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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.
Continue Reading Innovatio, WiFi suppliers clash over over “essentiality” of Innovatio 802.11 patents

Big news today in the Microsoft-Motorola RAND breach of contract dispute taking place before the U.S. District Court for the Western District of Washington.  After the November 2012 bench trial and significant post-trial briefing between the parties on a variety of issues, we finally have an order from the court.  However, we will need to…

Back in December 2012, the Federal Trade Commission and the Department of Justice held a joint workshop to explore the impact that patent assertion entities (PAEs — or non-practicing entities/NPEs) may be having on innovation, competition, and the U.S. economy.  The FTC and DOJ invited the public to submit comments for consideration by the agencies, even extending the deadline for submission until early April.  All in all, 68 separate submissions have been received and posted on the FTC/DOJ workshop’s site.

The commenters represent a wide variety of industries and interests, and express divergent viewpoints and positions about the effects of PAE activity.  Many comments focus on the newly-reintroduced SHIELD Act.  Given that the main focus of this blog is on standard-essential patent issues, we won’t even try to give a comprehensive rundown of all of the comments — we’ll leave the focus on non-practicing entities to others.  But several of the comments do express particular concern about the interplay between PAEs, standard-setting organizations and standard-essential patents.  After the jump, we’ll discuss some of these issues that are being flagged as troublesome.


Continue Reading Public comments on FTC/DOJ Patent Assertion Entity Workshop include worries that PAEs may “game the system” of standard-setting and RAND licensing

We recently came across a new paper written by noted scholars Mark Lemley and Carl Shapiro that we thought was worth passing along.  Lemley and Shapiro have written extensively about the interplay between patent issues and standard-setting, including the oft-cited article “Patent Holdup and Royalty Stacking.”  In their new paper, titled “A Simple Approach to Setting Reasonable Royalties for Standard-Essential Patents,” Lemley and Shapiro propose a way to tackle the difficult task of determining the appropriate terms for a FRAND-encumbered standard-essential portfolio (if the parties are unable to agree on terms).

Their solution to this common problem?  Requiring the parties to enter into a binding “baseball-style” arbitration — where each party must propose its final offer, and the arbitrator picks which one is the most reasonable (the arbitrator cannot choose a different number).  In their paper, Lemley and Shapiro describe how their proposed system would work in practice, and claim it would moot many of the FRAND-related disputes ongoing today.
Continue Reading Lemley, Shapiro propose “baseball-style” arbitration as solution to FRAND disputes

Late last week, Motorola Mobility filed its Responsive and Opening Brief in Federal Circuit Appeal No. 2012-1548 (the appeal from Judge Posner’s June 2012 decision to dismiss competing infringement claims in a case between Apple and Motorola).  We’ve previously discussed the large number of amicus briefs filed with the Federal Circuit by a wide variety of parties addressing the issues of damages and injunctive relief with respect to standard-essential patents.  Here, Motorola characterizes Apple as an “unwilling licensee” who wants to change the rules of how standard-essential patent licensing has long been done in the cellular industry.  Motorola claims that Judge Posner’s rulings — which barred injunctive relief for Motorola’s FRAND-pledged standard-essential patent at issue, and limited damages to ex ante (pre-standard) value of the patent — “devalue essential patents,” “upset the settled expectations” of patent holders who contribute to industry standards, and “create disincentives” to participate in standard-setting activities.
Continue Reading Motorola tells Federal Circuit Judge Posner’s ruling would inappropriately create a “categorical rule” against standard-essential patent injunctions

A couple of weeks ago, we noted a peculiar minute order emanating from Judge James L. Robart’s courtroom in the Microsoft-Motorola RAND case.  Based on his review of Google’s AVC/H.264 standard-essential patent pool license agreement with MPEG LA, Judge Robart asked the parties to submit short letter briefs addressing two questions regarding the relevance of the Enterprise License provision (Section 3.1.7) to any grantback license that Motorola (as a subsidiary of Google) might owe to Microsoft.

Late Friday, the parties submitted their respective answers to the court’s questions (Microsoft’s / Motorola’s).  The parties’ answers and arguments show just how millions of dollars in royalties could turn on the interpretation of just a couple of short phrases in the MPEG LA agreement.  After the jump, we’ll provide a short summary of both Microsoft’s and Motorola’s positions.  Essentially, though, the parties’ arguments boil down to this — Was the MPEG LA agreement’s grantback provision designed to extend to all affiliates of a given licensee, whether those affiliates receive any benefits under the agreement or not?Continue Reading Microsoft, Motorola submit final arguments to Washington court on the relevance and effects of Google-MPEG LA AVC/H.264 agreement to a Microsoft-Motorola RAND license

A quick update for those interested in the Apple-Motorola Federal Circuit FRAND appeal:

Last week, the U.S. Supreme Court issued its opinion in Gunn v. Minton, where the Court determined that a plaintiff’s patent litigation-related state law malpractice claim did not “arise under” the federal patent laws and did not create federal jurisdiction under…

This past Friday (Feb. 22) was the deadline for the public to submit comments to the Federal Trade Commission on the FTC’s consent decree that it entered into last month with Google and Motorola Mobility.  More than two dozen individuals, companies, and organizations chose to submit comments, and their submissions reflected a wide range of interests and opinions about issues relating to both standard-essential patent issues and Google’s search practices.

These comments may be accessed from the FTC’s web site.  In a future post, we will do a deep dive into some of the more interesting comments submitted.  In the meantime, after the jump is a list of the entities that submitted comments, along with links to their web sites:

Even though the trial in the Microsoft-Motorola RAND dispute took place over three months ago, there’s been a lot going on in Washington lately.  In addition to the arguments regarding the relevance of the Google-MPEG LA AVC/H.264 patent license agreement, recall that a couple weeks ago, Judge James L. Robart granted Motorola’s request to submit additional information that may be relevant to determining the RAND rate.  Late Friday, both Motorola and Microsoft filed these documents with the court — documents that may actually raise more issues than they help resolve (and may ultimately have no bearing on Judge Robart’s decision).
Continue Reading Microsoft-Motorola RAND case update: Microsoft accuses Motorola of violating the Google/FTC consent decree, and a potential H.264 license agreement in Germany

Last week, Judge James L. Robart briefly reopened the trial record in the Microsoft-Motorola RAND breach of contract case, in order to allow the parties to submit additional evidence regarding the RAND rate for Motorola’s patents.  Yesterday, Judge Robart issued another short minute order, this time allowing additional briefing on a different issue.  Yesterday’s order concerns the terms of Google’s license with the MPEG LA AVC/H.264 patent pool, which Microsoft claims are dispositive of the appropriate RAND rate for Motorola’s H.264 patents.  (For more background on this particular issue, see our earlier post on the parties’  briefing leading up to oral arguments.).  Judge Robart has now allowed the parties to submit letter briefs of up to six pages by March 1 in light of certain “novel arguments” regarding the MPEG LA agreement that were apparently raised by the parties at the January 28 oral argument.
Continue Reading Microsoft-Motorola judge orders additional briefing on how Google-MPEG LA license agreement may affect RAND terms for Motorola’s H.264 patents