Proposed EU SEP regulation and DG GROW-commissioned studies fail to consider claim construction and lack of EU-level harmonization of patent infringement case law

The European Commission's proposal for a regulation on standard-essential patents (SEPs) is facing the fundamental problem that--if enacted as is--it would increase costs and cause delays without being truly useful to either side of the licensing negotiation table.

The procedural reason for that problem is that the Commission did not seek stakeholder feedback to specific ideas. Instead, the Commission relied on a "consortium" of five "researchers". At least two of them simply have business interests related to patent data. And if the two "studies" they produced are any indication, the group as a whole lacked a sufficient understanding of how patent licensing and litigation work in practice. It's pretty certain that none of them ever advised companies with respect to SEP licensing, and that none of them ever actually followed a SEP dispute. The same applies to the Commission staff who drafted the bill, but that's normal and wouldn't be an issue if they had not decided to rely on researchers whose collective angle from which they're looking at the topic is way too narrow. There's just no way that the people who authored those "studies" could have been reasonably expected to obviate the need for stakeholder feedback to concrete proposals.

I'm still in the process of digesting all that material, but I've already identified some deficiencies and I plan to discuss all of the issues in a series of posts over the coming weeks and months, just like I did after the initial draft. Here's the first item:

Regulating SEPs prior to harmonizing substantive patent law puts the cart before the horse.

At the heart of the EU proposal are those essentiality checks. But what standard will be applied to those essentiality checks? There is no EU-level harmonization of claim construction and of how to map claim language (construed as necessary) to an accused technology.

The proposal itself and the study on essentiality checks don't say anything about claim construction. The Commission's impact assessment mentions the term only once: in connection with U.S. litigation costs.

DG GROW and its "researchers" just ignored the fact that there are differences between Member States. They're not huge, but they can be outcome-determinative. Think of the following hypothetical scenario (and I'll oversimplify it here by saying "patent" when I mean one specific patent claim):

• A given patent is essential if construed and mapped in accordance with German and Dutch case law, even if it may be a close call (such as a case in which the Doctrine of Equivalents must be applied).

• The same patent is not essential if claim construction and/or mapping applies the standards of, say, France or Bulgaria.

• The essentiality check is performed by someone applying French law. Therefore, the patent is deemed non-essential. Even a "second opinion" assessment by another person doesn't change the result.

• The patent will be stigmatized as non-essential and removed from the SEP register.

• The SEP owner is prejudiced in the sense that this patent will reduce its essentiality ratio and adversely affect valuations.

• The SEP owner will also find it more difficult to convince a German or Dutch court that the patent is essential if the judges take the EUIPO-led essentiality check seriously.

• But if the SEP holder manages to convince a German court that the patent is essential under that country's patent law, the restrictions under the SEP regulation wouldn't apply (as the patent would have been removed from the register). Enforcement would not be impaired and the implementer might have to settle before any EUIPO-led FRAND determination has been made. In this scenario, the SEP holder will benefit, but it won't be easy to overcome an initial presumption of non-essentiality.

Right now we don't even know what, if anything, the EU will instruct those performing the essentiality checks to do. If they don't specify the legal standard, it's going to be a gamble, based on who will perform the assessment. If they do, which standard would they choose?

• In the short term the choice could be German patent law because that is where most SEPs are litigated. But politically it's impossible for the EU to just declare German law the EU-level standard.

• The EPO construes claims, and its claim construction case law is reasonably persuasive in national courts, but the EPO doesn't perform infringement analysis, so it has no case law in place for mapping.

• The UPC will develop its case law over time, but is just about to start. It will take several years before there will be enough case law from the UPC appeals court that essentiality checks could be performed under a UPC standard.

• None of those options would avoid divergent outcomes. For instance, if there is a German national patent, a European patent that has been opted out of the UPC, or a utility model in the same IPR family, then it will be enforced in national court. No EPO, UPC or whatever other standard would be applied there.

If essentiality checks had to be performed country by country, with potential appeals or second opinions on a country-by-country basis, the cost estimates in the essentiality checks study would look rather different. But the assumption that there can be a single essentiality check for a set of countries prior to harmonizing substantive patent law is simply a false premise.

I've spent countless hours in courtrooms listening to debates over claim construction and mapping. I've seen SEP cases in which a reasonable person could come down on either side. I've seen only a few SEP cases where there was really no reasonable non-infringement argument at all, and in those cases there were typically serious questions of invalidity (the downside of broad claim language). Very often essentiality is a close call. And the problem of jurisdictional differences also relates to validity determinations (where, for example, the EPO's standard for added subject matter is stricter than that of some national courts), as I mentioned in other posts commenting on the proposed regulation.

The SEP Register in the envisioned form, with those essentiality checks, doesn't make sense unless the EU previously harmonizes all relevant aspects of substantive patent law.

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ITC judge orders Apple (in dispute with Ericsson) to disclose what it pays to ACT | The App Association, describe relationship; another ITC judge construes some claim terms in Apple's countersuit over mmWave patents

This post discusses recent orders by the Administrative Law Judges (ALJs) of the United States International Trade Commission (USITC, or just ITC) who preside over the investigations of (a) one of Ericsson's three ITC complaints against Apple and (b) Apple's sole countercomplaint. In the former case, a discovery dispute has been resolved; in the latter, a Markman (claim construction) order has been entered (direct link).

Apple must "explain its historic and current relationship with" ACT, FSA, and disclose direct or indirect financial contributions over the last five years

Fortunately, this fall is not a good season for astroturfing.

First it became known that ACT | The App Association, which falsely claims to represent the interests of small app developers (and IoT product makers), receives the vast majority of its funding from Apple. It's not an app developers' association, but an Apple Association. It's the most cynical and appalling type of astroturfing when an organization claims to represent the victims of a large corporations' abuse of market power.

Then several influential Members of the European Parliament formally complained to the European Commission over violations of transparency rules by other organizations, including the so-called Computer & Communications Industry Association, which is actually a Cash & Carry Industry Association that Apple has recently joined.

And on October 24, ALJ Bryan F. Moore handed down a discovery order in the investigation of Ericsson's SEP complaint against Apple. The public redacted version became available only yesterday:

ITC Inv. No. 337-TA-1299, Order No. 18: Granting in Part Complainants' Motion to Compel and Commission Investigate Staff's Motion to Compel

This is the key passage:

Regarding the Fair Standards Alliance and ACT | The App Association, Apple shall explain its historic and current relationship with these organizations, and state the amount Apple pays or otherwise describe its “direct or indirect financial contributions or payments . . . over the last five years.” Apple shall further supplement its interrogatory response to respond to parts c-f of Interrogatory No. 131 regarding these parties. Apple shall further provide any non-privileged documents or communications exchanged between Apple, or Apple’s attorneys, and ACT | The App Association, the Fair Standards Alliance regarding the submitted public interest statements. Apple shall produce these documents and supplement these responses by October 31, 2022.

Interestingly, ALJ Moore found that Apple had reasonably complied with discovery requests regarding some other parties supporting its public interest arguments. He also determined that Apple did not have to make disclosures regarding parties it asked to file public interest statements, but who declined to do so. It's just with respect to ACT and the FSA that Apple was stonewalling.

It's actually fair and important to make a fundamental distinction between those two organizations. FSA is what it is, and doesn't pretend to be anything else, while ACT | The App(le) Association is an astroturfing operation.

Not only did Apple refuse to answer Ericsson's questions but even the Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff") had to bring a motion to compel Apple. The Staff reinforced its motion after Apple stated its opposition.

Apple had something to hide with respect to ACT, but by now, thanks to the Bloomberg article that revealed where ACT's funding actually comes from, the facts are clear. The ITC should ignore ACT's public interest statement in support of Apple. If anything, Apple could be sanctioned for misleading the agency by claiming that small app developers are concerned (ideally, another U.S. government agency would also look into how ACT benefited from the Paycheck Protection Program that was intended to keep small businesses afloat).

Mixed results for Apple and Ericsson: claim construction order in the investigation of Apple's countercomplaint

Apple is countersuing Ericsson in the ITC over three mmWave patents. ALJ Monica Bhattacharyya is presiding over that investigation (no. 337-TA-1302).

Yesterday she handed down her Markman (claim construction) order:

ITC Inv. No. 337-TA-1302, Order No. 18: Construing Certain Terms of the Asserted Claims of the Patents at Issue

In some context she agrees with Apple, in another with Ericsson. And she leaves various questions open with a view to the evidentiary hearing, which will take place in a month (December 5-9, 2022). With a view to who will win or lose, the order seems more inconclusive than other claim construction orders I've seen.

Last time I checked, Ericsson wasn't challenging those three mmWave patents through IPR (inter partes review) petitions with the PTAB, while Apple has filed dozens of PTAB petitions against Ericsson patents, ten of which have failed.

Apple is also countersuing Ericsson in Germany. The Mannheim Regional Court--which will conduct an Ericsson v. Apple SEP trial today (about six hours after this post)--heard the first one of Apple's countersuits last month, and it doesn't look like Apple will gain leverage from that one. It's not easy for Apple to find patents that Ericsson can be plausibly alleged to infringe, and there's a huge discrepcancy between the parties' exposure to patent infringement lawsuits simply due to unit volumes.

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With additional favorable claim constructions, Ericsson inches closer to U.S. import ban on Apple gadgets

Settlement pressure is clearly mounting on Apple in its dispute with Ericsson. Meanwhile, it looks like Apple's patent license agreement with Nokia expired a few months ago and hasn't been renewed yet--and the one with InterDigital will expire this week, with no renewal having been announced either.

Ericsson continues to enforce a preliminary injunction in Colombia that bars Apple from selling 5G devices--including, but notl limited to, the new iPhone 14--in the Latin American country. The week before last, the Munich I Regional Court held its first hearings in two Ericsson v. Apple cases, and in both cases it looks like only a strong invalidity defense could help Apple. The court's 21st Civil Chamber under Presiding Judge Dr. Georg Werner rejected Apple's attempts to narrow a non-standard-essential patent Ericsson is asserting against Apple's distribution of WhatsApp's iOS app and a 4G/5G SEP. In three weeks today, the Mannheim Regional Court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher) will conduct a trial of an Apple v. Ericsson countersuit.

Yesterday, Ericsson made further headway at the United States International Trade Commission (USITC, or just ITC). Administrative Law Judge (ALJ) MaryJoan McNamara, who presides over one of three pending ITC investigations of Ericsson complaints against Apple (the larger one of the two non-SEP cases), entered a claim construction order:

https://www.documentcloud.org/documents/22927237-22-09-26-itc-1300-cc-order

The net result is that

• Ericsson prevailed on

  • all three disputed claim terms of U-S. Patent No. 7,151,430 on a "method of and inductor layout for reduced VCO [voltage-controlled oscillator] coupling" (Apple sought narrower interpretations of all three terms, and in two of those cases argued indefiniteness in the alternative) and

  • both disputed claim terms of a pair of patents from the same family--U.S. Patent No. 9,509,273 and U.S. Patent No. 9,853,621 on a "transformer filter arrangement"--against Apple's attempts to narrow the terms or, in the alternative, have one of them held indefinite;

• while Apple prevailed on

  • the sole disputed claim term ("vibrator"--expressly defined by the specification in ALJ McNamara's opinion as meaning a "vibration motor and vibration element" while Ericsson argued the plain and ordinary meaning was "a module that provides tactile information in response to a control signal") of U.S. Patent No. 7,957,770 on a "mobile communication terminal for providing tactile interface" and

  • the sole disputed claim term of U.S. Patent No. 9,705,400 on a "reconfigurable output stage".

    What's interesting about the EP'400 situation is that in purely linguistic terms, Ericsson seemingly sought a narrower construction than Apple: Ericsson's proposed construction was identical except for multiple insertions of "electrical" before the word "arrangement." Normally, an additional qualifying attribute narrows the meaning. Here, however, the judge basically said that Ericsson's proposed construction would be effectively broader by merely requiring "first and second operating states of the output stage" and blurring the distinction between two claim terms.

    I've seen countless claim construction disputes over time, but this is the first time that a proposal containing an additional qualifier was deemed broader than the same text without that qualifier. Again, it's linguistically counterintuitive.

What does this Markman outcome mean for the further process, especially in the build-up to, and with a view to, the January trial (called evidentiary hearing)?

Ericsson is now in great shape with respect to three patents from two families. The situation with respect to those patents may be similar to those Munich cases in which Apple practically depends on its invalidity defenses.

For the '770 patent, Ericsson now likely depends on an infringement theory under the doctrine of equivalents (unless it has waived that one, which I doubt). Paragraph 77 of the complaint stated this:

"On information and belief, the Accused Products that are sold for importation, imported, and/or sold within the United States after importation by Apple infringe claims 1, 2, 4, 7-10, 12, 15, and 16 of the ’770 patent, either literally or under the doctrine of equivalents."

It's not hard to imagine that a DOE infringement theory could work even if Apple's accused devices don't come with a "vibration motor and vibration element" in a strictly literal sense.

Given that the ITC favors the streamlining of cases (i.e., complainants dropping patents ahead of trial), and that the ALJ and Ericsson don't seem to see eye-to-eye on what to make of the '400 patent, it may be tactically opportune for Ericsson to just withdraw that one. Maybe the Commission (the top-level decision-making body) would agree with Ericsson, or the Federal Circuit might reverse the ITC--but there's probably more to be gained by just focusing on other patents.

All in all, claim construction has gone quite well for Ericsson in its offensive cases (and nothing has happened in Apple's offensive case yet):

• In the SEP case that was reassigned from ALJ David P. Shaw to ALJ Bryan F. Moore, the ITC staff sided with Ericsson on claim construction. By the way, ALJ Moore ordered Apple and Ericsson to clarify these days the extent of their discovery dispute over Apple's relationship with organizations that filed public-interest statements as there may have been some progress. Also, meanwhile it has become known that ACT | The App Association (more appropriately called "The Apple Association") is largely funded by Apple. I can't imagine the ITC will take ACT's submission seriously.

• In the smallest Ericsson case, which is a non-SEP case, Apple persuaded ALJ Cameron Elliot of some claim terms being indefinite, resulting in a withdrawal of one patent as well as multiple claims of another patent. But there still is enough material left in that case for an import ban to be a possibility.

All in all, it doesn't look--at this stage--like Apple can realistically expect to fend off all three ITC complaints by Ericsson. Taken together with the situation Apple faces in Colombia and increasingly in Germany, I really wonder whether the FRAND trial in the Eastern District of Texas will take place in December or whether there'll be a renewal of the parties' cross-license agreement before then. But for now they're fighting hard, including that Ericsson accuses Apple of having acted in bad faith when the license agreement that expired prior to the current wave of infringement cases was negotiated.

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First good news for Apple in current patent dispute with Ericsson: U.S. trade judge deems two Ericsson patents (asserted in Ericsson's smallest ITC complaint) indefinite

About six months into the Ericsson v. Apple 5G patent dispute (if we count from the filing of the first infringement actions rather than Ericsson's pre-emptive FRAND complaint last fall), things have not gone well for Apple. As I wrote on Tuesday, the iPhone maker tried various tactical games--and failed. The Office of Unfair Import Investigations (OUII, commonly requerred to as the "(ITC) Staff") finds Ericsson's--not Apple's--proposed claim constructions in a standard-essential patent (SEP) case persuasive.

If one had wanted to find any good among the bad here before yesterday, the harvest would have been meager. Essentially, Apple avoided an anti-antisuit injunction in the Netherlands, but the fact that it was forced to state it didn't intend to seek an antisuit injunction is still a significant disincentive. Apple hasn't moved for an antisuit injunction so far. Then, Ericsson requested preliminary injunctions in two South American jurisdictions (Brazil and Colombia), and the judges there basically said "not so fast, please." That's obviously better than being enjoined, but merely means that judgment is deferred.

Realistically, with a dispute of this scale, spanning (at least) six countries, it's impossible for all the important decisions to go only one way. Relatively speaking, the first significant good news for Apple comes from the ITC and may result in the withdrawal of an Ericsson patent--and of at least a couple of claims from another patent--asserted in the third and smallest one of Ericsson's ITC complaints. However, Ericsson's third patent in that case is faring a lot better and continues to pose a threat to Apple, as do--potentially--the non-indefinite claims from another.

Yesterday, Administrative Law Judge Cameron Elliot entered the following claim construction (Markman) order, which I'll discuss further below:

https://www.documentcloud.org/documents/22077038-22-06-30-itc-1301-ericsson-v-apple-markman-order

Without digressing too much into comparative law, ALJ Elliot's order is one good example of many for the systematic approach to claim construction in the U.S. under the Markman doctrine--and a significant percentage of patent injunctions in other jurisdictions, including but not limited to Germany, would never issue if courts followed the same discipline.

The order addresses the three patents-in-suit (by comparison, there are four patents in Ericsson's aforementioned SEP case, and five in another non-SEP case) in the order of the complaint. The first one of those patents is still "hot" in the sense that Ericsson may very well win a U.S. import ban over it. The other two patents, however, have indefiniteness issues in ALJ Elliot's opinion that may now result in a voluntary narrowing of the case.

U.S. Patent No. 8,792,454 on "secure and seamless WAN-LAN [wide area network, local area network] roaming"

The parties disagree on the construction of four terms from the asserted claims of this patent. A couple of arguments made by Apple were flatly rejected by the judge as "beside the point" and "entirely unpersuasive." In particular, Apple tried to read a Make-Before-Break requirement (meaning you connect with an additional network and only then disconnect from a previous one) into the claim language that is clearly optional based on the specification, ALJ Elliot says.

Apple also couldn't convince the judge of the additional requirement of a Windows-based network interface card named "1x/rtt card 514" being required components.

With respect to a third claim construction dispute relating to this patent, "[a]dditional evidence is required" as "Ericsson has offered evidence that, in essence, merely articulating the function amounts to an algorithm, because programming a computer to perform the function requires 'at most, a two-line program in any high-level programming language.'"

The fourth part is trickier. It's a means-plus-function claim limitation ("means for transitioning communications from said first network to said second network") with a corresponding hardware structure that can be a controller or equivalents thereof. ALJ Elliot has described the part that is now likely going to be outcome-determinative as follows:

"[I]f the controller is found to qualify as a general-purpose computer, then the only disclosed programming algorithm is a high level description of Make-Before-Break; conversely, if the controller is found to not qualify as a general-purpose computer, then the claim element is not limited to the Make-Before-Break process."

So there still is a chance for Apple to successfully argue that the claim is limited to a Make-Before-Break sequence of actions. But based on yesterday's order, there still is quite a possibility that Ericsson may prevail on the '454 patent.

U.S. Patent No. 10,880,794 on "inter-band handover of the same physical frequency"

Ericsson is asserting claims 11-20. Claims 12-15 are dependent from claim 11, and claims 17-20 from claim 16.

ALJ Elliot takes issue with the quality of the specification:

"Why a certificate of correction never issued as to the 794 patent is mystifying, because it has more typographic and scrivener’s errors than either of the other two asserted patents. [...] In fact, its errors are so numerous and severe that it is impossible to ascertain the meaning of certain claim terms, including the 'first logical frequency' and the 'second logical frequency.'"

With respect to the terms just mentioned in the quote ("first/second logical frequency"), ALJ Elliot considered it an "inescapable conclusion [...] in light of the specification and prosecution history" that these terms are indefinite. As they appear in all 10 of the asserted claims from this patent, I guess Ericsson will drop it as it's unlikely to gain short-term leverage, though Ericsson could, of course, try to persuade the Commission (the ITC's top decision-making body) of its take. I don't claim to have analyzed this in full detail (I couldn't even if I wanted, as the evidence is sealed), but I recognize a pattern from similar situations and consider withdrawal the most likely next step. The ITC very much wants complainants to narrow their complaints.

U.S. Patent No. 8,472,999 on a "method and system for enabling dual standby state in a wireless communication system"

Ericsson is asserting claims 11-19. Claims 12-17 are dependent from claim 11, and claim 19 from claim 18.

There are lots of means-plus-function limitations to be construed here. With respect to most of them, Apple failed to persuade the judge that no structure was disclosed. In those cases, ALJ Elliot found that "the corresponding structure is a chipset and its equivalents." In another such case, it is "the main controller" with the questin of adequacy still being deferred.

With respect to one claim limitation ("the primary mode module to enable ..., the primary mode module configured to monitor ... provided primary mode monitoring frequency"), however, Apple has already gotten its way:

"[B]ecause there is no disclosed structure that performs the claimed function of 'monitoring,' the claim is indefinite."

With respect to another claim limitation ("primary mode module"), ALJ Elliot makes an indefiniteness determination but isn't totally convinced, so he offers a fallback:

"[T]he 'primary mode module' element of claim 11 is construed as a means-plus-function element and is indefinite. Inasmuch as it is not indefinite, the claimed functions are 'enabling the primary mode of operation for the multimode wireless communication terminal' and 'monitoring paging information for the primary mode of operation at a communication network provided primary mode monitoring frequency,' the structure disclosed for performing the function of 'enabling the primary mode of operation for the multimode wireless communication terminal' is a chipset and its equivalents, and the claim is otherwise not construed." (emphasis added)

For practical purposes, this lack of confidence in the second indefiniteness determination makes things complicated. The claim element about the indefiniteness of which ALJ Elliot is sure appears in claim 11 and, therefore, in its dependent claims, but not in claim 18 and its dependent claim 19. However, the words "primary mode module" also appear in claim 18 and, therefore, claim 19.

So there's one term that the judge says is indefinite, period, but it's not found in all asserted claims; and another term is found in all asserted claims, but the judge doesn't rule out that it may not be indefinite.

Given the complexity of the situation, I can't offer a prediction as to whether Ericsson will continue to assert claims 18 and 19. A withdrawal of claims 11-17 is far more likely.

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Apple's tactical games in 5G patent dispute with Ericsson remain fruitless: ITC staff disagrees with new claim construction proposal

There was a time when Apple was an aggressive but mostly very reasonable litigant, while Apple's adversaries took extreme positions. It was the time when Qualcomm was seeking a preliminary injunction over standard-essential patent (SEP) royalty payments, and prior to that, when Samsung brought "me too" motions just hoping that Judge Koh (then in the Northern District of California) would grant them to avoid accusations of protectionism (though Apple's motion had far more substance), or when HTC was stalling patent cases on both sides of the Atlantic.

Times have changed. I am now watching with growing bewilderment Apple's behavior in the ongoing 5G SEP and non-SEP dispute with Ericsson--and keeping an eye on the organizations it uses to create the impression of third-party support.

Apple sought the dismissal of Ericsson's original FRAND complaint in the Eastern District of Texas and wanted to put itself into the plaintiff's position with a later-field action. Apple sought to deprive the Fifth Circuit of appellate jurisdiction by throwing in three declaratory-judgment claims. When Judge Gilstrap declined to let Apple restructure the litigation and, among other things, severed the three SEP claims from the FRAND part, Apple suddenly moved for a stay of the three-SEP case. That hot-then-cold about-face left the judge puzzled--and the case is going forward.

Over at the ITC, a similar pattern is becoming discernible, with Apple first omitting a prior art reference (likely intentionally as Ericsson believes), only to later request its admission out of time based on one demonstrably false claim (regarding Ericsson's position on a priority date) and one highly dubious one (inadvertent omission). In the meantime, new USPTO Director Kathi Vidal has narrowed the circumstances under which discretionary denials of PTAB IPR petitions can issue, and that may be a factor here.

In the SEP case (Inv. No. 337-TA-1299) among the three investigations of complaints brought by Ericsson, Apple faced a problem when the Office of Unfair Import Investigations (often referred to as "the ITC staff") disagreed with the entirety of Apple's proposed claim constructions. So what did Apple do? It asked for an additional term to be construed by the Administrative Law Judge (ALJ) at the Markman stage. The case is now before ALJ Bryan Moore, whose patent-related expertise is second-to-none among ITC judges (arguably even the strongest background of any person ever to have been appointed to this role).

In a way, it's not even "additional term" that Apple wants construed. In reality, it's a term from U.S. Patent No. 8,102,805 that appears in a longer passage that Apple would like to be deemed a means-plus-function term:

"a receiver subsystem in a spatial multiplexing Wireless communications system configured to … use the second disambiguation data to determine whether the re-transmitted transport block is scheduled for retransmission on the first data substream or the second data substream during the second transmission interval" (emphasis added)

Apple proposes that the highlighted passage be interpreted as "using the second data to resolve an ambiguity to determine." But once again, the Staff and Ericsson agree that Apple is wrong. They say the term should just be given its plain and ordinary meaning, which one of ordinary skill in the relevant art understands to be: "using the second data which signals transport-block-to substream mapping to determine ..."

Let's take a quick look at the state of play in the Eastern District of Texas. By order of June 13, Judge Rodney Gilstrap set an in-person motion hearing for Wednesday, July 6, regarding Ericsson's two motions to compel:

1. a May 27 motion to compel Apple to identify witnesses with respect to certain issues (such as Apple's App Store terms), which I published toward the end of a June 4 post, and

2. a June 10 motion t compel Apple to produce documents with respect to topics such as (again) the App Store, Apple's 5G launch, Apple's SEP devaluation efforts, Apple's acquisition of SEPs from Intel, and Apple's payments to component suppliers who also license SEPs to Apple.

Ericsson has now given notice that "on June 9, 2022, nearly two weeks after Ericsson filed its Motion, Apple made a written supplementation identifying further ESI custodians and mooting [the first of the two motions to compel]."

I guess the motion-to-compel hearing will still be necessary as Apple will likely to try to keep all--or at least some--of the topics raised by the second motion to compel out of this FRAND case.

It's hard to see what benefit Apple got out of firstly refusing to identify fact witnesses, only to do so after Ericsson brought its motion. Apple itself originally wanted that Texas FRAND case to be put on the most ambitious schedule possible, and that was pretty much the only wish Judge Gilstrap has granted Apple so far. I can't help but suspect that Apple would now rather see the Texas FRAND trial date pushed back, and should that impression be correct, the reason may very well be that Apple is worried about the potential impact of the Texas FRAND decision on its FRAND-related affirmative defenses--all but one of which the ITC Staff believes should already be thrown out at this early stage--the ITC SEP case.

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ITC staff sides with Ericsson on claim construction in standard-essential patent case against Apple

Given the IP-savvy audience of this blog, I don't need to stress the pivotal role of claim construction in patent infringement cases. With respect to claim construction, Ericsson is on the winning track against Apple in its standard-essential patent (SEP) case before the United States International Trade Commission (USITC, or just ITC). A document just appeared on the public docket of ITC investigation no. 337-TA-1299 that shows the Office of Unfair Import Investigations (OUII; commonly referred to as "the ITC staff") concurs with Ericsson, and conversely disagrees with Apple, on several disputed claim terms:

https://www.documentcloud.org/documents/22060656-22-06-14-itc-1299-joined-claim-construction-chart-ericsson-apple-itc-staff

Administrative Law Judge (ALJ) David P. Shaw is an experienced patent judge. He's going to form his own opinion. But what the ITC staff says is an indication to everyone--including, but not limited to, the ALJ presiding over an investigation or litigation watchers like me--as to what a neutral third party might reasonably conclude. Therefore, it appears fairly possible that Apple needs to rely on somewhat far-fetched claim constructions in order to avoid infringement findings over those SEPs. Of course, in order to prove a violation, Ericsson also needs to overcome any invalidity contentions, and has to establish the technical prong of the domestic industry requirement (over the economic prong Ericsson and Apple have agreed not to challenge each other). The technical prong of the domestic industry requirement is, however, rather unlikely to represent a problem for Ericsson in a case over cellular SEPs.

We're far from a final decision, but it is meaningful progress at this procedural stage. Were this a sports event, you'd see the betting odds being adjusted in Ericsson's favor--not massively, but quite significantly.

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Microsoft Excel table (part of 4G specs) unearthed by OPPO may render Nokia patent non-standard-essential: Mannheim trial

Yesterday (Tuesday) was the first courtroom clash between Nokia and OPPO in Mannheim (a FRAND hearing had already taken place in Munich). The patent-in-suit in that first case is EP2981103 on an "allocation of preamble sequences" (originally declared essential to 4G and later also to 5G). Given that the same court had ordered an injunction over this patent against Daimler in 2020 (which never got enforced), and that the Federal Patent Court of Germany had rendered a preliminary opinion according to which it was valid (and the EPO upheld another patent from the same family in an opposition proceeding), I thought the technical merits were going to be clear. But no.

To my surprise, OPPO has developed a more elaborate non-infringement argument than Daimler. To be fair, the smartphone giant had the benefit of being able to learn from what had happened in the Daimler case, but even if all other things were equal, OPPO--which is a major SEP holder itself by now--would almost always outperform any automaker by virtue of a far deeper understanding of the relevant technology and of standard-setting processes.

Before yesterday's Mannheim trial, I re-read the 2020 judgment in the Daimler case as well as parts of the nullity case file, which I had obtained from the Federal Patent Court. Against that background combined with what was said yesterday, I firmly believe this is a case in which Nokia would simply have to drop the patent from an ITC case, and even the vast majority of U.S. district judges would presumably throw it out on summary judgment (otherwise, the Federal Circuit would enter JMOL). By U.S. standards, it's not even close: the patent might simply be found invalid for indefiniteness, but at any rate, no court could arrive at an intellectually honest claim construction that would result in an infringement finding. The problem in Germany is that the courts don't follow the Markman procedure and firstly put down in writing an interpretation of the disputed claim limitations. In more than ten years of watching German patent infringement cases, I've seen a proper (by U.S. standards) claim construction only once--in Mannheim, but from a different panel (Presiding Judge Andreas Voss ("Voß" in German), in an Apple case over slide-to-unlock if I recall correctly). What is normally done there is that claim construction and infringement analysis become amalgamated without the court performing the important mental exercise of formally resolving a dispute over the interpretation of a claim limitation by writing up new claim language that would address the relevant question. And that shortcoming of the German approach is Nokia's (only) chance here, as a more systematic approach would simply render the patent non-standard-essential.

Not only didn't I expect to reach this conclusion before the trial started but I even agreed with Presiding Judge Dr. Holger Kircher's introductory remarks on the infringement (here, essentiality) allegations. He discussed three different non-infringement contentions by OPPO, all of which take aim at the final part of the claim language:

"ordering the sequence in each subset according to their cubic metric values, wherein the sequences of adjacent subsets are ordered with alternating decreasing and increasing cubic metric values" (emphases added)

The patent is all about arranging number sets called preambles. In other words, it's a sorting patent. These are--more specifically--the two issues I've already mentioned:

• The sort criterion--in Excel, that would be the "Sort by" column--is called "cubic metric value" or just "CM value." OPPO doesn't affirmatively say that the specifications of the 4G and 5G standards don't contain CM values, though they did present an alternative set of CM values calculated by an expert witness. Judge Dr. Kircher said that the patent specification doesn't prescribe a particular formula with which to derive the CM values, and that's why OPPO's non-infringement argument is irrelevant unless and until OPPO officially--and under the German equivalent of Rule 11--disputes that the numbers in the standard are CM values.

  I do understand the court's perspective on the pleading standard. However, if a number-sorting patent doesn't even define the very type of number by which a set is to be sorted, that to me represents a potential case for an indefiniteness argument. I'd have to re-read the patent document to be 100% sure, but at this point I strongly suspect that this patent lacks a clear boundary and would, therefore, be indefinite by (strict) U.S. standards.

• The reason for which I believe the patent doesn't map to the 4G/5G specs is that "decreasing and increasing" are mathematically clear directions (numbers go down or up), which depending on the segment of a chart that you look at would give you roughly the shape of a V (decreasing, then increasing) or a reverse V (the other way round). But an Excel table that is part of the specifications of the standards shows that in a few instances, there are apparently microscopic bumps in the road.

  The problem is now that those bumps are literally microscopic: there is a table in the specs of the standard that has a limited degree of precision, which is why you don't see bumps but just consecutive numbers that--up to the ninth post-point digit--are identical.

  Those identical consecutive numbers were already raised by Daimler, and I would agree with the court that an occasional plateau doesn't break a decreasing or increasing order. I would also agree with the court that it doesn't mean too much that neither the claim language nor the specification of the patent provide instructions as to how to deal with pairs of identical numbers. However, OPPO explained that the numbers aren't really identical. The appearance of equality results from the limited degree of precision of the output, but the specifications of the standard are not just a text document: there's also an Excel table that's part of it, and the numbers in the table are unique--and those numbers break the "decreasing and increasing" order that would be required to infringe the patent.

  I've looked at the 2020 Nokia v. Daimler judgment again, and in that one, Excel is mentioned only in connection with the accounting that Nokia demanded from Daimler (in order to calculate a damages claim). So, if Daimler never pointed the court to the fact that the actual numbers in the relevant Excel table are irreconcilable with the claim language, then OPPO has presented hard evidence of non-essentiality and is entitled to a different outcome. Potentially, they could get an injunction stayed rather quickly by the appeals court on that basis.

  From my own usage of Excel, I know exactly what the problem is: internally, Excel stores floating-point numbers that can be extremely precise; but normally the column width doesn't suffice for numbers with many post-point digits. In that case, Excel does and does not round: it does round in the sense of displaying a rounded number, but it doesn't actually round internally until you use the ROUND() function in a formula. I have indeed used the ROUND function on some occasions. A good example is Value-Added Tax: if you have multiple items with, say, 19% VAT, you arrive at many numbers with more post-point digits than the maximum of two that you can put on an invoice (example: if the net invoice amount is 325.99, 19% VAT amounts to 61.9381, but an invoice would round this to "61.94" and then arrive at a bottom-line amount of 387.93). Now, if you have multiple such items and round each line in this case, you really store 61.94 in that example, while in the other case you still have greater internal precision (albeit invisible), which in the sum of many lines could result in a wrong aggregate amount (just a rounding error, but still enough to get into trouble in the event of a tax audit).

  The specification of the standard is not like a law where only a text document is relevant. If the standard-setting organization provides an Excel table with exact numbers, then those numbers are the ones that matter, and the text document merely provides a first overview.

  I don't know whether OPPO (or previously Daimler) made that argument, but as someone who back in the 1980s reverse-engineered an operating system and BASIC interpreter and did some other coding over the years, I know how computers sort floating-point numbers. The way they do it is that they run a loop and compare the digits in the same position (for instance, the first post-point digits of both numbers), starting at the highest level. If one number is greater than the other, that determines the result. If the numbers in that position are identical, the loop continues until it finds a difference--and if it never does, it returns "equal." So, a number-sorting algorithm doesn't simply stop after an arbitrary number of digits. It makes use of all the data it has available.

  In a U.S. patent infringement case, the court would now have to construe "decreasing and increasing" as OPPO would give it the plain and ordinary meaning while Nokia's position would be that the numbers just have to be "materially" decreasing and increasing, with a level of tolerance that has scope for microscopic bumps. Now, "materially" or "largely" wouldn't be acceptable language, neither in a claim as granted by a patent office nor in a construction of a disputed claim limitation by a court or the ITC. Therefore, Nokia would have to propose some rather complicated language that would define a level of tolerance (such as "up to 0.000000001") for deviations from the "decreasing and increasing" rule. In that case, the numbers in the standard would be consistent with the (new) claim language, but the exercise of attempting to rewrite the claim language would make it clear that this is not what Nokia's patent actually covers. There wouldn't even be any support for that in the description. That's why I said further above that a sequential approach--first claim construction, then infringement analysis--would make Nokia lose the case. Nokia can win this only if one conflates the two steps and says that "decreasing and increasing" doesn't have to be applied with absolute mathematical precision.

OPPO's FRAND defense was discussed in a sealed courtroom. I'll try to find out what happened, but I don't have much hope given that the parties probably have a strict NDA in place. The resolution of the dispute will have to be a license agreement, as Nokia will sooner or later prevail on some SEP (and there is every indication that OPPO is prepared to pay FRAND royalties), but contrary to what I thought before, I no longer believe that EP'103 entitles Nokia to a 4G/5G injunction.

Finally, I'd like to show you two pictures taken before the court was officially in session. I'm sorry that I missed the moment when the judges had briefly taken off their masks, but I really did want to show you the Mannheim Regional Court's Second Civil Chamber for two reasons: there are many interesting cases pending before that division (not only those Nokia-OPPO but also numerous Ericsson-Apple cases, and maybe the most absurd patent-related antitrust case ever, Deutsche Telekom v. IPCom), and Judge Dr. Kircher never or only very rarely speaks at conferences and webinars. In the pictures below you see Presiding Judge Dr. Kircher in the middle, and his side judges are Judge Boettcher ("Böttcher" in German) to his left and Judge Elter (the judge rapporteur in this case) to his right:

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Federal Circuit may overrule Judge Albright should he hold Markman hearing prior to ruling on Volkswagen's motion to transfer venue

We're in the Western District of Texas again. Sometimes, such as on Thursday, I agree with Judge Alan Albright. As a former patent litigator, he knows this stuff inside out. But there are issues. I already indicated in a Thursday post that Judge Albright's reluctance to relinquish his jurisdiction over patent cases is controversial. And in my previous post I pointed to a recent Federal Circuit decision overruling a denial of a transfer motion by Samsung and LG.

This "what's filed in Waco stays in Waco" attitude has practical implications: he gets about 20% of all U.S. patent infringement cases, tries to keep as many of them as he can, and then he struggles to take cases to trial as quickly as he'd like to (and as plaintiffs hope). One of the ways in which he tries to optimize his workstream is that he takes a relatively long time to rule on--guess what--venue transfer motions.

On Tuesday, the Federal Circuit handed down its decision In re.: Volkswagen Group of America, Inc.. Volkswagen is the petitioner, and the original plaintiff is StratosAudio, a company that according to its website "won the CES Best of Innovations in the Mobile Electronics category in 2004 with Motorola and Hyundai Autonet." What Volkswagen sought--and didn't get at this stage--is for the case to be transferred out of the Western District of Texas or for the proceedings to be stayed until Judge Albright would get around at long last to a ruling on the venue transfer motion.

The Federal Circuit did not find that Volkswagen had a clear legal right to a stay. But that conclusion is based on the assumption that Judge Albright will adjudicate the venue transfer motion ahead of the Markman (claim construction) hearing scheduled for early October. The Federal Circuit "note[s], however, that the district court's failure to issue a ruling on Volkswagen’s venue motion before a Markman hearing may alter [the appeals court's] assessment of the mandamus factors."

That last sentence means the glass is half-full for the car maker. And it has serious ramifications for Judge Albright's case management beyond StratosAudio v. Volkswagen.

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Injustice is a built-in feature of Germany's bifurcated patent litigation system -- it would be unconstitutional in other countries

I am presently researching the most appalling miscarriage of justice that ever occurred in a German patent case: dozens of people lost their jobs over a patent--held by a publicly-traded U.S. corporation--that later got invalidated by the Federal Patent Court of Germany (a problem commonly referred to as the "injunction gap"). That patent-in-suit is either (if construed broadly) clearly invalid or (if construed narrowly) not infringed by the accused product, but could not reasonably be held valid and infringed at the same time. The case raises questions not only about the outcome but also about the reasoning and the circumstances that led to it. There's even a secondary question that reminds me of why Federal Circuit Chief Judge Rader resigned. But as the issues are so very serious, and the fallout from the facts being published might be massive and lasting, I'm making every humanly possible effort to analyze the matter with utmost diligence. That's why it's too early to provide names, but when the time is right, I will. The case number contains "39."

Germany needs patent reform badly. The German patent litigation system is not just broken: it was ill-conceived and it's been prone to abuse all along, but abuse has become so rampant that the time is ripe for change. The situation is unsustainable, and the system doesn't really deliver justice.

Right now there's only one leading German patent infringement court of first instance that I believe does a stellar job under the circumstances, and that's the Landgericht Mannheim (Mannheim Regional Court). Many years ago I thought the court was too plaintiff-friendly, but by now it's my favorite one. To a far greater extent than their counterparts in other German venues, the Mannheim judges--whose understanding of technical issue is unsurpassed--have realized just how irresponsible it is to let patent holders enforce invalid patents all the time. In Mannheim, there are judges who deserve an honorary doctorate in (at least) radio frequency electronics and have the expertise to figure out when a patent is likely invalid as granted, coupled with the backbone to stay such cases (while we're on this subject, I found out they recently also stayed one Broadcom lawsuit against BMW and one against Daimler, both over non-standard-essential patents). It will be interesting to see how they address the issue of component-level licensing in Nokia's automotive SEP cases.

The appeals court in Munich also impressed me on a couple of occasions this year, but can't really solve the problem that too few cases (only about 10%, which is an insanity considering that the vast majority of patents are invalid as granted) get stayed by the lower court there pending a validity determination. Dusseldorf--where the aforementioned tragedy occurred--is a near-total disaster at both levels, except on certain FRAND issues, where it's recently been a thought leader and more balanced than ever. Fortunately, Dusseldorf is a slow venue, which is why the kinds of cases I watch hardly ever get filed there.

As part of my research into the (most likely) unprecedented miscarriage of justice mentioned further above, I've come across a symptomatic decision by the Federal Court of Justice, the top German court for patent infringement cases (as only a very few issues, such as due process, go up to the Federal Constitutional Court). The Bundesgerichtshof (Federal Court of Justice) decision in the Kreuzgestänge (cross-linkage) case is nothing short of a declaration of structural and moral bankruptcy of the German patent litigation system. It's a mystery to me how one of the five judges who reached that decision could heap tons of praise on the German patent judiciary with a straight face in a closed-door government meeting in May instead of advocating much-needed reform.

In that case, the Federal Court of Justice pronounced the following doctrine:

"The court adjudicating a patent infringement lawsuit has to independently construe the patent-in-suit and neither legally nor factually bound to this Court's claim construction in a nullity [= invalidation] action relating to the same patent."

Let me provide some context on bifurcation first:

• Unless a patent is so fresh it can still be challenged at the patent office (a scenario I'll ignore for the remainder of this post), one needs to bring a validity challenge before the Federal Patent Court of Germany. That's the court of first instance for nullity (= invalidation) actions.

• The Federal Patent Court is typically far slower to resolve a nullity action than the Munich and Mannheim regional courts--and even sluggish Dusseldorf--are to rule on infringement. In the infringement cases, defendants can merely seek a stay pending resolution of (or a key milestone in) the parallel nullity action, but they don't have a full invalidity defense. The decision on a stay is based on some superficial (summary) analysis. The most problematic part is that the courts are largely receptive to non-novelty arguments but not obviousness contentions (and when they do evaluate obviousness, all but Mannheim apply an unreasonably high standard).

• From a Federal Patent Court decision on a nullity complaint, parties can appeal (of right) to the Federal Court of Justice. However, infringement determinations by a regional court are appealed to a higher regional court (in Munich and Dusseldorf, cases stay in the same city; from Mannheim, they go to Karlsruhe). In most cases, that's the end of the journey for infringement cases, though the higher regional courts sometimes allow a further appeal to the Federal Court of Justice--or, if they don't, one can bring a Nichtzulassungsbeschwerde, which is practically the equivalent of a U.S. cert petition (a request for top-court review) and denied in most cases.

• If the infringement case is brought in Munich or Mannheim, a nullity action will rarely reach the Federal Court of Justice (second nullity instance) soon enough that the above-cited doctrine would play a role. In Dusseldorf, it's more of a possibility, but even in Munich and Mannheim/Karlsruhe there might be an infringement determination by the appeals court after the Federal Patent Court ruled on validity, however, practically only imaginable if the nullity action was launched as a pre-emptive strike ahead of the infringement complaint or if the patent previously got challenged by another party.

Everywhere else in the world, there's a basic rule: you must apply the very same claim construction to the infringement analysis and the validity determination.

Only one country does it differently, and that's Germany.

The result is that a patent holder may benefit from a broad claim construction in the infringement proceeding and a narrow one with respect to validity. The system is (deliberately) asymmetrical: A defendant would never ever benefit, as the above-cited doctrine relates to a case where the nullity action has been fully resolved (all appeals--just one available anyway--exhausted) and the patent has been upheld (otherwise the infringement case would also be terminated immediately).

The Federal Court of Justice explained that--and this is per se correct--the infringement proceeding, if slower, may actually result in facts entering the record or legal theories being advanced that warrant a deviation from the (earlier) claim construction in the nullity action. That is conceivable, but the problem is that they drew a conclusion that results in the asymmetry I just outlined: if the infringement court finds that the claim construction should be broader than the one used in the (concluded) nullity action, the defendant can't get a new validity determination.

It's a tilted playing field. It's all meant to give leverage to those owning patents that should never have been granted in the first place. It's high time the legislature enacted reform.

If Congress wanted to introduce bifurcation in the U.S. by depriving defendants of a full invalidity defense, and if it then promulgated a rule allowing an inconsistency that can only benefit those enforcing--but never those defending against--patents, I'd predict that the Supreme Court would hold it unconstitutional. The incurable inconsistency of rulings would possibly be sufficient grounds for a holding of unconstitutionality--but, at a minimum, the asymmetry of the inconsistency's impact would be. Even Germany's Federal Constitutional Court might arrive at that conclusion, but it's unlikely that a challenge will be brought anytime soon--and even if it happened, that court is nowhere near as strong and principled as the SCOTUS.

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Qualcomm switch patent asserted against Apple in Germany should be invalidated, Swedish patent office says

Yesterday's Qualcomm v. Apple trial took twice as long as the average Mannheim patent trial. In fact, the ventilation system was switched off in the late afternoon, so for the last hour, two doors had to be kept open. The courtrooms at the Mannheim Regional Court, Europe's leading venue for wireless patents, are famously windowless.

Presiding Judge Dr. Holger Kircher forthcomingly stated at the outset that this case was, in my words, too close to call (unlike the one that Qualcomm agreed to stay in June), thus the court had to elaborate on all our of Apple's defenses: non-infringement, invalidity (which German district courts don't determine, but they can and often do stay cases pending a parallel nullity or revocation proceeding in another forum), abusive conduct (antitrust), and licensing (through one or more contract manufacturers). I'll address the first two--the traditional defenses to patent infringement--in this post, and the affirmative defenses (the remaining two) in a subsequent post since there's an abundance of interesting things to report and comment on.

The patent-in-suit, EP2460270 on a "switch with improved biasing" ("biasing" in this context basically meaning that one voltage gets to control another), is not standard-essential. Essentiality hasn't been alleged by any party to the German Qualcomm v. Apple cases that have been heard so far. Nor is it related to wireless baseband processors: it's a general circuity patent covering a type of switch. It was mentioned during yesterday's trial that the chip allegedly infringing on the patent is supplied to Apple by Avago/Broadcom. But all of the accused devices come with an Intel baseband chip, a fact that will be relevant to the antitrust part of the next post.

In the combination of Judge Dr. Kircher's summary of the issues in the case and what Qualcomm's German counsel, Quinn Emanuel's Dr. Marcus Grosch, said yesterday, it turned out that Apple originally didn't even deny infringement but focused on invalidity. Then, after Qualcomm's reply in support of its complaint, Apple presented a non-infringement theory in a sur-reply. It wasn't said whether Qualcomm's reply brief or a change of mind triggered this, but normally a defense has to be presented in the defendant's first pleading, so I would attribute this to something Qualcomm said. This much is certain: the non-infringement argument is effectively a disputed construction of a claim limitation, not a factual question concerning the accused products.

As far as I understood, Apple argued that the patent-in-suit covered a certain chipset architecture involving a constant bulk voltage, with ground also being constant. But Qualcomm disagreed, arguing that "AC ground" stood for only the AC part, not DC. In any event, the court appeared less inclined to agree with Apple. But... and this was something very special:

Judge Dr. Kircher, who unlike German criminal judges does not have a duty to "investigate," felt the parties had not focused enough on an inconsistency between claim 1 (an apparatus claim; Qualcomm is asserting one or more apparatus claims) and independent claim 16, a method claim that refers--unlike the apparatus claim(s)--to only "the" (a single) control signal in connection with what turns on the switch, resulting in an input signal being passed through a plurality of transistors. The accused chip, however, has two control signals and would therefore, at least potentially, fall outside the claim scope.

I was profoundly impressed and still am. Apple v. Qualcomm is the commercially biggest patent-related dispute ever (at a minimum, the biggest one in the history of the mobile device industry). This patent is just a limited part of the wider dispute, but still this (unlike what Judge Alsup once mislabeled Oracle v. Google) is truly the World Series of IP. Yesterday one could see sky-high piles of case documents behind the bench. Still, with all that had been written in the build up to the trial, the presiding judge identified an issue that has the potential to be outcome-determinative and had not received much if any, attention.

It's not just because of one demonstration of extraordinary competence and dedication that I couldn't imagine a future Unified Patent Court (UPC) without this judge, despite fundamental disagreements in the past and the present with respect to the bearing that antitrust issues should have on patent infringement cases.

Unsurprisingly, Qualcomm argued that the distinction between one or two control signals was an irrelevant labeling question. I lack the expertise in electrical engineering to form an opinion, but I've watched numerous patent cases in (mostly) two major jurisdictions and this is the typical difference between an accused product and a properly-construed patent claim that routinely becomes a defendant's "get out of jail free" card. In fact, the world is littered with complaints that have been dismissed for lesser reasons.

However, Judge Dr. Kircher said that case law and literature were inconclusive as to whether or not a parallel claim could help a court construe another claim. Apparently, reasonable and reputable people disagree on this legal question because it hasn't been resolved. Better late than never. Here, it's a given that Qualcomm would appeal a stay by "complaining" (that's the term used here) to the Karlsruhe Higher Regional Court.

For the development of German (and, by extension, European) patent case law it would actually be good if the Mannheim court was prepared to take the risk of being overruled on appeal. I have no idea how the appellate panel under Presiding Judge Dr. Andreas Voss ("Voß" in German), who previously presided over another patent infringement chamber in Mannheim, or, in the ultimate consequence, the Federal Court of Justice (both in the city of Karlsruhe) would decide. My guess is that neither would pronounce a bright-line rule declaring it categorically impermissible to get mileage out of something that is found in the patent document itself. Why rely on descriptions, which aren't even updated as the claims are narrowed (which is also a huge issue in this case, with Apple alleging that Qualcomm pointed to a drawing that relates to something that the original application covered but the actually-issued patent does not), but not on claims, which the examiners focus on? Much less on anything found outside the patent document? It would probably the most likely outcome that some weight (within reason) would be given to what can be inferred or deduced from parallel claims, and in a case that is too close to call, it doesn't take too much to tip the scales.

It's fair to stay that no one in the room appeared to have a better idea of the issues in the case and the evidence in the record, across the board, than Judge Dr. Kircher. But in connection with invalidity, something apparently entered the record rather late, and while the court initially showed an inclination not to grant Apple's motion to stay since it's based on lack of an inventive step, while German courts normally grant stays only if there's a strong case for anticipation. The aforementioned Judge Voss ("Voß") always reminded counsel that a stay required a prior art reference constituting a "photographic image" of the patent-in-suit.

That's because German patent infringement courts don't like to take a position on whether a person of ordinary skill in the art would be likely to combine two or more prior art references: they're jurists, not engineers, unlike patent examiners.

Yet the hurdle for getting German patent infringement cases has, fortunately, become lower and lower over the years, as the regional and higher regional courts saw all too many cases in which they issued injunctions and later the patent died or was defanged as its claims got narrowed.

The court agreed with Apple that a new prior art reference (with an Asian name I didn't fully understand, but I'll find out whenever I find the time to request access to the nullity file), coupled with one named "Brindel" or "Brindle" that had been considered by the examiner in connection, represented a relatively stronger case for invalidation than one that the examiner found wasn't likely to become part of a combination. Dr. Grosch's efforts to deny or downplay this didn't persuade the court.

Freshfields Bruckhaus Deringer's Prince Wolrad of Waldeck and Pyrmont argued Apple's invalidity contentions. Toward the end I got the impression that the court was potentially having second thoughts. Just potentially, but that means a lot in a case where the original position was that a stay would not be warranted here.

The potential silver bullet here is that Apple had submitted the original patent and its proposed combination of prior art references (which are, according to Apple, also at the heart of its German nullity complaint pending with the Munich-based Federal Patent Court) to the Swedish Patent & Registration Office ("PRV"), and received an expert opinion from an examiner according to which the patent-in-suit does lack an inventive step in light of the prior art.

I haven't been able to find that opinion on the website of the Swedish patent office yet, but I'll keep trying.

Judge Dr. Kircher asked a key question: how many sucb opinions had Apple requested before obtaining this one? Apple's counsel, under the usual obligation to speak the truth, said it was just this one, and stressed that Apple wanted a neutral opinion based on just the prior art and no interaction with the examiner himself. That's the way it works in Sweden according to Apple. The Austrian and Swiss patent offices were also mentioned as providers of such opinions, but one of them no longer offers that service and the other one lets the petitioner communicate a lot with the examiner, which Apple's lawyers didn't want to do because they have a stronger case based on an uninfluenced opinion.

Apple didn't say so, but I might add that Sweden is a country with a lot of expertise in this field of technology, especially because of Ericsson.

It was again no surprise that Qualcomm's counsel would be dismissive of Apple's position. Dr. Grosch said that it would obviously simplify all patent cases if one could just fill out a web form somewhere. And it's not like the court indicated a change of mind. But I got the impression that Judge Dr. Kircher may indeed take the independent Swedish evaluation seriously. Maybe--just maybe--this does constitute a basis on which the court would make one of those rare exceptions in which a patent infringement case is stayed over inventiveness, not novelty, concerns.

There'll be a formal post-trial brief for which Apple was granted leave, and a legal brief (no new facts) which Qualcomm announced. The court will announce a decision on December 4, 2018. That one could be a final ruling, a stay, or whatever other procedural order.

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In Munich iPhone case, Qualcomm wants thin air to infringe software patent claim limitations: dangerous precedent possible

The name of the game is the claim. There's no German equivalent, at least none that rhymes, but I vividly remember Quinn Emanuel's Dr. Marcus Grosch stressing this point when he was defending Motorola Mobility against Microsoft, particularly in the Munich appeals court. Now, as counsel for Qualcomm in a German lawsuit against Apple that will be tried on Thursday and involves the iPhone's built-in Spotlight search technology, he's espousing the very opposite position. The former anti-software-patent campaigner in me dreads and hates the notion of software patents being given overbroad scope in litigation--way beyond any reaonable claim construction.

Whatever may come out of that Munich case (technically, a host of cases asserting different members of the same patent family and targeting different Apple entities) is rather unlikely to move the needle in the intercontinental Qualcomm v. Apple dispute. Based on how a first hearing went in May, even an infringement finding wouldn't result in an immediate injunction: the case(s) would most likely be stayed over validity concerns. But Munich is one of Europe's most important--and fastest--patent litigation venues, and Presiding Judge Dr. Matthias Zigann one of Europe's influential patent judges (among other things, he's a contributor to a leading reference on patent law). An infringement holding could set a dangerous precedent affecting many other cases before the Spotlight matter, if ever (since the patents-in-suit might all die anyway), would be appealed.

The issue here is related to the nature of patent-eligible inventions, to claim construction, and, ultimately, to the principles of infringement analysis.

Half a century ago, the Federal Court of Justice of Germany defined, in its Red Dove ("Rote Taube" in German) decision, what constitutes a patent-eligible invention: "Patent protection is available for a teaching of a planned course of action involving the use of controllable forces of nature in order to achieve a result with an identifiable causation." (emphases added)

If the forces-of-nature part was still applied, most software patents would be invalid anyway. But that's a different story. The issue in the Munich Spotlight case(s) is that Qualcomm's infringement allegation is based on the mere possibility of a screen output, in some edge cases, "only representing the usable communication channels [of a given user]" (emphasis added), without a planned course of action and an identifiable causation.

Qualcomm is now seeking to prevail on the basis of a total misreading of the 2005 Federal Court of Justice ruling in Shunting Trolley ("Rangierkatze" in German). As a result, even thin air could infringe key elements of a patent claim.

Here's my translation of the Shunting Trolley doctrine:

"A patent is definitely infringed if the limitations of the patent claim are practiced and the accused embodiment is objectively capable of delivering the features and effects covered by the patent. An infringement holding is not avoided because an apparatus is normally operated in different ways and customers therefore do not usually make use of the relevant teaching, even in cases in which a vendor explicitly recommends using its apparatus differently, provided that there is a possibility of the patented teaching being utilized."

I already vented outrage over Qualcomm's approach in my post-hearing commentary in May. One actually just has to take the very first sentence of the Shunting Trolley doctrine seriously in order to reject Qualcomm's infringement theory: "if the limitations of the patent claim are practiced". Not so here. You can find an exemplary set of those claims on Google Patents. The key passage here is in the penultimate paragraph of claim 1:

"presenting, on the display of the first communication terminal, a plurality of selectable items only representing the usable communication channels, responsive to sensing input of a title" (emphasis added)

The word "only" is key here. Qualcomm's counsel says: if a user only has usable communication channels (suzch as only one usable channel per user) in an address book, the search result will be limited to only usable communication channels. Unfortunately, there's no Markman proceeding in Germany, where claim construction would be determined first and where disputed claim limitations would have to be interpreted by the court in writing. Otherwise I have no doubt--no doubt whatsoever--that this claim element here would have been deemed a filter (a word that, therefore, appeared multiple times in my May post on this matter).

Therefore, under general principles of patent law and the way the first sentence of the Shunting Trolley doctrine restates one of them, Qualcomm would actually have to prove the existence of a filter. The fact that Spotlight normally displays information related to a user that does not constitute a "usable communication channel[]" strongly suggests that there is no such filter. (Theoretically, the display could aggregate information retrieved with multiple filters, but at least at the May hearing, Qualcomm didn't even make that allegation and Apple's counsel, Freshfields Bruckhaus Deringer's Wolrad Prince of Waldeck and Pyrmont, denied the presence of a filtering operation of the claimed kind.)

The discussion in May had me so concerned about how software patents might get overbroad scope in future German infringement cases that I read the entire Shunting Trolley opinion. As I had assumed, I found that it stops far short of the basis on which Qualcomm seeks to prevail here:

The mechanical patent asserted in Shunting Trolley covers a certain kind of braking system: a particular type of rail brake. Even the defendant couldn't deny that the accused product contained such a rail brake, nor could the defendant deny that under some rare circumstances, more or less accidentally, the rail brake could be activated, but stressed that a different brake, called "operational brake," always got activated when a user hit the brake, while the rail brake was not intended for normal use:

So the case turned on the relevance of either brake to the infringement analysis. The Shunting Trolley defendant naturally wanted the analysis to be limited to the non-infringing one of the two brakes:

The Federal Court of Justice, however, sided with plaintiffs and deemed the trigger irrelevant (even a mere coincidence is sufficient), and applied the usual rule that the additional presence of non-infringing components is irrelevant:

Qualcomm's position is correct on the left side of that chart, and at the top of the right side (deeming the trigger irrelevant), but throws the baby out with the bathwater by also deeming the claimed cause and causation (see the pink color in the image below) irrelevant, limiting the entire analysis to the effect:

The legal error in the pink part is that the Federal Court of Justice never said a mere coincidence could serve as a substitute for practicing a claim limitation (which takes us back to the identifiable causation it already stressed half a century ago). Nor did Shunting Trolley say that you only had to look at whether a braking occurred, ignoring what caused it and how. If we now apply the only reasonable interpretation of "only" in the given context--a filter--to the Qualcomm v. Apple case and correctly map it to the Shunting Trolley doctrine, we find that the user input is irrelevant to the analysis, but there must still be a filter, in the absence of which there simply is no infringement:

Thin air is not a filter. Otherwise, thin air could infringe a patent on a coffee filter if filtered coffee comes out at the bottom because filtered coffee is poured in at the top. It would be absurd, but it would be particularly bad for software innovation, given that patents on data processing often involve an output that can meet certain criteria with a particular set of input data, even if no patented technique is utilized. For another example of an analysis confined to a mere digital output, a screen displaying a different random number per second could be deemed to infringe a patent on a digital thermometer because, if you watch it long enough, it will sooner or later happen to display the actual temperature.

I still hope Qualcomm's infringement theory will fail. If not, then maybe some other defendant in some other case will make use of the above and get a total misreading of Shunting Trolley overturned...

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