Another week, and another standard-essential patent trial.  Whereas last week brought us the jury’s verdict finding a RAND breach in the Microsoft-Motorola case, the trial this week relates to a determination of the appropriate RAND royalty rate for Innovatio IP Ventures, LLC’s WiFi-essential patent portfolio (consisting of patents previously owned by Broadcom).

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An issue that often comes up in standard-essential patent litigation is “essentiality” — whether the asserted claims are actually necessary to practice the technological standard that forms the basis of the infringement allegations.  This is important for at least two reasons: first, because if the claim is not actually necessary to practice the standard, an implementer could (at least theoretically) design around the patent to create a non-infringing implementation of the standard; and second, because the RAND obligations set forth in the patent policies of many SSOs are often limited only to truly “essential” patent claims.

This issue of essentiality has come to the forefront in the ongoing multidistrict litigation between non-practicing entity Innovatio and several WiFi suppliers (Cisco, Motorola Solutions, and Netgear).  You may recall that Innovatio, in winning (in part) a motion to dismiss some unfair competition and RICO claims, had argued that many of the asserted claims are not actually “Essential Patent Claims” as defined by the IEEE — and therefore cannot be subject to any existing RAND obligation.  Earlier this month, the court ordered the parties to meet and confer and submit a joint statement regarding disputes over whether, based on Innovatio’s infringement contentions, the asserted claims of Innovatio’s patents are actually essential to the IEEE 802.11 wireless networking standard.  Yesterday, the parties submitted their stipulation regarding the essentiality of Innvatio’s asserted patent claims.
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Last month, Judge James F. Holderman dismissed various claims brought by Cisco, Motorola Solutions, and NETGEAR against Innovatio IP Ventures, LLC over Innovatio’s vast licensing and litigation campaign relating to the IEEE 802.11 Wi-Fi standard.  These suppliers claimed that Innovatio — in threatening the suppliers’ customers and bringing litigation over standard-essential patents — violated various unfair competition laws, and even the Federal Racketeering and Corrupt Organizations Act (“RICO”).  But the court found that Innovatio’s conduct was protected petitioning activity under the Noerr-Pennington doctrine, and that the suppliers did not properly plead that the conduct was a “sham” that would exempt this activity from protection.  Yesterday, the suppliers filed a motion for entry of final judgment under Federal Rule of Civil Procedure 54(b), which indicates that the suppliers want to appeal the dismissal of these claims as soon as possible to keep the heat on Innovatio.
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