This is a roundup article summarizing the busiest seven-day period in the history of the standard-essential patent (SEP) ecosystem. ip fray was first to write (on this website and/or on LinkedIn) about almost everyone of those items. Let’s start with two tables of content (hierarchical and chronological) containing clickable links.
Hierarchical overview
- Court hearings
- New court filing
- Settlements
- Cellular SEPs
- Multimedia SEPs
- License deal without litigation
Chronological list
- Friday, October 25, 2024
- Sunday, October 27, 2024
- Tuesday, October 29, 2024
- Wednesday, October 30, 2024
- Thursday, October 31, 2024
Friday the 25th: Panasonic settles with Xiaomi and OPPO
A Panasonic v. Xiaomi trial in the UPC’s Mannheim LD had already been cut short by the parties’ joint request to stay the proceedings after an agreement on an interim license that was brought about by the England & Wales Court of Appeal (EWCA) and represented a major win for the Chinese consumer electronics company.
They then entered into a settlement agreement based on which they also obviated the need for a UK FRAND trial before Mr Justice Richard Meade. At least for a number of years, there won’t be any patent litigation between them.
Shortly after Xiaomi’s breakthrough, OPPO also settled with Panasonic. OPPO did not have the direct benefit of an interim license, but the parties presumably knew that Mr Justice Meade was going to become aware of the terms of the Xiaomi settlement.
Sunday the 27th: ip fray discovers Lenovo v. ZTE lawsuit in UK
Just like ip fray surmised, the Lenovo v. ZTE case that showed up in the electronic docketing system of the High Court of Justice for England & Wales (EWHC) was brought by a formal plaintiff who is in material terms the defendant. Lenovo will end up the net licensee when the two companies enter into a license agreement. ZTE has an active outbound licensing program.
ZTE expressed its dismay at Lenovo’s decision to run to a UK court instead of either working out an agreement at the negotiating table or leaving any dispute, primarily if not exclusively, to a Chinese court.
Tuesday the 29th (part 1/3): InterDigital settles with OPPO
After almost three years of litigation, InterDigital and OPPO agreed on a license deal. In the UK a key question was what bearing the EWCA’s InterDigital v. Lenovo decision should have on the situation between InterDigital and OPPO. One ramification was all too obvious: both the EWHC (Mr Justice James Mellor) and the EWCA held that a willing licensee will pay back-royalties for the entire period of use of the SEP portfolio in question, as opposed to invoking a statute of limitation that applies to patent damages.
InterDigital was enforcing a SEP injunction that it had obtained from the Munich I Regional Court. Whether OPPO can now return to the German market (given that the only SEP holder left with whom OPPO needs to settle litigation there is VoiceAge EVS), and whether that would be commercially fruitful, remains to be seen. What’s difficult to tell from the outside is whether OPPO should have awaited the Munich appeals court’s hearing in VoiceAge EVS v. HMD, given that some of what the appeals court said would actually have increased the likelihood of a motion for a stay of enforcement to succeed.
Tuesday the 29th (part 2/3): Nokia settles with HP
(link to detailed discussion in another article)
For Nokia, just like some other major SEP holders, multimedia patents (video, audio, virtual reality etc.) are now a key growth area. Nokia has announced two license agreements with unnamed video streamers. It won a SEP injunction in Germany against certain Amazon streaming devices last month (September 20, 2024 ip fray article), which it is now enforcing. The dispute with HP, which also had a UPC part, has now settled out without reaching the stage of injunction enforcement. This also comes at a good time for Nokia Technologies in light of a management change.
Tuesday the 29th (part 3/3): Access Advance signs license agreements with HP and TCL settling litigation by Access Advance licensors
(link to detailed discussion in another article)
Access Advance is a successful and transparent patent pool administrator that discloses its licensees. ip fray discovered both HP and TCL as new entries on that list. Certain .
This makes HP the second company (the other one being OPPO) to have settled two disputes during that SEPtacular period: with Nokia as well as Access Advance. Not only was there infringement litigation but HP was also suing in the U.S. over commercial disagreements (duplicative royalties etc.). The UPC’s Dusseldorf LD has already ordered a stay of a Dolby v. HP case as a result of this license deal (PDF (in German)).
TCL was seeking a FRAND determination for the entire Access Advance pool from a Chinese court, and according to the Supreme People’s Court, that particular Chinese court had jurisdiction, which doesn’t necessarily mean that a pool rate would have been set, but that case will be, or has been, withdrawn as well.
Wednesday the 30th (part 1/2): Huawei v. Netgear trial in UPC’s Munich LD
With the Panasonic cases having been settled and a recent Philips v. Belkin case having been about a SEP but not about an alleged abuse of market power (September 13, 2024 ip fray article), Huawei v. Netgear is now most likely leading to the seminal UPC decision on a SEP assertion against which a FRAND defense is raised.
Not just one FRAND defense, but even two (antitrust and contract law), but neither appears strong. The court did not indicate an inclination, except that it found a couple of Netgear’s arguments unclear, but all in all, the UPC’s first FRAND injunction looms large. The court can give guidance on the legal standard, but this may be one of the easier and clearer cases where the standard is not necessarily outcome-determinative.
A decision has been scheduled for December 18, 2024.
Wednesday the 30th (part 2/2): Avanci EV Charger program signs up ADS-TEC Energy
Anything related to litigation, including settlements of pending litigation, tends to get far more attention than amicable license agreements, most of which are never announced. Avanci is, thankfully, very transparent and discloses licensees. The latest licensee of Avanci’s EV Charger licensing program (which will celebrate its first birthday in December) is ADS-TEC Energy, a company that apparently appreciated the ease of doing licensing through a one-stop shop solution.
It constitutes undeserved injustice that some others occasionally take digs at Avanci, or publish anti-Avanci write-ups by lobbyists, that would not be possible if Avanci wasn’t transparent.
Thursday the 31st: VoiceAge EVS (plaintiff-appellee) v. HMD (defendant-appellant) appellate hearing
Save the best for last: the VoiceAge EVS v. HMD Halloween hearing in the Munich Higher Regional Court featured the European Commission, represented by outside counsel and with two staff attorneys present for the most interesting part.
On the eve of that hearing, the appellate panel shared with the parties and the amicus curiae (the EC) an idea. The appeals court would like implementers to make a deposit to the amount of the royalties due under a SEP owner’s royalty demand (later nuanced by clarifying that a blatantly absurd demand would be rejected) in order to have a basis to proceed to a FRAND determination. Neither party was enthusiastic about that idea, and the patentee even less so than the implementer. In the end, the ecosystem needs more clarity, not more delay.
The appeals court deserves credit for having realized that something must be wrong when every SEP case they see (usually only at the stage of a motion for an enforcement stay) is decided against implementers, even those that diligently and reasonably expediently responded and made counteroffers that were at least not facially insufficient.
Initially it appeared that the appeals court wanted to duck the really important FRAND issues raised by the EC (though this case was never a good vehicle) based on a half-baked and ultimately unhelpful idea. But the longer the hearing lasted, the clearer it was that the judges were really looking for a workable solution. Put differently, they also expressed their disagreement with what ip fray has criticized as a kindergarten approach is the issue: implementers are judged by their behavior instead of looking at the economics. Both Presiding Judge Lars Meinhardt and Judge-rapporteur Baumann said unequivocally that a constructively negotiating implementer should not be enjoined only because it might be faulted for not having responded as quickly as possible or not having offered as much as it could have at a certain stage.
The appeals court and the EC share a common objective: they absolutely positively want to enable the parties to a SEP dispute to negotiate FRAND license terms without hold-up forcing an implementer into agreements on supra-FRAND terms (a reality that the appeals court correctly recognized) or hold-out forcing SEP holders dependent on a steady revenue stream to make lowball offers (a problem that the appeals court may not have considered specifically, though it definitely is a pro-patent court).
Unless the court allows itself to be persuaded by the EC’s very good arguments or at least grants the EC’s wish to put this matter before the European Court of Justice (ECJ) sooner rather than later, they still disagree on how to enable threat-free licensing negotiations, and what the corridor for the terms discussed between the parties should be.
The EC made it clear that FRAND is a range, and no one disputed that fact. Within that range, it wants negotiations to happen. But a supra-FRAND demand by the patentee should, in the EC’s opinion based on its interpretation of the ECJ’s Huawei v. ZTE framework, result in the denial of an injunction. This means that if a SEP holder demands a royalty at the upper end of the FRAND range and the implementer makes a counteroffer at the lower end, there wouldn’t be an injunction.
One could describe it in these words: Presiding Judge Meinhardt would order an injunction if the SEP holder came into the FRAND fold, even if maybe just at trial time, while the EC’s understanding of Huawei v. ZTE is that an injunction can issue only if a willing licensor meets an unwilling licensee (but not if both are unwilling or both are willing).
There will be post-hearing briefing and a decision. All of this can still take time. In the meantime, there is significant uncertainty over SEP enforcement in Munich and, practically, in all of Germany. German SEP case law (Sisvel v. Haier) became extremely lopsided, to the extent that it made mockery of the administration of justice. Halloween 2024, or arguably the appeals court’s notice to the parties on the eve of the hearing, was a watershed moment.
The EC’s amicus curiae brief is a much more targeted and effective measure to redress the balance in SEP enforcement than the proposed SEP Regulation.