In a May 10, 2018 ruling, discussed earlier on this blog, Magistrate Judge Payne affirmed the jury’s willfulness finding largely on the ground that TCL did not proffer any evidence that it held a subjective, good faith belief that it did not infringe the patent-in-suit or that the patent was invalid. The fact that TCL filed over a dozen petitions for inter partes review of the asserted patents did not mean, as a matter of law, that TCL held such a subjective, good faith belief. The ruling demonstrates the importance, post-Halo, of alleged infringers performing their own investigation of allegations against them – mere pleadings taking non-infringement or invalidity positions may not suffice to defeat a willfulness allegation. Continue Reading Willfulness Finding in EDTX Ruling in <i>TCL v. Ericsson</i> Illustrates the Risk to Accused Infringers of Failing to Investigate Allegations
Robert Moore is an Associate based in the firm’s Boston office and is experienced in patent litigation and licensing. He practices primarily before the International Trade Commission and various federal District Courts, both asserting patents and defending against allegations of infringement. One major aspect of his practice involves joining parties wishing to sell or monetize patents with those interested in investing in monetization programs.
On May 10, 2018, Magistrate Judge Payne reconsidered his previous March 2018 order which had vacated a jury award, and granted plaintiff Ericsson’s motion for reconsideration. The May ruling makes clear that the accused infringer bears the burden of production for royalty-stacking and other mitigatory arguments on damages. Whereas the March ruling excluded Ericsson’s damages expert for failing to account properly for the royalty stack on the accused products that his damages theory implied, the May ruling scrutinized the record and found that TCL had failed to submit any evidence into the record that would support even a jury instruction on royalty stacking. The decision underscores the importance of developing an affirmative record in support of each element of a damages theory or counter-theory.
The ruling also stands in stark relief to Judge Selna’s 2017 ruling in the Central District of California case between the parties. There, Judge Selna determined that approximately $20 million would represent a fair, reasonable, and non-discriminatory (FRAND) royalty for TCL’s infringement of Ericsson’s worldwide portfolio of patents declared essential to various telecommunications standards (SEPs) – thousands of patents that, the parties agreed, represented a significant share of the value of the technology in those standards.
The public version of ALJ Shaw’s Initial Determination (ID) in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (1012 Investigation), provides important guidance on enforcement of standard-essential patents (SEPs) in the ITC. Respondent and accused infringer Sony argued that several of the patents asserted by patentee Fujifilm wereessential to the LTO-7 standard (relating to “linear tape open” magnetic media) and therefore that Fujifilm had waived its right to injunctive relief and was obligated to license its patents on FRAND terms. ALJ Shaw ultimately found that Sony had not met its burden of demonstrating essentiality, but he nevertheless provided helpful instructions on the quantum of proof necessary to make out such a claim, as well as other factors relevant to ITC enforcement of SEPs, all of which affirmed that the ITC is a viable forum for enforcement of SEPs. In sum he ruled that:
- The party arguing that a patent is essential bears the burden of proof on that point;
- Unless a patent is, in fact, essential to a given standard, there can be no breach of the standard-setting organization (SSO) agreement(s) giving rise to the FRAND obligation at issue;
- Breach of an SSO agreement and of forum selection clauses are not valid defenses in ITC investigations; and
- Respondents bear the burden of proving that a complainant/patentee relinquished its rights to equitable relief by joining the SSO in question.
The decision in U.S. International Trade Commission (ITC) investigation Certain Magnetic Data Storage Tapes and Cartridges Containing the Same, Inv. No. 337-TA-1012 (“1012 Investigation”), is still confidential, but the ITC has issued a notice stating that ALJ Shaw has ruled in favor of patentee Fujifilm against Sony and recommended that an exclusion order be issued. This is important because it is the first time the ITC has issued an exclusion order on standard-essential patents (SEPs), and may be the first time any U.S. tribunal has issued exclusionary or injunctive relief on patents which were declared standard essential. In the opinion, which should become public in a few weeks, ALJ Shaw, who presided over the case, is expected to address a number of key issues relating to the assertion of SEPs in general, and at the ITC specifically. In this case many of Sony’s affirmative defenses relate to the alleged essentiality of the asserted patents and the Administrative Law Judge was asked to answer a number of questions relating to SEPs generally and the ability to enforce them at the ITC.
Last week, the Federal Circuit held computer memory system patent claims not abstract and thus patent-eligible under Section 101, reversing a lower court dismissal of the case under Rule 12(b)(6). Visual Memory LLC v. NVIDIA Corp., No. 2016-2254, 2017 U.S. App. LEXIS 15187 (Fed. Cir. Aug. 15, 2017).
U.S. Patent No. 5,953,740 (“the ‘740 patent”) describes a memory system that can be tailored for use with multiple different processors without reducing performance. Id. at 3. The ‘740 patent explains that when “the [memory] system is turned on, information about the type of processor is used to self-configure the programmable operational characteristics.” Visual Memory, No. 2016-2254, slip op. at 4. “For example, depending on the type of processor, internal cache 16 can store both code and noncode data, or it can store only code data.” Id. at 4. Claim 1 recites the following:
On Monday, March 27, 2017, the U.S. Supreme Court heard oral argument in TC Heartland v. Kraft Foods Group Brands LLC, a case that could have a profound impact on where patent infringement cases may be litigated.
Although this case has focused a lot of attention on the Eastern District of Texas – a hotbed of patent litigation – it wasn’t even filed in that district. TC Heartland moved to transfer a patent infringement action that Kraft Foods filed in the District of Delaware (a distant second to the Eastern District of Texas in terms of the volume of patent litigation) to the Southern District of Indiana, where TC Heartland is headquartered. After that motion was denied, TC Heartland appealed to the Federal Circuit, arguing that the patent venue statute (28 U.S.C. §1400(b)), not the general venue statute (§1391(c)), sets forth the requirements for venue in patent cases, a position that would limit the venues available to plaintiffs in most infringement actions. In denying TC Heartland’s petition, the Federal Circuit reaffirmed its long-standing view that patent suits may be filed in any judicial district in which the defendant sells an allegedly infringing product. But the U.S. Supreme Court granted certiorari on the appeal, perhaps signaling the Court’s willingness to overturn almost 30 years of practice.
Nondisclosure or confidentiality agreements (NDAs) are among the most common documents attorneys draft and review for clients. They are so common, in fact, that where a client needs to execute a large number of facially distinct but substantively similar NDAs, it may make sense for the client to draft and review these documents itself. To assist the client in doing so, we typically provide it with an informal and non-exhaustive list of considerations, of the kind recreated below, to bear in mind when thinking about each specific NDA.
On December 28, 2016, the Korean Fair Trade Commission (KFTC) issued a steep fine (“KFTC Ruling”) against Qualcomm for antitrust violations in patent licensing and modem chip sales – a record penalty that the U.S. company will challenge in court. Finding that Qualcomm leverages its standard-essential patent (SEP) portfolio to further its chipset business in contravention of Qualcomm’s fair, reasonable and nondiscriminatory (FRAND) obligations and Korean antitrust law, the agency levied a penalty of over US$850 million and directed Qualcomm to alter its business model.
The KFTC Ruling is just one of the latest challenges to Qualcomm’s licensing strategy and also sets forth Korea’s understanding of what FRAND obligations entail. Mintz Levin attorneys provide detail and insight in “Korea, In Sanctioning Qualcomm, Articulates A New Meaning For ‘FRAND’“, as published on IP Law 360.
Did Qualcomm utilize anticompetitive licensing tactics to extract excessive royalties from OEMs for its standard-essential patents (SEPs)? Is the company seeking to weaken its competitors by refusing to license its patents on fair, reasonable, and non-discriminatory (FRAND) terms? The Federal Trade Commission thinks so and filed suit against Qualcomm on January 17 in the Northern District of California for allegedly monopolizing the market for CDMA and LTE baseband processor technologies.
Issuance of the complaint was authorized on a 2-1 vote of the Commission, which hinged on the vote of President Obama-appointed FTC Chairwoman Edith Ramirez, so the Inauguration of Donald J. Trump as President on Friday may have direct implications on this case.
The Mintz Levin team discusses the case and points out the irony of the timing since the FTC and Antitrust Division of the Department of Justice (DOJ) issued their revised Antitrust Guidelines for the Licensing of Intellectual Property on January 13, in which they declined to adopt guidelines relating to precisely this sort of conduct.
Read our full discussion.
On November 28, 2016, Baroness Neville Rolfe, the United Kingdom Minister of State for Intellectual Property, announced that the U.K. would ratify the Unified Patent Court Agreement, paving the way for the European Unified Patent Court (UPC). Commentators were generally surprised that the U.K, in the wake of June 2016’s referendum vote to leave the E.U., would take this step, moving towards greater cooperation with E.U. member states and ceding some control over its patent system. Regardless of whether the U.K.’s ratification was expected, the establishment of the UPC could have a profound impact on global intellectual property, provided that the U.K. follows through on its announcement.
To read more about this announcement, and what the European Unified Patent Court means for the world patent market, please click here.