Posts Tagged: "InterDigital"

A bipartisan group of five U.S. senators have introduced a bill to amend Chapter 28 of Title 35 of the U.S. Code to include language that would “combat corrupt Chinese Courts from issuing ‘anti-suit injunctions,’” according to a joint press release issued by the senators today. Senators Thom Tillis (R-NC), Chris Coons (D-DE), Tom Cotton (R-AR), Mazie Hirono (D-HI), and Rick Scott (R-FL) introduced the bill on March 8. An anti-suit injunction is an injunction issued by a foreign court to limit the rights of parties to pursue litigation in U.S. courts.

This is the fifth and final article in a series of articles analyzing statements made by various entities in the cellular industry regarding licensing Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis. The fourth article focused on the obligations of SEP owners in the process of FRAND licensing. This article considers the obligations of implementers.

Over the years, several entities have published statements related to licensing 4G/5G cellular wireless Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis.  These include entities that are primarily licensors of SEPs, entities who sell network equipment products or components and who are also significant licensors of SEPs, entities who sell end user products and who are significant licensees of SEPs, an association focused on FRAND policy development and a patent pool.  An analysis of these statements reveals several common themes, but also a wide range of opinions on such issues. Below is the first in a series of articles that will review these statements with a view to highlighting some of these differing viewpoints, and provides context for these statements by way of reference to the policies of standards setting organizations and related legal pronouncements.

This week in Other Barks & Bites: the U.S. Supreme Court hears oral arguments over copyright status of the Official Code of Georgia Annotated; the Federal Circuit remands Ericsson appeal to calculate release payment in patent license; Apple, Ford and others urge the USPTO to retain policy against injunctions on companies practicing SEPs; Huawei asks the Fifth Circuit to undo the FCC’s ban preventing it from supplying U.S. networks; Sergey Brin and Larry Page relinquish executive duties at Google; U.S. antitrust regulators explore Amazon’s cloud business; Washington politicians send letter to ALI over Copyright Restatement Effort concerns; and Qualcomm challenges Judge Koh’s class action certification at the Ninth Circuit.

Here we go again! Another day, another ridiculous attack on the U.S. patent system. This time the attack comes from the R Street Institute, who claims that patents are too strong and are inhibiting American companies from achieving success in the race for leadership in the 5G marketplace and continued leadership in Artificial Intelligence (AI). R Street will hold a panel discussion on their wildly outlandish theory, for which they can’t possibly have any factual support, on Tuesday, October 15, in the Capitol Visitor Center. In the announcement they claim that patents are inhibiting American companies because Chinese telecommunications company, Huawei, asserted more than 200 patents against Verizon Communications earlier this year. Therefore—and ipso facto—patents are too strong and American companies are suffering. There may be legitimate security concerns around Huawei’s infrastructure, but to suggest that the company’s patents are at the root of these threats is in a word—Absurd!

Earlier this summer, Intel announced that some 8,500 patent assets (i.e., issued patents and pending patent applications) would be auctioned. Approximately 6,000 assets related to 3G, 4G, and 5G cellular standards, while 1,700 assets relate to wireless implementation of cellular standards. According to initial reports from IAM, Intel was hoping to sell these patents separately from the smartphone modem business, although they were open to the possibility that a prospective buyer might seek to acquire both the patent assets and Intel’s smartphone modem business. Shortly after the Intel patent assets were announced as available for sale, Intel abruptly took the assets off the market in favor of negotiating with a single interested suitor. Very quickly, news broke that the negotiations with that unidentified suitor were quite advanced, suggesting that the Intel auction announcement was nothing more than a negotiating ploy to get the unidentified suitor back to the table and for the suitor to realize that they could lose the patent assets if they did not play their hand correctly and misidentified the leverage involved in the negotiation. It has recently come to light that the unidentified suitor for the Intel patent assets was none other than Apple, just as IAM has predicted in its initial reporting. So, now we know that Apple will buy the majority of Intel’s modem business, including the patent assets, for $1 billion. 

In a decision published in redacted form on January 29, Judge Beth Labson Freeman of the Northern District of California denied ASUSTek Computer Inc.’s and ASUS Computer International’s (collectively, ASUS’s) motion for summary judgment that InterDigital, Inc.’s (InterDigital’s) standard essential patent (SEP) licensing practices breached its FRAND obligations. The court also granted-in-part and denied-in-part InterDigital’s motion for summary judgment, rejecting a request to dismiss ASUS’s Sherman Antitrust Act claim but granting summary judgment as to issues relating to judicial and promissory estoppel and as to a California competition law claim. ASUS Computer Int’l v. InterDigital, Inc., Case No. 5:15-cv-01716-BLF, ECF No. 367 (N.D. Cal. Jan. 29, 2018). The court’s ruling comes as the case is progressing toward a jury trial, presently scheduled for May 2019. Several of the issues addressed are fact-specific to the case, but the rulings relating to breach of contract, most favorable licensees, and the Sherman Act are of particular interest for SEP licensing and illustrate how the legal landscape continues to evolve.

Protecting IP means securing a portion of a $1.2 trillion industry and the 29 million jobs created directly and indirectly by the mobile connectivity ecosystem. As companies like InterDigital contribute to finalizing the new 5G standard, actions by the Trump Administration to decrease IP theft from China, as well as new policies from the USPTO, are building confidence to encourage investment by U.S. companies that will lead to the development of exciting future technologies. Through smart policy-making and an understanding of the value of these technologies and the standardization process, the U.S. will continue to be a hub for innovation and economy will continue to grow stronger.

InterDigital will end up acquiring more than 21,000 global patent assets from Technicolor, more than doubling InterDigital’s current portfolio of 19,000 patent assets. This includes more than 2,500 Technicolor patents which cover video coding technologies… As part of this transaction, Technicolor and InterDigital will also enter into a perpetual grantback licensing agreement, which will give Technicolor freedom to operate its remaining businesses and benefit from existing and future patents.

These government agencies target successful, inventive U.S. firms. They politicize their processes and disregard the exclusivity that rightfully belongs to patent owners. They take away private property from the creators and give it to favored domestic companies like Samsung and Huawei, which apparently lack the smarts to win fair and square in market-based competition or by ingenuity. It’s time that America put an end to these threats, foreign and domestic. Either you believe in property rights and free enterprise or you don’t… In essence, Chinese, South Korean and FTC officials demand the benefits produced by free markets and property rights for free from American innovators in mobile technology, who took all the risk and made investments in research and development.

Unlike other technologies (e.g. User interface) where the manufacturers have a choice to design around the technology of the patent, in case of SEPs, there is no possible way to avoid infringement and still comply with the standard. On the other hand, non-compliance with standard is a commercially non-viable option. This situation gives the SEPs holders a great leverage to assert their licensing terms. While there have been several cases and rulings in favor of SEP licensees that put some restrictions on the SEP holders regarding their FRAND licensing commitments as well as their abilities to exercise an injunction for infringement of SEPs, lack of clarity on FRAND terms still make the negotiations tough for a potential SEP licensee.