By now, it’s really no surprise to those who pay attention to SEP issues that certain lawmakers have their eyes on the standard-essential patent world, as well.  Although non-practicing entity issues generally grab headlines these days, Congress does make some time for SEPs, too.  One example of this just became public — a May 21, 2013 letter to ITC Chairman Irving Williamson from several U.S. Senators concerning the then-anticipated decision in the Samsung-Apple ITC case (Inv. No. 337-TA-794) — the case where the ITC last week issued its Notice of Final Determination finding a Section 337 violation by Apple due to its infringement of a Samsung 3G-essential patent (and issuing an exclusion order barring certain Apple products).  (The letter was sent to Chairman Williamson for consideration well in advance of the ITC’s decision, but the Commission has apparently now honored the Senators’ request that the letter be made part of the public record in the case.)

[337-TA-794 5-21-2013 Senate Letter]

In the bipartisan letter — signed by Sens. Mike Lee (R-UT), Amy Klobuchar (D-MN), Jim Risch (R-ID), and Mark Begich (D-AK) — the Senators state that while they take no position on the merits of the Samsung-Apple case, they want the ITC to “carefully assess the substantial public interest considerations that exist with regard to this and other cases at the ITC in which SEPs are at issue.”  In this regard, the letter is not all that remarkable — the ITC is required to consider the public interest in all cases, and it certainly received plenty of public interest submissions in the Samsung-Apple case.

But two statements caught our eye and seemed somewhat curious.  First, the Senators argue that parties with FRAND-encumbered patents “should not expect the grant of an exclusion order when they are violation of an obligation to license the patent on FRAND terms.”  They further warn the ITC of setting precedent that would enable a FRAND-pledged patent owner to “seek to secure an exclusion order despite a breach of that [FRAND] commitment.”

This appears to be a bit of a strawman — we’re not aware of any party that has claimed that it is appropriate to breach a FRAND obligation to an SSO, and then subsequently seek an injunction or an exclusion order as a remedy for infringement.  Indeed, many SEP disputes have centered around when (if ever) the seeking of injunctive relief may itself be a violation of a FRAND obligation — a question that seems to be far from settled.  Samsung (and many others) takes the position that injunctive relief should generally be available against unwilling licensees, while Apple is far from alone in believing that injunctive relief is waived in virtually (if not all) FRAND-related situations.

Once the public version of the ITC’s Final Determination becomes available, we’ll get some valuable insight into just how deep the Commission dove into the FRAND issues and whether Samsung has complied with its FRAND obligations — and the Senators can see whether their concerns are allayed.  In its Notice of Final Determination, the ITC simply noted that “Apple failed to prove an affirmative defense based on Samsung’s FRAND declarations,” and also that “Samsung’s FRAND declarations do not preclude” the exclusionary remedies issued by the Commission.

In late April we shared with you the litigation activities of Innovative Wireless Solutions LLC, a non-practicing entity that filed 40+ lawsuits in the Eastern District of Texas against a variety of hotels, hotel chains, and restaurants/coffee shops/delis.  IWS asserted that by providing wireless interest service to their customers, these defendants infringed three patents originally owned by Nortel Networks that IWS later acquired.  IWS was apparently following a Innovatio IP Ventures-style model, asserting patents formerly owned by a practicing entity (here, Nortel) against end users of the allegedly-infringing technology (here, as with Innovatio, mostly hotels).  But late last week, IWS’s litigations took a decidely un-Innovatio-like turn — while Innovatio’s litigations mostly continue on in N.D. Ill., IWS filed motions to voluntarily dismiss its allegations of infringement in all of its E.D. Tex. cases.

This does not necessarily mean that IWS has ceased its patent enforcement campaign, however.  All of the cases were in the early stages — no answers had been filed yet, and defendants’ counsel hadn’t even entered appearances in many of the cases.  Notably, IWS’s motions to dismiss were for dismissal without prejudice (and the court has begun granting these on that basis), meaning that IWS is free to file identical claims against the same defendants in the future — so it doesn’t look like the defendants paid up and settled the cases.  The USPTO assignment records for IWS still only show the three patents that were previously asserted against all these defendants, but there’s no requirement to record assignment of all patents owned by a party (at least for now — this is among the patent reform issues currently being discussed).  There’s always a chance that IWS has already acquired or is in the process of acquiring more patents to assert in the future.  We’ll keep an eye out for future IWS standard-essential patent litigation activity.

CAFCLast week, the Federal Circuit granted a motion by Microsoft for permission to file an amicus brief in the Apple-Motorola appeal (No. 12-1548, Judge Posner edition).  Microsoft then filed its amicus brief, becoming the latest in a long time of companies (see, e.g., here, here, here, and here) to weigh in on the case.  Today, the public version of Microsoft’s brief became available.  In it, Microsoft supports Apple and Judge Posner, but cautions the Federal Circuit against making an overly broad ruling and deciding issues related to standard-essential patents and RAND licensing obligations that are not present before the court.

[2013.06.04 Microsoft Amicus Brief (12-1548)]

Microsoft pulls no punches — it argues at the outset that Motorola’s positions “are wrong as a legal matter and terrible as a policy matter.”  That should come as no surprise, given Microsoft’s current litigation disputes with Motorola (as well as ongoing competition with its parent company, Google).  But Microsoft claims that its interest in this case goes far beyond its adversarial relationship with Motorola, arguing that as an active participant in many SSOs and implementer of many standards, Microsoft wants to ensure that standards are broadly implemented for the benefit of the public.

Continue Reading Microsoft amicus brief supports Apple, cautions Federal Circuit about breadth of ruling in Apple-Motorola appeal

VermontWe’re going to take a brief time-out from SEP issues here for a short update on a case that’s being watched with interest by many in the patent world — the Vermont Attorney General’s consumer protection action brought last month against MPHJ Technology Investments, the so-called “scanner patent troll.” (For details on the complaint filed by the Vermont AG, see our previous post.)

It’s a somewhat mundane, and not surprising (but still noteworthy) development — This past Friday, MPHJ filed a notice of removal under 28 U.S.C. § 1441, seeking to transfer the case to the U.S. District Court for the District of Vermont, as opposed to the State of Vermont Superior Court (where it was filed by the attorney general).  Apparently, MPHJ likes its chances much better in federal court than in state court.

Continue Reading MPHJ Technology Investments seeks removal of Vermont consumer protection action to federal court

CAFCLater this month, Adminstrative Law Judge David P. Shaw is expected to issue an Initial Determination in In the Matter of Certain Wireless Devices with 3G Capabilities and Components Thereof (Inv. No. 337-TA-800), which is the ITC’s Section 337 investigation into InterDigital’s allegations of 3G-essential patent infringement by Huawei, LG Electronics, Nokia, and ZTE.  The upcoming ID, though, will only relate to infringement accusations against Huawei, Nokia, and ZTE — as LG had previously been terminated from the case in July 2012.  LG had been dismissed from the ITC case because LG claimed that InterDigital’s infringement allegations were an “arbitrable dispute” covered by a license agreement between the parties, and that an arbitrator — not the ITC — should decide the infringement issues.  Once the ITC terminated LG from the case, InterDigital appealed this ruling to the Federal Circuit.

Today, in a 2-1 opinion [LINK] written by Judge Sharon Prost (joined by Judge William Bryson, with Judge Alan Lourie dissenting), the Federal Circuit reversed the ITC’s decision and remanded the case to the ITC for further proceedings.  The court held that the ITC erred in terminating LG from the investigation, because the ITC failed to analyze the text of the license agreement to determine whether LG’s arguments regarding the arbitrability of the infringement dispute were “wholly groundless.”  Furthermore, the court found that when the text of the agreement was actually considered, LG’s assertions were indeed “wholly groundless,” and the infringement claims were not subject to arbitration.

Continue Reading Federal Circuit reverses ITC decision to terminate LG Electronics from InterDigital 3G patent case (337-TA-800)

ITC LogoOne thing that has frustrated many followers of the Samsung-Apple ITC case is the currently unavailability of a public version of the Commission’s Final Determination.  Generally, the only insight into the ITC’s reasoning came from the limited information in the Commission’s Notice of Final Determination.  But for those of you who are interested, we thought it’d be worth taking a look at the publicly-available documents that spell out the specific exclusionary relief awarded to Samsung in this case:

  1. 337-TA-794 Limited Exclusion Order
  2. 337-TA-794 Cease and Desist Order

After the jump, we’ll dive into these in a little more detail.

Continue Reading A look at the ITC’s exclusion and cease & desist orders in the Samsung-Apple case (337-TA-794)

On June 4, a patent holding company named PatentMarks Communications LLC filed patent infringement lawsuits in the District of Delaware against a slew of electronics companies.  The companies accused of infringement include at least Dell, Futurewei, HTC, Kyocera, LG, Motorola Mobility, Sony Ericsson, Samsung, and ZTE.  (The complaint against HTC [LINK here] is exemplary).  PatentMarks — who is the assignee of six U.S. patents, according the USPTO — accuses these companies of infringing U.S. Patent No. 8,400,926, which is titled “Multi-Protocol Telecommunications Routing Optimization” — and which just issued as a patent on March 19, 2013.  The ‘926 patent generally claims an optimized method and system for transferring files over a telecommunications network.

Incidentally, this is not the first litigation rodeo for this family of patents.  The ‘926 patent is a 4th-generation continuation application that claims priority to U.S. Patent No. 6,016,307, a patent based on an application originally filed in 1996 that was assigned to Kapcom Industries, a failed telephony startup located in Miami.  The ‘307 patent passed through various Florida entities over the ensuing 10-15 years before ending up in the hands of PatentMarks  last month (with the assignment recorded the day before the suits were filed).  ConnecTel LLC, one of these intermediate owners (whose sole employee appears to have been one of the named inventors), filed several infringement suits in the early-to-mid 2000s against a variety of entities, including Cisco and Arbinet.

Now it looks like the new owner is going back to the well, and is targeting standards-compliant products.  While PatentMarks’ newly-filed complaints do not include very much detail, PatentMarks appears to now be asserting that infringing products include any devices that are capable of transferring files over telecommunications paths via wireless standards such as IEEE 802.11 WiFi and 2G/3G/4G cellular standards.

PatentMark is seeking damages, costs, attorneys’ fees, as well as a permanent injunction.

In the wake of the ITC’s landmark exclusion order barring imports of certain Apple 3G products, we noticed an interesting question raised by Prof. Brian J. Love of Santa Clara law school, among others:

BrianJLove

Professor Love is referring to one of several legislative recommendations and executive actions related to the patent system and patent litigation that were announced yesterday by President Obama’s Administration.  (For a good round-up on some of the issues the Administration is seeking to address, check out this post by Matt Levy at Patent Progress or Dennis Crouch’s post on Patently-O.)  Among the Obama Administration’s recommendations are several relating to the U.S. International Trade Commission, including this one:

Change the ITC standard for obtaining an injunction to better align it with the traditional four-factor test in eBay Inc. v. MercExchange, to enhance consistency in the standards applied at the ITC and district courts.

This specific recommendation largely seeks to reduce incentives for forum-shopping in patent cases.  For example, a patent owner who might not be able to satisfy the equitable four-factor eBay test for injunctive relief in district court instead may choose to go to the ITC — where an exclusion order generally “shall” issue upon a finding of a Section 337 violation, unless it would be contrary to the public health, welfare, or competitive conditions in the U.S. (i.e., the “public interest”).  The Federal Circuit has made it clear that the standard for issuing an exclusion order is different than the eBay standard (see Spansion v. ITC, 629 F.3d at 1358) — now, the Obama Administration is seeking to unify or align the standards applied in district courts and the ITC.

So, what does this mean for the exclusion order against Apple?  By statute (19 U.S.C. § 1337(j)), President Obama (and the U.S. Trade Representative) have 60 days to review the ITC’s decision to issue an exclusion order, and can decide to “disapprove” of, or veto, the exclusion order. (**See Update Below**)  As we noted in our original post on the ITC decision, such presidential vetoes are rare — only five have ever occurred, and none since the 1980’s.  In 2007, an ITC case involving Broadcom and Qualcomm (Inv. No. 337-TA-543) resulted in a controversial, wide-ranging exclusion order entered against Qualcomm cellular chips and certain downstream products — but the Bush Administration decided to let the exclusion order go forward (the parties eventually settled).

Here, the Obama Administration is now on record taking the position that the standard for exclusionary relief at the ITC should be aligned with the standard for injunctive relief in district courts.  And several judges (e.g., Judge Robart and Judge Posner) have found that under eBay, FRAND commitments preclude entitlement to injunctive relief — although this issue is currently being debated in an Apple-Motorola Federal Circuit appeal.  It seems unlikely that the Administration would disapprove of the exclusion order on the basis of eBay itself, especially given the Federal Circuit’s Spansion decision.  But it’s entirely possible that the Administration could take the position — one apparently shared by dissenting ITC Commissioner Pinkert — that it would be against the public interest for an exclusion order to be enforced against the infringer of a FRAND-encumbered standard-essential patent.  The public version of the Commission’s Final Determination and exclusion order (and Commissioner Pinket’s dissent) should shed more light on the ITC’s particular consideration of the public interest factors with respect to the particular facts of this case — e.g., whether Apple is a “willing licensee,” the reasonableness of Samsung’s prior licensing offers, etc.  While we’ll have to wait awhile (potentially several weeks) for the public versions to become available, the confidential versions have already been delivered to President Obama and the U.S. Trade Representative for their consideration.

As this article notes, various groups undertook significant lobbying efforts during the Presidential review period associated with Inv. No. 337-TA-543.  Given the high profile of standard-essential patent issues and the Administration’s stance on ITC issues, it wouldn’t be surprising to see similar efforts take place over the next couple months.

**[UPDATE] To be clear, the authority to veto the ITC’s determination was delegated to the U.S. Trade Representative in a 2005 Presidential Memorandum (70 Fed. Reg. 43,251) **[/UPDATE]

TVFor the second time in a couple of weeks, members of a standard-essential patent pool have filed an infringement lawsuit.  Last month, it was Blu-ray patent pool One-Blue (and several licensors) filing suit against Imation Corp.  Yesterday, a group of licensors to the MPEG LA Advanced Television Systems Committee (ATSC) digital television patent pool filed a patent infringement suit against Canadian electronics maker Curtis International.  This group of licensors includes Zenith Electronics, Panasonic Corp., U.S. Philips Corp., and Columbia University.

[Link: Zenith-Electronics-et-al-v-Curtis-International]

The complaint, which was filed in the Southern District of Florida, accuses Curtis of infringing four patents through its making/selling/using televisions that comply with the ATSC Standards.  While MPEG LA is not a party to the lawsuit (unlike with the recent One-Blue complaint), the patent owners assert that MPEG LA has “offered the ATSC patent pool license to Curtis on several occasions but Curtis has declined to take a license.”  In what appears to be a nod to the ATSC Patent Policy‘s requirement that essential patents be made available on “reasonable and non-discriminatory terms” the complaint also asserts that the rates in the MPEG LA license are “fair, reasonable, and non-discriminatory,” and that each of the individual patent owners have committed to individually license their ATSC patents on FRAND terms.  The patent owners are seeking damages adequate to compensate for infringement, as well as treble damages for willful infringement and costs and attorneys’ fees, but are not seeking an injunction against Curtis.

Here’s a list of the patents in suit:

[UPDATE]  The same group of MPEG LA licensors has apparently also filed complaints in the Southern District of Florida against ViewSonic and Craig Electronics, alleging infringement of the same five ATSC-essential patents.  Links to these other complaints are below:

[/UPDATE] 

The ITC just issued a Notice of Final Determination in Inv. No. 337-TA-794, the investigation concerning Samsung’s complaint against Apple.  (For a refresher on the case and issues, check out our previous posts).  In a decision that will reverberate across the standard-essential patent world, the Commission has determined that Apple’s products at issue — certain models of the iPhone and iPad — infringed one Samsung UMTS-essential patent, and issued both a limited exclusion order (preventing importation into the U.S.) and a cease & desist order (preventing sales/distribution of products already within the U.S.).  Here’s the text of the ITC’s summary:

Notice is hereby given that the U.S. International Trade Commission has found a violation of section 337 in this investigation and has issued a limited exclusion order prohibiting respondent Apple Inc. of Cupertino, California (“Apple”), from importing wireless communication devices, portable music and data processing devices, and tablet computers that infringe claims 75-76 and 82-84 of U.S. Patent No. 7,706,348 (“the ’348 patent”). The Commission has also issued a cease and desist order against Apple prohibiting the sale and distribution within the United States of articles that infringe claims 75-76 and 82-84 of the ’348 patent. The Commission has found no violation based on U.S. Patent Nos. 7,486,644 (“the ’644 patent”), 7,450,114 (“the ’114 patent”), and 6,771,980 (“the ’980 patent”). The Commission’s determination is final, and the investigation is terminated.

The ITC determined that Apple failed to prove its affirmative FRAND-related defenses, and also concluded that public interest did not prevent the issuance of a limited exclusion order and cease and desist order against Apple (i.e., Samsung’s FRAND declarations by themselves did not preclude an exclusion order).  However, Commission Dean. A. Pinkert dissented on public interest grounds from the decision to issue an exclusion order.

The ITC’s Final Determination will now be reviewed by President Obama and the U.S. Trade Representative, who have 60 days to decide whether to veto the ITC’s decision (although such vetoes are rare, having happened only 5 times ever — none since the 1980’s).  And of course, Apple can appeal this decision to the Federal Circuit.

Importantly, there are two things to note about the effect of the ITC’s decision — first, due to a modification of the claim construction by the Commission, this decision currently only affects the the Apple iPhone 3G, iPhone 3GS, iPhone 4, original iPad 3G and iPad 2 3G that run on the AT&T network (Verizon-related models are unaffected); second, the Commission found that the bond should be set at zero percent, so Apple can continue to import these devices during the 60-day Presidential Review period without paying any money to Samsung.

But whatever the limitations are on the remedy in this specific case, this ruling is certainly a landmark one in the world of standard-essential patents — the ITC has never before issued an exclusion order based on infringement of a FRAND-encumbered standard-essential patent.  Be sure to check back with the Essential Patent Blog for more — we will be updating this post with more analysis, and will be doing more follow-up posts on the matter once the public version of the ITC’s Final Determination (and the dissent) become available).

[UPDATE] The ITC has now published a Letter from Lisa Barton (acting Secretary of the ITC) to the Intellectual Property Rights branch of U.S. Customs and Border Protection notifying the CBP of the ITC’s decision and the issuance of the exclusion order.  [/UPDATE]