Last week, on July 28, the U.S. Department of Justice (DOJ) Antitrust Division issued a press release and business review letter (BRL) based on Avanci’s request for a BRL on Avanci’s proposed joint patent-licensing pool (the Platform) to license patent claims of 5G cellular wireless standard essential patents (SEPs) of several patent owners for use in automobile vehicles (vehicles) (to later be expanded to a pool for Internet of Things (IoT) devices) and then distribute royalties among those patent owners. A BRL provides DOJs views on whether a business model raises any competition law concerns–e.g., is the business model pro-competitive or anti-competitive–so that the business may proceed with some assurance that its activities will not violate competition laws. The focus of the BRL is competition law and does not endorse one way or another the merits or value of a business model. DOJ concludes that “Avanci’s proposed 5G Platform is unlikely to harm competition” and DOJ “has no present intention to challenge the Platform.” Below is a summary of Avanci’s request and DOJs BRL in response. Continue Reading DOJ issues business review letter on Avanci SEP Pool licensing
On May 5, 2020, Germany’s highest court, the Federal Court of Justice (GFCJ), made a provisional (tentative) ruling at the hearing in Sisvel’s SEP case against Haier, determining that Sisvel had not abused a dominant market position and Haier – as the implementer – had failed to comply with its FRAND obligations in the way that it handled licensing negotiations with SEP-owner Sisvel.
The GFCJ not not yet issued its final written decision, so we’ve done our best to summarize key points from various accounts of the May 5 hearing. So consider this post more as issue spotting with proper skepticism and understanding that the final decision may be different from what was said at the hearing. We encourage readers to keep an eye out for the Court’s final ruling, and we will provide an update once we receive an English version of the final decision (we will give a shout-out to the first person to send us an English version of the final decision).
Following the May 5 ruling, Sisvel on May 15 filed patent infringement suits against Tesla, Dell, Honeywell, HMD Global, TCL, BLU Products, CradlePoint, OnePlus, Tinno Mobile, Sun Cupid Technology, Verifone, and Xirgo in the District of Delaware, asserting patents previously assigned to Nokia, BlackBerry, LG, and Thomson Licensing and declared essential to 3G and 4G/LTE wireless standards. Sisvel had filed cases against BLU, Dell, Honeywell, Tesla and Xirgo last June. Continue Reading Germany’s highest court tentatively rules that infringer hold-out violated its obligations to negotiate a FRAND license (Sisvel v. Haier)
Yesterday, InterDigital announced that it signed “a multi-year, worldwide, non-exclusive, royalty bearing patent license agreement” with Huawei, bringing an end to the companies’ SEP litigation in China and the U.K. over FRAND terms for InterDigital patents essential to 3G, 4G, and 5G wireless telecommunication standards. InterDigital’s press release states the new agreement “covers certain of Huawei’s products and certain of InterDigital’s essential patents” and that the companies have agreed to dismiss all pending litigation between them.
In addition to resolving a significant overhang that the dispute posed to InterDigital’s licensing business, we anticipate the Huawei agreement could feature prominently in InterDigital’s defense against Lenovo’s newly filed antitrust claims, particularly those predicated on an alleged failure to license its patents on FRAND terms (see our April 28, 2020 post). Quoting InterDigital President and CEO William Merritt, the press release may preview the tone of InterDigital’s response in the Lenovo case by noting that the Huawei agreement “underscores the fairness and flexibility of our licensing approach, including our rate and portfolio transparency, which set an industry standard.” Continue Reading InterDigital pens SEP license agreement with Huawei as Lenovo Dispute escalates
On April 7, 2020, the U.S. International Trade Commission issued its Notice of Opinion in Investigation No. 337-TA-1089, essentially reversing Chief Administrative Law Judge (“ALJ”) Bullock’s Initial Determination and declining to issue remedial orders blocking SK Hynix products from the sale in or import to the U.S. The ITC found that no remedy was warranted, as patent owner Netlist (complainant) failed to establish that Korean-based SK Hynix infringed the asserted patents and failed to meet the technical prong of the ITC’s domestic industry requirement. A redacted Public Version of Commission Opinion of the Commission Opinion was posted April 21, 2020.
The ITC did not address standard essential patent issues beyond finding that ALJ Bullock erred in ruling that the JEDEC Patent Policy was unenforceable because the terms “reasonable” and “nondiscriminatory” were too ambiguous under New York law:
[T]he Commission has determined to reverse the ALJ’s findings that the ‘907 patent is essential to a JEDEC standard and that the JEDEC Patent Policy is unenforceable, has determined to affirm the ALJ’s finding that the ‘623 patent is not shown to be essential to a JEDEC standard, and has determined to vacate all other finding relating to obligations to license on reasonable and nondiscrimatory terms. Continue Reading ITC avoids SEP FRAND issues by finding patents not infringed (Netlist v. Hynix, 337-TA-1089)
On April 9, 2020, Lenovo and Motorola Mobility filed a Complaint against InterDigital in the District of Delaware alleging InterDigital violated U.S. antitrust law and contractual FRAND commitments by its standard setting participation and licensing practices related to 3G and 4G standard essential patents (SEPs). The Complaint is the most recent development in a larger patent dispute between the companies and alleges that InterDigital “has engaged in a multi-pronged scheme, through a combination of agreements with its competitors and fraudulent promises, to unlawfully acquire, maintain, and exploit such market or hold-up power arising solely from the alleged essentiality of patents it contends have been incorporated into the Cellular Standards.”
A short background and summary of the Complaint is included below. Continue Reading Lenovo, Motorola file antitrust claims against InterDigital’s standards setting participation and patent licensing practice (Lenovo v. InterDigital)
On April 3, 2020, Judge Selna issued an Order in the TCL v. Ericsson case upon remand from the Federal Circuit, teeing the matter up for a jury trial on all liability and FRAND issues in the case to be heard at the same time. Continue Reading Judge Selna will hold jury trial on all SEP issues on remand (TCL v. Ericsson)
On March 2, 2020, Judge Gilstrap issued an Order granting-in-part Apple’s motion to dismiss a declaratory judgment claim by Optis to the extent the claim related to FRAND commitments for foreign standard essential patents (SEPs). But he maintained the action as to FRAND commitments for U.S. patents. This decision may be part of a trend for U.S. courts respecting comity with other countries by limiting disputes over SEPs and FRAND commitments to U.S. patents in the absence of consent by both parties to adjudicate issues concerning foreign SEPs. Continue Reading Judge Gilstrap dismisses foreign SEP FRAND claims in global SEP feud, but maintains claims on US SEPs (Optic Wireless v. Apple)
On February 18, 2020, ALJ McNamara issued an Initial Determination on Violation in INVT SPE’s ITC case against Respondents Apple, HTC, and ZTE, finding INVT SPE failed to show a violation of Section 337 of the Tariff Act of 1930. The ALJ found no asserted claims were infringed, no claims were invalid, there was no requisite domestic industry, and, of particular interest to our readers, that none of the asserted patents are essential to 3G or LTE standards.
On April 3, ALJ McNamara issued a Recommendation on the Public Interest and Remedy, which is confidential. We expect a public version of that ruling in the coming weeks. Even though ALJ McNamara ruled that the patents were not essential nor infringed, the ITC procedural rules require in all cases that the ALJ also issue a recommendation on public interest and remedy because the decision will be reviewed by the full ITC Commission, which could disagree with the ALJ on infringement and address the public interest/remedy issues. Under the current schedule, the ITC has until May 18, 2020 to determine whether to review ALJ McNamara’s decision. The ITC is soliciting public comments due by May 5 regarding the impact on the public interest from an exclusion or cease-and-desist order on 3G and LTE enabled devices at issue.
On January 29, 2020, Caltech prevailed in its Central District of California jury trial against Apple and Broadcom, where the jury found both Broadcom (who supplied WiFi chips) and Apple (who sold products with the Broadcom WiFi chips) infringed all five asserted claims of Caltech’s U.S. Patent Nos. 7,116,710, 7,7421,032, and 7,916,781, and awarded over $1.1 billion in total damages. The case marks what appears to be the largest verdict awarded on standard essential patents (SEPs) that were not subject to any standard-setting commitment (i.e., no RAND commitment).
The Jury Verdict shows that the jury found neither Broadcom nor Apple had willfully infringed any of the asserted claims and awarded Caltech running royalties in the amount of $837,801,178 for Apple’s infringement and $270,241,171 for Broadcom’s. The jury was not asked to make any findings on issues related to validity or any affirmative defenses or counterclaims, focusing solely on infringement and damages.
The parties currently are filing post-trial motions in which Apple/Broadcom are asking the trial court to enter judgment in their favor and overturn the jury verdict. The post-trial filings also include Caltech’s request for a permanent injunction. The trial court may decide those motions in the next couple months.
Oral Argument in the appeal of Judge Koh’s FTC v. Qualcomm decision is schedule to take place February 13, 2020 before the 9th Circuit Court of Appeals in San Francisco to consider whether and to what extent competition law should apply to licensing standard essential patents (SEPs). This appears to be the most important and impactful U.S. case so far on the issue and could have far reaching impact on domestic and foreign SEP licensing.
The Court will hear from Qualcomm and the U.S. Federal Trade Commission (FTC) and has also allotted the U.S. Department of Justice (DOJ) five minutes to present as amicus curiae during the argument. In addition to the parties-at-interest and DOJ, twenty-two amicus briefs have been lodged in the case by other companies, licensors, industry groups, academics, and interested parties. In fact, due to public interest in the case, the Ninth Circuit has created a separate website dedicate to the appeal, “to notify the media and public of procedures and rules for admission to proceedings, as well as access to case information.” The FTC also maintains its own website on the litigation that includes all the FTC’s filings and public statements regarding the proceedings.
In anticipation of the upcoming hearing, we’re provide this summary of the appeal issues and topics raised by the amicus briefs. As usual, we provide links to the filings and encourage you to read through them yourself. Continue Reading Ninth Circuit to Hear Argument Feb. 13 from FTC, DOJ and Qualcomm on Competition Law’s Applicability to SEP Licensing (FTC v.Qualcomm)