Earlier this month, InterDigital Communications filed a Section 337 complaint with the ITC, alleging that Samsung, Nokia, ZTE, and Huawei infringed several of InterDigital’s 3G and 4G-essential patents. As we noted in our earlier post on the matter, InterDigital included a statement regarding the public interest along with its complaint, attempting to preemptively assuage any public interest concerns the Commission may have due to the inclusion of standard-essential patents in the complaint. Over the past two weeks, though, the proposed respondents have each filed their own public interest statements with the ITC, asserting a number of reasons why the public interest might be adversely affected by the institution of an investigation based on InterDigital’s complaint.
In practice, the ITC nearly always institutes an investigation based on a complaint alleging a violation of Section 337 (absent extraordinary circumstances, settlement, or a technical problem with the complaint). But that doesn’t stop parties accused of patent infringement from trying use any and all tools at their disposal to try and avoid a costly ITC case, or at least have the public interest concerns get aired early on before the Administrative Law Judge (rather than only by the full Commission at a later stage). This is particularly true in cases that involve the assertion of standard-essential patents, given the focus put on these patents by the FTC, the courts, and Congress.
The Proposed Respondents’ Positions
The main focus of the public interest statements submitted by Nokia, Huawei, and ZTE is that the seven patents asserted by InterDigital are claimed to be essential to various cellular technologies. Nokia, Huawei, and ZTE each assert that InterDigital is bound to license these patents to all parties are RAND terms, and that these RAND obligations preclude InterDigital from seeking exclusion orders against willing licensees. Both ZTE and Huawei expressly claim that each has committed to paying a RAND rate for InterDigital’s patents in a co-pending litigation in the District of Delaware. (While Nokia’s letter does not include any reference to such a commitment by Nokia, some portions relating to “confidential licensing negotiations” have been redacted). Thus, Nokia, Huawei, and ZTE each urge the ITC to decline to institute an investigation.
Samsung’s statement, unlike the others, does not focus on RAND-related public interest concerns, which is not surprising given Samsung’s pending assertions of SEPs against both Apple and Ericsson. (Although, toward the end of its statement, Samsung does note that the asserted patents are allegedly standard-essential, and the RAND issues may apply.) Samsung instead directs the Commission’s attention to another hot-button issue that was also brought up in Huawei’s statement — the fact that InterDigital is in the business of licensing its patents, not producing products that embody these patents. Samsung (and Huawei, in its statement) claim that by bringing a Section 337 complaint seeking an exclusion order, InterDigital is misusing injunctive relief to the detriment of competition and the public. Samsung also urges the Commission to decline to institute an investigation, or in the alternative, to direct the ALJ to take discovery and make a recommendation on public interest issues.
InterDigital recently submitted a reply statement that takes issue with the arguments offered by the proposed respondents, claiming that many of their arguments are irrelevant to the public interest and/or are relevant only to affirmative defenses that must be established through the course of an instituted Section 337 investigation. InterDigital asserts that there is no per se rule against exclusion orders issuing for standard-essential patents (RAND-encumbered or otherwise), and that any RAND-based defenses should be considered on a case-by-case basis. InterDigital also disputes the assertions by several of the proposed respondents that it is a “patent assertion entity” whose activities should be disfavored by the ITC — InterDigital claims that it invests heavily in both people and money in research and development, and even points the ITC to a recent Federal Circuit opinion to support its case for institution of an investigation.
The ITC typically makes a decision on whether to institute a Section 337 investigation within 30 days of receiving the complaint, so it’s likely that the Commission will issue a notice of its decision within the next week and a half.