Lately, there’s been a lot of activity in InterDigital-related cases, both in district courts and the ITC. Aside from the hearing in Inv. No. 337-TA-800 (scheduled to wrap up today), the respondents named in InterDigital’s latest complaint (Inv. No. 337-TA-868) — Huawei, Nokia, Samsung, and ZTE — filed their answers yesterday. Given InterDigital’s assertion of 3G/4G cellular standard-essential patents here, it comes as no surprise to see that in addition to customary patent infringement defenses, the respondents have asserted several FRAND-specific defenses. Below is a quick rundown of the FRAND-specific defenses asserted by the individual respondents.
As is the case in the corresponding Delaware district court case, Huawei’s and ZTE’s answers closely track each other. And just as in Delaware, Huawei/ZTE assert here the defense of patent misuse, in which they set forth their FRAND-related factual allegations. For example, Huawei’s complaint asserts that
InterDigital has failed to offer and grant a license to Huawei with FRAND terms and conditions, despite repeated requests. In particular, the terms and conditions offered to Huawei are significantly less favorable than the terms and conditions of licenses that InterDigital has entered into with prior licensees, including licensees that are competitors of Huawei. At the same time, InterDigital has refused to accept FRAND license terms and conditions counteroffered by Huawei.
Huawei/ZTE also assert that InterDigital has impliedly licensed its patents by way of its standard-setting activities, and that InterDigital is barred from enforcing its patents based on the doctrine of unclean hands, breach of contractual FRAND obligations, and the doctrines of equitable/promissory estoppel. Lastly, Huawei/ZTE claim that in entering into FRAND obligations, InterDigital waived any right to enforce its SEPs — and that this necessarily includes a waiver of the right to exclusionary relief.
Samsung understandably faces a bit of a quandary in asserting FRAND-related defenses against SEP infringement allegations, as it is currently attempting to procure exclusion orders on FRAND-pledged standard-essential patents in Inv. No. 337-TA-794 (against Apple) and Inv. No. 337-TA-866 (against Ericsson). So, unlike Huawei and ZTE, Samsung does not claim that a party undertaking a FRAND promise waives all rights to an exclusion order. Instead, Samsung takes the position that FRAND obligations and related defenses should be evaluated on a case by case basis — and that here, InterDigital violated its FRAND obligations. To wit, Samsung asserts a catch-all FRAND-related “unenforceability” defense:
InterDigital’s claims are barred in whole or in part by reason of estoppel, unclean hands, waiver and/or other equitable doctrines based on InterDigital’s failure to comply with its contractual obligations and promises made to various standards setting organizations (“SSOs”), to the industry as a whole, and to Samsung in particular that it would offer and grant licenses to each of its patents that are essential to the W-CDMA, UMTS, HSPA+, CDMA2000, 802.11, or LTE standards (the “Relevant Standards”) on terms that are fair, reasonable, and nondiscriminatory (“FRAND”).
Samsung alleges that the parties had a prior license (that expired on December 31, 2012) and that Samsung is willing to renew that license on FRAND terms, but that InterDigital has refused to do so. Samsung also asserts “patent misuse” and “lack of standing” defenses based on these same facts.
Along with its answer, Samsung also filed a motion for partial termination of the investigation as to whether Samsung imports products that infringe 6 of the 7 asserted InterDigital patents (importation into the United States is a necessary prerequisite for a finding of a Section 337 violation). While this motion is confidential, it almost certainly relates to Samsung’s allegations — set forth in a January 28, 2013 letter to the Commission — that the products on which InterDigital based its complaint were actually licensed under the prior InterDigital-Samsung license for these 6 patents at the time they were purchased by InterDigital or its counsel. (Even if Samsung prevails on this motion, InterDigital could likely just go out and purchased unlicensed products now and re-file its complaint, but it would obviously not like to have to do so.)
The last respondent, Nokia, also filed an answer, but only the confidential version was available as of the time of this writing. When a public version is posted to the ITC’s docket, we will update this post (along with commentary on anything noteworthy from a standard-essential patent perspective).
[UPDATE] A public, redacted version of Nokia’s answer finally became public on March 4. Nokia asserts essentially the same defenses as Huawei and ZTE, including the claim that InterDigital waived its right to injunctive relief by entered into FRAND obligations. For the obvious reasons noted above, Samsung is the lone respondent not asserting that defenses. [/UPDATE]
Public Interest Statements
The respondents each also filed updated public interest statements, although these are largely repetitive of the statements filed prior to the institution of the ITC investigation.