09.22.18

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Bogus Patents Which Oughtn’t Have Been Granted Make Products Deliberately Worse, Reducing Innovation and Worsening Customers’ Experience

Posted in Apple, Europe, Patents, RAND at 12:07 pm by Dr. Roy Schestowitz

Marco Cassia patent
EP2460270 by Marco Cassia (warning: epo.org link)

Summary: How shallow patents — or patent applications that no patent office should be accepting — turn out to be at the core of multi-billion-dollar cases/lawsuits, with potentially a billion people impacted (their products made worse to work around such questionable patents)

IN OUR previous post we mentioned how the EPO had begun feeding patent trolls in the same way the USPTO did for a number of decades. Qualcomm is a poorly-managed aging company in a state of decadence, so it nowadays resorts to patents more than anything, even dubious European Patents (EPs), granted by the EPO.

Florian Müller has been keeping a close eye on legal filings from Qualcomm, especially earlier this year. He more or less understands the underlying issues, having spoken to some of the people involved and also glanced at the underlying patents. “Very long (by local standards) Qualcomm v. Apple patent trial just finished,” he wrote some days ago. “Stuff for more than one blog post: infringement, validity, antitrust, licenses to contract manufacturers… By far their most interesting court fight to date.”

The CCIA‘s (Computer & Communications Industry Association) Joshua Landau weighed in by saying: “The FRAND obligation means you negotiate a license with *anyone* who asks, not “anyone but your competitors.” This shouldn’t be controversial-even Qualcomm has argued that when they were in the position of wanting a license.”

“Qualcomm [is] presently asserting 13 patents against Apple in Germany,” Müller noted. “Until today‘s trial, „only“ 10 were known, including the one the court in Munich told me about yesterday.”

Müller, Landau said, “beat me to it (and beat our press release as well), but yeah, FRAND means FRAND – you have to be willing to license anyone who asks for a license. Qualcomm even agrees with this principle—when they’re the ones who want a license.”

Müller already wrote a number of posts about it — ones that we took stock of last week. He separately took note of another FRAND case: “Huawei v. Samsung: no deal. Minute Entry for proceedings held before Magistrate Judge Kandis A. Westmore: Case did not settle. Settlement Conference held on 9/17/2018. Total Time in Court: 4 hours 17 minutes…”

But focusing on the main case in question (one which impacts Android/Linux as well), Müller said that “[i]ndustry bodies @actonline and @ccianet support @FTC’s motion to require #Qualcomm to license SEPs to rival chipset makers,” basically citing a disgraced Microsoft front group which pretends to represent small businesses. He wrote a blog post about it and assured me that “I never said they represented me. I just agree selectively…”

Here’s what’s happening in a nutshell:

It’s a busy September on the FRAND front…

As I reported on the first of the month, the Federal Trade Commission brought a motion for partial summary judgment that may open up the wireless chipset market–by reminding Qualcomm of its self-imposed obligation to license rival chipset makers–even prior to the big antitrust trial in the Northern District of California.

It’s odd that a mere reminder would be a potential game-changer, but that’s the way it is because of Qualcomm’s refusal to live up to the FRAND promise.

Disturbing it was to then see CCIA liaising with a Microsoft AstroTurfing group:

Yesterday, CCIA and ACT filed an amicus brief in the FTC’s case against Qualcomm in the Northern District of California. As explained in the brief, the FRAND obligation which patent owners voluntarily agree to when they participate in the development of a standard requires the owners of standard-essential patents to license their patents on “fair, reasonable, and non-discriminatory terms.” And the “non-discriminatory” portion of that obligation means precisely what it states—that the patent owner may not discriminate amongst willing licensees, but has to license anyone who wants a license.

Why would CCIA wish to associate with ACT? We could expect this perhaps 7 years ago when CCIA did all sorts of questionable things, but why now? Why again?

“Trolling with junk patents works best in Germany,” Müller wrote later. “With respect to injunctions, worse than the Eastern District of Texas.”

Something like the UPC would put that ‘on steroids’ if it was ever to materialise, further broadening scope of injunctions. The patent maximalists deny that a problem even exists in that regard.

As it turns out, the European Patent in question may in fact be bunk: [via]

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.

Another sore eye for patent quality at the EPO? As Landau put it: “An Expert Opinion from the Swedish Patent Office says that Qualcomm’s Patent used to Sue Apple Should be Invalidated…”

It cites an Apple proponents’ site, which in turn cites Müller and says: “Yesterday’s Qualcomm v. Apple trial took place in the Mannheim Regional Court, Europe’s leading venue for wireless patents. The trial took twice as long as the average Mannheim patent trial, reports Florian Mueller. Mueller described the Apple v. Qualcomm case the commercially biggest patent-related dispute ever and could be truly seen as the World Series of IP cases. Apple is trying to invalidate Qualcomm’s patent titled “Switch with Improved Biasing” in this Mannheim case based on an expert opinion from Sweden.”

Apple too has been granted bogus European Patents, based on reliable sources of ours. It’s somewhat of a crisis. Another new post from Müller says: [via]

This is my second post on the Qualcomm v. Apple patent infringement trial held by the Mannheim Regional Court yesterday. In the previous post I reported on the alleged (non-)infringement and (in)validity of the patent-in-suit, EP2460270 on a “switch with improved biasing”. While the case is too close to call, this patent assertion may fail on the merits just like the first one that went to trial in Mannheim. But the court might also, contrary to what the non-asserted independent claim 16 implies for claim construction purposes and despite a finding by the Swedish patent office that the patent lacks a sufficient inventive step over prior art presented by Apple, hold Apple liable for infringement and decline to stay the case pending a parallel nullity action. In that case, Apple’s affirmative defenses–antitrust and licensing–will be outcome-determinative at least with respect to the availability of injunctive relief.

For a long time, it was hard to fend off even standard-essential patent injunctions in Germany on antitrust grounds (with or without a FRAND commitment, which German courts wouldn’t deem enforceable by third-party beneficiaries anyway). It was arguably hardest in Presiding Judge Dr. Kircher’s court. The situation improved after the Court of Justice of the EU ruling in Huawei v. ZTE; in a way, it already got a little bit better after the European Commission took action against Samsung and Motorola. But very regrettably, the thinking of German patent judges is still, by and large, that antitrust defenses are just part of a throw-in-the-kitchen-sink tactic of infringers.

The patents Qualcomm is asserting in Germany–at least the ones that have been discussed in hearings or trials–aren’t standard-essential, which ups the ante for Apple’s antitrust defense. However, the fact that Qualcomm’s conduct has been deemed anticompetitive by competition enforcers in multiple jurisdictions (“Antitrust Grand Slam”).

Last but not least is this post about Apple’s workaround (around the patents):

Yesterday the Munich I Regional Court held a six-hour (including breaks, though) trial on Qualcomm’s eight lawsuits asserting four different search user interface patents against Apple’s Spotlight search, with two lawsuits per patents targeting a total of three different Apple entities. A first hearing had been held in early May.

That part of the wide-ranging, earth-spanning, multifaceted Apple-Qualcomm dispute is, however, strategically so unimportant that it’s not worth multiple posts or anything. That set of eight cases is a total waste of court and party resources–sort of a tempest in a teacup–as these Munich Spotlight cases have been defanged in three important ways…

This is no doubt useful for patent law firms, especially German or Germany-based ones, but who else does that serve? All these ruinous lawsuits already contribute to deliberate exacerbations in product development. And based on what? Bogus patents that should never have been granted in the first place?

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