Judge Gilstrap recently issued an Order rejecting the equitable defense of patent misuse in a case involving standard essential patents (SEPs) subject to a commitment to license them on fair, reasonable and non-discriminatory (FRAND) terms. Motorola Mobility LLC (Motorola) alleged that Saint Lawrence Communications LLC (St. Lawrence or SLC) was guilty of patent misuse by, among other things, requiring Motorola to take a worldwide license to FRAND-committed SEPs, using the threat of injunctive relief in Germany to coerce licensing of those SEPs, entering different license terms with different licensees and not disclosing effective royalties from licensing the SEPs under a patent pool when negotiating individual licenses. This decision is another indication that competition law claims asserted against SEPs may not prevail when patent owners have followed traditional patent enforcement and licensing strategies or even if they breach of a FRAND commitment. Rather, there must be something more egregious or deceptive with the particular patent owner’s conduct at issue to give rise to competition law claims that are required to address harm to competition beyond harm that can be addressed by more traditional patent or contract law remedies — e.g., a contract remedy for breach of a FRAND commitment or limits on patent remedies based on a FRAND commitment. Continue Reading Judge Gilstrap rejects patent misuse defense to alleged FRAND-committed SEPs (St. Lawrence v. Motorola Mobility)
Judge Gilstrap recently ruled that certain challenges to a damages expert’s testimony went toward the weight a jury could give that testimony, rather than whether the testimony should be admitted. Specific FRAND-related portions of the testimony that he would admit at trial include the following:
- Expert could testify that the hypothetical FRAND royalty rate to be awarded for infringement damages (which presumes the patents are valid and infringed) would be higher than the royalty rate of a comparable FRAND license, which comparable license’s royalty rate may have been skewed low based on discounts made for litigation risks and costs.
- Expert could testify about FRAND royalties that the accused infringer charges for its own SEPs.
- Expert could testify about licenses negotiated in the context of German litigation and threat of injunction.
Judge Gilstrap indicated that the expert had sufficiently identified what he relied on and explained adjustments that he made to those proposed comparable licenses to account for differences from the hypothetical negotiated license. The defendant’s challenges to that testimony goes to the weight the jury should give the testimony, not its admissibility.
Judge Gilstrap’s ruling is an interesting example of how FRAND litigation has matured since taking the main stage in Judge Robart’s first-of-its-kind FRAND royalty decision in Microsoft v. Motorola (see our May 1, 2013 post) and Judge Holderman’s following decision in In re Innovatio (see our Oct. 3, 2013 post). Both of those 2013 decisions were based on, inter alia, a general failure of litigants to present sufficiently comparable licenses. Since then, Federal Circuit decisions have leaned toward admitting comparable licenses where expert testimony sufficiently accounts for differences from the hypothetical negotiated license.
For example, the Federal Circuit’s 2014 Virnetx decision (a non-SEP case) counseled that, although “alleging loose or vague comparability … does not suffice,” a jury may consider comparable licenses where differences from the hypothetically negotiated license are explained to them (see our Sep. 17, 2014 post). And the Federal Circuit’s 2015 Ericsson decision (an SEP FRAND case) stressed that, although real world licenses “are almost never perfectly analogous to the infringement action,” the jury may consider them if expert testimony accounts for “distinguishing facts when invoking them to value the patented invention.” (see our Dec. 5, 2015 post). Litigants following the Federal Circuit’s guidance may find courts more willing to allow expert testimony on proposed comparable licenses despite their differences from the hypothetical negotiated license.
Continue Reading Judge Gilstrap permits damages expert testimony that litigated FRAND royalty should be higher than comparable license’s FRAND royalty that was skewed low by litigation risk discount (St Lawrence v. ZTE)
Last Friday, Apple and Google reportedly agreed to dismiss all current lawsuits between them, including standard essential patent cases involving Motorola Mobility that Google recently sold to Lenovo. The three-sentence joint statement by Apple and Google indicates that their agreement does not include any cross license (to SEPs or otherwise), stating:
Apple and Google have agreed to dismiss all the current lawsuits that exist directly between the two companies. Apple and Google have also agreed to work together in some areas of patent reform. The agreement does not include a cross license.
Dismiss Judge Posner Appeal. Thus the parties filed a Joint Motion to Dismiss The Appeal from Judge Posner’s decision in which a Federal Circuit panel recently ruled there is no per se rule against injunctive relief for standard essential patents (see our April 25, 2014 post). Procedurally, the joint motion asks the Federal Circuit to issue the mandate on its recent decision so that jurisdiction of the case will return to the district court where the parties will then seek dismissal without prejudice, stating:
Whereas all parties agree that it would be appropriate to dismiss this litigation without prejudice, and whereas none of the parties intend, therefore, to file a petition for rehearing or rehearing en banc or for writ of certiorari, Plaintffs-Appellants Apple Inc. and NeXT Software, Inc. (formerly known as NeXT Computer, Inc.), together with Defendants-Cross Appellants Motorola, Inc. (now known as Motorola Solutions, Inc.) and Motorola Mobility , Inc. (now know as Motorola Mobility LLC), respectfully move the Court to issue the mandate in these consolidated appeals, so that the parties can proceed to the district court to dismiss the litigation without prejudice. The parties further agree that each party will bear its own costs and attorneys’ fees.
Dismiss Judge Crabb Appeal. The parties also filed a Joint Motion to Dismiss The Appeals from Judge Crabb’s decision that had dismissed Apple’s declaratory judgment action against Motorola because Apple would not commit to be bound by the court’s determination of a reasonable and non-discriminatory (RAND) royalty rate (see, e.g., our Jan. 13, 2014 post). Procedurally, Judge Crabb had dismissed the case without prejudice and there had been no decision yet on appeal (briefed, but not yet argued), so the joint motion simply seeks dismissal, stating:
Pursuant to Federal Rule of Appellate Procedure 42(b), Plaintiff Appellant Apple Inc. and Defendant-Cross Appellant Motorola Mobility LLC jointly move to dismiss these appeals (Nos. 2013-1150 and -1182). The parties will each bear their own costs and fees.
And so yet another standard essential patent skirmish goes gently into that good night … (see our May 15, 2014 post).
Back in June, we alerted you to a number of infringement suits brought by licensors to the MPEG LA ATSC patent pool in the Southern District of Florida, targeting several television manufacturers — ViewSonic, Craig Electronics, and Curtis International. Yesterday, a different group of MPEG LA licensors filed suit on patents related to a different MPEG LA patent pool (relating the MPEG-2 video compression standard), but most of the defendants include those targeted in the earlier suits. This could raise speculation that MPEG LA (through its licensees) is becoming more apt to bring enforcement actions to “encourage” technology companies to become licensees to its various patent pools.
The plaintiffs in the new suits include Mitsubishi, Philips, General Electric, Thomson Licensing, Panasonic, and Sony, each of whom are licensors to the MPEG LA MPEG-2 Patent Pool. They have filed the following complaints:
- Mitsubishi et al. v. Craig Electronics
- Mitsubishi et al. v. Curtis International
- Mitsubishi et al. v. Motorola Mobility LLC
- Mitsubishi et al. v. ViewSonic
The plaintiffs allege that that the defendants’ MPEG-2 compliant products, such as television and set-top boxes, infringe several of their patents. The patents-in-suit include the following:
- U.S. Pat. No. 5,606,539: “Method and apparatus for encoding and decoding an audio and/or video signal, and a record.” (Assigned to Philips)
- U.S. Pat. No. 7,376,184: “High-efficiency encoder and video information recording/reproducing apparatus” (Assigned to Mitsubishi)
- U.S. Pat. No. 5,784,107: “Method and apparatus for picture coding and method and apparatus for picture decoding” (Assigned to Panasonic)
- U.S. Pat. No. 6,097,759: “Image signal coding system” (Assigned to Mitsubishi)
- U.S. Pat. No. 5,481,553: “Methods and apparatus for preventing rounding errors when transform coefficients representing a motion picture signal.” (Assigned to Sony)
- U.S. Pat. No. 5,459,789: “Packet TV program component detector” (Assigned to Thomson)
- U.S. Pat. No. 5,491,516: “Field elimination apparatus for a video compression/decompression system” (Assigned to GE)
The plaintiffs acknowledge that they have committed to license these patents on FRAND terms and are not seeking an injunction, but instead seek damages adequate to compensate for infringement — as well as treble damages for willfulness and attorneys’ fees and costs under Section 285. The complaints state that each of the defendants has been previously offered a license to the patents through MPEG LA (and that Motorola was in fact a prior licensee and licensor of the MPEG LA MPEG-2 pool), but that none of the defendants has accepted a the license offers.
One last interesting note to point out about these new cases — the MPEG LA licensor plaintiffs are represented by attorneys at Proskauer Rose, which is the same law firm that MPEG LA uses as patent counsel and to determine whether its licensors’ patents are essential.
Back in 2011, Intellectual Ventures fired off a patent infringement complaint against Motorola Mobility in the District of Delaware. That case is scheduled to go to trial early in 2014 But today, Intellectual Ventures upped the ante, announcing that it has filed a second patent infringement complaint against Google subsidiary Motorola Mobility, choosing this time to file in the Southern District of Florida (where Motorola has a facility, in Plantation, FL).
IV has asserted a total of seven new patents against Motorola. The accused functionality appears to include both technology standards and non-standard features of Motorola’s products. The specific standards implicated by IV’s infringement claims are the IEEE 802.11 Wi-Fi standards, as well as certain ETSI/3GPP cellular standards (GPRS and LTE).
As a remedy for the accused infringement, IV is seeking damages, plus costs and attorneys’ fees (but no injunction). The full list of patents asserted by IV is below, along with a brief description of the accused functionality:
- U.S. Patent No. 5,790,793, titled “Method and system to create, transmit, receive and process information, including an address to further information.” Motorola’s products implementing MMS (multimedia messaging service) technology are accused of infringing this patent.
- U.S. Patent No. 7,136,392, titled “System and method for ordering data messages having differing levels of priority for transmission over a shared communication channel.” Motorola’s products that comply with the IEEE 802.11n wireless networking standard are accused of infringing this patent.
- U.S. Patent No. 6,121,960, titled “Touch screen systems and methods.” Motorola’s products that use Google’s Android operating system are accused of infringing this patent.
- U.S. Patent No. 7,382,771, titled “Mobile wireless hotspot system.” Motorola’s products that provide “Wi-Fi hotspot access” via the IEEE 802.11n wireless networking standard are accused of infringing this patent.
- U.S. Patent No. 7,564,784, titled “Method and arrangement for transferring information in a packet radio service.” Motorola’s products that comply with the ETSI General Packet Radio Service (GPRS) cellular standard are accused of infringing this patent.
- U.S. Patent No. 6,170,073, titled “Method and apparatus for error detection in digital communications.” Motorola’s products that comply with the ETSI 3GPP and/or 4G Long-Term Evolution (LTE) standards are accused of infringing this patent.
- U.S. Patent No. 7,848,353, titled “Method, communication system and communication unit for synchronization for multi-rate communication.” Motorola’s products that comply with the LTE standard are accused of infringing this patent.
It should come as no surprise to those familiar with Intellectual Ventures that IV was not the original assignee of the patents-in-suit — these patents have been assigned to IV over the years, with former owners of the patents including Nokia, Spyder Navigations (who, according to this site, is a Nokia-related “privateer” that was managed by IV), Ninety Portals, IPWireless, Inc., Intersil, Conexant, In Motion Technology, and Infologix, among others.
Last week we discussed a couple of amicus briefs in the Apple-Motorola Federal Circuit appeal that addressed standard-essential patent issues. Intel supported Apple’s view that injunctions should generally not be available for FRAND-pledges SEPs, while Qualcomm supported Motorola’s contention that there is no such blanket restriction. In this post, we’ll address two more briefs, both of which were filed by parties supporting Apple: (1) the Business Software Alliance, which is a trade association of software and hardware technology companies; and (2) a group of law school professors.
On March 5, 2013 at 2:00pm, the Intellectual Property Owners Association is holding a webinar to discuss the potential implications that the FTC-Google consent decree may have on the world of standard-essential patents. The webinar is taking place as part of of IPO’s weekly IP Chat Channel series. David W. Long, a member of Dow Lohnes’s Litigation group and a co-author of The Essential Patent Blog, will be one of the webinar presenters. Details on the webinar and information on how to register for it is after the jump.
We’ve finally sifted through the many public comments submitted in response to the FTC-Google consent decree and proposed order. As we noted Monday, over two dozen individuals, companies, and organizations representing a wide range of interests submitted comments. Later this week, we will do a post featuring the details of some of the post submitted by interested companies, such as Apple, Ericsson, Microsoft, Qualcomm, and Research In Motion. But today, we are going to focus on the comments that have been submitted by other types of organizations, which include a veritable alphabet soup of interest groups, professional organizations, and industry or trade associations.