Back in January, we alerted you to a patent infringement case brought in the U.S. International Trade Commission by Acacia Research subsidiary Adaptix. Adaptix accused Ericsson of infringing U.S. Pat. No. 6,870,808, which Adaptix asserted to be essential to the ETSI 4G Long-Term Evolution (LTE) wireless standard. The ITC later instituted the investigation as In the Matter of Certain Wireless Communications Base Stations and Components Thereof, Inv. No. 337-TA-871. Recently, there was a new development in this case that we thought was worth noting.
Although the ‘808 patent is allegedly standard-essential, it originally seemed that FRAND licensing obligations might not come into play. As we noted in our original post on the case, Adaptix asserted that because it had not participated in the development of the LTE standard, the ‘808 patent was not subject to any FRAND licensing obligations. Ericsson at first didn’t raise any FRAND-related defenses in its response to the complaint, but recently asked Administrative Law Judge Theodore Essex to allow it to amend its response to the complaint to add a defense based on “Breach of FRAND obligations (breach of contract, estoppel, patent misuse, unclean hands).” Earlier this month (in a ruling that just became public this week), ALJ Essex denied Ericsson’s motion.
[337-TA-871 Order Denying Motion to Amend Answer (PUBLIC VERSION)]
Ericsson’s theory of a breach of FRAND obligations here is a novel one. Ericsson alleges that Samsung, who apparently has a license with Adaptix to practice the ‘808 patent in compliance with the LTE standard, was a participant in ETSI’s development of the LTE standard. Ericsson alleges that through the agreement with Adaptix, Samsung was aware that the ‘808 patent was LTE-essential, but failed to disclose this fact to ETSI — allegedly in breach of the ETSI IPR Policy. According to Ericsson, because Samsung breached its FRAND obligations concerning Adaptix’s patent, Adaptix should now be estopped from enforcing that patent.
ALJ Essex did not agree, finding that Ericsson’s proposed amendment was not supported by good cause, would not facilitate the resolution of the investigation, and may prejudice Adaptix. For one, he found fault with the timing of the motion, because the investigation is nearing the close of fact discovery — and FRAND issues have the potential to involve extensive discovery. ALJ Essex also noted that all of the relevant evidence Ericsson needed to assert this defense in the first place — the Adaptix-Samsung license agreement — was attached to Adaptix’s original complaint. Additionally, ALJ Essex found that Ericsson failed to demonstrate that there was any legal support for its “complex and novel defense” that imputed an unrelated third-party’s (Samsung) alleged breach of a FRAND obligation to the patent owner (Adaptix).
This decision can still be reviewed by the full Commission, so FRAND issues are not necessarily out of the question for this investigation. However this turns out, Ericsson’s attempt to raise FRAND issues here is a great example of just how much this whole area continues to be in flux.