About a month ago, Administrative Law Judge David Shaw issued a Notice of Initial Determination in ITC Inv. No. 337-TA-800, concluding that InterDigital failed to prove that Respondents Huawei, Nokia, and ZTE infringed any valid patent claims that InterDigital asserted as essential to 3G cellular standards (several claims of one patent were found infringed, but invalid). ALJ Shaw also found that the Respondents had failed to prove that InterDigital violated its FRAND obligations. The public version of the Initial Determination has yet to issue, but the parties recently filed public versions of their respective petitions for review of the ALJ’s decision. These petitions provide some insight into the FRAND-related issues in the case, so we thought they warranted a quick Friday post.
- 337-TA-800 InterDigital Petition for Review (PUBLIC)
- 337-TA-800 Respondents Petition for Review (PUBLIC)
InterDigital, not surprisingly, asks the full Commission to reverse most of ALJ Shaw’s decisions on infringement and invalidity. But InterDigital also notes that it mostly agrees with the ALJ’s conclusion that InterDigital complied with its FRAND obligations, and that its prior license offers to the Respondents were not improperly discriminatory.
On the other hand, the Respondents don’t want the ITC to review the ALJ’s findings with respect to invalidity and infringement (although as is customary, they ask the Commission to “contingently” review certain issues if necessary). But not all of the Respondents’ petition concerns issues for review as a contingency — Huawei, Nokia, and ZTE affirmatively ask the ITC to overrule ALJ’s Shaw’s finding that InterDigital satisfied the ITC’s domestic industry requirement through its portfolio licensing activities, and also want the Commission to vacate the ALJ’s FRAND-related findings.
We’ll focus here on the FRAND issues, which are addressed starting on page 88 of the Respondents’ petition. Citing actions and statements by the FTC and the DOJ, the Respondents urge the ITC to now adopt a policy that until a FRAND determination has been made by a neutral third party, it is improper for a FRAND patent holder to seek exclusionary relief at the ITC against a “willing” licensee. Not surprisingly, the Respondents cite the FTC-Google settlement order as providing a “fair and balanced” procedure.
The Respondents also take issue with the ALJ’s apparent determinations that a FRAND obligation is simply an accord de principe — an obligation to negotiate in good faith toward reaching a license agreement — and that InterDigital complied with this obligation. The Respondents claim that conclusions reached by Judge Robart in Microsoft-Motorola and Judge Posner in Apple-Motorola regarding FRAND obligations hold to the contrary. But even so, the Respondents argue that InterDigital actually acted in bad faith by obstructing and delaying efforts by the Respondents to have the Delaware district court determine a FRAND royalty rate. The Respondents further argue that InterDigital acted in bad faith by improperly demanding a worldwide license to its entire patent portfolio, while the the Respondents had requested a FRAND license to only the patents-in-suit here. Lastly, the Respondents claim that InterDigital’s prior license offers impermissibly discriminate against each of the Respondents in violation of its FRAND obligations (although these sections are redacted, so we don’t know the details of these offers).
The public version of the ID should become available any day now, so stay tuned…have a great weekend!