On May 5, 2020, Germany’s highest court, the Federal Court of Justice (GFCJ), made a provisional (tentative) ruling at the hearing in Sisvel’s SEP case against Haier, determining that Sisvel had not abused a dominant market position and Haier – as the implementer – had failed to comply with its FRAND obligations in the way that it handled licensing negotiations with SEP-owner Sisvel.

The GFCJ not not yet issued its final written decision, so we’ve done our best to summarize key points from various accounts of the May 5 hearing.  So consider this post more as issue spotting with proper skepticism and understanding that the final decision may be different from what was said at the hearing.  We encourage readers to keep an eye out for the Court’s final ruling, and we will provide an update once we receive an English version of the final decision (we will give a shout-out to the first person to send us an English version of the final decision).

Following the May 5 ruling, Sisvel on May 15 filed patent infringement suits against Tesla, Dell, Honeywell, HMD Global, TCL, BLU Products, CradlePoint, OnePlus, Tinno Mobile, Sun Cupid Technology, Verifone, and Xirgo in the District of Delaware, asserting patents previously assigned to Nokia, BlackBerry, LG, and Thomson Licensing and declared essential to 3G and 4G/LTE wireless standards. Sisvel had filed cases against BLU, Dell, Honeywell, Tesla and Xirgo last June.
Continue Reading Germany’s highest court tentatively rules that infringer hold-out violated its obligations to negotiate a FRAND license (Sisvel v. Haier)

Yesterday, InterDigital announced that it signed “a multi-year, worldwide, non-exclusive, royalty bearing patent license agreement” with Huawei, bringing an end to the companies’ SEP litigation in China and the U.K. over FRAND terms for InterDigital patents essential to 3G, 4G, and 5G wireless telecommunication standards. InterDigital’s press release states the new agreement “covers certain of Huawei’s products and certain of InterDigital’s essential patents” and that the companies have agreed to dismiss all pending litigation between them.  

In addition to resolving a significant overhang that the dispute posed to InterDigital’s licensing business, we anticipate the Huawei agreement could feature prominently in InterDigital’s defense against Lenovo’s newly filed antitrust claims, particularly those predicated on an alleged failure to license its patents on FRAND terms (see our April 28, 2020 post). Quoting InterDigital President and CEO William Merritt, the press release may preview the tone of InterDigital’s response in the Lenovo case by noting that the Huawei agreement “underscores the fairness and flexibility of our licensing approach, including our rate and portfolio transparency, which set an industry standard.”  
Continue Reading InterDigital pens SEP license agreement with Huawei as Lenovo Dispute escalates

On April 9, 2020, Lenovo and Motorola Mobility filed a Complaint against InterDigital in the District of Delaware alleging InterDigital violated U.S. antitrust law and contractual FRAND commitments by its standard setting participation and licensing practices related to 3G and 4G standard essential patents (SEPs). The Complaint is the most recent development in a larger patent dispute between the companies and alleges that InterDigital has engaged in a multi-pronged scheme, through a combination of agreements with its competitors and fraudulent promises, to unlawfully acquire, maintain, and exploit such market or hold-up power arising solely from the alleged essentiality of patents it contends have been incorporated into the Cellular Standards.  

A short background and summary of the Complaint is included below. 
Continue Reading Lenovo, Motorola file antitrust claims against InterDigital’s standards setting participation and patent licensing practice (Lenovo v. InterDigital)

On March 2, 2020, Judge Gilstrap issued an Order granting-in-part Apple’s motion to dismiss a declaratory judgment claim by Optis to the extent the claim related to FRAND commitments for foreign standard essential patents (SEPs).   But he maintained the action as to FRAND commitments for U.S. patents.  This decision may be part of a trend for U.S. courts respecting comity with other countries by limiting disputes over SEPs and FRAND commitments to U.S. patents in the absence of consent by both parties to adjudicate issues concerning foreign SEPs.
Continue Reading Judge Gilstrap dismisses foreign SEP FRAND claims in global SEP feud, but maintains claims on US SEPs (Optic Wireless v. Apple)

Oral Argument in the appeal of Judge Koh’s FTC v. Qualcomm decision is schedule to take place February 13, 2020 before the 9th Circuit Court of Appeals in San Francisco to consider whether and to what extent competition law should apply to licensing standard essential patents (SEPs). This appears to be the most important and impactful U.S. case so far on the issue and could have far reaching impact on domestic and foreign SEP licensing.

The Court will hear from Qualcomm and the U.S. Federal Trade Commission (FTC) and has also allotted the U.S. Department of Justice (DOJ) five minutes to present as amicus curiae during the argument. In addition to the parties-at-interest and DOJ, twenty-two amicus briefs have been lodged in the case by other companies, licensors, industry groups, academics, and interested parties. In fact, due to public interest in the case, the Ninth Circuit has created a separate website dedicate to the appeal, “to notify the media and public of procedures and rules for admission to proceedings, as well as access to case information.” The FTC also maintains its own website on the litigation that includes all the FTC’s filings and public statements regarding the proceedings.

In anticipation of the upcoming hearing, we’re provide this summary of the appeal issues and topics raised by the amicus briefs. As usual, we provide links to the filings and encourage you to read through them yourself.
Continue Reading Ninth Circuit to Hear Argument Feb. 13 from FTC, DOJ and Qualcomm on Competition Law’s Applicability to SEP Licensing (FTC v.Qualcomm)

Today, the Unites States Patent & Trademark Office (“USPTO”), the U.S. Department of Justice, Antitrust Division (“DOJ”) and the National Institute of Standards and Technology (“NIST”) issued a joint “Policy Statement on Remedies For Standards-Essential Patents Subject To Voluntary F/RAND Commitments.”  This policy statement supplants  the prior 2013 joint policy statement on remedies

Today the Federal Circuit vacated Judge Selna’s bench trial decision in the much-watched TCL v. Ericsson case, ruling that Ericsson has the right to a jury trial to  determine  compensation for past infringement of Ericsson’s standard essential patents (SEPs) under the Seventh Amendment of the U.S. Constitution.  So this case involving a FRAND computation method

Today, the Ninth Circuit issues an Order that stays Judge Koh’s injunction entered in the FTC v. Qualcomm case in order to maintain the status quo so that the Ninth Circuit can decide whether Judge Koh’s “order and injunction represent a trailblazing application of the antitrust laws, or instead an improper excursion beyond the outer limits of the Sherman Act”, which is not decided by this Order but “is a matter for another day.”

We provide a summary of the ruling below and, as always, recommend reading the 7-page Order for yourself (see link in first sentence above).   The Ninth Circuit has not decided the substantive issues–that will be done on “another day”–but did indicate that Qualcomm had raised meritorious arguments that (1) Qualcomm was not required to license its SEPs to rival chip suppliers and (2) Qualcomm could assess royalties on its SEPs on a per-handset basis (rather than based on modem chip component of the handset).

As far as next steps, the parties and interested amicus on all sides of the issue are preparing briefing on an expedited schedule in preparation for a hearing at the Ninth Circuit in January 2020.
Continue Reading Ninth Circuit Stays Judge Koh’s Injuncton in the FTC v. DOJ Competition Brawl (FTC v. Qualcomm)

Last week, Judge Gilstrap ruled that Ericsson’s end-product-based “offers to HTC–$2.50 or 1% with a $1 floor and a $4 cap per 4G device–were fair, reasonable and non-discriminatory.”  Judge Gilstrap found that the comparable licenses presented by Ericsson to be “the best market-based evidence” of the value of Ericsson’s standard essential patents (SEPs) and that “the market evidence, in the form of comparable licenses, has failed to embrace HTC’s preferred SSPPU [smallest salable patent-practicing unit] methodology.”    He noted that there was no evidence that industry licenses are negotiated based on the cost of a baseband chip (the alleged smallest saleable patent practicing unit or SSPPU) and evidence showed that the value of SEPs can exceed the value of the chip, which price does not include the cost if that intellectual property.  This SEP cases is one of the closest to capturing what actually happens in the licensing market with FRAND-committed SEPS, rather than generating new litigation-based theories on valuing SEPs (e.g., top-down analysis).  This decision also is at odds in many respects with the decision by Judge Selna in the TCL v. Ericsson case that currently is on appeal at the Federal Circuit (see our Jan. 3, 2018 post summarizing that decision).
Continue Reading Judge Gilstrap rules Ericsson’s licensing offers were FRAND-compliant (HTC v. Ericsson)

A jury recently found that Huawei willfully infringed four patents owned by PanOptis alleged to be essential to mobile cellular standards and subject to a FRAND commitment as well as a fifth patent related to the H.264 video compression standard but was not subject to a FRAND commitment.   The jury awarded a reasonable royalty of $7.7 million for the single patent without a FRAND commitment, which was almost three times higher than the combined royalty awarded for the four FRAND-committed SEPs of $2.8 million.  But it is not clear at this point whether that difference is due to the FRAND-commitment or to the relative value of the patented technologies to the infringing products.

Prior to trial, the court also showed judicial restraint by limiting the case to determination of FRAND commitments on U.S. patents as a matter of U.S. law and not opining on FRAND commitments for foreign patents under foreign law.  For example, the court refused to enjoin a Chinese antitrust action based on alleged FRAND violations for related Chinese SEPs.  And the court refused to include in this case a determination of whether there was infringement of related foreign SEPs and whether licensing offers on those foreign SEPs complied with the FRAND commitment under foreign law.

The next steps in this case involves the court holding a bench trial (i.e., trial before the judge, not a jury) on whether PanOptis licensing offers complied with its FRAND commitments.  Further, the parties will file the usual post-trial motions that may challenge the jury verdict and ultimate bench trial ruling.  Those further filings may provide more insight into the case.  So stay tuned.
Continue Reading Jury awards running royalty for willfully infringed SEPs subject to FRAND commitment (Optis v. Huawei)