Context: The multi-jurisdictional patent dispute between Ericsson and Lenovo also involves five complaints with the United States International Trade Commission (USITC, or just ITC): three by the former, two by the latter. The least important one of Ericsson’s three complaints (investigation no. 337-TA-1376) related to non-standard-essential patents (non-SEPs) and went nowhere as an Administrative Law Judge (ALJ) found no infringement (November 16, 2024 ip fray article) and Ericsson did not invest in a petition for review. But Ericsson scored a resounding victory (four out of four) in its first and most important case (inv. no. 337-TA-1375), which is about cellular SEPs (December 18, 2024 ip fray article). A recommendation on remedy (where the only tool at the ITC’s disposal is a limited exclusion order (LEO), i.e., U.S. import ban) has been postponed to February 21, 2025 (December 31, 2024 ip fray article).
What’s new: Yesterday, the Office of Unfair Import Investigations (OUII, commonly referred to as “the [ITC] Staff”) filed public redacted versions of its two post-hearing briefs in one of the two investigations instigated by Lenovo (inv. no. 337-TA-1397, which is over non-SEPs). According to the documents, the Staff does not consider Lenovo subsidiary Motorola Mobility’s two patents-in-suit infringed (nor practiced by Lenovo’s domestic industry products).
Direct impact: The Staff’s views are not binding on the ALJ or the Commission (the political appointees at the top of the U.S. trade agency), but bear significant weight as the Staff is independent of the parties. Lenovo is, therefore, more likely than not to lose this case.
Wider ramifications: It is an oddity at best and absurdity at worst that Lenovo makes a FRAND (fair, reasonable and non-discriminatory [licensing terms]) argument in connection with a hypothetical bond to be posted for enforcement. The Staff also appears puzzled, and it raised concerns over Lenovo’s FRAND compliance in a different investigation (inv. no. 337-TA-1388). Lenovo has, however, found a judge who is receptive even to extreme and novel FRAND positions: Lord Justice Arnold of the England & Wales Court of Appeal (EWCA) (February 2, 2025 ip fray article), a man on a mission to derail SEP enforcement on a worldwide basis. But other jurisdictions are not defenseless and will sooner or later strike down on litigants like Lenovo who try to take advantage of judicial activism and imperialism (February 4, 2025 ip fray article). A UK appellate hearing will commence on February 18, 2025.
In ITC inv. no. 337-TA-1397 (In the Matter of Certain Cellular Base Station Communication Equipment, Components Thereof, and Products Containing Same), the Staff filed its initial post-hearing brief on January 7, 2025, and its responsive post-hearing brief on January 17, 2025. The public redacted versions of both documents were filed yesterday (February 5, 2025).
In the Staff’s opinion, Lenovo’s Motorola Mobility subsidiary defended the two patents-in-suit against Ericsson’s invalidity contentions, but neither U.S. Patent No. 11,076,304 nor U.S. Patent No. 11,711,706 (both covering a “communication configuration selection”) is infringed.
Even an infringement of a valid patent would not be enough to prevail on the technical merits in the ITC. There is an additional hurdle called domestic industry requirement. Motorola Mobility pointed to some of its products that come with a certain Qualcomm chipset, but failed to convince the Staff that those products practice the patented inventions.
Only if the ALJ agreed with the Staff on validity, but disagreed on both infringement and the technical prong of the domestic industry requirement, would there be a possibility of an import ban. In that hypothetical case, the Staff says any LEO should be tailored, allowing Ericsson to continue to sell O-RAN equipment.
FRAND
During the 60-day Presidential review period (allowing the U.S. government, typically the U.S. Trade Representative (USTR), to veto an import ban), a bond may be required, but the Staff does not believe Ericsson should have to provide any collateral here. The Staff says in this context that “Motorola also does not adequately explain why its proposed bond rate at Motorola’s alleged ‘FRAND offer of {REDACTED]’ is relevant for the Asserted Patents, let alone a reasonabl[e] royalty, as the Asserted Patents are not standard-essential patents, and Motoroal includes no other basis for supporting its proposal.”
In the other investigation instigated by Lenovo ( inv. no. 337-TA-1388), SEPs are at issue. The Staff is not participating in that investigation as far as the technical merits are concerned, so there is no third-party opinion on Lenovo’s infringement allegations available right now. The Staff’s exclusive focus in that context is on remedies and the public interest, with the Staff arguing like in the non-SEP case that Ericsson should be permitted to continue to sell O-RAN equipment.
In a January 6, 2025 filing in that SEP investigation (“reply post-hearing brief on the public interest and remedy”), the Staff made a couple of interesting remarks about whether Lenovo complied with its FRAND licensing obligations. After reciting what Lenovo said about a recent Federal Circuit decision in an antisuit injunction context (October 24, 2024 ip fray article), the Staff states the following:
In the Staff’s view, if Motorola/Lenovo’s behavior regarding its SEPs is measured by the quote above, its very own compliance with its ETSI IPR obligations to “negotiate in good faith” is at best questionable.
The Staff does not consider that legal standard applicable to the ITC investigation, however. It applies a very lenient standard where the mere fact that Lenovo would be prepared to enter into a license agreement on terms to be set by the UK judiciary is already sufficient to justify an import ban. But after clarifying the standard, the Staff comes back again to how Lenovo’s actions contradict its words:
Under the Staff’s narrow reading of the Federal Circuit decision, […] However, if Motorola/Lenovo’s very broad application of statements in Ericsson v. Lenovo were to apply, the undisputed fact that [REDACTED] is problematic.
The context suggests that Lenovo sued Ericsson over SEPs without making much of an effort (if any) to negotiate in good faith.
The Staff always has the ITC’s institutional interest in mind. Once they realize at the ITC that Lenovo is trying to use the EWCA to undermine, by way of an interim license, the ITC’s jurisdiction over its Section 337 investigations, the Staff will be more careful next time whether it should attach any importance to someone’s declared willingness to enter into a license on FRAND rates set by the UK judiciary.