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09.06.18

The Eastern District of Texas and Patent Courts Elsewhere Are Eating Huawei, But Huawei Also Uses These US Patent Courts to Prey on Its Competitors Outside China

Posted in America, Asia at 6:37 am by Dr. Roy Schestowitz

In China Huawei enjoys favourable treatment/courts because Huawei is connected to the government

Huawei

Summary: The flawed notion that US patent law would somehow guard the US from competition in Asia overlooks the simple fact that companies in the Far East, China included, can turn US courts against US companies

THE EPO has much to learn from the mistakes made in the US, resulting in many billions of dollars going down the drain (or into the pockets of lawyers and trolls who produce nothing). There’s no way to prevent oneself from being sued when the US Patent and Trademark Office (USPTO) grants bogus patents whose validity would cost a fortune to not only dispute but also contest in court. “The resulting Intraspexion product lets enterprise legal departments prevent potential lawsuits before they even start,” says this new press release, marketing a product that almost certainly would not work. They sell a fantasy. There’s no way to track and properly understand millions of patents; moreover, once such patents are asserted in the form of a lawsuit, legal bills come flowing in. Even if one can predict such lawsuits, that cannot facilitate prevention.

The patent maximalists (who profit from excessive lawsuits/litigious culture) nowadays ‘name-drop’ China quite habitually. Like Donald Trump, they just use “China” as a dog-whistle by which to distract with an external bogeyman and push an agenda that has nothing to do with China. It has a lot more to do with Texas and the meta-industry of patent litigation in there. Here’s what a Dallas patent maximalism site published earlier this week. Media in eastern Texas is just celebrating what would likely get used by patent trolls around there — lots of bogus software patents that the USPTO should not have granted. We have meanwhile learned that PanOptis, which we covered here before [1, 2, 3, 4], sued Huawei successfully, owing to an Eastern District of Texas jury, i.e. a venue that markets itself as being patent trolls- or plaintiff-friendly and a jury that rarely understands technical matters. Appeal to the Federal Circuit would likely overturn this judgment.

A patent maximalists’ site wrote about it. Michael Loney said:

Eastern District of Texas jury awards $2.8m for infringement of four standard essential patents and $7.7m for infringement of one patent without a FRAND commitment

An Eastern District of Texas jury has awarded PanOptis $10.6 million in damages, finding that Huawei willfully infringed five PanOptis patents covering wireless communication technology. The case is Optis Wireless Technology v Huawei Technologies.

The term “FRAND” is nonsense; we’ll come to this again in a moment. It isn’t fair, reasonable, and non-discriminatory (FRAND); it’s the exact opposite.

Huawei isn’t really worthy of sympathy; Huawei fell for Microsoft's blackmail campaign and based on action in the Northern District of California — as covered as recently as yesterday — Huawei itself is a patent bully not only in Chinese courts but also American ones. Citing the example of InterDigital (it took 21,000 Technicolor patents some months ago) and Microsoft’s patent war on Android, this new post says:

As I mentioned a month ago, Samsung had a deadline last week for its response to Huawei’s Ninth Circuit appeal lodged with the Federal Circuit against the antisuit (actually, just anti-enforcement) injunction Judge William H. Orrick upheld in the Northern District of California in late June. The U.S. district court will hold a trial in December, and the purpose of the injunction is to bar Huawei from leveraging two Chinese patent injunctions (granted by the Shenzhen Intermediate People’s Court) before Judge Orrick has the chance to adjudicate a related claim.

Like in the court below, Quinn Emanuel, as counsel for Samsung, is defending the Microsoft v. Motorola it once sought to prevent as Motorola’s counsel, while Sidley, then counsel for Microsoft, is trying hard (but not convincingly so far) to distinguish one case from the other.

[...]

I remember that a Chinese court had held that InterDigital was entitled to SEP royalties far below what InterDigital was seeking then and Huawei is seeking now. But that’s the problem when a company is licensor in some cases and licensee in others: once the shoe is on the other foot, the positions one used to take and sometimes even the victories one scored in a different context backfire. Just like Huawei’s U.S. counsel from the Sidley firm is now struggling to distinguish Huawei v. Samsung from what may have been by far the most important triumph of the firm in connection with patent enforcement.

Meanwhile, Samsung’s counsel is making a lot of effort to describe the anti-enforcement injunction as no big deal. That’s necessary because of the international comity considerations involved: it’s about a U.S. court having enjoined a Chinese company (that elected to file a case in San Francisco), not about a U.S. court putting itself above a Chinese court, or putting U.S. law above Chinese law. As Samsung’s brief puts it, the U.S. district court merely sought to “protect its own jurisdiction to decide the controversy now before it” and to “ensur[e] that the U.S. case can also proceed unimpeded.”

The same blog also wrote about Qualcomm a day earlier. Just like Intel in the more distant past, Qualcomm faces antitrust/abuses scrutiny in Korea, Europe and the US (maybe China too one day). There are some press reports on the (US) FTC’s Qualcomm-’busting’ action, which merely compelled Qualcomm to reduce the prices a little. FRAND too is an injustice, as it’s merely a euphemism for something that isn’t Z-RAND (zero cost). It’s a patent tax. One front group said this:

The Federal Trade Commission (FTC) pressed ahead with its challenge of Qualcomm’s licensing practices on Thursday, August 30, asking a California federal court to find that the company is required to license its standard essential patents (SEPs) to rival chipmakers.

The FTC filed its motion for partial summary judgment at the US District Court for the Northern District of California, San Jose Division, on August 30. Qualcomm’s competition dispute with the FTC is due to be heard at trial in January 2019.

However, four months before the trial is due to commence, the FTC has asked the court for partial summary judgment that, under the fair, reasonable, and non-discriminatory (FRAND) licensing obligations Qualcomm committed to when it participated in setting wireless standards, Qualcomm must license its SEPs to rival chip makers.

The Commission’s lawsuit, submitted in January last year, alleges that Qualcomm had unlawfully maintained a monopoly in the market for baseband processors.

Sadly, Qualcomm will continue to tax the entire market. So will Huawei, even in the United States. This is in no way beneficial to customers or valuable for innovation purposes. It’s for rich shareholders of very affluent companies whose goal is to undercut, undermine and undertake the competition worldwide. As we pointed out last year, Chinese companies have begun turning US patent courts (and US patent law) against American companies in their own back yard, notably in the Eastern District of Texas. In order to improve matters one needs to question patent maximalists and their agenda; China now patents vastly more things than the US does because China (SIPO more specifically) barely even pretends to value quality of patents.

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