While InterDigital continues to press its claims of 3G- and 4G-essential patent infringement in the International Trade Commission against Huawei, Nokia, Samsung, and ZTE (Inv. No. 337-TA-868), the companies have also been fighting about FRAND-related issues in Delaware, where some of defendants have asserted FRAND-related counterclaims against InterDigital. A few weeks back, we noted InterDigital had asked the court to dismiss Huawei and ZTE’s FRAND counterclaims, arguing that they were not ripe and were not properly pleaded, among other reasons. Last Thursday, Huawei and ZTE filed their opposition to the motion to dismiss [LINK].
We’ve covered a lot of the FRAND issues between these parties before in a variety of postings, and there’s really nothing remarkably new here, so we won’t do a deep dive into the brief. But there are a couple of interestings nuggets to point out.
InterDigital had claimed these FRAND claims should be dismissed because they were compulsory counterlclaims in an earlier-filed action (the district court actions corresponding to ITC Inv. No. 337-TA-800, involving InterDigital 3G-essential patents). But Huawei and ZTE take issue with InterDigital’s evocation of the “first to file” rule in this instance, nothing that the district court actions were stayed under 28 U.S.C. § 1659 (the statute allowing stay of district court actions pending resolution of parallel ITC cases) before an answer or counterclaims could be filed. Furthermore, Huawei and ZTE argue that the district court has refused to lift the stay in that case, and that there are additional 4G-related FRAND claims here that weren’t present in the earlier action. Thus, they argue that the first to file rule should not apply.
Huawei and ZTE also strenuously argue that their claims are ripe — that resolution of the FRAND counterclaims would in fact resolve the entire dispute between the parties. They argue that they “repeatedly have made clear their unqualified commitment to pay the FRAND rate set by the Court,” regardless of whether any asserted patent is found to be infringed or valid. They distinguish their situations from the Apple-Motorola case now on appeal before the Federal Circuit, where Judge Crabb dismissed Apple’s FRAND claims on the eve of trial.
Lastly, Huawei and ZTE argue that they have properly pled breach of contract claims under the law applicable to the ETSI patent policy — French law. They claim that the FRAND commitments are not an unenforceable “agreement to agree,” as InterDigital claims; rather, they are an enforceable “stipulation for the benefit of a third party.” And they assert that specific performance is an appropriate remedy for the court to order, because the essential terms for a FRAND license are sufficiently known or determinable (as Judge Robart has just shown).