FOSS Patents

Bring the popcorn. The seemingly neverending, multijurisdictional patent dispute between Nokia and OPPO continues to make news. Earlier this week, I reported on a decision by the European Patent Office (EPO) to uphold an OPPO patent in an amended form, and now let'see how the modified claim language will fare at a Mannheim infringement trial in early December and/or in a preliminary injunction proceeding before the Unified Patent Court (UPC). Now there's news from the U.S., a jurisdiction in which the parties don't have any infringement actions pending against each other, but where the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) instituted an inter partes review (IPR) roughly a year ago relating to U.S. Patent No. 10,701,588 on "methods, apparatuses and computer program product for PDU formatting according to SDU segmentation."

On Thursday, the PTAB granted the petition and held all challenged claims unpatentable:

Guangdong OPPO Mobile Telecommunications Corp., Ltd., v. Nokia Solutions and Networks Oy (IPR2022-00632, Patent 10,701,588 B2): Final Written Decision Determining All Challenged Claims Unpatentable

Nokia can appeal the PTAB decision to the United States Court of Appeals for the Federal Circuit, just like it also appealed in September a decision made by the Opposition Division of the European Patent Office (EPO) in May, which declared the European equivalent of that patent, EP3395029, invalid. Now that both the USPTO and the EPO have sided with OPPO in the first instance, any appeal seeking to salvage one of those patents is going to be an uphill battle.

It's been 27 months since the previous cross-license agreement between the two expired and Nokia sued without delay. OPPO's resilience is admirable. They're giving one of the very best in-house patent litigation teams out there a run for the money to say the least. It's become clear in recent years that some German judges have an anti-Chinese bias (which is not a conspiracy theory but was evidenced by problematic public statements as well as rather divergent decisions in neutral jurisdictions), without which the situation would look even more favorable to OPPO.

There are policy areas in which the European Union cannot vigorously defend the EU economy's interests without some transatlantic antagonism. Subsidies are an example. Standard-essential patents (SEPs) are not. Much to the contrary, a couple of major European SEP holders generate very significant revenues from licensees based in the United States.

But the EU's proposed SEP regulation is so fundamentally flawed that voices of reason from outside the EU are needed. One of them is the UK IPO with its very careful approach. Another example is the Biden Administration, and I just can't see why an initiative that harms European SEP holders is worth a rift between the EU and the United States.

Almost three months ago I reported on U.S. Secretary of Commerce Gina M. Raimondo having said at a Senate hearing that the U.S. government has officially commited "concerns" over the proposal to the European Commission. Yesterday (Wednesday, July 26) the Senate's Subcommittee on Intellectual Property (chairman: Sen. Chris Coons (D-Del.)) held a USPTO oversight hearing, toward the end of which the following was said:

SENATOR COONS: This is my last question. ... I've been following with genuine concern recent proposed regulations by the European Union for what would essentially be an SEP rate court. That regulation, I'm concerned, validates China's practices ... and I had shared those concerns ... and [Secretary Raimondo] agreed the proposal is problematic. What steps has the USPTO taken to communicate concerns to our European colleagues and what steps do you think the Administration can and should take to guard against restrictions on SEP licensing in the EU and globally?

DIRECTOR VIDAL: As I mentioned in my opening remarks, that's one of the things that I'm keenly focused on: it's standards, because I think it's critical to our economy. I will say that when we withdrew the 2019 policy statement around SEPs with NIST and DOJ, it was because we see standards as an international issue that individual countries weighing in in these ways could be extremely problematic. So what we've done when it comes to the EU directorate is I've met with the EUIPO in Geneva [presumably a WTO/WIPO meeting] just a week and a half ago. I've also spoken to other stakeholders in Europe about this. We also are issuing soon an FR notice, a Federal Register notice, to seek feedback from U.S. stakeholders on international SEP policy so that we can inform an all-of-government approach. That's gonna be not just the USPTO. I'm doing that with NIST, our standards and technology group, and ITA, our international group within [the Department of] Commerce, so that we can get an all-of-government approach that's data-driven by feedback.

The patent infringement dispute between Dutch telecommunications carrier KPN and Swedish telecommunications equipment maker Ericsson is unusual because infrastructure makers typically sell products to telcos rather than getting sued by them over patents. What is not that unusual, though, is the fact that Ericsson is on the receiving end of that case. Ericsson and Nokia, while being net licensors, typically have multiple disputes pending at any given time in which someone else wants to collect patent royalties somewhere, most frequently in the United States. That's why those two companies don't take extreme positions when they are on the enforcing side: they know what it's like when the shoe is on the other food, and they know that whatever they say as a defendant may be held against them as a plaintiff (though inconsistencies could only undermine their credibility but in the end all that should matter is the law).

Last August, a jury in the Eastern District of Texas handed down a verdict in KPN's favor and relating to a package of three patents. The verdict form did not distinguish by patent or claim, but merely indicated whether "any" of the claims had been infringed and whether any of the patents were invalid (juries rarely ever invalidated patents, and here they also thought all patents-in-suit were valid):

Koninklijke KPN N.V. v. Telefonaktiebolaget LM Ericsson & Ericsson Inc. (case no. 2:21-cv-113-JRG, E.D. Tex.): Jury Verdict of August 26, 2022

KPN is apparently never going to get the 32ドル million payout.

One of the three patents-in-suit, U.S. Patent No. RE48,089 on a "method and system for automatic coverage assessment for cooperating wireless access networks", has now been invalidated by the PTAB. Ericsson--represented by the Baker Botts firm--challenged most claims, also including the ones asserted in the Texas infringement action, and prevailed across the board. The PTAB judgment came down yesterday:

Ericsson Inc. v. Koninklijke KPN N.V. (PTAB IPR2022-00079, Patent RE48,089): Judgment (of May 23, 2023) Determining All Challenged Claims Unpatentable

Maybe this decision will pave the way for a settlement between the parties. They should be commercial partners, not adversaries in patent litigation.

Earlier today I commented on USPTO Director Kathi Vidal's proposed PTAB IPR rulemaking reform. Then I saw this interesting PTAB decision.

The USPTO under Director Kathi Vidal is on the right track with respect to PTAB IPR reforms, particularly with a view to discretionary denials. Probably many of you will disagree. Many of my esteemed readers are on one side or the other: net licensors (including pure licensing firms) as well as net implementers. I'm sympathetic to either side's legitimate concerns, and I have friends across the whole spectrum. When taking positions, I can't please everyone, nor can policy makers.

I think the USPTO has not had a more balanced Director in quite a while. I have great respect for Andrei Iancu, but his policies very much reflected his firm's predominant--if not exclusive or near-exclusive--client profile, i.e., the interests of the enforcing side. His predecessors in office knew the perspective of actual operating companies, with Michelle Lee coming from a net licensee (Google, which nevertheless considered patents very valuable in its early years) and David Kappos from a net licensor (IBM). Kathi Vidal's most important clients in private practice have been companies like Apple, i.e., PTAB IPR heavy users. But it would not be correct to claim that she was using her current position to just advance her former clients' interests.

I applaud the USPTO for its policy-making efforts, above all for the first section (on petitions filed by certain for-profit entities) of its April 21 advance notice of proposed rulemaking.

In light of the VLSI v. Intel case with the 2ドル.4B verdict, Director Vidal correctly identified discretionary denials as a field in which decisive action was needed. Unfortunately, her predecessor--for the reason discussed above, which is unrelated to his track record as a litigator representing patent holders--had overshot in one way and not taken action against a more blatant form of abuse. That was comparable to pulling some healthy teeth while failing to identify a sore one. The USPTO is now likely to strike a far better balance.

The idea underlying the America Invents Act (AIA) was that patent owners should not get to overleverage their intellectual property rights in litigation. As a litigation watcher with a primary focus on U.S. cases, I can't remember if I've ever seen a case in which a jury held a patent invalid. Juries typically believe that the USPTO got it right. So the PTAB IPR system is important, and I'm in favor of it, but there is abuse from both sides.

Unified Patents' business model does raise serious issues, arguably even bigger ones than OpenSky. OpenSky, in case you don't remember, is the entity that essentially collected a ransom from VLSI in exchange for withdrawing a PTAB challenge that posed a serious threat to the aforementioned verdict. Some described this as "extortion" and I can see why, but if one thinks it through, Unified Patents' business model is way more problematic.

The USPTO has correctly identified that in the VLSI case, the party with a legitimate interest in challenging the validity of the patents-in-suit, Intel, was (at least temporarily) unreasonably restricted in its ability to defend itself, while someone with a business model that the AIA was never intended to enable profited from it. The only sound approach to policy making in such a situation is to address issues arising from an abuse of the system without overshooting to the detriment of actual defendants.

An end-justifies-means argument is not going to help, and the USPTO should not give it any weight. Sure, if a patent shouldn't have been granted in the first place, there must be ways of overturning it, and jury trials won't work. At the same time, well-resourced defendants should not be able to just outspend patent holders, and the purpose of the PTAB is not to give every defendant two bites at the apple, so if a PTAB challenge fails, defendants are reasonably estopped from re-raising the same issues in the related infringement litigation. If the end of defeating invalid patents justifies any means, then we must also celebrate OpenSky as heroes, allow multiple challenges in different fora (i.e., no estoppel), abolish or massively increase page limits for petitions, and so forth. That wouldn't result in good policy.

Here's the USPTO's proposal to curb abuse by entities like Unified Patents:

"The changes under consideration would make clear that the Board would discretionarily deny any petition for IPR or PGR filed by an entity that: (1) is a for-profit entity; (2) has not been sued on the challenged patent or has not been threatened with infringement of the challenged patent in a manner sufficient to give rise to declaratory judgment standing; (3) is not otherwise an entity that is practicing, or could be alleged to practice, in the field of the challenged patent with a product or service on the market or with a product or service in which the party has invested to bring to market; and (4) does not have a substantial relationship with an entity that falls outside the scope of elements (1)–(3). The Office contemplates defining 'for-profit entities' as entities that do not qualify for tax-exempt status with the Internal Revenue Service."

That makes a lot of sense to me. We're not talking about unreasonably restricting the ability of the companies that are Unified "members" to defend themselves: they can bring their own challenges in their own name and will then be reasonably subjected to litigation estoppel.

There are (at least) two key concerns over Unified Patents' business model, and either is enough of a reason in its own right to support the USPTO's proposal:

1. Abusive circumvention of litigation estoppel:

   There simply is no need for the USPTO to condone Unified's business model, given that its "members" can bring their own petitions. The USPTO is not even against a pooling of resources: if you have a joint defense group, why not bring one challenge on behalf of everyone? The problem with Unified is that they say their members don't get to decide which patents they challenge. But obviously it's a pay-to-play system. They're not doing that work pro bono. Disallowing such petitions will increase transparency. Could transparency also be increased in other areas, such as patent ownership? Absolutely, but that is not a reason to tolerate a circumvention of litigation estoppel rules. I also don't think the USPTO should give any weight to claims that this is about singling out just one PTAB filer. It's a business model that others could also adopt.

2. Extortionate effects:

   For the avoidance of doubt, I'm not alleging extortion, but I do see extortionate effects of Unified Patents' business model. Nice patents you have there... too bad if anything happened to them.

   • Philips' membership:

     While Philips does have an operating business, it's actually known as a rather aggressive enforcer of patents, including but not limited to standard-essential patents (SEPs). Philips has precisely the profile of the companies whose SEPs routinely challenges. Why is Philips a member? It cannot be ruled out that they primarily joined so that their patents would be left alone.

   • Unified's expansion into patent pool administration:

     While I've repeatedly given credit to MPEG LA with respect to other pools they run, their joint venture with Unified Patents named Alium has left me unconvinced so far. In particular, I find it hypocritical to say that Unified will help ensure "patent quality" in connection with O-RAN when they are not going to challenge Alium's own patents but only those belonging to patent holders who decline to contribute their patents to that pool. Here, again, you have that "racketeering" effect, presenting companies with a choice of being trolled or making Unified money.

   All of those issues are not unique to Unified Patents: others might implement their business model or similar models, even with a purely extortionate agenda.

There still is time to submit formal comments to the USPTO.

This post here will be of interest to two parts of my audience: the patent litigation community as well as videogamers (including game industry professionals), many of whom have recently started following me on Twitter because of the Microsoft-ActivisionBlizzard merger reviews. With a view to the latter group, I'll explain things in more basic terms, but the ruling by a U.S. appeals court that I'm discussing in this post is definitely of interest to patent professionals as well.

Yesterday, the United States Court of Appeals for the Federal Circuit--which is based in Washington, D.C., and the only appeals court in the entire U.S. to which district court judgments in patent infringement cases can be appealed--handed down its decision in Ironburg Inventions Ltd. v. Valve Corporation (PDF). The (precedential) ruling and the case are interesting for more than one reason.

In 2015, Ironburg sued Valve--known for the Steam storefront (Wikipedia) and certain Steam-branded hardware--over U.S. Patent No. 8,641,525. The case was ultimately transferred to the United States District Court for the Western District of Washington (Seattle), where Steam is based. The title of that patent is Controller for video game console.

The patent-in-suit purports to improve video game controllers as they were known at the time (2011) by "remov[ing] the need for a user to remove his or her thumb from the left or right thumb stick in order to operate additional actions controlled by the four buttons and/or the direction pad." The controller is described as "having a hard outer case and a plurality of controls located on the front and top edge of the controller" and being "shaped to be held in both hands of the user such that the user's thumbs are positioned to operate controls located on the front of the controller and the user's index fingers are positioned to operate controls located on the top edge of the controller." In addition, the patented controller "includes one or more additional controls located on the back of the controller in a position to be operated by the user's other fingers."

If you wish to take a look at that Xbox forum post that may now decide the case (that Valve originally lost in 2021) in Valve's favor, just click here and you can always come back and read eveything else.

The Federal Circuit takes note of how the trial was conducted. Normally, jurors only see the evidence (including actual products) in a jury room. But in the trial in this case, which was held in January 2021, it worked differently:

"Due to the global pandemic caused by the novel coronavirus, the trial proceeded virtually, with each juror attending trial remotely through videoconferencing technology. Before closing arguments, the parties and the district court agreed that each juror should have the accused product in hand, and that device – a hand held controller for playing video games – was mailed to each juror."

If there were any gamers among the members of the jury, this means they got a Steam Controller--the accused device--for free to play around with until they had to return it by mail.

The jury determined that Valve infringed the patent and that Valve owed the patent holder 4ドル million in damages for past infringement. As Valve's infringement was furthermore found to be willful, that amount could have been increased ("enhanced damges"), possibly up to 12ドル million. Valve appealed because it wants to pay nothing; Ironburg cross-appealed because it wants the bill to increase to 12ドル million. In fact, the 4ドル million award won't exceed Ironburg's litigation expenses by much (if at all). But no: the Federal Circuit says that even though Valve's infringement was willful (because Valve had been made aware of the patent and infringed it nonetheless), Judge Thomas S. Zilly in Seattle didn't abuse his discretion when he found that this was a "garden variety" patent infringement case where even a finding of willfulness does not have to result in an enhancement of the damages award. That is a very defendant-friendly position (which some other U.S. judges would probably not have adopted), but justifiable in the appeals court's opinion.

While Valve's appeal failed to make the case go away at this stage (for the most part, its appeal was unsuccessful), yesterday's appellate opinion is good for Valve in two respects. The first one is what I just mentioned: the damages award won't go up from 4ドル million to a potential maximum of 12ドル million. The other win for Valve involves what I mentioned in the headline:

Valve still has the chance to defend itself by proving Ironburg's patent invalid. That is not going to be easy because U.S. juries typically have greater respect for the fact that a patent office--a government agency--granted a patent than the United States Patent & Trademark Office's own PTAB (Patent Trial and Appeal Board) judges when they make their post-grant review decisions. The invalidation rate in jury trials is low, while it is fairly high when the PTAB decides. Still, Valve has another chance to defend itself, so it may now be able to negotiate a settlement with the patent holder.

If they don't settle, there'll be further proceedings in Seattle where an Xbox fan's forum post could make a key contribution to a decision in Valve's favor.

On appeal, Valve wanted to resurrect various of its invalidity arguments, which the district court had decided Valve was "estopped" from raising.

There are/were three sets of invalidity arguments:

1. arguments that Valve presented in its petition for an inter parties review (IPR) and which the PTAB found worth looking at (though it ultimately didn't result in a complete invalidation of all claims of the patent-in-suit; only some claims were deemed invalid);

2. arguments that Valve presented in that petition, but which the PTAB did not consider worthy of a closer look; and

3. arguments that a third party, a Canadian company named Collective Minds Gaming (Twitter account), raised in its own attack on Ironburg's patent and which were distinct from Valve's arguments. Collective Minds brought its petition later than Valve.

With respect to the second and third groups, the district court granted an estoppel motion, meaning he threw those invalidity arguments out because Valve was not allowed to make them at the time because of things that had already happened. The relevant statute says this (just skip it if you're not interested or already know it):

"The petitioner in an inter partes review of a claim in a patent under this chapter that results in a final written decision under section 318(a), or the real party in interest or privy of the petitioner, may not assert either in a civil action arising in whole or in part under section 1338 of title 28 or in a proceeding before the International Trade Commission under section 337 of the Tariff Act of 1930 that the claim is invalid on any ground that the petitioner raised or reasonably could have raised during that inter partes review."

Valve asked the Federal Circuit to overturn that decision so it would get another bite at the apple, i.e., another chance to strike down Ironburg's videogame controller patent. With respect to the second group, Valve's appeal failed: the Federal Circuit essentially says Valve made the mistake of not appealing the PTAB decision to the effect of obligating the PTAB to analyze all of Valve's invalidity arguments as opposed to only a subset.

Valve could indeed have done so. In 2018, the Supreme Court decided in SAS Institute, Inc. v. Iancu--a decision on which I commented at the time--that it's all-or-nothing for a PTAB decision to review a patent: if only one of the arguments made by the petitioner (the party challenging the patent) looks meritorious, the PTAB must analyze them all.

The Federal Circuit decided that Valve has no one to blame but itself for not insisting on a review based on the entirety of its arguments. The appeals court rejects Valve's legal argument that estoppel doesn't kick in until the actual review starts. Instead, the decision on Valve's petition was already relevant.

But with respect to the third group--the Collective Minds arguments--Valve's apppeal succeeded.

The district court placed the burden of proof on Valve that it could not have reasonably identified those arguments back when it brought its own PTAB petition. The Federal Circuit says that the onus is on the patent holder, Ironburg.

If Ironburg can show that Valve could reasonably have raised those arguments years ago in its PTAB petition, then it's game over for Valve and it must pay 4ドル million. Otherwise, those Collective Minds invalidity arguments will be revived. In that case, Valve can ask the court for summary judgment (decision without a jury trial) that the patent is invalid. If it doesn't do that, or if the judge declines to invalidate the patent, then the case will be put before a new jury in a retrial--and this time around they won't get Steam Controllers sent to their homes but will have to carry out their duty at a federal courthouse.

The Collective Minds arguments involve a combination of different prior art references. Prior art--material that shows the claimed invention was either now new at the time or (which is the argument here) not inventive (because one could have easily combined what already existed at the time) can be an earlier-published patent application but also other publications.

Jimakos Sn, Rapid Fire Mod for Wireless Xbox 360 Controller, Step by Step Tutorial with Pictures, (July 9, 2008), http://forums.xbox-scene.com/index.php?/topic/643928rapid-fire-mod-forwireless-xbox-360-controller/page-23 (posts 341 to 346) (“Jimakos”)

That forum post is no longer online, which is why I purposely didn't "linkify" it. But that doesn't matter: the information is in the record of the case anyway.

In that July 8, 2008 posting, a user named "Jimakos Sn" described how he modified an Xbox 360 controller. Here's an excerpt from the Collective Minds petition as well as images that were actually found in that forum post and show the modified controller (click on an image to enlarge or read the text below the image):

IV. THERE IS A REASONABLE LIKELIHOOD THAT THE CHALLENGED CLAIMS OF THE ’688 PATENT ARE UNPATENTABLE

A. Ground 1 Claims 1, 9, 10, 21, 26, 28, and 30 of the ’688 Patent are Obvious Under Jimakos in View of the Knowledge of a Person of Ordinary Skill in the Art

i. Jimakos

“Rapid Fire Mod for Wireless Xbox 360 Controller” is an online forum discussion, where user “Jimakos Sn” posted details of his modification to an existing Xbox 360 controller. [...] The forum entry was posted in an active thread, with the substance relied upon in this Petition coming from a July 8, 2008 posting.

In its petition, Collective Minds also argued as follows:

"Like the ’688 Patent, Jimakos is based on a standard video game controller. It includes a case with controls located on the front and top of the case shaped to be held in the hands of the user such that the user’s thumbs operate the controls on the top of the case, and the user’s index fingers operate the controls on the front end of the case."

The PTAB never decided on the Collective Minds petition because the parties settled. That, however, may also mean that Ironburg was afraid of those challenges to its patent--including that Xbox forum post.

I think the district court may actually conclude--now that Ironburg, not Valve, has the burden of proof--that Valve couldn't reasonably have raised those arguments. That argument is particularly strong with a view to Jimakos: it was just a forum post, not a major industry publication or patent document.

Should Valve win the case thanks to that forum post, I hope they'll be able to find Jimakos Sn and reward that gamer!

E-health device maker AliveCor yesterday announced that the company has been informed of the White House not having vetoed a hypothetical U.S. import ban on the Apple Watch. Apple sought a presidential override of the U.S. trade agency's patent infringement ruling on public-interest grounds.

AliveCor is rather unlikely to get leverage over Apple from its patents, but its story makes Apple look bad in other ways as I'll explain further below. At this point, the noise that AliveCor is making about the White House decision looks like it's just an attempt to pressure Apple into some kind of settlement based on the hypothetical possibility of an import ban entering into force further down the road.

The United States International Trade Commission (USITC, or just ITC) has quasi-judicial powers. It can impose what is called a limited exclusion order and amounts to a U.S. import ban on "unfair imports", with the (alleged) unfairness most of the time consisting in (alleged) patent infringements. The Apple Watch is not affected for now, and may never be. The ITC's notice of final determination (PDF) (i.e., summary of final--though appealable--ruling) clearly states the following:

"The enforcement of these orders, including the bond provision, is suspended pending final resolution of the U.S. Patent and Trademark Office, Patent Trial and Appeal Board’s (“PTAB”) Final Written Decisions finding the asserted patent claims unpatentable."

An infringement of an invalid patent is an infringement only in an academic sense, but has no practical implications. There's no liability. And for now, the relevant patent claims are deemed invalid, meaning the United States Patent and Trademark Office (USPTO) itself has concluded that those patents should never have been granted in the first place. The two relevant patents on heart-rate measuring techniques are close related, which is why the prior art references cited by Apple's (thus far successful) validity challenges partly overlap: U.S. Patent No, 10,595,731 on "methods and systems for arrhythmia tracking and scoring" and U.S. Patent No. 10,638,941 on "discordance monitoring".

On December 6, 2022, the same panel of Patent Trial and Appeal Board (PTAB) judges declared either patent invalid (case nos. IPR2021-00971 and IPR2021-00972). There are two prior art references that are key to either decision. One of them is a Patent Cooperation Treaty (PCT) patent application from 2012: WO 2012/140559 A1 on "pulse oximetry measurement triggering ecg measurement" by inventors Ram Shmueli and Nimrod Sandlerman. In the PTAB decisions, that one is briefly referred to as Shmueli. The other is U.S. Patent Application No. 2014/0275840 on a "pathological state detection using dynamically determined body data variability range values" by inventor Ivan Osorio. That one is briefly referred to as Osorio. Most of the PTAB's invalidity holdings are based on combinations of Shmueli and Osorio, potentially with some other prior art.

So what is required before AliveCor will actually gain leverage over Apple?

AliveCor appealed the two PTAB rulings to the Federal Circuit, raising a multitude of questions. While it cannot be ruled out that one or more patent claims might ultimately be deemed valid, the much more likely scenario is that the PTAB is affirmed, either 100% or to an extent that the net effect won't be different from the current situation. And at the same time, Apple can try to get the ITC's infringement decisions overturned.

AliveCor, which even used a Wall Street Journal op-ed to urge President Biden not to veto the ITC ruling, looks a little bit desperate. It may also have a resource problem as the small company is trying to assert its rights against the world's richest corporation, but that David-versus-Goliath situation doesn't make those patents any more valid.

In retrospect, AliveCor should probably have focused on enforcing some European patents in Germany, where obviousness (as opposed to anticipation) arguments often don't dissuade courts from entering an injunction under the country's bifurcation regime (i.e., validity determinations are made in separate proceedings). In the U.S., it is a bit odd that AliveCor first filed lawsuits in the Western District of Texas--a venue that was extremely popular at the time for patent damages claims--in late 2020, and then brought its ITC complaint a few months later. Normally, litigants file ITC complaints and federal companion complaints at the same time.

The history of interactions between AliveCor and Apple is, hoever, interesting. Here are some passages from the ITC complaint:

"35. After AliveCor presented KardiaBand publicly, its founder Dr. Albert was invited to Apple's campus by Dr. Michael O'Reilly, Apple's Vice President of Medical Technology, to present to Apple on KardiaBand. Dr. Albert demonstrated KardiaBand's operation to Apple engineers and Apple's COO, Jeff Williams. Mr. Williams told Dr. Albert that Apple wanted to figure out how to work with AliveCor.

"36. A few months later, Dr. Albert and AliveCor's then-CEO met with Phil Schiller, Apple's SVP of Worldwide Marketing, in order to further demonstrate the KardiaBand product. Unbeknownst to AliveCor, however, Apple was using these meetings to gather information on the operation of KardiaBand. Apple recognized the value in the combination of AliveCor's KardiaBand and SmartRhythm products and wanted to take those ideas as their own and eliminate AliveCor and everyone else as competition.

"37. In fact, after seeing the utility of KardiaBand and SmartRhythm, Apple decided to copy these features and introduce a version of an Apple Watch with its own ECG and AFib analysis and reporting functionality. In late 2018, Apple announced that it was introducing its own ECG app and irregular heart rhythm notification feature as part of an update to the Operating System for the Apple Watch Series 4."

Now, the above sounds like Apple stealing IP--but if AliveCor's patents are invalid, then there was no actual IP, and what Apple did may have been a way of taking advantage of AliveCor's interest in discussing a business relationship, but wasn't illegal.

It's possible that after the initial discussions with AliveCor, Apple performed a check on what IP AliveCor actually owned, and concluded that any issued patents or pending patent applications belonging to AliveCor and relevant to what Apple wanted to do were weak.

But now comes the part that I find more interesting than AliveCor's patent infringement assertions:

"38. After Apple introduced its KardiaBand and SmartRhythm competitor products, it decided to eliminate AliveCor as a competitor. Specifically, with the Apple Watch series 4, Apple updated the watch operating systems from OS4 to OS5. This operating system update included changes to the algorithm the Watch OS used to report heart rates in specific ways that made it impossible for KardiaBand and SmartRhythm (as well as other third party heartrate analysis app providers) [emphasis added] to identify and predict unexpected heartrates and arrhythmias and suggest users record an ECG for confirming potentially [sic] occurrences of AFib.

"39. Ultimately, the changes Apple made to its operating system in OS5 and the introduction of Apple's copycat ECG watches compelled AliveCor to pull the KardiaBand product and SmartRhythm from the market in 2018. [...]"

That, however, is just stated in the complaint to make Apple look bad and not the basis on which AliveCor wanted an ITC exclusion order. AliveCor is, however, pursuing antitrust claims against Apple in the Northern District of California. In an October 2022 post on an antitrust litigation in the same district brought by credit card issuers against Applem I quoted from Judge Jeffrey S. White's March 21, 2022 order that granted in part--but also denied in part--Apple's motion to dismiss AliveCor's original complaint. The most important part was that Judge White held "AliveCor has plausibly alleged an aftermarket for watchOS apps"--i.e., the court may ultimately find that there is a single-brand market under Kodak/Newcal.

Apple filed a motion to dismiss AliveCor's first amended complaint. A hearing that had been postponed to January 27, 2023 was vacated. The court "will issue a written decision on the papers." That case continues to be interesting, but it could be that AliveCor will somehow have to settle because it might otherwise run out of cash. The antitrust case is another potential risk for Apple, but if Epic Games prevails on a single-brand market definition, AliveCor's case is going to be considered a small problem.

Here's a quick Ericsson v. Apple update. Ericsson yesterday filed an unopposed motion that surfaced today, narrowing one of the three USITC investigations of Ericsson complaints over Apple from five patents-in-suit to three, and from four patent families to three.

The investigation no. is 337-TA-1300. You can find the five original patents-in-suit here. By way of a motion for partial termination of the investigation, Ericsson drops

• all asserted claims of U.S. Patent No. 9,705,400 on a "reconfigurable output stage" (a patent that I already identified in late September as a candidate for withdrawal, and even more so when I saw that the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) had instituted an inter partes review further to a petition by Apple);

• all asserted claims of U.S. Patent No. 9,853,621 on a "transformer filter arrangement" (which is from the same family as U.S. Patent No. 9,509,273, four claims of which remain in the investigation); and

• various--but not all--claims from each of the other three patents.

On November 4, Apple had brought a motion for summary determination of non-infringement and/or no technical domestic industry of the '400 patent (that part of the motion is now moot) and of no technical domestic industry for the '770 patent, which Apple argues Samsung's devices (Samsung is a key Ericsson licensee) don't practice, but Ericson continues to assert claims 1,2, and 7 of that patent.

Administrative Law Judge MaryJoan McNamara will preside over an evidentiary hearing (trial) in early January. The most interesting patent-in-suit in that investigation may very well be U.S. Patent No. 7,151,430 on a "method of and inductor layout for reduced VCO [voltage-controlled oscillator] coupling." Erisson is asserting claims 2-3, 5-8, and 13-18 of that patent, and a subset of those claims (all but claims 14 and 18) in the domestic industry context.

In other Ericsson v. Apple news, Apple can again sell 5G devices in Colombia after an appeals court lifted a preliminary injunction that Ericsson was allowed to enforce for about four months. Most likely, the next Ericsson v. Apple injunction will come down in Germany (in the first half of next year), be it in Mannheim--where a first trial was held earlier this month--or in Munich, where Ericsson is already on the winning track with respect to two patents. However, the last patent spat between those parties led to a settlement at roughly the stage at which the current dispute is as we speak, so it remains to be seen how many decisions will actually have to be handed down.

If anyone sympathetic to Apple wanted to engage in oversimplification for the purpose of spin-doctoring, a misleading "scoreboard" would currently indicate that 23 of Apple's petitions for inter partes review (IPR) have resulted in institution decisions by the Patent Trial & Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO), while "only" 10 have been denied. 23 of 33 ain't bad? At a closer look, Apple's PTAB campaign has so far done more harm than good to Apple's defensive efforts.

There is one part of the multijurisdictional Ericsson v. Apple 5G patent litigation in which a PTAB decision--coupled with a highly debatable decision by an Administrative Law Judge (ALJ) of the U.S. International Trade Commission (USITC, or just ITC)--may indeed carry the day for Apple. That one is the smallest and least important of Ericsson's three ITC complaints against Apple. The trial started on Friday and will conclude on Thursday. Ericsson's lawyers can still argue to the ALJ that the PTAB was wrong about its finding of a reasonable likelihood of invalidity of the '454 patent, but it will be an uphill battle. Another patent was dropped earlier. In that case, Ericsson's most promising horse in the race is the '999 patent, of which it dropped six claims after claim construction, but the two remaining ones include an independent claim and may still prove valuable.

There is another patent that Ericsson is asserting in the ITC and that is now subject to a PTAB IPR proceeding: U.S. Patent No. 9,705,400 on a "reconfigurable output stage". That case will go to trial in early 2023, and on Wednesday (November 2, 2022) the PTAB instituted an IPR proceeding (IPR2022-00716). However, Apple had already persuaded the ALJ of its proposed construction of the sole disputed claim term, so it appeared to be on the winning track anyway.

But the other 21 institution decisions that Apple has won so far are unprofitable. They relate to patents that Ericsson isn't asserting against Apple, at least not in the United States. Shortly after the current dispute broke out in January, Apple started filing IPR petitions against patents that Samsung had challenged before, which I described as "piggybacking" on Samsung's 2021 campaign.

Seven of those petitions targeting patents-not-in-suit have been denied, and most of those patents are young enough that Ericsson may very well elect to assert them on some other occasion. Theoretically, Ericsson could now file additional infringement actions against Apple over them, but it probably won't have to do so because it can get leverage (especially in jurisdictions like Germany) well before any new complaint would be adjudicated.

The majority of Apple petitions against actual patents-in-suit have failed: three out of five have been denied. And each of those three plays a pretty important role in the present dispute.

Yesterday, Apple and Ericsson filed a joint claim construction chart with the United States District Court for the Eastern District of Texas, in which they referenced the pre-institution PTAB proceedings relating to two of the three patents that Apple against which Apple had brought declaratory judgment claims. Ericsson decided to bring compulsory counterclaims and insisted even when Apple--which primarily wanted to use those DJ claims to sidestep the Fifth Circuit's appellate jurisdiction, a transparent maneuver that failed--was no longer interested in pursuing its DJ claims, which left Judge Gilstrap "puzzled."

On Tuesday (November 1), the PTAB denied Apple's petition no. IPR2022-00850 against U.S. Patent No. 11,039,312 on "handling of multiple authentication procedures in 5G":

Decision Denying Institution of Inter Partes Review (IPR2022-00850)

On September 21, the PTAB had already denied Apple's petition no. IPR2022-00349 against U.S. Patent No. 10,374,768 on "efficient SRS resource indication methods" (Apple has moved for reconsideration):

Decision Denying Institution of Inter Partes Review (IPR0022-00349)

And against the third E.D. Tex. DJ patent, no PTAB petition has been brought in the first place. The infringement action in the Eastern District of Texas will go to trial next summer (while the FRAND trial is now only one month away), and two of the three 5G standard-essential patents have--at least so far--been strengthened by PTAB decisions in Ericsson's favor, and it's telling that Apple didn't even elect to attack the third.

While Ericsson is not asserting U.S. Patent No. 10,516,513 on "controllable CSI-RS density" against Apple, that patent is--as I noted before--from the same family as the patent over which Ericsson won a preliminary injunction against Apple in Colombia. On September 22, the PTAB denied Apple's IPR petition:

Decision Denying Institution of Inter Partes Review (IPR2022-00169)

That outcome doesn't help Apple as it seeks to overturn the Colombian injunction.

With its vast resources, Apple can drive up litigation costs by bringing PTAB petitions even against patents that are practically irrelevant to the current dispute, but so far I believe Ericsson has actually gotten more value out of those PTAB proceedings. Even if Ericsson lost 20 patents or so (and institution decisions don'mean that all claims will ultimately be invalidated), it would still have a huge portfolio, but at this stage, ten of Ericsson's patents have been hardened, including some strategically important ones.

Apple may come away unscathed from the ongoing ITC trial, but in some other respects the noose is tightening. For example, the Mannheim Regional Court will hold an Ericsson v. Apple standard-essential patent infringement trial on Tuesday. Yesterday the court informed me that the (new) time of the trial is an earlier one than originally scheduled, and that there would likely be a non-public part (i.e., an in-depth discussion of Apple's FRAND defenses) following the public part. To me this indicates that Presiding Judge Dr. Holger Kircher sees a high likelihood of having to reach FRAND in that case. I'll find out on Tuesday. Should Ericsson win that case, an injunction would come down before Christmas--just the kind of present Apple would like to return to the shop on Boxing Day.

I still believe Ericsson will win its patent dispute with Apple and get a per-iPhone royalty that will be a lot closer to Qualcomm's (which benefits from the company's chipset market power) than before. It's a now-or-never opportunity for Ericsson. But I'm now somewhat skeptical that the third and smallest Ericsson v. Apple complaint with the United States International Trade Commission (USITC, or just ITC)--a trade agency with quasi-judicial powers, particularly the authority to impose U.S. import bans--will give the Swedish wireless innovator leverage. Decisive leverage will come soon, but in other venues--particularly Mannheim and Munich. Also, Ericsson is already enforcing a preliminary 5G patent injunction in Colombia. And it may very well win an import ban in one or two other ITC cases that are pending.

The case in question is ITC investigation no. 337-TA-1301 (presiding judge: Administrative Law Judge (ALJ) Cameron Elliot), and the trial (called evidentiary hearing) will begin tomorrow (Friday, November 4). Ericsson asserted only three of its 15 U.S. patents-in-suit in that complaint. It was the third complaint Ericsson filed against Apple with the ITC, and the smallest one. Also, none of the patents-in-suit in the 1301 investigation was declared essential to an industry standard.

Three months ago, that small case shrunk as Ericsson--in response to a partly unfavorable claim construction order--dropped one patent-in-suit in its entirety and withdrew six of the eight asserted claims of another patent. One patent, however, fared pretty well in claim construction: U.S. Patent No. 8,792,454 on "secure and seamless WAN-LAN [wide area network, local area network] roaming." But after a decision that ALJ Elliot entered yesterday, Apple is rather likely to defend against that one.

This means that the two surviving claims of U.S. Patent No. 8,472,999 on a "method and system for enabling dual standby state in a wireless communication system" are now the only promising part left in Ericsson's smallest case. Should the two claims of the '999 patent that survived be Ericsson's best claims anyway, then the trial can still get interesting. But if the strongest claims were among the six that Ericsson felt forced to withdraw, then the trial starting tomorrow is not going to be interesting.

Here's what happened:

On Friday (October 28), the Patent Trial and Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO) instituted--further to an Apple petition--an inter partes review of the '454 patent (the one from which Ericsson had not dropped a single claim). Here's the PTAB order according to which Apple "has established a reasonable likelihood of prevailing":

Decision Granting Institution of Inter Partes Review of U.S. Patent No. 8,792,454 B2

Apple is challenging claims 1-9, a superset of the claims Ericsson is asserting (1, 4, 6, and 8). As always, what's particularly important is the fate of the independent claims (claims 2-9 are derived from independent claim 1).

Apple is attacking Ericsson's asserted claims with the combination of two prior art references (and throws in a third to tackle the non-asserted claims, which could be relevant in other litigation as the companion federal lawsuit, but are irrelevant for the purposes of the ITC trial starting tomorrow). The two prior art references Apple uses against the asserted claims are

• "Luo": Integrating wireless LAN and cellular data for the enterprise, a nine-page article published in the March/April 2003 edition of IEEE Internet Computing; and

• "Zhang": Efficient mobility management for vertical handoff between WWAN and WLAN, an article published in the IEEE Communications Magazine in November 2003.

The PTAB concluded on Friday that "the information presented in [Apple's] Petition demonstrates a reasonable likelihood that [Apple] will prevail in establishing that claims 1, 4, 6, and 8 are unpatentable under 35 U.S.C. § 103 over the combination of Luo and Zhang."

This is just a preliminary assessment, and it is not formally binding on ALJ Elliot. But there is, of course, a very high likelihood now that he is just going to concur with the three administrative patent judges' assessment and, therefore, won't impose an import ban on Apple over the '454 patent. As I wrote further above, the two remaining claims of the '999 patent now appear more interesting than the asserted claims of the '454 patent.

The problem here has to do with procedure, not substance.

As I discussed on Thursday, Apple had actually promised not to rely on the Luo prior art reference in the ITC case. That is why Ericsson brought a motion in limine seeking to enforce an earlier pledge by Apple. However, ALJ Elliot denied that motion yesterday, and as I'll discuss below, that decision does not appear well-reasoned or fair:

ITC Inv. No. 337-TA-1301: Order No. 34 Denying Complainant Ericsson's Motion in Limine No. 6

For the details, let me refer you again to my commentary on the motion. Here I'll just assume you know all of that already and explain why I disagree with ALJ Elliot's decision.

His decision reads as if he hadn't understood--or, more likely, decided that it was better for him (even though unfair vis-à-vis Ericsson) to pretend not to understand--what Ericsson really said in its motion. I could easily see his decision overruled later, either by the Commission (the ITC's top-level decision-making body) or the Federal Circuit, but in the meantime the PTAB will decide anyway. There are still scenarios in which Ericsson could enforce that patent before its mid-2024 expiration, but statistically Apple is now likely to fend off that one.

ALJ Elliot says Ericsson should simply have prepared for dealing with Apple's Luo-based invalidity contentions since Apple had disclosed that prior art reference in the ITC case, and even if Apple had honored its PTAB stipulation, the PTAB could have denied the petition and then Ericsson would have had to address Luo. That part misses the key point: based on Apple's stipulation, the Luo prior art reference was going to be

• either strong but out of the ITC case

• or still in the ITC case, but weak as a result of a negative PTAB decision.

It undoubtedly makes sense for a litigant not to focus in pretrial depositions and discovery on a prior art reference that couldn't be simultaneously strong and relevant.

Given strict time and page limits, it makes no sense to just say "you might have had to address it anyway." Apple was gaslighting Ericsson.

ALJ Elliot also misstates what Ericsson was seeking:

"It may be that the Commission has the power to give legal effect to a stipulation filed with another adjudicative tribunal and then withdrawn in accordance with that tribunal’s rules, but Ericsson offers no authority on point."

In formal terms, Apple had stipulated before the PTAB that it would not rely on Luo in the ITC. Under the old Fintiv rule, that was key or Apple's petition would likely have been denied on a discretionary basis. But in the end, the executive branch of the U.S. federal government is indivisible, and all too obviously the purpose of a pledge like that to the PTAB is not just to tell the PTAB a story, but to have an actual effect on a parallel litigation in another venue. One could have a debate over that if Apple had, in a hypothetical scenario, made that promise to a foreign court. The ITC and the USPTO are not only sister agencies, but both concerned with patent litigation.

Anyway, the question is not whether the ITC can "give legal effect" to that stipulation after Apple withdrew it; Ericsson's motion said nothing like that. It's all about whether Apple should be rewarded for its tactics of not withdrawing that stipulation until a few minutes after Ericsson brought it up in an expert deposition. Ericsson didn't ask the ALJ to hold that Apple's stipulation was still intact. It was all about the ALJ's discretion to find that Apple's overall conduct--of which Apple's undue delay of the withdrawal of that stipulation is an indispensable part--warranted an order granting a motion in limine with respect to that particular prior art reference. The net effect for the purposes of the ITC litigation would be the same as if the withdrawal of the stipulation wasn't recognized, but that doesn't mean that the only way for the judge to grant Ericsson's motion would have been to "give legal effect" to the stipulation.

It looks really weak that ALJ Elliot does not address two key aspects of Ericsson's motion--the fact that the patent was going to be either out of the case or otherwise irrelevant (it would then simply have focused on the PTAB decision at the trial) and Apple's delayed withdrawal of the stipulation. When a judge doesn't even touch on the real issues, the decision may not be well-reasoned. And this one, indeed, isn't. It's a red herring to say "[i]f Ericsson did not conduct such discovery, that oversight was entirely its own fault."

It's wrong and unfair, and I would normally say that it sets a troubling precedent, but this fact pattern is highly unlikely to reoccur as USPTO Director Vidal changed the PTAB's policy with a view to petitions targeting patents that are being asserted in parallel ITC investigations.

We'll never know if the same decision had come down if its beneficiary had not been Apple. That said, for the first time in this dispute, Apple has now outmaneuvered Ericsson, even though it was lucky to find a judge who sidestepped the actual issues.

The ITC decision won't make a difference if Ericsson prevails in Germany. On Tuesday, there'll be an interesting Ericsson v. Apple SEP trial in Mannheim--before a judge who also has a very special style that some litigants like a little less than others (sometimes plaintiffs are unhappy, sometimes defendants), but whom I've never seen ignore the points a party actually made.

Sooner or later Ericsson and Apple will have to settle their patent dispute, but as long as they are litigating, they will keep playing hardball. This includes they they avail themselves of certain procedural options in different jurisdictions. Apple is unhappy about Ericsson's enforcement of a 5G standard-essential patent injunction in Colombia as well as about the parallel assertion of patents from the same family in Mannheim and Munich (a basis on which the Munich court declined to dismiss an Ericsson case at an early stage). The key difference between the two litigants' conduct is, however, that Apple isn't merely exercising its procedural rights (as Ericsson also did in Colombia, where you simply can request an ex parte preliminary injunction): occasionally Apple comes across as a bit underhanded or, at minimum, disingenuous by opportunistically contradicting itself. Two judges have already reproached Apple for its "puzzling" litigation tactics--including Administrative Law Judge (ALJ) Cameron Elliot, who will preside over the Ericsson-Apple ITC trial that will commence on Friday (November 4).

A new issue has arisen from Apple's shifting-sands positions, and it involves USPTO Director Kathi Vidal's new policy regarding IPR petitions, which makes it a procedurally interesting matter especially for the many patent practitioners among my esteemed readers.

Apple is the #2 PTAB user (in recent years, second only to Samsung), and some criticize that heavy use of the inter partes review process by a single Big Tech company, but that's actually not my concern here. It's only about what happened with respect to one of Apple's IPR petitions:

• The relevant patent is U.S. Patent No. 8,792,454 on "secure and seamless WAN-LAN [wide area network, local area network] roaming." It's one of three patents Ericsson originally asserted in the smallest of its three January 2022 ITC complaints against Apple. What makes it particularly relevant is that, in the aftermath of claim construction, Ericsson dropped one of the other patents in its entirety and several of the asserted claims of the other, while the '454 patent fared really well in claim construction. Against that backdrop, validity is likely going to be the key battlefield.

• On April 1, Apple brought an IPR petition against the '454 patent that relies on the following prior art reference briefly referred to as Luo (the first-named author): Integrating wireless LAN and cellular data for the enterprise, a nine-page article published in a March/April 2003 edition of IEEE Internet Computing.

• At the time, the USPTO's Fintiv rule that Mrs. Vidal's predecessor in office, then-Director Andrei Iancu, had promulgated was still intact. Apple's IPR petition faced a high risk of a discretionary denial because the ITC trial was on the horizon and there was clearly an overlap between issues raised in the petition and in the parallel proceeding. In order to resolve that conflict, Apple stipulated that it wouldn't leverage the same invalidity contentions based on the Luo prior art reference at the ITC hearing if the petition is granted. That's what Apple told the PTAB early on, and Ericsson relied on it.

• The timeline of the PTAB pre-institution proceedings made it clear that a decision on whether or not to institute an IPR would be made no later than by the start of the ITC trial.

• In the meantime, discovery in connection with the ITC case took place (fact discovery cutoff was in late June). Ericsson viewed Luo as a prior art reference that was either going to be irrelevant in the ITC trial (in the event of an IPR being instituted, as Apple promised not to rely--in that scenario--on Luo before the ITC) or not very likely to succeed as a denial of Apple's petition by the PTAB would have shown the USPTO's disbelief in the strength of Apple's Luo-based invalidity contentions.

• On June 21, Director Vidal threw out key parts of her predecessor's Fintiv rule, and particularly made it clear that an impending ITC hearing should not counsel against the institution of an IPR proceeding. If the same had happened only about four months earlier, Apple would never have had a reason to stipulate not to proffer Luo in the ITC case should the PTAB institute an IPR.

• If Apple had decided at that point--June 21--to go back on its earlier stipulation in light of a new USPTO rule, one could have criticized it for doing so only after its petition originally benefited from the stipulation, and that Ericsson would have had only three more days to adjust until fact discovery closed. But at least Apple could not have been accused of letting more time pass in a way that was prejudicial to Ericsson.

• Ericsson highlights in a motion in limine (which now seeks to preclude Apple from relying on Luo in the ITC) that on August 24, Ericsson brought up the Luo stipulation in a deposition of Apple's '454 patent expert Mr. Geier, and four minutes later Apple's counsel emailed the PTAB to rescind the stipulation.

• Last Friday--October 28--the PTAB granted the petition to institute an inter partes review. I've uploaded the decision (PDF) to DocumentCloud.

• Had Apple stuck to the stipulation, Luo would now be a non-issue before ALJ Elliot. There would be a potential "injunction gap" as an ITC import ban might be ordered and enforced before a potential PTAB decision invalidating the patent, but only because of Apple's own decision to bet on other prior art in the ITC case while pursuing a Luo-centric PTAB strategy in parallel.

Ericsson's related motion in limine accuses Apple of gamesmanship:

ITC inv. no. 337-TA-1301: Ericsson's Motion in Limine No. 6 to Preclude Evidence, Testimony, and Argument about Luo If Apple's Petition for Inter Partes Review is Granted

The motion in limine had to be filed on the 21st--a week before the PTAB actually decided and two weeks before a hard deadline. When Ericsson brought the motion, it assumed that--should the motion be granted--Luo would be a total non-issue or Ericsson could focus its trial depositions on the reasons for which the PTAB would have deemed Apple's Luo-based theories unconvincing.

Ericsson's position that Apple tactically delayed the rescission of the stipulation--and that this constitutes gamesmanship that no court or, as in this case, quasi-judicial body should reward--is understandable. At the same time, Apple's position will presumably be that the USPTO's new rules are better than the old ones, and that Apple should not face the risk of a U.S. import ban over a patent that in the PTAB's preliminary opinion may very well be invalidated at the end of the IPR proceeding. The institution decision doesn't prejudge the outcome and the ITC might or might not deem the '454 patent invalid over Luo, but Apple's chances would be well over 50% if it could rely on Luo. At the abstract level, Ericsson has a procedural good-faith argument, and Apple a substantive one.

So far, ALJ Elliot has been extremely strict and detail-minded in procedural terms--so much so that if he now deemed Apple's about-face acceptable, he would arguably no longer be consistent with how he has been conducting this investigation so far. And he would set a precedent that would impair the ITC's ability to conduct fair proceedings on famously tight schedules. It would look like Apple can get away with inequitable conduct that would normally not succeed. From an institutional point of view, it would be desirable to tell Apple that it made its bed (without anyone forcing it to do so) and has to lie in it, especially since the chronology of events shows that Apple was indeed playing a tactical game instead of putting all the cards on the table at the appropriate juncture.

Certain companies and their lobbying fronts are pushing the U.S. Federal Communications Commission (FCC) to support those organizations' efforts to devalue standard-essential patents (SEPs). The most vocal one of them is automotive supplier Continental (see Conti's latest filing, dated July 29), but Apple and its astroturfers (see this July 2021 filing (PDF)) are also involved.

The specific context has docket no. OET 19-138 and relates to the use of the 5.850-5.925 GHz spectrum block for Cellular-V2X (C-V2X) purposes. Put differently, Conti, Apple, and their friends are trying to hijack a spectrum regulation process for their gain, and their pretext--the suggestion that ruthless SEP holders would otherwise threaten the viability of the standard--is simply made up. The SEP holder with the most clout in U.S. politics, Qualcomm, opposes that initiative.

Let's go for a quick, virtual walk around Washington, D.C., and "visit" the various agencies of the Executive Branch that are actually in charge of SEP policy and/or the related enforcement:

• The Antitrust Division (ATR) of the United States Department of Justice (DOJ), the United States Patent & Trademark Office (USPTO), and the National Institute of Standards and Technology (NIST) have recently withdrawn a SEP policy statement. At the same time they declined to agree on a new one or reinstate an Obama-era position that was favored by implementers like Apple.

  The fact that those three agencies determined it was better to let the market and--to the extent necessary--courts sort SEP things out strongly counsels against the FCC taking a position on the most controversial of SEP-related questions, which is the proper licensing level and royalty base.

• The Federal Trade Commission (FTC) challenged Qualcomm's licensing-centric business model, but lost the appeal and ultimately gave up. The bottom line was that patent holders like Qualcomm enjoy wide latitude in defining and implementing their business models, and it's very hard to obligate them to do business with a third party on the latter's preferred terms. While other circuits, such as the D.C. Circuit, could theoretically reach different conclusions than the Ninth Circuit, the FTC v. Qualcomm outcome, too, should dissuade the FCC from taking steps that would invite legal challenges. A solid Supreme Court majority is absolutely not in favor of federal agencies overstepping their mandate.

• Then there's also the United States International Trade Commission (USITC, or just ITC), which can order import bans if patent rights are infringed (and provided that it's not against the public interest, which is, however, a narrow exception).

It's not a question of whether the FCC is important. No one would doubt that. It's just that too many cooks in the SEP policy kitchen are not a good idea. On its face, Conti's (and its allies') argument is that the FCC should just exercise its regulatory authority in connection with the reservation of spectrum for one specific standard. But the issues, particularly access to exhaustive component-level SEP licenses, have far wider ramifications.

Now, Conti points the FCC to the fact that it mandated FRAND licensing of SEPs in the context of ATSC Conti at least once misspells ATSC as "ATCS" and there are other typos in its recent submissions to the FCC, of which "AUtomotvie" is the most striking one. But compared to last year's Epic Games v. Apple judgment (271 typos and similar mistakes; an average of more than 1.5 per page) that's not too bad.

With respect to ATSC 1.0, the FCC didn't decree that component makers had to be licensed. The agency merely reminded SEP holders of their FRAND licensing obligation without narrowing the meaning of FRAND, which is what Conti and its allies are seeking here. Spectrum regulation isn't FRAND interpretation.

The FCC should not buy those unsubstantiated allegations of widespread problems in SEP licensing. Well over half of the automotive industry (based on car sales volumes) has already taken the Avanci 4G patent pool license. The two exits from the wireless component market that Conti mentions are not even anecdotal evidence: the car industry is affected by a chipset shortage, not by an insufficient number of actual and potential suppliers.

Conti is telling the FCC what the Fifth Circuit rejected (even twice): the notion that Conti is being harmed by the fact that SEP holders prefer to license Conti's customers over licensing Conti itself. The only harm Conti is really suffering here is entirely self-inflicted and amounts to the legal fees it keeps wasting in its crusade against SEP holders.

Normally, neither the World Intellectual Property Organization (WIPO) nor the United States Patent & Trademark Office (USPTO) should advance a patent devaluation agenda. It's plainly inconsistent with those institutions' mandates. But yesterday the USPTO and WIPO issued a press release on an agreement "to partner on dispute resolution efforts related to standard[-]essential patents" that I don't view favorably at this stage.

When President Biden appointed Kathi Vidal, a patent litigator known for her Big Tech ties, to head the USPTO, there was widespread concern in the IP community that she might take initiatives that benefit infringers rather than innovators. With respect to PTAB inter partes reviews, it's too early to tell. With the stroke of a pen she undid some of her predecessor's PTAB rules favoring discretionary denials. We'll see what comes out of the current decision-making process, and it's important that stakeholders on both sides of the debate accept her invitation to submit amicus briefs.

With respect to standard-essential patents (SEPs), three of the Biden Administration's agencies (DOJ, USPTO, NIST) refrained from adopting a policy statement that was heavily criticized by SEP holders (or reinstating an older policy position of that kind). The question is now what the USPTO's partnership with WIPO means.

It could be that in the end it's just bureaucratic activism: governmental agencies like to draw attention to their work on a hot-button issue regardless of whether such work will actually have much of an effect. But there is also the possibility that Director Vidal is indeed pursuing a SEP devaluation agenda, while WIPO just has a "business development" objective with respect to its alternative dispute resolution (ADR) services. As I'll discuss in a moment, it looks like WIPO's SEP ADR initiative isn't going too well.

The press release quotes Director Vidal as saying that "SEP policy is an international issue of international importance." That is correct: SEP licenses are typically global portfolio licenses.

Given that WIPO and the USPTO agree on the international dimension of SEP policy, antisuit injunctions and antisuit damages motions should actually be the number one item on their list. Instead, they leave the heavy lifting to the courts. Case in point, later today (Thursday) Judge Rodney Gilstrap of the United States District Court for the Eastern District of Texas will hold an Ericsson v. Apple motion hearing on Apple's request for an antisuit damages order as the iPhone maker is currently unable to sell 5G devices in Colombia due to a SEP injunction obtained by Ericsson.

There is nothing in the USPTO-WIPO announcement to specificially suggest that WIPO and the USPTO seek to "enhance the efficiency of licensing of standard essential patents" (a quote from Director Vidal's statement) in a balanced fashion. To increase the efficiency of SEP licensing, one needs to tackle the problem of hold-out, which is widespread, and of outlier cases of hold-up. But this is all that the announcement says about the scope of the five-year agreement:

• Cooperate on activities that will lend efficiency and effectiveness to the resolution of disputed standard essential patent matters by leveraging existing WIPO Arbitration and Mediation Center and USPTO resources, and

• Engage in stakeholder outreach to raise awareness of the services provided by the WIPO Arbitration and Mediation Center through joint USPTO-WIPO programs.

The second bullet point is laughable: the stakeholders on both sides of the SEP licensing negotiation table are sufficiently sophisticated to know that WIPO offers arbitration and mediation services. This is not like teaching traffic rules to children.

Toward the end of the press release, WIPO Director General Daren Tang promotes WIPO's ADR services. On WIPO's website I found the following information:

"In recent years, the WIPO Arbitration and Mediation Center (the 'WIPO Center') has administered some 55 WIPO mediation cases relating to FRAND licensing negotiations."

Interestingly, they're not saying anything about SEP arbitration proceedings. The key difference is that arbitration will result in a decision, while mediation is just an attempt to bring parties together. The "Summary of WIPO FRAND ADR case examples" is also just about mediation, and WIPO can't even claim that its mediation efforts actually resolved a single dispute. The first example just "prompted renewed licensing negotiations" between a patent pool and implementers, half of which were Asian companies. The second one is that "IP courts in China have referred ten ICT patent infringement cases to WIPO Mediation. Seven of those cases involved claimants from Europe." And then "a large Asian manufacturer submitted a unilateral request to WIPO Mediation concerning its SEP infringement litigation against a large European SEP holder"

If this was the track record of a private mediator, he or she would find it hard to be hired again.

There are reasons to suspect here that it's not really SEP holders who expect WIPO's ADR services to be of any help to them. It's more like some players on the implementer side hope to be deemed willing licensees based on their requests for WIPO ADR.

Hopefully I'm just being too skeptical and this is more than a scheme to facilitate hold-out and devalue SEPs. In the short term, I actually think an initiative like LIFT--which was announced this week-- is more likely to enhance the efficiency of SEP licensing. Gustav Brismark and Bowman Heiden discussed it in an IAM article, Building incentives to overcome the SEP licensing prisoner’s dilemma (paywalled).

On July 7, United States Patent & Trademark Office Director Kathi Vidal encouraged stakeholders to submit amicus briefs with a view to the Director review of the PTAB decisions in two cases involving challenges to patents asserted by VLSI Technology against Intel. The deadline is August 4.

This is really important stuff. Now, I don't want to take a position on the specific cases other than saying that the parties are entitled to a correct adjudication of their dispute (where the Federal Circuit plays a key role), and VLSI is additionally entitled to protection from abuse by third parties driven by questionable motives.

The Under Secretary of Commerce for Intellectual Property--that's her long-form title--raised transcendental questions involving

• abuse of process or

• conduct that otherwise thwarts, as opposed to advances, the goals of the [USPTO] and/or the America Invents Act (AIA).

That's a big topic, and I just want to bring up a couple of issues here, which I would encourage stakeholders to raise in their replies. This blog has repeatedly been referenced in court filings, even in an Acer v. Volkswagen patent infringement complaint in the Eastern District of Virginia. Of course, it would be even better if others could raise these points in a more elaborate form themselves.

While I've been a big believer in balanced patent enforcement rules and patent quality assurance for a long time, I disagree with those who essentially suggest that the end of invalidating patents justifies any means. Whether or not one believes that former Director Andrei Iancu (now, again, a top-notch patent litigator) went too far with the Fintiv rule, there is indeed rampant abuse, and I fear that various abusers of the system could be emboldened as they see the pendulum swinging back.

Not only can patent holders employ trollish litigation tactics in their assertion campaigns but it is equally possible to troll patent holders, for financial gain, through PTAB IPR petitions.

I don't even want to talk about the problem of short-selling stocks around attacks on business-critical patents (mostly in the pharmaceutical sector), but focus on Unified Patents.

Unified Patents is one of the most active filers of PTAB petitions. Its business model is that of a "club": companies who frequently defend against patent infringement assertions pay their fees and then Unified will keep them happy by attacking certain patents, but the members of the club don't formally make the decision. In its most recent petition, like in numerous others before that one, "Unified Patents, LLC [...] certifies that Unified is the real party-in-interest and further certifies that no other party exercised control or could exercise control over Unified's participation in this proceeding, the filing of this Petition, or the conduct of any ensuing trial."

I have a simple policy question here: is Unified really necessary?

The companies paying Unified are the likes of Adobe, Cisco, Daimler, Dell, Salesforce, Spotify, Tesla, and Uber. There's no doubt that those organizations would be well-equipped to bring their PTAB petitions themselves. That would be more transparent.

Unified always makes a lot of noise when it achieves a partial or complete invalidation of a patent, and there's deafening silence when it loses--which ends up hardening certain patents with a view to litigation. That's as counterproductive as it gets.

It's another question whether some of the companies who support Unified primarily just want to avoid that their own patents get challenged. Without access to the terms of the relevant agreements, I can't form an opinion on that one.

Even if one did not take issue with Unified's primary business model, Unified's latest strategy for leveraging its PTAB IPR machinery deserves a closer--and rather skeptical--look:

In at least one case (Alium), Unified has co-founded a patent pool that vows to challenge patents outside the pool. The euphemism here is "patent quality." But were this about quality, wouldn't it then make sense to start with the patents that are actually in that pool? No, the idea is for Unified to use some of the pool's licensing income to go out and attack patents in the same field of technology that belong to companies who may have perfectly valid reasons for declining to put their own IP in that pool.

Unified's partner, MPEG LA, is a very well-respected patent pool administrator. I have no idea why they partnered with Unified in the first place--it's certainly not because Unified knows more about the pool business than MPEG LA. But if even MPEG LA teamed up with Unified, who will be next? Is this going to become a scalable business model?

It raises serious policy issues when a patent pool puts pressure on patent holders to join. "Join us or we'll challenge your patents" should not be a message with which a patent pool tries to "convince" patent holders to join: patent pools should be all about finding a workable compromise between licensors and licensees (and that's what MPEG LA--when not working with Unified--is all about) and about maximizing transactional efficiencies.

The USPTO should deny any PTAB IPR petitions that might be part of a scheme to bully patentees into joining a pool. At least there should be a strong presumption against such petitions serving to advance the AIA's goals.

I agree with MPEG LA's amicus brief (PDF) in Continental v. Avanci et al. that antitrust law must not be used against patent pools to the extent that they "become inefficient and unreliable, licensors will cease to participate in them, the interoperability of the standards they enable will be lost, and the competitive market benefits including convenience for licensees and savings to consumers that they provide will disappear. As MPEG LA also notes, "[i]ndividual licensees should not be permitted to interfere with [...] competitive market forces and a business’ freedom to make [...] decisions."

But patent pools don't enjoy antitrust immunity either. And it's not just about potential implementer concerns such as whether a pool has the right to grant licenses at a certain level of a supply chain, or whether the terms (including duplicative-royalty policies) are fair to implementers. It can also be a serious problem if a pool is designed to contribute to the devaluation of patents.

That's why I applaud the European Commission's Directorate-General for Competition (DG COMP) for investigating on a preliminary basis (which will hopefully lead to full-blown investigations) concerns over the Alliance for Open Media (AOM) abusing the market power of its members like Google to force patent holders to give up their rights.

The USPTO, too, should be concerned about whether patent pools, or companies that co-found or otherwise profit from them, bring IPR petitions for reasons that run counter to the spirit of the AIA.