#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.