The smartphone wars have definitely seen their share of assertions of standard-essential patents in recent years. Even more of these SEPs entered the fray in a flurry of litigation at the end of 2012 between Ericsson and Samsung.
In late November 2012, Ericsson filed several complaints for patent infringement against Samsung – all of which relate to standard-essential patents. On November 27, Ericsson filed two complaints in the E.D. Tex. against Samsung, alleging infringement of 24 patents that allegedly cover inventions relating to the use of various electronic devices such as telephones, base stations, televisions, computers, etc. in wireless communications networks. One of Ericsson’s district court complaints also alleges that Samsung has breached its contractual obligations with the European Telecommunications Standards Institute (ETSI) by failing to offer Ericsson a license to Samsung’s essential patents on FRAND terms, while the second district court complaint simply accuses Samsung of infringing 13 U.S. patents. Then, on November 30, Ericsson also filed a complaint with the U.S. International Trade Commission accusing Samsung of violating 19 U.S.C. § 1337 by importing products that infringe the same 11 patents in Samsung’s first district court complaint.
Ericsson’s infringement complaints accuse a wide variety of Samsung products – smartphones, tablets, televisions, and Blu-ray players – of infringing patents essential to cellular communications standards and Wi-Fi standards. The complaints assert that “Ericsson owns and patented hundreds of inventions that are essential to the GSM, GPRS, EDGE, WCDMA, LTE and 802.11 wireless standards,” and that Samsung had previously licensed Ericsson’s SEPs, but that the license is now expired. Ericsson alleges that it has extended multiple offers to Samsung to renew the license on FRAND terms over two years of negotiation, but Samsung refuses to pay the FRAND rate paid by competitors. Ericsson previously asserted some of these patents in litigation relating to cellular and Wi-Fi standards (including prior litigation with Samsung), and also has disclosed some of the patents to ETSI as being essential to certain cellular standards.
Notably, the relief requested by Ericsson for Samsung’s alleged infringement includes both monetary damages and injunctive relief (the latter in the form of an injunction and, in the case of the ITC complaint, an exclusion order). This stands in contrast with the positions taken by parties such as Microsoft, Apple, and Cisco, all of whom believe that the FRAND commitment is inconsistent with injunctive relief. But the relief sought by Ericsson dovetails with public statements made by Ericsson about the FRAND commitment, such as its policy statement submitted in connection with the ITC investigation involving Motorola and Apple (No. 337-TA-745). There, Ericsson proposed a “balanced approach,” claiming that if an essential patent owner has “exhausted reasonable negotiation efforts and offered a license on RAND terms,” it is appropriate for a court to enter an injunction against an unwilling licensee.
As for the FRAND issues, Ericsson’s claims against Samsung for breach of contract based on Samsung’s alleged violating FRAND promises to ETSI are similar to the claims filed by Microsoft and Apple against Motorola over the past two years. Ericsson claims that in their negotiations, Samsung failed to offer Ericsson licenses to patents essential to certain ETSI cellular standards in an effort to compel Ericsson to license its own portfolio at a below-market rate. Again, the relief sought by Ericsson is somewhat notable. Ericsson is seeking both a declaratory judgment that Samsung breached its contract, damages for the breach, and specific performance requiring Samsung to offer Ericsson a license on FRAND terms to Samsung’s essential patents. But Ericsson is also requesting that the court decree that Samsung’s essential patents are unenforceable against Ericsson and to enter an injunction preventing Samsung from enforcing its essential patents against any party. While limited unenforceability rulings have been ordered in the past in cases involving violations of a duty of disclosure (e.g., Broadcom v. Qualcomm), no court has yet found a breach of a FRAND obligation justifies rendering a patent unenforceable. In the separate Apple v. Motorola cases, for example, both Judge Posner and Judge Crabb expressed skepticism about Apple’s claims that licensing demands alone (even non-FRAND demands) could nullify a patent grant.
Samsung Returns Fire
Unsurprisingly, Samsung did not sit idly by. On December 21, Samsung filed a complaint with the ITC that accused Ericsson of violating Section 337 by importing base stations and components that infringe seven patents that Samsung claims are essential to the ETSI 4G LTE standard. Samsung is seeking an exclusion order that would prevent Ericsson from importing these base stations and components into the United States.
Because both parties have asserted essential patents in their ITC actions, these assertions could be affected by the ITC’s upcoming Final Determination in Investigation No. 337-TA-794, which is expected in early February.