Context: Nokia has won four patent infringement rulings against Amazon, some over standard-essential patents (SEPs) and some over non-SEPs. The Munich I Regional Court entered a Germany-wide SEP injunction against certain devices (September 20, 2024 ip fray article), which Nokia has been enforcing for a few months now. Thereafter, Nokia won two preliminary rulings by Administrative Law Judges (ALJs) of the United States International Trade Commission (USITC, or just ITC) (December 21, 2024 ip fray article and January 30, 2024 ip fray article). And on Friday, the Dusseldorf Regional Court handed Nokia its first-ever patent injunction against a streaming service (February 7, 2025 ip fray article) as well as certain devices, with a high ($670M) security requirement for enforcement indicating the commercial importance of the injunction (February 8, 2025 ip fray article).
What’s new: Several filings were made by and with the ITC in this dispute and shed light on the overall situation. Not only the first final initial determination (FID, not as final as it sounds) by an ITC ALJ but also a second FID (of which a public redacted version just became available) by a different ALJ says Nokia complied with its FRAND obligations. In a motion for an extension of time, Amazon tells the ITC that a UK hearing on Amazon’s request of an interim license “will be scheduled [by the High Court of Justice for England & Wales (EWHC)] between April 29, 2025 and May 23, 2025.” Mr Justice Richard Meade decided to allocate more time for that hearing than the England & Wales Court of Appeal (EWCA) envisioned. And there is other information that can be gleaned from various new ITC documents.
Direct impact: Amazon wants the ITC to delay its final (truly final, though appealable) decisions to give the UK court time to effectively encroach on ITC jurisdiction. It remains to be seen whether the ITC considers this helpful or an unlawful attempt to undermine its Section 337 (Unfair Import Investigations) authority. Even if the interim license was granted in the form in which Amazon has lately been seeking it, various encoding claims are not standard-essential in the ITC’s opinion even if decoding claims of the same patents are. Also, the German streaming injunction is over a total non-SEP. But the EWCA left the door open so Amazon could try (again) to demand an interim license covering video-related non-SEPs that are routinely licensed by Nokia together with video SEPs. Furthermore, is interesting to see Amazon attacking the ITC not only through its pursuit of an interim license but also by raising arguments according to which the ITC’s Section 337 investigations should be deemed unconstitutional.
Wider ramifications: It is impossible to know from the outside whether all of Amazon’s efforts to defuse the situation on the patent enforcement front are merely meant to optimize the terms of a settlement that could happen any moment. About a year ago, Amazon finally took a WiFi 6 patent license after Huawei had won a German patent injunction (March 5, 2024 ip fray article), the difference being that no one ever expected a “freebie” on WiFi while streaming services used to be left alone by major video patent holders for a long time.
- Amazon’s FRAND defenses failed to convince another ALJ
- Amazon has been unlicensed for 15+ years, but tries to hold Nokia’s saintly patience against it
- Amazon attacks the ITC on constitutional grounds
- Encoding patent claims are not subject to FRAND according to ALJ
- Upcoming UK interim license hearing
- Nokia’s and Amazon’s petitions for review
- PTAB denies Amazon petition for inter partes review
1. Amazon’s FRAND defenses failed to convince another ALJ
There are two Nokia-Amazon ITC investigations at the moment. The one with the higher number, inv. no. 337-TA-1380, is slightly further ahead: the FID, written by ALJ Cameron Elliot, came down shortly before the end-of-year holidays. Nokia prevailed on four out of five patents. In the one with the lower number, inv. no. 337-TA-1379, ALJ Doris Johnson Hines issued her FID shortly before the end of January. Nokia prevailed one of the the two patents asserted at this stage.
The public redacted version of ALJ Elliot’s decision showed that he held Amazon responsible for its unlicensed status (January 9, 2025 ip fray article), though Amazon blamed Nokia. Now there is also a public redacted version of ALJ Johnson Hines’s FID, and the following quotes regarding FRAND (which appear in that order, but with ohther findings and holdings in between) are worth highlighting:
The evidence supports that Nokia did not breach its [F]RAND obligation to Amazon.
The evidence supports that the obligation to negotiate in good faith does not require specific licensing terms.
The evidence supports that Nokia negotiated with Amazon in good faith and did not breach its obligation to negotiate in good faith.
Amazon makes several arguments that Nokia did not negotiate in good faith. […] The evidence supports that none of these contentions demonstrate a lack of good faith.
Not sharing confidential information does not show that Nokia acted in bad faith.
If anything, the evidence supports that Nokia was trying to get the deal done.
The evidence does not support that Nokia intentionally relinquished its known right and thus waived its right to exclusionary relief in this investigation.
2. Amazon has been unlicensed for 15+ years, but tries to hold Nokia’s saintly patience against it
The following quote shows that Nokia has been trying since 2009 to get Amazon to take a patent license:
The Staff contends that “the facts here do not support a finding of laches” because Nokia’s alleged 15-year delay from 2009 to 2023 before filing suit against Amazon “is not an unreasonable delay, because throughout much of this time period, including most of the time period the Accused Products were available, Nokia was engaging in license negotiations with Amazon.” […] Nokia contends that it “was (and continues) negotiating in good faith.” […] Nokia also contends that “Amazon cannot argue that Nokia waited too long to sue, while simultaneously arguing that Nokia breached its duty to negotiate in good faith by filing suit too quickly.”
Presumably, there was a time when Nokia, like so many other patent holders, did not want to sue Amazon because of the backlash to be feared due to Amazon’s market power as a reseller.
3. Amazon attacks the ITC on constitutional grounds
Since the Supreme Court’s Loper Bright ruling that did away with the Chevron doctrine, U.S. government agencies like the Federal Trade Commission (FTC) or, in this case now, the ITC increasingly see their jurisdiction over certain matters challenged on constitutional grounds. Not only does Amazon seek to undermine ITC jurisdiction through its pursuit of a UK interim license (which in an expansive form is an antisuit injunction by any other name) but it also raised arguments under Articles II and III of the United States Constitution that ALJ Johnson Hines threw out. In the other investigation, ALJ Elliot did so as well, but devoted less space in his judgment to that type of argument.
Basically, Amazon argues that it should be entitled to a jury trial and that the President of the United States does not directly appoint or fire the ALJs.
4. Encoding patent claims are not subject to FRAND according to ALJ
This ITC investigation is not the first one in which the topic comes up, but it is worth mentioning that ALJ Johnson Hines agrees with Nokia that only decoding, but not encoding, video codec claims are covered by an International Telecommunication Union (ITU) FRAND pledge governing the H.264 video codec standard.
It is yet another example of how even professionals, for practical reasons, use terminology that lacks precision. Actually, there is no such thing as a SEP: there are only SEPCs. Standard-essential patent claims. The name of the game is the claim.
The following passage from ALJ Johnson Hines’s FID makes a claim-by-claim distinction:
And in the European Union there even is a debate over whether an essentiality determination relating to a single patent is determinative of the entire patent family’s essentiality…
A UK interim license relating to Nokia’s FRAND licensing obligations would not be able to cover those claims. But the question is whether Amazon will now try to broaden its request for a UK interim license so as to have additional scope for non-essential encoding claims and non-SEPs like the “casting” patent underlying the German Prime Video injunction.
5. Upcoming UK interim license hearing
Amazon transparently wants to delay the point at which any U.S. import ban can enter into force so it has more time to obtain an interim license by successfully asking a UK court to obligate Nokia to grant one.
We are now talking about investigation no. 337-TA-1380, the one in which a FID already came down in December.
Temporarily, Amazon made an argument regarding an allegedly insufficient quorum of commissioners to make a majority decision (January 17, 2025 ip fray article). That argument is no longer valid, at least not in its original form, as ITC commissioner Rhonda K. Schmidtlein has meanwhile stepped down (January 16, 2025 ITC press release), so the Commission is able to make majority decisions even if Amazon’s procedural arguments had been meritorious.
Amazon now argues that there are only two commissioners left, but it does not have a clear statutory basis for saying that the ITC cannot function, nor why the difference between two and three commissioners is of significance under the law. It is more of a psychological or political type of argument, just like Amazon’s argument that it would be desirable to align the target dates of both ITC investigaitons.
With its ITC-specific arguments no longer having a strong basis, Amazon now emphasizes the upcoming UK interim license hearing before Mr Justice Meade and asks the ITC to modify its own schedule so as to “permit the High Court in the United Kingdom to rule on Amazon’s request for an interim license following a hearing that will be scheduled between April 29, 2025 and May 23, 2025.”
Amazon attached various documents, including transcripts, from the UK proceedings to its motion. One can see that some judges in the UK are concerned about the German approach of ordering SEP injunctions based on the implementer’s conduct regardless of whether the SEP holder offered FRAND terms. But the UK judiciary’s aspirations are global, and the UK case schedule clearly appeared to have been designed so as to enable Amazon (provided that it prevails on its request for an interim license) to avoid the consequences of a U.S. import ban.
6. Nokia’s and Amazon’s petitions for review
Back to investigation no. 337-TA-1379 (the one with the late-January FID):
The parties have recently also filed their petitions for review (by the Commission) of the ALJ’s adverse findings. Nokia wants to prevail on the other patent, and Amazon wants to have its loss over one patent reversed.
Amazon raises various arguments, to a large extent FRAND.
Nokia challenges the ALJ’s claim construction, but also argues that even under the ALJ’s own construction, it had proved infringement and the existence of a domestic industry.
In terms of relevant domestic industry products, the key companies here are Nokia licensees Samsung and (with respect to its Xbox videogame console) Microsoft.
7. PTAB denies Amazon petition for inter partes review
Amazon brought petitions for inter partes review (IPR) with the Patent Trial & Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO) against various patents asserted by Nokia. The relevance of those PTAB proceedings on the ITC investigations is a patent-specific question, but the ITC also has a higher evidentiary standard for invalidity. Of course, if the PTAB actually and formally declares a patent invalid, that has an effect. But the persuasive value of PTAB decisions to institute investigations is limited, even more so in cases where there are different theories or even just different arguments and expert witnesses involved.
One of the patents asserted in investigation no. 337-TA-1380 (the one with the December FID) is U.S. Patent No. 8,077,991 (“Spatially enhanced transform coding”). The related IPR petition by Amazon was denied, on the merits (as opposed to a merely discretionary denial), last week:
