;Video #26: Samsung vs Apple

Video #25: IP

#26: Nokia vs. HTC

Nokia is experiencing a fairly high drop-out rate of its patent infringement claims against rivals. HTC has been consistently defending itself and shows no signs of backing down.

On April 23^rd, the Mannheim Regional Court held a trial on Nokia's patent infringement action against HTC over patent number EP1581016, "a communication network terminal for accessing Internet." The court unusually decided to announce its decision later that day.

Additionally, after another trial held in the afternoon that related to Nokia’s lawsuits against HTC over patent number EP0792077, a "multi-service mobile station" and against ViewSonic over that patent as well as its divisional patent EP1601167, Judge Dr. Holger Kircher dismissed Nokia’s case based on finding of non-infringement.

This is not the first of such dismissals, Nokia had claimed that Android’s app architecture centered around the Google Play store infringes the “o16 patent because of the way it allows third-party app developers to provide data to the end-user devices on which their programs run via a Google-operated server.” However, that went no where. And recently another lawsuit that targeted Google play was dismissed.
Judge Dr. Kricher has shown much skepticism concerning Nokia’s infringement theory. He and his colleagues felt that they could only side with Nokia’s infringement contentions if they seriously bent three rules:

1.      Nokia considered the term "service page" to include not only web pages (as the term suggests) but also apps. If this had been the only issue, an infringement would not have been too likely, but not inconceivable.

2.      Nokia faced an insurmountable challenge in persuading the court that two "means for wireless communication" limitations could mean one and the same mobile Internet connection. Based on the claim language the court felt that these claim limitations are meant to be different connections, with only the second one relating to communication "with a device", conversely suggesting a structural difference between the two consecutive limitations. The court identified further support for this position in the specification, such as its Figure 8 (which illustrates two types of connections), and in the fact that independent claim 11 uses a different article, presumably reflecting the author's awareness of this issue. Nokia's lawyers tried their best to argue that the patent also covers cases in which the same connection serves both purposes at the same time, but their arguments were of a functional nature and lacked a basis in the claims and the description.

3.      The court also touched on a third issue that the parties had not paid much attention to. It would take too long to explain this one here, and it wasn't outcome-determinative in the end.

The results concerning Google Play where a huge relief for Google as the company has been having a very difficult time winning any patent infringement cases lately (ever since it has been using its 12.5 Motorola purchase to file claims against other companies). To further this point, yesterday, the USITC tossed Motorola’s last complaint against Apple. Google’s attempts to gain a stronghold over Apple and Microsoft have been very unsuccessful.

Conversely, “the dismissal of Nokia’s second Google Play-related suit against HTC shows that Google is still a very effective defendant.” However, Nokia owns enough patents that it is only a matter of time until another break though emerges and a new lawsuit is filed. Therefore it is important to win offensive cases and fend off patent assertions.

HTC filed 3 countersuits against Nokia, Nokia won the first injunction against HTC over a power-saving patent. That one is already being enforced, but HTC’s German sales will apparently not be affected. The other cases have been dismissed. HTC will probably win something soon though.
The EP 167 Nokia asserted against ViewSonic was deemed too narrow. “The court was inclined to find the broader EP’077 infringed, but doubts the validity, making a stay the most likely outcome and an outright dismissal the second-most likely one.”

Nokia does have some gems in its patent portfolio, but it takes dozens of patent assertions to identify them. I've said on numerous occasions that the moment of truth for a patent is not when the patent office grants it: patent offices grant too many patents they shouldn't issue. The moment of truth is litigation. Once you assert a patent against a deep-pocketed, sophisticated rival, you'll see its true strength (or weakness). No patent valuation method is a substitute for this real-world test.

#25: New Munich Court Rulings

The Oberlandesgericht München (Munich Higher Regional Court) has made 3 important decisions regarding smartphone patents:

1. The court rejected Google’s attempt remove the injunction Microsoft won last year over a text-messaging-related patent. Google’s acquired IP from Motorola turns out again to not benefit Google in another lawsuit.
2. The court decided to postpone its decision on the cross-appeal of Apple’s photo gallery injunction against Motorola to May 16^th. Google obviously wants to remove this injunction but some predict that Apple may be able to get an even broader ruling on its current injunction.
3. The court sided with Google to remove the injunction over Apples slide-to-unlock patent because the Bundespatentgericht (Federal Patent Court) ruled that the patent was invalid on April 4^th. Apple will have a chance to revisit this case if it is able to appeal successfully and nullify the courts ruling. The decision will probably be made in 2014.

Florian Müller said there is nothing very special about these rulings except for that they continue trends we have seen and that it is important to note the decisions to stay on top of what is going on in the patent war.

Video # 24 Paterns Display Improving Patent System

Video #23: Designing Around Patents

Video #22: Reduced Royalty Demand for SEPs

#24: More Google Setbacks

As we have read about in many previous blog posts from students in our class, Google has not gained much if any actual leverage from its $12.5 billion spent on acquiring Motorola’s patents as they are constantly unsuccessful in proving patent infringement by other companies such as Apple, Microsoft, and Nokia. Google was wrong to think that owning many patents would enable the settlement of any infringement issues no matter what the scale. So it is clear that this has not worked, however, licensing has been successful.

In Mannheim, Germany, Google lost again when the regional court announced that Motorola is not entitled to an injunction against Microsoft over its push notification patent because “Google owes Microsoft a license under an AciveSync license agreement.” This result is not that surprising considering Judge Richard Arnold and Wales High Court of Justice declared the suit invalid for multiple reasons. In addition, Google was about to loose its right to that particular patent anyway because the patent was going to expire in two years. Considering the costs and time involved in most patent litigation this law suit doesn’t even seem logical for Google to waist its time an money on especially if many Justices also argue the suit to be invalid!

“Google cannot currently enforce, and isn't going to be able to enforce anytime soon, an injunction against Microsoft. But Microsoft has already won a U.S. import ban and three German injunctions against Motorola's Android-based devices (1, 2, 3), and is likely to win a fourth one, relating to Google Maps, on June 3. In November Google's lawyers told an appeals court that their client lost four months of German sales as a result of Microsoft's patent enforcement (and, which they didn't say, Google's unwillingness to join the likes of Samsung, HTC, LG and Acer in taking a royalty-bearing Android patent license).”

What we can see here is that licensing is supported and for good cause. Licensing is key to open innovation.

#23: Federal Judge set FRAND rate for Microsoft's license to Google's SEP

Today Judge James Robart, the federal judge that ruled over the Microsoft v. Motorola FRAND contract case in the Western District of Washington determined a FRAND license fee for a case that was brought to the courts attention in November of last year.

The actual fee has not yet been published, Florian Mueller just noticed an order after which the court "issue[d] its Findings of Fact and Conclusions of Law (the 'Findings and Conclusions') determining a reasonable and non-discriminatory royalty rate and range for Motorola's standard essential patents". The decision will be filed under seal and were emailed to the council of record. The parties have until April 25^th at noon to propose redactions of confidential business information. On April 26 the court will hold a telephone conference with the parties to determine what information will be made public. So stay posted!

On August 26^th Judge Robart scheduled a second trial, “a breach-of-contract trial that may be another bench trial or could be (if Google gets its way) a jury trial.” This trial will discuss whether Motorola’s initial royalty demand, of about $4 billion per year. Was blatantly unreasonable and constituted a breach of Motorola’s FRAND pledge (which is apparently an enforceable contract). “Microsoft won a summary judgment decision against Motorola’s pursuit of injunctive relief” after the first trial.

Microsoft one its case against Motorola in November 2010 because Motorola was said to have failed adhering to its FRAND licensing commitment. Motorola’s conduct was judged to be so bad that the United States as well as the European Union conducted antitrust investigations. Based on these previous rulings it will be interesting to see whether Motorola will face similar consequences in the current cases.

#22: Samsung Reduces 2.4% Royalty Demand for SEPs

The USITC postponed its decision on Samsung’s complaint against Apple until May due to raised issues regarding FRAND licensing obligations and an excision order. There is now an interesting development that has come about in the Apple-Samsung dispute: in December 2012, “Samsung abandoned the 2.4% royalty demand for its wireless standard-essential patents (SEPs) it had been adamant about for well over a year.”
This issue arose in the Netherlands in 2011 when a Dutch court denied Samsung’s injunction request as its 2.4% royalty demand was considered to be outside the FRAND terms. In December, however, Samsung decided to withdrawal all of its European SEP-based injunction requests. The filing does not specify what the new demand is or weather that complies with the FRAND terms.


Samsung behaved similarly with Ericsson. It reduced its demands on Apple a week after it reduced its royalty demands with Ericsson. Samsung realized that its tactics were not working and had to shift gears. However, it still has to defend itself against Apple and Ericsson’s claims as well as the European Commission and countersuing. Apparently, the European Commission is still investigating Samsung to determine if it violated the European antitrust law in use of declared-essential patents against Apple.

Apple wants FRAND rates to be set in a district court and highlighted Samsungs track record of overdeclaring patents (where Samsung said certain patents were essential to standards when they were not) twice as much as the average industry rate. Apple has used Samsungs statements against them. Samsung and Nokia and others agreed licensing cost of a wireless standard should not exceed 5-7%, and Samsung would then get a fraction of this. There is still one SEP that remains on the table but apparently is quite trivial as far as functionality goes and accounts for less than 0.01% of the code in the accused device. In addition, this small amount is a relatively unimportant portion of the UMTS standard. All in all, there should be a standardized license so everyone pays the same amount, claims Dr. Nils Rydbeck, former Chief Technical Officer at Ericsson.

Just as Samsung, Google’s Motorola Mobility might agree to a 100-125 million annual royalty cap after Microsoft had dealt with years of 2.25% royalty for its Motorola patent use. SEP licensing is not something companies are able to hold over others heads any longer.  

Video #21: Samsung vs. Apple: Import Ban

#21: The Other Side of The Silicon Valley

I just read an interesting article in TechCrunch this week about the other side of the Silicon Valley. Because I was pretty unaware of this issue I thought others may be interested. While we discuss patents and the big companies I think it is important to look at how influential the decisions of huge tech firms are.

http://vimeo.com/63373007

Veteran Journalist Bill Moyers has fueled a new conversation about the Silicon Valley in his segment called, "Homeless in High Tech's Shadow." "It is a very interesting look at the growing homeless problem in the South Bay of San Francisco that's happening in stark contrast to the growing wealth in the same area."
Instead of looking at the Google cafeteria that provides its employees with gourmet food, the segment features a former worker in that same cafeteria who was laid off as the company tightened its hiring policies and now lives in a tent. It takes a new look at the wealth disparity that has developed in the Valley. 

“Food stamp participation just hit a 10-year high, homelessness rose 20 percent in two years, and the average income for Hispanics, who make up one in four Silicon Valley residents, fell to a new low of about $19,000 a year— capping a steady 14 percent drop over the past five years”

Moyer aruges that offshore tech manufactuing has played a large part in this trend. It is a hard and complicated situation that has resulted from various factors and it is not easy to get a comprehensive picture of everything in this six minute video. However, I think it is an interesting trend that is quite important as it depicts how the decisions of these corporations shape our society in more ways that just the products we consume. 

Video #20: Envrionmental Issues

Video #19: Apple vs. Samsung Contunied Rulings and Issues

#20: Judge Oversite Resolved

Last week, Administrative Law Judge Thomas Pender made a preliminary ruling on remand issues concerning Apple’s complaint against Samsung. That ruling is available on the ITC’s document system. Now a Commission review will be held.
The remand was an opportunity for Apple to broaden its preliminary win with respect to two patents. The review that will commence shortly is an opportunity for Samsung to narrow or overturn Apples win. One of Apples two patents were broadened.
U.S. Patent No. RE41,922 on a "method and apparatus for providing translucent images on a computer display" already infringes by Samsungs Android devices, especially in the text selection feature on the Android browser app and the translucent buttons of the android photo gallery. Judge Pender cleared Sumsung’s “designaround products.” Apparently, Judge Pender may not have had jurisdiction over the designaround products, which Apple is claiming.


Apple is asserting multiple claims of the RE'922 patent in this investigation. The initial determination identified infringements of claims 29, 30, and 33-35, and deemed all these claims valid. All of these claims are method claims, which (as Google is just experiencing in its attempt to get Microsoft's Xbox gaming console banned) (I wrote about this in a previous post http://patentengineering190g.blogspot.com/2013/03/google-vs-microsoft.html) can only give rise to an ITC exclusion order (i.e., U.S. import ban) if the act of importation itself constitutes a patent infringement (as opposed to post-importation use per se). In this case, the fact that Samsung provides manuals that tell users how to use the accused features means Samsung is liable for induced infringement, and with this finding of inducement, the act of importation also constitutes a violation of the statute governing the ITC's intellectual property enforcement (Section 337).

In the original determination Judge Pender made a slight oversight when he found that claim 33 did not infringe as he later decided that the text selection feature did in fact infringe claim 33. The remand gave him the opportunity to make this correction and then easily apply that judgment to claims 34 and 35 because those claims derived from claim 33.

·             Claim 34 adds to claim 33 the limitation that the base image (the one that's overlapped by a translucent image) must be active to receive user inputs. The initial determination had already established the fact that this requirement is met in connection with claim 29.

·         Claim 35 additionally requires the electronic device to be a "handheld device", which is obviously the case in this investigation of Samsung smartphones and tablet computers.

#19: Sansung and Apple: At it again...

Disputes between Samsung and Apple continue this week as a ruling is due on May 31^st regarding Apples infringement on U.S. Patent No. 7,706,348. This issue has to do with the scope of the import ban, should one be ordered. Here is a link to read more about the specific patent http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PALL&p=1&u=%2Fnetahtml%2FPTO%2Fsrchnum.htm&r=1&f=G&l=50&s1=7,706,348.PN.&OS=PN/7,706,348&RS=PN/7,706,348. 348 is described as an “apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system.” The main issue is outlined in the statement below. 

"4. With respect to the '348 patent, Samsung’s infringement case before the Commission relied upon accused third and fourth generation Apple products that operate on the AT&T wireless network. If the Commission were to issue remedial orders covering articles covered by the asserted claims of the ’348 patent, would such an order cover (a) Apple products that operate on other wireless networks in the United States, and (b) later generation Apple products (e.g., iPhone 5, later iPad versions)?"

Basically, in the proceedings before the ALJ Samsung accused only older Apple products of infringement of the '348 patent: the AT&T models of the iPhone 4 (but not the 4S or 5), 3GS and 3, and of the iPad 3G and iPad 2 3G. Apple did not believe that Samsung could enforce and exclusion order against newer Apple products because of technical reasons. The Office of Unfair Import Investigations (“ITC” staff) acknowledged that there is no evidence in the record concerning other networks or newer Apple products. If any exclusion order were to be issued the ITC staff agreed it should include a certification provision to help enforce the ban.  The U.S. Bureau of Customs and Border Protection would have to decide on a case-by-case basis whether future products could be in the scope of this infringement through a certifications process or scope ruling.

Now Samsung is taking the dispute to another level as the company is taking the position that that not only the AT&T versions of the accused iPhones and iPads but versions sold by other carriers infringe and should fall within the scope of this import ban.

"At the time the complaint was filed, Apple's iPhones and iPads with UMTS connectivity were only available through AT&T. Since then, Apple has expanded its sales to other UMTS carriers. Because all iPhone 4 (UMTS version) and iPad 2 (UMTS version) devices infringe the asserted claims of the '348 patent, regardless of carrier customer, they would be subject to the Commission's remedial orders. However, AT&T remains the largest UMTS iPhone 4 carrier by volume. [...].

Based on Samsung's understanding, the current configurations of the iPhone 4 (CDMA version), iPhone 4S, iPhone 5, iPad 2 (CDMA version), iPad (third and fourth generations) and iPad mini contain [REDACTED]. Accordingly, unless these devices are altered to incorporate [REDACTED], they would not be subject to an exclusion order or cease and desist order. Similarly, future devices incorporating [REDACTED] would not be subject to an exclusion order or cease and desist order."

If there is a ban on older iPhones and iPads, Apple will only be affected at the low end and the repair business. They could delay before the ban takes place and solve the majority of the problem. Is it likely that the ITC will ban any Apple products? Especially as Samsung failed to comply with its FRAND licensing obligations? And if it does happen would the impact even be very significant?