For the fourth time over the course of the Samsung-Apple ITC Investigation (No. 337-TA-794), the Commission has extended the target date for its much-anticipated Final Determination.  We’ll have to wait until Tuesday, June 4 for a ruling on whether Samsung can get an exclusion order as a remedy for Apple’s alleged infringement of Samsung’s standard-essential patents.

[337-TA-794 Notice to Extend Target Date (5-31)]

In the meantime, if you’d like to catch up on the details of the case, check out our list of previous posts on the matter.  And have a great weekend, everybody.

[UPDATE] Friday evening, David Long discussed the import of the Samsung-Apple ITC ruling on the Bloomberg TV show Bloomberg West.  You can check out the video of David’s interview with host Emily Chang here [LINK].  [/UPDATE]

 

 

Late last week, the American Antitrust Institute submitted a very interesting petition to the U.S. Dept. of Justice and the Federal Trade Commission.  In the petition, which is titled “Request for Joint Enforcement Guidelines on the Patent Policies of Standard Setting Organizations,” the AAI urges these agencies to step up their enforcement of the antitrust laws with respect to SSOs themselves — not merely the participants in the standard-setting process.  To that end, the AAI requests that the FTC/DOJ (1) issue specific guidelines for what should be included in SSO patent policies, and (2) hold SSOs liable for not adopting procedural safeguards to prevent patent hold-up behavior.

Continue Reading American Antitrust Institute calls on FTC, DOJ to force standard-setting organizations to adopt more stringent patent policies

Well-known non-practicing entity Intellectual Ventures has been fairly quiet on the litigation front, particularly as compared to other high-profile NPEs.  And when IV has filed suits, it has generally targeted technology companies, such as semiconductor manufacturers, handset makers, or telecom service providers.  But earlier this week, IV branched out into new territory, suing the First National Bank of Omaha in Nebraska district court and accusing the bank of infringing several patents (including some potentially standard-essential patents).

Complaint: [IV v First Natl Bank of Omaha]

IV’s complaint accuses First National Bank of Omaha (FNBO) of infringing five patents:

For three of these patents, IV’s allegations of infringement specifically point to FNBO’s systems (e.g., its online banking system and a specialized technology service) that comply with the Payment Card Industry Data Security Standards (PCI-DSS).  These are standards related to encryption/cryptography (among other things) which were promulgated by the PCI Security Standards Council (PCI SSC).  For the other two patents (the ‘694 & ‘666 patents), it’s not clear whether IV is claiming infringement based on compliance with PCI-DSS.  IV is not seeking an injunction (or even a future, ongoing royalty), but has limited its claims to damages, costs, and attorneys’ fees.

It’s not clear whether there are any licensing/non-enforcement obligations with respect to these patents.  On its website, the PCI Security Standards Council posts a license agreement that includes a covenant not to assert PCI standard-essential patents against PCI members or licensees.  It appears that through this agreement, developers and licensees of PCI SSC standards such as PCI-DSS generally agree not to bring patent infringement claims on PCI standard-essential patents.  But from a quick look at the PTO’s assignment database, it looks like some of IV’s asserted patents are well-traveled — having previously been owned by companies such as Mitre Corp., Veridian Information Solutions, General Dynamics, Verifides Technology Corp., Entegrity, Bellsouth, and AT&T — so there is certainly the potentially that the PCI SSC-related covenant not to sue could come into play should this litigation proceed along far enough.

Spring has been an interesting time in the world of standard-essential patent litigation.  Last month brought us Judge Robart’s groundbreaking RAND-setting opinion in Microsoft v. Motorola; this month, it’s the ITC’s turn.  Tomorrow is the (thrice-extended) target date in   In the Matter of Certain Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computers, Inv. No. 337-TA-794, which is the ITC’s investigation into Samsung’s Section 337 complaint against Apple.

You may recall that back in March, the ITC asked the parties (and the public) to submit additional information in response to several questions, most of which surround FRAND issues and/or one particular patent that Samsung has alleged to be essential to the ETSI UMTS 3G wireless communication standard.  The specific questions have caused many to speculate that the ITC may have concluded that Apple does in fact infringe that Samsung SEP, and is now deliberating over what — if any — remedy the ITC will issue.

We at the Essential Patent Blog will be keeping an eye out for the ITC’s decision tomorrow, and will do a post breaking down the Final Determination once we’ve had a chance to digest it.  But in the meantime, if you’d like to catch up on the issues facing the ITC, below is a table with links to our many prior posts that have covered the -794 ITC investigation:

Date

Post

5/28/2013

 Samsung accuses Apple of violating ITC rules & misrepresenting key facts

5/23/2013

 Apple draws ITC’s attention to Realtek-LSI district court order

5/14/2013

 Apple cites Judge Robart’s opinion as supplemental authority

4/15/2013

 Public interest briefing wraps in Samsung-Apple ITC case

4/9/2013

 A round-up of new public interest submissions in 337-TA-794

4/8/2013

 Briefs filed by Samsung, Apple demonstrate fundamental dispute over SEP/FRAND issues

4/5/2013

 ITC Staff says exclusion order is an appropriate remedy for Apple’s SEP infringement

3/13/2013

 ITC extends target date in Samsung-Apple case, asks for additional briefing

3/5/2013

 Apple cites recent Japanese court ruling as evidence against exclusion order for SEP infringement

1/17/2013

 Decision delayed in Samsung-Apple ITC case

1/8/2013

 Catching up on the Samsung-Apple ITC action (337-TA-794)

CapitolVermont recently became the first state to pass legislation specifically directed to patent issues (a law which, as noted by Camilla Hrdy at Patently-O, has interesting federalism implications and may or may not run into federal preemption issues).  But even more patent-related activity has been taking place here in Washington, DC.  Over the last few months, several bills of varying scope and substance have been introduced to address various patent- and patent-litigation-related issues.  We thought it’d be useful to round up links to all of them in one brief post.

  • S.866, the Patent Quality Improvement Act of 2013 (introduced May 6, 2013 by Sen. Chuck Schumer (D-NY))
    • As noted by Patently-O, this bill would expand the USPTO’s “Covered Business Method” program to cover non-financial business methods (and would make it permanent rather than transitional).

Given the relatively high degree of attention that patents have been receiving, there may be more to come from other Congressmen (for example, Sen. Patrick Leahy (D-VT), who is the Senate Judiciary Chairman, is expected to introduce something soon).  It will be interesting to see if and how these wide-ranging, diverse proposals will converge into one cohesive, comprehensive piece of legislation — and how long that may take.

While there are just a few days to go before the target date for the ITC’s long-awaited Final Determination in Samsung’s Section 337 investigation against Apple, that hasn’t stopped the parties from continuing to spar.  Last week, Apple filed a “Notice of New Authority and New Facts” with the ITC, directing the Commission’s attention to a N.D. Cal. district court order that purported to preclude a standard-essential patent holder (LSI/Agere) from enforcing an ITC exclusion order against a willing licensee (Realtek).  Today, Samsung filed a response, in which it accuses Apple of both (1) violating the ITC rules of practice and procedure, and (2) showing a “reckless disregard for the facts” and making misrepresentations about both this case and Samsung’s standard-essential patent dispute with Ericsson.  Samsung asks the Commission to strike or disregard Apple’s notice.

[337-TA-794 Samsung Resp to Notice of New Authority (Realtek v LSI)]

Samsung first argues that the Commission should disregard Apple’s submission (as well as Apple’s May 14 submission regarding the Microsoft-Motorola RAND opinion), claiming that these filings “disregard the procedures set up by the Commission to ensure due process and the orderly presentation of argument.”

Samsung also disputes Apple’s statement that Samsung’s conduct was more “egregious” than the conduct that gave rise to the N.D. Cal. injunction, claiming that this assertion is “inaccurate and misleading”.  Although the specifics are redacted, Samsung casts Apple “mischaracterization” of Samsung’s conduct as a “thinly-disguised attempt” to muddy the issues in the investigation.

Finally, Samsung takes issue with Apple’s reliance on the dispute between Ericsson and Samsung (where Samsung has asserted FRAND-related defenses in response to Ericsson’s claims of infringement).  Samsung argues that unlike here — where Apple allegedly “has demonstrated that it has no intention of paying anything to Samsung” — Samsung “has always been willing to negotiate a license for Ericsson’s declared-essential patent portfolio.”  Because the Samsung-Ericsson scenario involves a different set of facts and circumstances, Samsung asserts, there is no inconsistency in Samsung raising FRAND-based defenses there while simultaneously maintaining that Apple’s FRAND-based defenses should fail.

Come Friday, we just might at long last get some clarity from the ITC.

A couple weeks ago, Apple directed the Federal Circuit’s attention to the Microsoft-Motorola RAND-setting opinion.  Apple claimed that in a variety of ways, Judge Robart’s decision supported Apple’s arguments on appeal.  This past Friday, Motorola filed a brief response to Apple’s citation of supplemental authority — and in it, Motorola claims that the reasoning of Judge Robart’s decision shows that Motorola — not Apple — should prevail on appeal.

[2013.05.24 Moto Response to Apple Citation of Supplemental Authority]

Motorola first argues that the situations in Apple-Motorola and Microsoft-Motorola are different, because Microsoft was seeking a contractually-based RAND determination for entire portfolios of patents related to software and video gaming devices, while Judge Posner’s decision related to remedies for infringement of a small number of individual standard-essential patents mostly related to cellular/mobile devices.

But Motorola then points to several portions of Judge Robart’s decision that, in its view, support its arguments that Judge Posner’s decision should be reversed.  These include Judge Robart’s views that:

  • The “ex ante” incremental value of the patent is but one factor in the determination of a FRAND rate (not the sole factor, as implied by Judge Posner);
  • The Georgia-Pacific framework for simulating a hypothetical negotiation between the parties is the proper way to determine a FRAND rate, and the negotiation should take place at the time of first infringement — although the G-P analysis should be modified, and only certain factors will be relevant; and
  • Unlike the patent portfolios at issue in Microsoft-Motorola (802.11 Wi-Fi and H.264 video coding), Motorola’s cellular-related standard-essential patent portfolio is “extremely strong” (which is relevant because some of the SEPs at issue in Apple-Motorola are cellular-essential).

The Federal Circuit now has a good juxtaposition of the views of two well-respected judges on the issue of determination FRAND terms — we’ll see whose side (if either) the appeals court will take.

This past Wednesday, the Blu-ray patent pool One-Blue, LLC and several of its licensors (Philips, Panasonic, Pioneer, and Sony) filed a patent infringement lawsuit in Delaware district court, accusing Imation Corp. of infringing several patents that are either essential or related to the Blu-ray Disc Assocation’s (BDA) Blu-ray standards.

[One-Blue v Imation Complaint]

Continue Reading Patent pool One-Blue and several licensors file suit against Imation over Blu-ray patents

Earlier this week, we discussed N.D. Cal. Judge Ronald Whyte’s order granting partial summary judgment and issuing a preliminary injunction in a Realtek v. LSI district court case.  As we explained in our post, while the district court found that LSI had breached its contractual RAND obligations by filing an ITC complaint without first making a RAND offer to Realtek, and therefore issued an order enjoining LSI from enforcing any exclusionary relief in the pending ITC case against Realtek (No. 337-TA-837), it’s unclear whether the preliminary injunction will actually have any effect (because ITC exclusion orders are enforced by Customs and Border Protection, often without any action taken by the ITC complainant).  As of now, the Initial Determination in the -837 case is due by July 18, with the Commission’s Final Determination (where an exclusion order would be issued if appropriate) due by November 18.

But not surprisingly, yesterday Realtek filed a short letter with presiding Administrative Law Judge David P. Shaw, attaching Judge Whyte’s order [LINK].  In the letter, Realtek states that:

Judge Whyte’s findings in the Order resolve several issues relating to Realtek’s RAND-related defenses in this investigation, such as estoppel and breach of contract. Judge Whyte’s Order also enjoins LSI and Agere from seeking to enforce any injunctive relief until the completion of a trial on the merits in the district court proceeding. See Order at 11-14.

If Your Honor needs additional information or related briefing papers, please do not hesitate to contact us.

Two quick things to point out — first, Realtek’s claim that the district court’s findings “resolve several issues” might be overstating things a bit, as the order is not a final judgment and likely doesn’t have res judicata or preclusive effects (at least at this point).  Second, Realtek’s offer of additional briefing may be a signal that Realtek wants either ALJ Shaw or the Commission itself to bring the investigation to a halt now, rather than proceeding to the Initial and Final Determination stages.

We will continue to keep an eye on this case to see what (if any) effect this has on ALJ Shaw’s handling of the investigation.

[UPDATE]  For its part, Apple has filed its own Notice of New Authority and New Facts Relevant to the Issues on Review with the ITC in Inv. No. 337-TA-794, where the Commission’s Final Determination is due by May 31.  Apple argues that the situation between it and Samsung is “strikingly similar” to the facts that gave rise to the Realtek-LSI injunction.  Apple argues that prior to filing its ITC complaint, Samsung never made a license offer that was limited to its FRAND-encumbered SEPs — and Apple also argues (as it has in the past) that Samsung’s use of the end product price as a royalty base and its efforts to seek injunction relief are further evidence of its FRAND violations.  Finally, Apple accuses Samsung of making contradictory arguments in defending itself from SEP infringement allegations in its district court case against Ericsson.  Apple argues that this shows that it would not be in the public interest to issue an exclusion order in the -794 case.  [/UPDATE]

Last month, we briefly discussed an article that proposed that “baseball-style” arbitration be used to resolve FRAND licensing disputes.  The following guest post about this article was authored by David Balto, a former Policy Director of the Bureau of Competition for the Federal Trade Commission who currently has his own public interest antitrust practice here in Washington, DC.  David’s views expressed below are his own, and do not necessarily reflect the views of the authors of The Essential Patent Blog, Dow Lohnes PLLC, or Dow Lohnes’s clients.

Baseball has the Best Rules:  Using Arbitration to Solve FRAND Disputes

How to calculate Fair, Reasonable and Nondiscriminatory (FRAND) royalties seems like one of the most intractable problems firms, standard setting organizations and the courts are grappling with.   No wonder, there is sparse authority and relatively few litigated cases.

Two of the most thoughtful scholars on antitrust intellectual property issues — Professors Mark Lemley and Carl Shapiro — have weighed in and issued a paper outlining an interesting solution to the FRAND licensing problem and it provides a clarion call for how to grapple with the problem.

Continue Reading Baseball has the Best Rules: Using Arbitration to Solve FRAND Disputes