At the same time that Judge Gilstrap recently entered his bench trial ruling that rejected Metaswitch’s standards-based equitable defenses (see our Oct. 2, 2016 post), he also entered an Order that rejected Metaswitch’s request to set aside a jury’s verdict that it infringed valid patent claims based on, among other things, SEP-related grounds.  The ruling is interesting mainly due to the procedural issues it raises.  Judge Gilstrap did make a substantive ruling that the CableLabs, IETF and ITU-T intellectual property rights (IPR) agreements at issue applied on a patent claim-by-claim basis and not on a patent-by-patent basis (i.e., some claims in a patent may be subject to the IPR agreement, but other claims within that same patent may not).
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Judge Gilstrap recently entered an Order that rejected various defenses raised by Metaswitch based on the prior patent owner’s (Nortel) activities in standards organizations CableLabs, the Internet Engineering Task Force (“IETF”) and the International Telecommunication Union (“ITU”).  The decision highlights the importance of considering the specific language of the standard setting intellectual property rights (“IPR”) policy and patent owner commitment at issue as well as the importance of showing that the standard incorporates the patented technology and is implemented in the accused infringing products.

For example, under the wording of the specific CableLabs IPR Agreement at issue, Judge Gilstrap ruled that (1) an entities’ commitment only applied to intellectual property (e.g., patents or applications) it owned at the time the entity made the commitment and did not apply to intellectual property that the entity later acquired and (2) a subsidiary’s intellectual property commitment did not obligate its parent entity.  Thus, although one of Nortel’s subsidiary’s that owned no patents participated in the CableLabs standards process, Nortel could hold (and later sell) patents relevant to the CableLabs standard without those Nortel patents being subject to the royalty-free licensing obligation that CableLab’s otherwise required of participants.

Further, Judge Gilstrap ruled that the accused infringer failed to show one or more material parts of the alleged standard setting obligation, such as showing that (i) the standard setting document at issue was actually an adopted standard subject to an obligation (e.g., not an expired draft or request for comment), (ii) the patented technology was incorporated into the standard (e.g., the patent claims actually are “essential” to the standard), and (iii) the accused products actually implement the standard and patented technology.  The latter requirement — e.g., show that the accused products implement the patented technology within the standard — can be particularly problematic, because accused infringer’s generally deny infringement (usually a first line of defense) and are reluctant to undermine that defense by arguing that the claims read onto their product in order to support a lower priority defense, such as the standard essential patent defenses raised here.

The decision also provides incremental insight into common equitable defenses raised in standard essential patent cases: laches, equitable estoppel, implied waiver, and implied license.  In this case, the circumstances that lead to a failure to establish breach of an expressed standard setting commitment also doomed the equitable defenses as well.  Perhaps this is not too surprising, because equity generally does not step-in when there is an adequate remedy at law–e.g., enforcement of a contractual obligation that sets the rights, obligations and expectations of the parties.  This further bolsters the importance of the language used in the specific standard setting IPR policy and specific patent owner commitment at issue when determining rights and obligations under standard essential patents subject to a standard setting obligation.
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Yesterday, a jury returned a verdict finding that Fujitsu had breached its standard-setting obligations to offer its declared ‘737 Patent (now expired) to Tellabs on reasoanble and non-discriminatory terms (RAND).  Judge Holderman then issued an order to show to cause why the patent should not be held unenforceable as to Tellabs.  This case presents many

The U.S. International Trade Commission (“ITC”) recently issued the public version of ALJ Essex’s Initial Determination in Inv. No. 337-TA-868 finding that InterDigital had not violated any FRAND obligation and that ZTE and Nokia had not infringed the patents-in-suit (see our June 19, 2014 post). Although the patents were found not to be essential

Judge Richard Andrews of the District Court of Delaware dismissed Nokia and ZTE’s amended FRAND counterclaims against InterDigital on Wednesday, ruling that the amended declaratory judgment actions would not serve a useful purpose in the context of the parties’ ongoing litigation. Nokia and ZTE’s FRAND counterclaims involve around 500 patents identified to ETSI as possibly

Last Friday, several cable operators filed a Complaint against Rockstar in D. Del. alleging that Rockstar’s assertion against them of patents breached obligations owed to various standard setting organizations (“SSOs”) based on prior owner Nortel’s commitment to license patents on RAND, FRAND or royalty-free terms.  Our Jan. 2 and Nov. 1 posts discussed Rockstar’s purchase

Last week (Thu. Oct. 17, 2013), the International Trade Commission (ITC) issued a Notice that it will review “in its entirety” Administrative Law Judge Shaw’s initial determination (ID) that found no infringement of LSI’s 802.11 and H.264 standard essential patents (SEPs), but otherwise rejected RAND-based defenses, as discussed in our prior post.

The ITC

Yesterday, Judge Robart issued an Order that denied Motorola’s motion to overturn the jury’s verdict that Motorola breached its RAND obligations in dealing with Microsoft on standard essential patents (SEPs) for IEEE 802.11 WiFi standards and ITU H.264 video compression standards. Judge Robart’s ruling here indicates that assessing compliance with a RAND obligation is a

Yesterday marked the start of the long-awaited Microsoft-Motorola RAND breach of contract jury trial, taking place before Judge James L. Robart in the Western District of Washington.  Over the next week or so, the jury will hear testimony on whether Motorola breached its IEEE- and ITU-related RAND obligations through its licensing negotiations and course of

A month ago, we alerted you to ALJ David P. Shaw’s Initial Determination finding no violation of Section 337 in In the Matter of Certain Wireless Devices with 3G Capabilities and Components ThereofInv. No. 337-TA-800 — the ITC’s investigation into InterDigital’s accusations that Huawei, Nokia, and ZTE infringed several 3G-essential InterDigital patents.  Yesterday, the ITC finally released the public version of the ~450 page Initial Determination.

[337-TA-800 Initial Determination (PUBLIC)]

As we noted in our post on the parties’ respective petitions for review, while the ALJ found no infringement of any valid patent claims (and therefore no violation of Section 337), he did address the Respondents’ FRAND-related defenses — and made some interesting findings.  After the jump, we’ll take a quick look at these findings, which begin on page 417 of the Initial Determination.


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