Yesterday, InterDigital filed its opposition to Huawei & ZTE’s motion (later joined by another respondent, Nokia) to stay Inv. No. 337-TA-868, which is the ITC’s investigation into InterDigital’s 3G/4G standard-essential patent infringement-based Section 337 complaint. Much as it did in its prior opposition to Huawei/ZTE’s attempts to seek an expedited FRAND determination in Delaware district court, InterDigital here claims that nothing in the motion to stay counsels staying the investigation pending a determination of FRAND terms in Delaware — in fact, InterDigital attached its opposition to expedite the Delaware proceedings as an exhibit to its ITC stay opposition. After the jump, we’ll provide a brief summary of InterDigital’s arguments against staying the ITC case.
InterDigital wasn’t the only one filing papers in this case yesterday, though — Samsung also filed a response to the motion to stay. Samsung’s position is, succinctly, that “[w]hile Samsung does not join the Motion, Samsung does not oppose the requested stay.” (You may recall that Samsung has its own motion to terminate some of InterDigital’s infringement claims pending in this case).
In its opposition, InterDigital argues that the motion to stay “turns judicial efficiency and economy on its head” and is just “the latest in a series of efforts by the Respondents to attempt to divest the Commission of its jurisdiction over their unfair acts.” InterDigital characterizes Huawei/ZTE’s discussion of FRAND-related statements and actions taken by the FTC, DOJ/USPTO, and courts as “unsupported hyperbole.” Furthermore, InterDigital asserts that the motion to stay is “based on speculation upon speculation” relating to: (1) the viability of their FRAND counterclaims in Delaware; (2) bifurcation and expedition of FRAND issues in Delaware; (3) whether the Delaware district court would actually set a FRAND rate; and (4) whether the FRAND rate would be binding on Huawei/ZTE.
As to the specific factors the ITC evaluates in conjunction with a motion to stay, InterDigital claims that these all weigh against granting a stay. These factors are:
- The state of discovery and the hearing date;
- Whether a stay will simplify issues and hearing of the case;
- The undue prejudice or clear tactical disadvantage to any party;
- The stage of the parallel proceedings; and
- The efficient use of Commission resources
As to the first factor, InterDigital asserts that the evidence is “at most neutral” because discovery has just commenced and the hearing is scheduled to occur before the end of the year. InterDigital claims that under the third factor, it will be severely prejudiced by a stay because the ITC can only award prospective exclusionary relief, not past damages — and a stay would delay any relief. InterDigital also argues that the stage of parallel proceedings (the Delaware district court case and Inv. No. 337-TA-800) do not favor a stay, because (1) the district court case is in its infancy and (2) the parties will have sufficient time to address any outcome of the -800 case through the course of this investigation. And as to efficient use of ITC resources, InterDigital argues that the same resources will be expended “almost regardless of the outcome in the 800 Investigation and potentially the district court counterclaims.”
The second factor — whether the stay will simplify issues — is the most highly debated between the parties. As to overlap with the -800 case, InterDigital asserts that while there is some overlap in issues, “none of the same patents asserted in the 800 Investigation are asserted against as to the same respondents and products.” The larger issue here, though, is with respect to potential FRAND determination in Delaware. InterDigital makes six points in its argument that a stay will not simplify issues:
- One respondent, Samsung, did not plead FRAND counterclaims or move for a stay, so claims against Samsung would either proceed or be unncessarily stayed (but as noted above, Samsung does not oppose the stay);
- Only Huawei/ZTE moved for an expedited FRAND determination in Delaware;
- The motion improperly assumes that the district court will grant the motion to expedite;
- Even if the district court granted the motion to expedite, there is no indication when — if ever — a decision setting a FRAND rate would occur;
- Even if a FRAND rate was set, there’s no indication that Huawei, Nokia, or ZTE would actually agree to be bound by the FRAND rate, because they are still contesting issues of validity, infringement, and essentiality; and
- The effect of case law and agency actions identified in the motion to stay were overstated or incorrect.
InterDigital calls the arguments in the motion to stay regarding simplification of issues “largely speculative, overstated, and without legal support.” Now that is up to ALJ Robert K. Rogers to decide.