Nokia wins first patent ruling since Microsoft deal: German court tosses HTC complaint

At the end of an eventful week for Nokia, the Mannheim Regional Court announced its decision this morning to reject an HTC v. Nokia patent infringement complaint over EP2073096 on "Power management systems and methods for electronic devices". I discovered in early February that HTC was asserting this patent against Nokia.

Nokia welcomes today's ruling:

"Nokia is pleased by the court's decision in this case, which confirms that Nokia's products do not infringe HTC's patents."

The trial was held on May 31. I didn't attend that one due to a scheduling conflict, but I did attend two hearings (the second one of which was tantamount to a trial) held by the Munich I Regional Court over the same patent. HTC is suing Nokia Oyj (the Finnish parent company) in Munich and Nokia's German subsidiary in Mannheim. The first Munich hearing took place in mid-February. At the second hearing (i.e., trial) in late June it became known that HTC had in the meantime amended its complaints (in Mannheim as well as Munich) so as to accuse newer (Windows Phone 8-based) Lumia devices of infringement (the infringement allegations don't relate to Windows Phone per se, but to Qualcomm and Broadcom chips incorporated into the accused devices). Those additional infringement contentions were severed (a related hearing in Munich was scheduled for October 31, 2013. Today's ruling relates only to the originally-accused devices. The Munich court will rule on those older devices next week, and based on how it managed the case, I got the impression at the June trial that a dismissal is the most likely outcome there, too.

Bird & Bird is defending Nokia against HTC and is representing it in many of its offensive cases. Preu Bohlig is HTC's counsel in its offensive power management cases against Nokia. While it looks like HTC won't win those, Preu Bohlig did a great job defending HTC against Apple in several German actions (none of which was adjudged prior to last year's settlement, but HTC was in better shape than Google's Motorola with respect to the same patents).

Nokia succeeded with its own power management patent lawsuit against HTC: it won a Mannheim injunction earlier this year.

Nokia is asserting approximately 50 patents against HTC worldwide. In addition to the power management-related lawsuits, HTC also has a countersuit going against Nokia over a video codec patent. Wholly-owned HTC subsidiary S3 Graphics is suing Nokia, in Mannheim, over the alleged infringement of EP0797181 on "hardware assist for YUV data format conversion to software MPEG decoder" by the Qualcomm Snapdragon chip. A decision (which may or may not be a final ruling) was scheduled for September 20 (i.e., two weeks from today). I think HTC's S3G has a decent chance of winning something, but the impact of the injunction it might obtain will depend on the specific infringement theory on which the ruling will be based. The injunction could be easy to work around if a hardware feature that the software doesn't use merely has to be thrown out.

The Microsoft-Nokia M&A deal announced earlier this week may actually render HTC's countersuits against Nokia irrelevant from a practical point of view. In a matter of months, the Lumia devices will be Microsoft products. Microsoft and HTC entered into a patent license agreement in the spring of 2010 (the first of 20 Android-related patent license deals Microsoft has announced so far). I don't know the terms of that agreement but strongly doubt that HTC would sue Microsoft, let alone enforce an injunction against Microsoft, after the closing of the deal. In a strategic rationale document published this week, Microsoft discussed the cost-effective ways in which it can combine its own patent cross-license agreements with the benefits Nokia will assign to Microsoft under dozens of other agreements. HTC wasn't mentioned, but I'd be surprised if HTC had more favorable terms than the likes of Samsung and LG. I could imagine (and this is now somewhat speculative, but not without a logical basis) two reasons for which HTC wasn't mentioned: its ongoing litigation with Nokia and the fact that it doesn't play in the same patent league as the companies mentioned in Microsoft's slide.

Theoretically, if HTC obtained an injunction in the very near term against Nokia and enforced it, it could hope that this would make Nokia back down, but patent monetization is going to be so key to Nokia in 2014 and beyond that I believe it would take a strategic, long-term perspective on this. Also, Nokia could even take some risks with its workarounds: if those raised questions of fact that a German court would have to address, a contempt proceeding would likely take longer than the merger process, after which the whole issue would presumably go away at any rate.

HTC is defending itself extremely well against Nokia so far, but it will end up sending royalty checks to Finland, I'm sure.

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|

HTC recently filed two additional lawsuits in Germany to target newer Nokia Lumia phones

The patent dispute between Nokia and HTC continues to escalate. With Nokia's recently-lodged second ITC complaint against HTC, which is now being investigated, and simultaneous filings in the Southern District of California the number of patents Nokia is currently asserting against HTC has reached (if not surpassed) 50. Meanwhile, the number of HTC complaints against Nokia (all of them filed in Germany) has increased from three to five. At an HTC v. Nokia trial held in Munich today I learned about HTC's attack on half a dozen new (Windows Phone 8-based) Nokia Lumia smartphones, which it is targeting in two courts in parallel (HTC is suing Nokia's German subsidiary in Mannheim and the Finnish parent company in Munich) over a power-saving patent it's also asserting in Mannheim and Munich against older (Windows Phone 7-based) smartphones. The accused functionality is implemented by chipsets, not the Windows Phone operating system per se.

The number of distinct patents asserted by HTC against Nokia is still the same: two. In one Mannheim case, HTC subsidiary S3 Graphics is alleging infringement of a video processing patent by Qualcomm's Snapdragon chip. That case will go to trial tomorrow. In another Mannheim case, which went to trial on May 31 and in which a decision (which may or may not be a final ruling) has been scheduled for August 23, and in a Munich case that went to trial this morning (with a decision scheduled for September 12), HTC is asserting EP2073096 on "power management systems and methods for electronic devices". The cases that have already gone to trial involve previous-generation devices. HTC's amendments to both power management patent complaints for the purpose of accusing newer Lumia phones were severed by the Mannheim and Munich courts and put on separate schedules. The Munich case will be heard on October 31.

In all jurisdictions the fast pace of this industry poses challenges to patent enforcement. Yesterday a United States Magistrate Judge suggested to Apple (in a footnote of a ruling) that it bring a third infringement complaint against Samsung in the Northern District of California in order to accuse the Galaxy S4.

In mid-February I reported on the first Munich hearing (patent infringement cases in the Munich I Regional Court typically involve an "early first hearing" and a second trial, which is tantamount to a trial). Since then HTC has apparently, besides bringing an amendment, addressed some of the evidentiary issues highlighted in February. The court had suggested some measurement of power-saving effects, and some such effort was mentioned today (without much detail). And HTC has amended its infringement contentions so as to capture non-literal infringement based on the German equivalent of the Doctrine of Equivalents (DoE).

Even though Nokia filed a nullity (invalidation) complaint with the Federal Patent Court of Germany in December 2012, today's discussion was solely about administrative issues (court fees and a bond covering Nokia's legal fees in the event HTC loses and fails to pay) for the first hour and about claim construction and infringement analysis during the next two hours. There was no time to discuss Nokia's motion to stay the case (should an infringement be identified) pending the nullity proceeding. Judge Dr. Zigann said that an unusual (but not unheard of) third hearing may have to be held to discuss the likelihood of success of Nokia's nullity action, but this will be necessary only if the court is convinced of there being an infringement. The court did not take a clear position on the merits of the infringement allegations, but if it felt that HTC had a strong infringement theory, it would have set aside some time today for the (in)validity part of the case or at least would have scheduled a near-term subsequent hearing for that purpose rather than wait until mid-September to decide whether to hold that other hearing at all. Should the third hearing be necessary, HTC has already requested that it take place on October 31 when its more recently-filed claims will be heard as well.

The challenge HTC faces here is the same that Nokia faces in the dozens of cases in which it is the plaintiff (and in which HTC has so far been an amazingly effective defendant, so far losing only one case that didn't have devastating consequences): a defendant can raise multiple non-infringement arguments, and if only one of them succeeds, the case is dismissed. I don't know whether HTC has a stronger infringement case for those newer Nokia Lumia devices, which come with different chips, but today it was clearly struggling to deal with Nokia's defenses to infringement.

The patent's literal scope is that a telecommunications chip will wake up an application processing chip from its sleep state if certain messages are identified based on patterns. This way the application processing unit can save power when not needed, but incoming calls (including voice-over-IP calls) won't be missed. Simply put, Nokia's noninfringement arguments are that the devices accused in this action don't conduct positive filtering (finding and processing matches) but sort out by means of negative filtering (throwing out non-matching messages), which HTC says is, if not a literal infringement, an equivalent. Nokia says there's neither a literal nor a non-literal infringement because, in any event, what's missing is a wake-up messages to the application processing unit. In response to this, HTC contends that the inter-chip messaging by means of interrupts has the effect of a wake-up message. Nokia does not dispute that interrupts are involved (it's simply the way chips typically communicate with each other) -- but it says that the interrupts HTC means don't fall within the scope of the claims. Not all interrupts are wake-up signals.

According to Nokia, HTC's broad construction of the term "wake-up signal" would result in an extremely high frequency of switches from sleep to normal state, which Nokia says cannot possibly be meant to be the idea covered by this patent. Nokia does not deny that its chips consume more power if they have more work to do. It does dispute, however, that the claim language, which also refers to the process of entering a state, has scope for the usual inter-chip communication by means of interrupts unless there's such a thing as an identifiable wake-up signal, triggered by identification of a certain data pattern.

These are just HTC's primary challenges on the infringement side; Nokia may also have raised some other points that weren't discussed today. And even if there is an infringement, an injunction won't issue unless HTC fends off Nokia's motion to stay.

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|