorneys at government roundtables and in the European Parliament, lobbying aggressively for software patents.

In 2005, the European Parliament rejected a proposed directive on computer-implemented inventions (more accurately and commonly referred to as the "EU software patent directive," though it's a fact that software patents already existed in Europe and continue to exist, because the exclusion of software patents defined in the European Patent Convention had already been vitiated beyond recognition by the European Patent Office and, to a lesser extent, national courts). Before the decisive vote, SAP placed an ad in the European Voice, a Brussels-based weekly on EU affairs published by the Economist Group, calling on Members of the European Parliament to vote in favor of the proposal. That ad came in handy for the movement opposing the bill: the liars supporting software patents (including the European Commission) had said all the time that the legislative measure was not at all about software, just "technical inventions," and had pointed to computer-controlled refrigerators and car braking systems, but SAP doesn't make any products of that kind: SAP is purely a software company, so its ad exposed the CII lie.

Now, more than ten years later, SAP appears to be part of the Google-led movement that is rather critical of software patents and those seeking to extort true innovators (ab)using patents of usually very questionable quality.

I hope SAP has now come full circle.

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|

Google defeats Apple in Germany's highest court: slide-to-unlock not a patentable invention

Well over a year ago, Apple and Google announced an armistice under which they withdrew all pending patent infringement lawsuits against one another. I described that one as a second-class settlement from a position of mutual weakness. I still stand by that assessment, with one modification: Google actually got a better deal than Apple. Here's why:

While Google had to give up its original hopes that Motorola's patents could force Apple into a patent cross-license agreement covering the entire Android ecosystem, Google and its partners can also achieve patent peace by getting all the Apple patents invalidated (or narrowed beyond recognition) that have been or could be asserted against Android. Unlike Motorola (prior to being sold to Google for the first time, which later sold it on to Lenovo), Google never wanted to impose a patent tax on Apple: it just wanted its ecosystem to be left alone. Apple hasn't brought any new infringement cases against Android device makers in more than four years, and whatever little is left of Apple v. Samsung is not of concern to Google.

The spring 2014 armistice with Google has a major downside for Apple: it related only to infringement cases, not to challenges to the validity of its patents, a fact that was not clear at the time of the original announcement. Five months ago, the European Patent Office revoked Apple's iconic rubberbanding patent on a Europe-wide basis. The sole remaining party opposing the grant of that patent was Motorola. I have no doubt that Google (not Lenovo) is the driving force behind this continuing effort to shoot down Apple patents, and I guess Google is paying Quinn Emanuel for representing Motorola in cases such as that one.

Today, Google and QE's continuing efforts have succeeded once again (and most probably not for the last time): the Federal Court of Justice, Germany's highest court (besides, theoretically, the Federal Constitutional Court, which has never heard a patent case in its history), today announced (German-language press release) affirmance of the Federal Patent Court's April 2013 decision to invalidate the German part of Apple's European slide-to-unlock patent.

At the time of the previous decision, Samsung was actually leading the effort. I attended that hearing in Munich and Zimmermann & Partner's Dr. Joel Naegerl ("Nägerl" in German), a patent attorney Samsung has been working with in Germany for a long time, was standing in the front row of the part of the courtroom assigned to the attorneys of the complainants (the parties seeking invalidation), and was first to plead. But a year ago, Apple and Samsung agreed to drop all non-U.S. lawsuits against each other, and Samsung withdrew from the invalidation proceedings as a result of that partial settlement. It's easy to imagine why: unlike Google, which has to take care of the Android ecosystem as a whole (a reason for which I believe it should settle the Java copyright dispute with Oracle sooner rather than later), Samsung has no incentive for continuing to challenge patents that won't be used against it anymore.

HTC had also played a key role in the early stages of the case, but already dropped out during the proceedings in the lower court due to a global settlement with Apple.

The Federal Court of Justice found, as I had predicted on Twitter, that the Neonode N1m smartphone, which predates Apple's slide-to-unlock patent, anticipated the slide-to-unlock mechanism per se, so all that Apple could claim as an innovation on top of that one comes down to the visual representation (a slider movement), for which there also is prior art. What is not patent-eligible by German standards (and not under post-Alice U.S. standards either) is the notion of users being able to figure out a certain graphical representation (a slider) more intuitively than, for example, a text (such as the one the Neonode N1m displayed in the same situation) instructing users to swipe.

The number of judges who have now found Apple's slide-to-unlock patent invalid has increased from 10 to 15 (a Federal Court of Justice panel has five members). The only judge in the world who has held so far that Apple deserved a patent on that concept is Judge Lucy Koh of the United States District Court for the Northern District of California. Judge Koh has also made public statements that suggest the opposite of sympathy for parties who challenge bad patents. Her position on what constitutes a patentable invention (as opposed to a great but merely psychological idea without any technologically impressive aspect, which is the way I would describe slide-to-unlock as well as rubberbanding) is an outlier among the 16 judges who have ruled on this "invention" so far.

It will be interesting to see how the Federal Circuit, which also has some exceedingly patentee-friendly judges (Circuit Judge Reyna, for example) but now has a chief judge with a more balanced perspective than her predecessor and appears to have read the Alice writing on the Supreme Court wall, rules on Samsung's appeal of Judge Koh's decision. The Federal Circuit judges frequently talk to and sometimes meet face-to-face with the members of the patent-specialized senate (division) of the Federal Court of Justice of Germany. Maybe they will see eye to eye on this question. Jurisdictional differences exist, but they don't justify upholding a patent on psychology.

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|

Corel Software sues Microsoft for software patent infringement: LivePreview feature in Word, Outlook, Excel, PowerPoint

While Microsoft has numerous patent cross-license agreements in place (including with dozens of smartphone, tablet and netbook manufacturers who pay Microsoft considerable amounts of royalties on devices powered by Google's Android and Chrome operating systems), it rarely goes to court--and far more often than Microsoft takes anyone to court, other patent holders sue it. Those plaintiffs are typically NPEs. Yesterday, however, Corel Software filed a patent infringement complaint against Microsoft in the District of Utah (this post continues below the document):

15-07-27 Corel Software v. Microsoft Patent Infringement Complaint by Florian Mueller

This is not the first time Corel enforces patents. In 2013, its Micrografx subsidiary sued Google and a couple of Android device makers.

Microsoft Office for Android is also mentioned specifically (though not exclusively) in Corel's complaint against Microsoft, which alleges that the LivePreview feature of key Microsoft Office apps--Word, Outlook, Excel, PowerPoint--infringes patents on claimed inventions covering WordPerfect's RealTime preview feature (WordPerfect belongs to Corel):

• U.S. Patent No. 6,731,309 on "Real time preview"

• U.S. Patent No 7,827,483 on "Real time preview"

• U.S. Patent No. 8,700,996 on "Real time preview"

Corel alleges that Microsoft's infringement is willful. Among other things, the complaint says that "[i]n or around 2011, representatives for Corel engaged in communications with Microsoft regarding the potential sale of certain Corel patents to Microsoft, including [two of the three patents-in-suit]." The theories behind Corel's willfulness allegations also include citations by Microsoft patent applications to some of those patents and the rejection of Microsoft patent applications by the United States Patent and Trademark Office because of certain Corel/WordPerfect patents.

Microsoft is known to try to win the race to the courthouse and file declaratory judgment complaints in its home district, the Western District of Washington, in anticipation of infringement actions brought elsewhere (especially if those could be filed in the Eastern District of Texas, which Corel opted not to do). I haven't been able to find a declaratory judgment filing in the Western District of Washington by Microsoft against Corel, however. It could be that Microsoft didn't necessarily expect Corel to bring an infringement case at this time.

It's strategically clear that what Corel really wants is (still) to sell those patents to Microsoft. WordPerfect is history, so there's no commercial reason for which Corel would need them.

I guess Corel has a good chance of getting Microsoft to buy these patents now--maybe not immediately, but before this case goes to trial. If Microsoft lost this case, damages could be substantial. And while I haven't analyzed this in detail, it's possible that Microsoft's best chance to defeat those patents would be to allege invalidity under § 101 in light of the Supreme Court's Alice ruling (abstract subject matter)--but such an interpretation of Alice would also affect countless Microsoft patents, including some rather important ones.

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|

European Patent Office revokes rubberbanding patent: Google and its partners win, Apple appeals

Two weeks ago I highlighted some smartphone patent cases that are still ongoing but have almost been forgotten by the public, including, among others, Google's continuing efforts to have Apple's European rubberbanding (overscroll bounce patent, EP 2126678, revoked. Originally, Samsung and HTC were also pushing for the same result, but due to HTC's worldwide settlement and Samsung's mutual ex-U.S. armistice with Apple, only Google (formally through Motorola Mobility) continued to participate in the proceedings. Still, Samsung and HTC's filings remained on the docket and relevant to the decision, so the time and money they had spent wasn't lost at all.

Last year, the EPO's Opposition Division had already communicated its preliminary position, which was that this patent is entirely invalid in Europe. The two-day hearing was held two weeks ago, with Google's lawyers from Quinn Emanuel Germany appearing on Motorola's behalf. At the end of the hearing, the decision to revoke this patent and to reject all of Apple's amendments (including any that were introduced in the meantime) was announced. This decision has now been made official on the EPO's website:

"The European Patent is revoked because, account being taken of the amendments made by the patent proprietor during opposition proceedings, the patent and the invention to which it relates were found not to meet the requirements of the [European Patent Convention] (Art. 101(3)(b) EPC)."

In mid-2013, the United States Patent and Trademark Office had upheld three claims of that patent, including one Apple asserted against Samsung in the 2012 trial (and the related 2013 retrial).

Apple still hasn't given up on its European rubberbanding patent. This is an iconic user interface feature that Apple clearly wouldn't want its competitors to implement in Europe. Apple's lawyers submitted a notice of appeal to the EPO on March 19, days after the hearing and prior to receiving the written decision that will state the reasons in detail soon. As a result, a Technical Board of Appeal will at some point have to review the Opposition Division's decision.

I've seen various Apple patents go down in Europe, but Apple hasn't been able to defend any European patent Android was actually found to infringe, not counting (of course) patents that were upheld in formal terms only because, after a negative decision that was appealed, settlements put an end to the proceedings. Depending on what kind of procedure we're talking about and in which jurisdiction, a settlement can salvage a patent only because of the withdrawal of a party, regardless of prior negative decisions on the merits.

If one brings a challenge to a European patent within nine months of publication of the grant, the EPO can still look at an opposition and, as in this case, revoke the patent with respect to al European countries in which it was registered. Thereafter, European patents have to be challenged on a country-by-country basis. That's why, for example, Apple's slide-to-unlock patent was held invalid by ten different judges in three different countries.

Losing a patent like slide-to-unlock or rubberbanding in Europe is a disappointment for Apple, but it has no bottom-line impact, at least not in the short term (and probably not even in the mid to long term, though it does make it harder for Apple to position itself as a breakthrough innovator and its competitors (especially those whose devices run on Android) as copycats.

To the extent that U.S. judges (especially at the Federal Circuit, the center of gravity of Apple v. Samsung at this stage) hear about such rulings, bad news for Apple's European patents may also, not as the most important factor but as another piece of the puzzle, dissuade American jurists from buying Apple's innovator v. copycat story. For someone who argues that courts need to protect its groundbreaking innovation, Apple's patent assertions haven't had a whole lot of merit, though this is an industry-wide issue: smartphone patent assertions usually go nowhere. The U.S. is not the only jurisdiction in which Apple can win at all, but it's the only one in which can win anything meaningful. Substantive patent law has not been harmonized between the U.S. and Europe, but cross-jurisdictional differences will likely play less of a role in the future given the impact of the Supreme Court's Alice decision (which has turned out bigger than I would have thought, though I still think some people blow it out of proportion).

Again, none of this should have Apple investors or its loyal fans concerned. Steve Jobs thought patent litigation would help to keep Android at bay, and we all know by now that it won't--still Apple is doing fantastically well and will continue to do so for years to come.

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|

Apple loses very important round over its pinch-to-zoom API patent, Samsung tells appeals court

Two weeks ago, the United States Court of Appeals for the Federal Circuit held a hearing on the damages award and underlying liability issues in the first Apple v. Samsung case. In my commentary on the official recording of the hearing, I also talked about something that was not discussed at the hearing at all: Samsung's challenges to the validity of the '915 pinch-to-zoom API-related patent. The fact that the judges didn't ask questions about it and that counsel had a different focus does not at all mean that the related part of Samsung's appeal is going nowhere. The only thing it suggests is that everyone felt that everything had already been said and that the issue was ripe for decision. And it would increasingly be a surprise if that decision was favorable to Apple:

Earlier this week Samsung informed the appeals court of a decision by a Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) that could cost Apple up to $150 million just in that one lawsuit. The '915 patent, Apple's relatively most valuable software patent in the first Samsung case (most of the damages related to design patents, but Apple's per-unit royalty claim was higher for the '915 patent than for rubber-banding and tap-to-zoom-and-navigate), has been on a rough reexamination ride for some time. From the first Office action two years ago, the USPTO's Central Reexamination Division has consistently held all claims of this patent, including the one Apple asserted against Samsung (claim 8), invalid. Another thumbs-down Office action (called "final" though it wasn't "final" in the true sense of the word) came down in July 2013. About a year ago, Apple realized that the only option it had left was to appeal the examiner's rejection decision within the USPTO, to a PTAB. On appeal, the examiner stood by his decision as I reported in July (this year). A PTAB hearing was held recently, and the three-judge panel just affirmed the examiner's rejection of all claims (this post continues below the document):

14-12-16 PTAB Decision Affirming Rejection of Apple's '915 Patent by Florian Mueller

In a notice filed with the Federal Circuit, Samsung's counsel argues that "[a] final decision by an administrative body has collateral estoppel effect" and describes this as "an additional reason to reverse the $114 million in lost profits awarded for infringement of the '915 patent and to vacate the $35 million in royalties awarded for infringement of the three utility patents-in-suit."

The latter part about vacating that award would, even though the amount is relatively small by the standards of these companies and their dispute, require a damages retrial involving more or less all products at issue. And a retrial may be necessary anyway because of the design patent and/or trade dress damages issues in the case (which the appellate hearing focused on).

So for the first Apple v. Samsung lawsuit, there is no end in sight. And the process concerning the '915 patent isn't over either. Apple can choose to immediately appeal the '915 decision to the Federal Circuit. Samsung's notice to the appeals court also says that "Apple can request a discretionary [PTAB] rehearing."

Even if the appeals court disagreed with Samsung on collateral estoppel, the USPTO decision can't be ignored. The credibility problem the '915 patent faces is that no one at the USPTO who looked at this patent after an anonymous requester presented some new invalidity theories-- by now, four persons: the (re)examiner and the three PTAB judges--believed at any point that a single claim of this patent deserved to be upheld. That is, frankly, pretty damning. Of course things can always change, but it's less and less likely.

If the appeals court didn't agree with Samsung on collateral estoppel, it would still have to make its own decision on Samsung's invalidity theories. The legal standard for invalidating a patent in an infringement litigation is higher (clear and convincing evidence) than at the USPTO (preponderance of the evidence), but the consistent stance of the USPTO (again, four persons) has been clear and convincing.

Apple's decision in the summer to drop its cross-appeal (i.e., not to pursue an injunction anymore in that case) may also have to do with Apple's realization that this patent is going down the tubes even though it still can appeal the USPTO's final decision to the Federal Circuit. The '915 patent was the only patent in the first California case with respect to which Apple argued that Samsung continued to infringe (though Samsung said it had a workaround). If there was any patent in the first Samsung case over which Apple would have liked to win an injunction (in order to then have a debate over whether the workaround indeed is a workaround), it would have been this one. But Apple is now, instead, fighting hard for an injunction in the second California case against Samsung, which Judge Koh denied in August. Samsung had a deadline this week to respond to Apple's opening brief on appeal, and the docket indicates that the filing was made but it's not yet publicly accessible (I'll comment on it when it's available).

The state of Apple's patent enforcement efforts and the strategic landscape

Apple's patent assertions, despite the undoubtedly great work performed by the lawyers involved, have massively underperformed the expectations I used to have for some time (even in the summer of 2013 I still thought that, after some setbacks, there were signs of Apple still turning this around). I do know that a lot of people in different places were very surprised when they felt this year that my tone had changed. I can understand that, but conspiracy theories are a poor substitute for facts. The reason I adjusted my position was that after the summer of 2013, several important things happened that showed to me Apple wasn't going to get huge leverage. There came a point when I had to face those facts and draw the appropriate conclusions. And I was indeed thoroughly disappointed when I saw Apple bring an outsized damages claim in the second Samsung case. It looked to me like a desperate act after repeatedly failing to win (lasting) sales bans, and it was inconsistent with Apple's own positions on the value of patents in other contexts--positions I always supported and never disagreed with.

Apple itself vindicated the adjustment of my positions through its strategic retreat. It agreed with Google/Motorola to drop all pending litigation between those companies; it then agreed to confine the once-earth-spinning Samsung dispute to only one jurisdiction, the United States. And it hasn't brought any new cases, neither against long-time rival Samsung nor against any other Android device maker, in a long time. So it wasn't just me who determined this year that this was going nowhere for Apple. Apple's leadership recognized this and decided accordingly.

Even the remaining part of the Apple-Samsung will go away at some point--I find it hard to imagine that they (meaning both companies, but particularly Apple because it started this) really want to have a third California trial in just their first lawsuit (or a fourth trial in total).

For as much as Apple's supposedly "thermonuclear war on Android" underperformed my expectations, Apple's ability to command premium prices and still sell incredibly high volumes of products, has to a comparable extent outperformed them. According to Gartner's latest data, more than 83% (five out of six) of smartphones sold in the world run on Android, and more than 12% on iOS. But then there's also data that shows iPhone and iPad users are really much more active, and obviously many low-cost Android phones are technically smartphones but practically used as feature phones. In fact, just for app testing purposes I bought various low-cost Android phones (all of them in the 50 euro price range) from different vendors with screen sizes from 3" to 4". If you look at it strictly through a functionality lens, those are smartphones and you can run a million apps or so on them. But Apple is still doing very well. Incredibly well in fact.

I also bought an iPhone 6 Plus and an iPad Air 2. I now use the iPhone alternatingly with an Android phablet. My Android phablet has a significantly higher resolution, and when you view photos, it's quite a difference, and it's even noticeable when you just look at the standard user interface. But there's definitely some magic detail about the iPhone user experience. For example, when switching (in a test program for a component of an app I'm working on) from portrait to landscape (or the other way round), it's not just a sudden repositioning of all items but a smooth animation that I haven't seen in any Android app to date. That animation won't be patentable. But it's one example (and I could give more of these) of how Apple still manages to differentiate. Without litigation. Without injunctions.

What also still helps Apple to justify a price premium (and also has nothing at all to do with patent litigation) is the average quality of the apps available for the two platforms. I regularly look at many apps on both platforms. The two game categories I follow most closely are trivia games and puzzle games. In the trivia game genre, there's no noticeable difference in quality between Android and iOS, thus no reason to pay a premium price for an iPhone. In the puzzle games field, however, the difference is rather significant. While Candy Crush and some other titles from major publishers look and feel the same on both platforms, I've seen some really great games in this genre from smaller developers that exist only on iOS (or all you may get for Android is an unauthorized clone of inferior quality). There's still a lot of talented developers who develop primarily for iOS and invest more heavily in their iOS versions, despite the fact that you can reach so many more people in the world with an Android app. That's because iPhone users have more purchasing power than Android users.

It turns out that patent litigation was neither a winning strategy nor a necessary last resort for Apple. I can still understand why they thought they had to enforce their rights, but Apple's greatest strategic assets appear to be unprotectable by patents. IP has never been the only entrance barrier in this industry. It will continue to be important, and even Apple may at some point get more leverage out of its patents in different contexts. But stuff like a patent on a pinch-to-zoom-related API turned out to be of no value in the end. It's time for the U.S. part of Apple v. Samsung to end. With the Holiday Season so close, it may not happen this year, but next year is most probably the year for the definitive settlement.

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|