L2 Mobile Technologies claims Qualcomm chips in Ford, Lincoln cars infringe 3G standard-essential patents originally obtained by ASUSTeK

Ford Motor Company appears to have a history of standard-essential patent (SEP) hold-out. It was unwilling to take an actual long-term license from Nokia a few years ago, so the parties entered into what was more of a standstill than license agreement. Last week I found out about an IP Bridge v. Ford infringement action in Munich. An injunction looms large, and just today Germany's chief patent judge said that a recent amendment to the patent injunction statute was merely "a clarification and consolidation of the case law". One of his side judges told another audience that any proposals to soften patent enforcement should be directed to the legislature. Therefore, Ford can expect to be enjoined in Germany unless it agrees to take a FRAND license or is cleared of infringement of any valid SEP.

Three weeks ago, L2 Mobile Technologies, a subsidiary of a Texas-based non-practicing entity named Longhorn IP, sued Ford in the District of Delaware over a handful of 3G SEPs (this post continues below the document):

21-10-01 L2 Mobile Technolo... by Florian Mueller

L2 announced the complaint on its website, on which it also recently reported a favorable validity determination on one of its Chinese patents and, about six months earlier, an infringement lawsuit against Google. Against Ford, L2 is not seeking an injunction, at least not at this stage, but treble damages. In order for such willfulness enhancement to be awarded, L2 must prove an objective and a subjective prong. The latter is about whether Ford actually had knowledge of its infringements of these patents. It appears that the underlying theory is based on Ford's decision not to take an Avanci pool license:

ATTEMPTS TO LICENSE FORD

17. L2MT is a member of the Avanci LLC patent pool. On information and belief, Avanci LLC made Ford a FRAND offer to patents that are essential to the 3G wireless communications standard. On information and belief, Ford declined to take a license to the Avanci LLC patent pool.

The Avanci pool contains the cellular SEP portfolios of dozens of companies, a number of which are way bigger than L2. If L2 prevailed on this objective-willfulness theory, all car makers with significant U.S. sales would have to be extra cautious when rejecting an Avanci licensing offer as they might be liable for treble damages when any Avanci licensors sue them in the United States.

A willful infringer and an unwilling licensee are the same type of market actor, just from different angles. In Germany, courts increasingly deem implementers unwilling licensees if they decline to take a pool license. Therefore, I wouldn't be surprised if a U.S. court considered Ford a willful infringer of any patents in the Avanci pool that the iconic car maker hasn't licensed bilaterally either.

L2's infringement allegations involve Qualcomm chips. Qualcomm is an Avanci contributor as well, but apparently does not have a license from L2. The patents-in-suit were originally obtained by ASUSTeK, a subsidiary of Taiwanese device maker ASUS, and later assigned to a non-practicing entity named Innovative Sonic (also based in Taiwan). That one brought some infringement litigation many years ago, such as against BlackBerry, and in 2018 joined Via Licensing's LTE pool. Via welcomed Innovative Sonic as an innovative leader. Somewhere along the way, Innovative Sonic assigned a bunch of former ASUSTeK SEPs to L2. Maybe Qualcomm had a cross-license in place with ASUSTeK, but Innovative Sonic and L2 obviously never needed a license or chipsets (which wouldn't be available without taking a license first) from Qualcomm.

These are the patents-in-suit:

1. U.S. Patent No. 7,266,105 on a "method for determining triggering of a PDCP sequence number synchronization procedure" (PDCP means Packet Data Convergence Protocol)

2. U.S. Patent No. 8,179,913 on a "method and apparatus of handling variable of RLC reset procedure during receiver-side-only re-establishment in wireless communications system" (RLC means Radio Link Control)

3. U.S. Patent No. RE47,200 on "preventing shortened lifetimes of security keys in a wireless communications security system"

4. U.S. Patent No. 8,054,777 on a "method and apparatus for handling control PDUs during re-establishing receiving sides in a wireless communications system" (PDU means Protocol Data Unit)

5. U.S. Patent No. 8,064,460 on a "method and apparatus of delivering protocol data units for a user equipment in a wireless communications system"

The complaint correctly describes these patents as 3G-related. However, its third paragraph confuses 2G (GSM) and 3G--an unusual (but merely clerical) error in a wireless SEP complaint:

"The wireless communications devices in Ford's connected vehicles comply with the GSM wireless communications standard. This standard is also referred to as the '3G' wireless communications standard."

The costs of patent infringement litigation in the U.S. add up, and in the German IP Bridge case, Ford faces the threat of an injunction. It could take an Avanci pool license, but so far appears to have been opposed. It can also enter into bilateral license agreements.

Avanci itself doesn't hold patents and can't assert them, nor does it have the power to direct its licensors to enforce. Patent pools always have an obligation to inform their contributors (licensors) of any license agreements they conclude, and normally also keep them updated as to ongoing negotiations. For example, if Ford had been close to signing a deal with Avanci, L2 and IP Bridge would presumably have known and might then have waited instead of suing. But ultimately those companies are in the licensing business, and they can't let all car makers get away with unlicensed use forever. By suing Ford, they send out a clear message to others.

No coordination is needed for an independent patent holder to decide to sue the same entity after someone else decided to do so. Those companies do not mean to drive Ford out of business; they merely want to get paid. The more patent cases a given company has to defend against, the greater the incentive to settle at least some of them. A company like Apple or Samsung has to deal with numerous NPE cases in parallel, so one more wouldn't make a difference--but Ford is much smaller, and has much less expertise in the field of cellular SEP litigation. To me it just seems a logical choice that companies holding patents in the same field (regardless of whether they're even contributors to the same pool) would be more inclined to sue someone who is already embattled than pick another target.

For that reason alone, I would not attribute to malice (such as conspiracy) what can be adequately explained with natural litigation choices--and which Ford may have had coming because it apparently passed on licensing options of any kind, be it the Avanci pool or bilateral licenses such as with Nokia. Also, Qualcomm is a far bigger contributor to the Avanci pool than L2 (in fact, Qualcomm's portfolio dwarfs L2's), so the mere fact that L2's case against Ford accuses Qualcomm chips of infringement makes it impossible to imagine that Avanci would have orchestrated anything here.

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Broadbased support for Samsung's petition for rehearing en banc in Apple injunction case

With an unusually strong dissent, Federal Circuit Chief Judge Sharon Prost practically invited Samsung to request a rehearing en banc (full-court review) of a 2-1 decision that would, unless overturned, pave the way for a permanent injunction for Apple against Samsung over patents covering limited aspects of some of countless smartphone features. Samsung accepted the de facto invitation and petitioned accordingly. On Monday, five amicus curiae briefs in support of Samsung's petition were filed. These amici include:

• the National Black Chamber of Commerce (which warns against the risks of African-American businesses being forced out of markets by patent-wielding incumbents);

• non-governmental organizations Public Knowledge and the Electronic Frontier Foundation (EFF), whose joint filing focuses on the majority opinion's holding that the public interest "nearly always" favors patentees seeking injunctions, which has these NGOs greatly concerned;

• innovation policy researchers Charles M. Davidson and Michael J. Santorelli of the Advanced Communications Law and Policy Institute of New York Law School, whose brief (filed in their individual capacities, not on behalf of their university) expresses profound concern over a potential "deluge of lawsuits seeking injunctive relief" that would stifle innovation;

• the Computer & Communications Industry Association (CCIA), whose members include, among others, Amazon, Intuit, Microsoft, Netflix, Sprint, and Yahoo; and

• a group of companies including Google, Facebook, eBay, ASUSTeK, HTC, Lenovo, Newegg, and Red Hat. (ASUSTeK, HTC and Lenovo compete directly with Samsung.)

Chief Judge Prost must be pleased that her dissent from the majority opinion has support in academia, NGOs, and industry.

Apple, however, has a particular problem with the brief filed by the Google-Facebook group. It has asked the Federal Circuit to reject the brief because the filers allegedly didn't meet and confer with Apple prior to filing and because Google should, in Apple's opinion, be treated as another party to the dispute lest its amicus brief constitute an end-run around page limits. I don't have an opinion on the procedural argument, and it doesn't seem overly important to me whether Google is a legitimate amicus curiae in this case, given that there is no way Apple could prevent all the other members of that group of companies from filing an amicus brief. Also, even if the court formally agreed with Apple, the circuit judges would get to see that brief anyway. By far and way the most important aspect of this brief is that it shows the support Samsung has in industry. That political weight would not be diminished by a potential rejection.

Here's the "Google et al." brief (this post continues below the document):

15-11-02 Google Facebook Et Al. Amicus Curiae Brief ISO en Banc by Florian Mueller

Just like Chief Judge Prost, these companies seek to defend the causal nexus standard the Federal Circuit established in its first three Apple v. Samsung injunction decisions. Part A of the brief explains why there is now an inconsistency that must be settled by means of a rehearing en banc. In the second half of their filing, these companies focus on their concerns as major high-tech companies. They refer to an analogy that came up in a previous Apple v. Samsung injunction-related ruling (and to Justice Kennedy's famous concurrent opinion in eBay v. MercExchange):

"To borrow from this Court's analogy in Apple III, if a laptop computer maker was required to change the design of its battery, cooling fan or screws (and the list goes on and on) every time it was found to infringe one of the thousands of patents covering minor features of its product, and was then forced to litigate whether its design-around complies with the injunction, the laptop maker would face the constant threat of coercive patent litigation."

Instead of injunctions, they propose cross-license agreements such as the one Google and SAP announced last week. They note that Apple has licensed the patents at issue, as the record of this case irrefutably shows.

There is a significant overlap between these amici and the membership of CCIA, but CCIA also has a number of very significant other members, such as the ones I listed further above. Here's CCIA's brief (this post continues below the document):

15-11-02 Apple v. Samsung CCIA Amicus ISO Petition for en Banc by Florian Mueller

I have repeatedly disagreed, but also agreed on more than one occasion, with CCIA. I agree this time around, with one exception:

"There is no dispute that patents are a critical part of protecting innovations."

There are industries in which that is the case, but in this industry, there's a constantly-growing number of companies and individuals who believe the patent system does more harm than good. CCIA notes that its member companies file for patents, and they probably didn't want to appear as an anti-patent group here. So they diplomatically chose to say something about information and communications technology (ICT) patents that is actually rather controversial in this industry. That tactical choice has nothing to do with the strength of CCIA's arguments for a rehearing, of course.

CCIA's brief is very focused. The concern is all about outsized, undue leverage for patent holders over high-tech companies that build highly multifunctional products. It's a concise and convincing brief that has drawn my attention to a brand-new academic paper I wasn't previously aware of:

"The majority's 'new and lower causal nexus appears disconnected from the reality of multicomponent devices. It fails to appreciate that even those most innovative technology products are made up of countless small advances, not a few pioneering ones.' Bernard Chao, Causation and Harm in a Multicomponent World at 9 (U. Denv. Sturm C. of Law Legal Studies Research Paper Series, Working Paper No. 15-56, Oct. 27, 2015), http://ssrn.com/abstract=2681204"

The five amicus briefs nicely complement each other. There are, of course, overlaps (for example, the thrust of the two filings from industry is very similar). But each of these filings raises issues and arguments that increase the likelihood of a rehearing. I'm optimistic about the prospects of this, and we'll likely see even more amicus brief activity if the rehearing is indeed granted.

Apple will likely also get some support for its opposition to Samsung's petition, including, if the not too distant past is any indication, from Ericsson, a company that would not hesitate to leverage a patentee-friendly final decision in Apple v. Samsung against Apple...

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Google asks appeals court to move Rockstar patent cases against Android device makers out of Texas

Google really doesn't want its Android device makers to mess with the Rockstar Consortium (which is owned by Apple, BlackBerry, Ericsson, Microsoft, and Sony) in Texas. Last December it brought a declaratory judgment action against the Rockstar Android cases in the Northern District of California, and the chief district judge held that California was a proper venue because Rockstar's patent lawsuits advance Apple's interests (Apple is headquartered in that district). As I said at the time, the Rockstar Consortium is so opaque that Apple isn't necessarily responsible for those lawsuits -- but responsible or not, Apple is a potential beneficiary.

But the California decision didn't persuade Judge Gilstrap in the Eastern District of Texas (who has previously been overruled by the Federal Circuit because he denied transfers of venue) to put his case on hold or to transfer it to California. When two district courts practically disagree on the proper venue, clarity can only be provided by an appeals court. That's why Google filed a petition for writ of mandamus (i.e., a request for the appeals court to interfere with an ongoing case, as opposed to an appeal in the narrow sense of the word, which relates to a final ruling) with the Federal Circuit last week. The objective is to have the Texas cases transferred to California (where Google developed Android) or at least to stay the Texas litigations until the California case has been resolved (which would have the same effect as a transfer).

This is what I expected to happen. In fact, I expected it a while ago. In February I wrote that "[w]e m[ight] very well see one or more mandamus petitions in this context" because "these defendants won't leave a stone unturned in their attempts to move the matter out of Texas." In March, I predicted that Judge Gilstrap wouldn't grant the Android device makers' motion to transfer venue, but that his decision wouldn't "dissuade Google and its OEMs from filing a somewhat likely mandamus petition with the Federal Circuit." I noted that Google could lose in Texas or win in California, but "especially with a view to pretrial decisions (summary judgment etc.), the Northern District of California would clearly be a better venue for the defendants in these cases." There we go.

While Apple and Samsung recently dropped all of their ex-US patent infringement actions against each other and Google (jointly with Motorola) reached a similar ceasefire agreement (even of worldwide scope) with Apple, the Rockstar lawsuits are continuing. In addition to still dealing with Apple in the U.S. (directly and through Rockstar) Samsung now basically has a two-front war with Microsoft: a contract action in New York plus that Rockstar lawsuit in Texas.

Some of the same players (as in the direct disputes between certain key organizations) are involved. Quinn Emanuel, the firm that had the lead in fending off Apple and Microsoft's lawsuits against Android (except for Samsung's defensive efforts in Germany, where credit for preventing Apple from ever enforcing any software patent against Samsung goes to the firms of Rospatt, a litigation firm, and Zimmermann & Partner, a patent prosecution firm with considerable litigation expertise) to the point that neither of those players ever achieved significant leverage, brought the mandamus petition against Judge Gilstrap's "what is filed in Texas stays in Texas" approach. I think it's very likely that Quinn Emanuel will defuse the Rockstar lawsuits just the way it defused the lawsuits brought by two of Rockstar's largest owners. But that is going to be more feasible in the Northern District of California than in the Eastern District of Texas.

[Update] I have a small correction to make. While the official caption of the Federal Circuit cases is In re Google, Google is (which comes as no surprise) not alone in this effort. For example, Samsung also filed a petition, and that's the one I downloaded first from the docket and published here. There are several related case numbers. [/Update]

If you're interested in further detail, here's Samsung's petition:

14-08-14 Google Petition for Writ of Mandamus (Rockstar Cases) by Florian Mueller

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Rockstar fine-tuning its Android lawsuits, now asserting four more patents against Google

There hasn't been much progress so far with the Rockstar Consortium's Halloween lawsuits against Google and seven Android device makers (one of whom, Huawei, has already settled) because the parties are still debating the proper venue. But the venue fight does involve some substantive issues, and as a side effect of the related motion practice it became known that Nortel employees told Google back in 2010 that it infringed certain patents that Rockstar is asserting now.

Just for a brief update, Rockstar has made some adjustments to its complaints in order to increase its chances of defeating Google's (and the Android OEMs') push for moving the cases out of the Eastern District of Texas:

• Late last year Rockstar already added Google as a co-defendant to its Samsung lawsuit. That was the first amended complaint in Rockstar v. Samsung. Rockstar is now seeking permission to file a second amended complaint. In the first one, it asserted only three of the seven patents-in-suit against Google. The objective of the proposed second amended complaint (i.e., the third version in total) is to additionally asserted the four other patents against Google as well. Since those four patents were previously already asserted against Samsung and were addressed by Google in its declaratory judgment action in the Northern District of California, Rockstar argues there's no reasonable basis for Google to oppose this addition. But there is a disagreement.

• Samsung was first to bring a motion to dismiss Rockstar's lawsuit(s) for lack of standing at the time of filing and, with respect to one of the patents-in-suit, on the grounds of invalidity. The other Android OEMs brought similar, though not in all cases identical, motions to dismiss shortly thereafter. ZTE was last to do so (mentioned in this post) and additionally argued that Rockstar lacked a basis to allege willful infringement of the '551 patent. Rockstar amended its complaint against ZTE accordingly, rendering the '551 willfulness issue moot.

I guess Rockstar's procedural steps will be sufficient to dissuade Judge Gilstrap in Texas from granting any motion to transfer, but won't dissuade Google and its OEMs from filing a somewhat likely mandamus petition with the Federal Circuit. Google could lose in Texas or win in California; so could Rockstar. But especially with a view to pretrial decisions (summary judgment etc.), the Northern District of California would clearly be a better venue for the defendants in these cases.

Finally, on a somewhat related note I'd like to mention something here on which I already commented on Twitter. Bloomberg reported on Google's successful efforts to find out who is behind a patent troll named Suffolk Technologies LLC that is suing it over a former BT patent, and it turned out that "Suffolk is owned by Corporate Research Partners, which is owned by IPValue, formed in 2001 by a joint venture of Goldman Sachs, General Atlantic Partners and Boston Consulting Group". A spokeswoman for Goldman Sachs "said the company has a minority, non-controlling stake in iFormation Group, the parent of IPValue", reports Bloomberg. This doesn't reflect favorably on Goldman Sachs at all, and Google did the world a service by naming and shaming Goldman Sachs for its involvement with patent trolling. But the Bloomberg article misses an important point: while Google supports disclosures of the real party in interest in connection with litigation, it has said that it's not really interested in ensuring transparency in patent ownership before litigation is brought. And that's where transparency should begin. So, while I congratulate Google on its revelations regarding Goldman Sachs, I would encourage it to promote transparency in patent ownership at all levels and all stages, not just selectively.

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HTC, LG, ASUSTeK, Pantech join Samsung in moving for dismissal of Rockstar Android lawsuits

A week ago I reported and commented on Samsung's motion to dismiss the patent infringement lawsuit brought against it by the Rockstar Consortium and its MobileStar Technologies subsidiary in the Eastern District of Texas. The next day ASUSTeK brought a motion raising the same issues (alleged invalidity of one patent and, which has potentially broader implications, lack of standing at the time the lawsuit was filed). Yesterday HTC, LG and Pantech followed suit. Technically, due to the AIA's joinder rule, each defendant faces a different Rockstar lawsuit, though the issues are near-identical, except that the case Rockstar brought against Google itself (apart from the fact that Google was later added as a co-defendant to the Samsung case) is about search engine patents.

Of the seven Android device makers sued on Halloween, one (Huawei) has settled, five (firstly Samsung, then ASUSTeK, HTC, LG, Pantech) have brought motions to dismiss, and one (ZTE) has yet to respond. Presumably ZTE will also move for dismissal, unless it settles before.

What we're seeing here is just the overture in the form of a venue fight. Google filed a declaratory judgment action in the Northern District of California shortly before Christmas. Google's partners are meanwhile trying to get the Texas cases dismissed, which would make the California action the first-filed case. At the same time, Rockstar is trying to win the dismissal of the California lawsuit, arguing that there's no point in litigation in two districts "when a single suit in Texas, combined with six existing suits in Texas, can fully safeguard Google's interest".

In each case in which a motion to dismiss should fail, we're going to see a motion to transfer venue. In its reply brief in California, Rockstar has already described a transfer motion as "the predictable next step should this [California] case survive a motion to dismiss", and Rockstar and MobileStar "of course, reserve the right to file such a motion, if necessary, at an appropriate time".

From what I heard (from a major industry player who is neither a client of mine nor a party to Rockstar's Google/Android-related cases), Judge Rodney Gilstrap, who is presiding over the Rockstar-Android cases in Texas, is notoriously unwilling to transfer cases out of his court to other districts, but some defendants have apparently won such transfers through petitions for writ of mandamus filed with the Federal Circuit. We may very well see one or more mandamus petitions in this context as well. I believe these defendants won't leave a stone unturned in their attempts to move the matter out of Texas.

While all of this delays resolution of the actual infringement issues, even the procedural maneuvering that is going on at this stage does involve some arguments touching on the substance of these cases. In last week's reply brief by Rockstar in California I found the following passage particularly interesting:

"C. Google Is Incorrect That Rockstar's Claims Concern Only Android

Throughout its opposition, Google argues that the asserted patents in this action and the Texas litigation concern solely the Android operating system. [...] This is misleading and mistaken. Rockstar and MobileStar are accusing various mobile devices that, while including the Android operating system, also include hardware and software components that infringe Rockstar and MobileStar patents, not the Android operating system alone. [...] For example, at least one patent (U.S. Patent No. 5,838,551) asserted against these mobile devices in the Texas actions has nothing to do with their operating system, but is directed solely to a type of component contained in those devices.

For this reason, Google is mistaken in invoking the customer-suit exception to the first-to-file rule. That exception applies only 'where the first suit is filed against a customer who is simply a reseller of the accused goods, while the second suit is a declaratory action brought by the manufacturer of the accused goods.' [...] Here, the Texas defendants are not resellers of devices or Android operating systems obtained from Google, but rather design, manufacture, and sell the devices themselves (which use the Android operating system). [...] This is hardly the situation of a patentee taking advantage of a customer who unknowingly purchased an infringing product from a manufacturer.

In any event, Google cannot have it both ways. If Google wishes to paint the Texas litigation as a direct assault on Google itself, then Google cannot plausibly hold out this suit as the 'first-filed' case. It is undoubtedly the second-filed case under any logical view of the substance of each suit."

The '551 patent covers an "electronic package carrying an electronic component and assembly of mother board and electronic package", which is obviously Android-unrelated. I'm still going to refer, for the sake of brevity, to these cases as the "Rockstar Android lawsuits" because all defendants have in common that they make Android-based devices and because most of the asserted patents are allegedly infringed by Android itself. When I say "Rockstar Android lawsuits", I mean "Rockstar's lawsuits against six (originally seven) Android OEMs". But for the legal question of whether a dismissal or transfer is warranted, the distinction must be made, and I do agree with Rockstar that Android device makers -- rather large and sophisticated companies, by the way -- can't be compared to the targets of typical customer suits such as hotels or restaurants offering WiFi access.

The potential scope and usefulness of a customer suit exception is also a hotly contested issue in the ongoing U.S. patent reform debate.

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Google tries to get Rockstar's Android lawsuits transferred out of the Eastern District of Texas

On Halloween 2013, the Rockstar Consortium -- the winner of the 2011 Nortel patent auction -- brought patent infringement actions against Google and seven of its Android hardware partners (Samsung, Huawei, ZTE, LG, HTC, Pantech, and ASUSTeK) in the Eastern District of Texas. The lawsuit against Google itself involves seven "associative search engine" patents, while the seven patents-in-suit in the actions against Android OEMs cover a diversity of hardware and software features.

So far, no defendant has answered to the complaint. They were all granted extensions.

On Monday (December 23), Google filed a declaratory judgment lawsuit in the Northern District of California against Rockstar and its MobileStar Technologies subsidiary over the seven patents-in-suit in the Android OEM cases (this post continues below the document):

13-12-23 Google N.D. Cal. DJ Action Against Rockstar Consortium by Florian Mueller

The complaint contains a lot of rhetoric, accusing Rockstar of having "placed a cloud on Google's Android platform" and threatening "Google's business and relationships with its customers and partners, as well as its sales of Nexus-branded Android devices". One tidbit previously unknown to me is that "MobileStar [the subsidiary that is a co-plaintiff in the Rockstar suits against Android device makers) was formed for litigation one day before Rockstar filed its lawsuits against Google's customers". Other than that, it's the usual anti-troll rhetoric, blaming Rockstar's shareholders, with a particular focus on Apple, for the fact that Google's aggressive pursuit of the Nortel patent portfolio (as a matter of fact, Google won the "stalking-horse bid" in 2011) forced other industry players to join forces in order to clear the market of these patents. If not for Google's aggressive pursuit, these patents would have sold at a fraction of the price.

Google alleges that "Rockstar intends the Android OEM Actions to harm Google's Android platform and disrupt Google's relationships with the Android OEM Defendants". Google does not adduce any particular evidence at this stage; it just refers to an Ars Technica article.

I've previously commented on Google's hypocrisy in connection with patents, such as in an op-ed published last month on The Hill's Congress Blog, entitled "Sue when you're winning".

Presuambly none of the defendants wants the liability issues and remedies to be decided in the Eastern District of Texas. But in order to move the Rockstar Lawsuits out of Texas, they need to present a superior alternative. We'll see soon whether they all advocate that their lawsuits be moved to Northern California, where they could and would be consolidated with Google's declaratory judgment action, or whether some or all OEMs additionally bring declaratory judgment actions in districts where their U.S. subsidiary are based.

Rockstar will presuambly request that Google's DJ action be transferred to the Eastern District of Texas and consolidated with the earlier-filed infringement cases.

Quinn Emanuel filed the Northern California action on Google's behalf. Quinn Emanuel has already done, and continues to do, a lot of work for Android device makers (especially Samsung, HTC and Motorola). It remains to be seen whether all defendants agreed that QE should lead their collective defense, or whether some of them have other preferences.

The case was filed with the San Jose division (that's the one closest to Google's Mountan View HQ) and automatically assigned to Magistrate Judge Paul S. Grewal, known for his work on discovery disputes (including the "Patentgate" affair, which also involves QE) on the Apple v. Samsung cases Judge Lucy Koh is presiding over. If any of the parties declines to proceed before a Magistrate Judge, the case will have to be assigned to a United States District Judge. I'm sure Judge Grewal could handle a case like this just as well as any district judge, but chances are someone will want the case reassigned.

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Failed $4.4 billion bid for Nortel patents comes back to haunt Google and friends on Halloween

Almost two and a half years ago, Google lost the Nortel patents auction to a consortium of six industry leaders (Apple, BlackBerry, EMC, Ericsson, Microsoft, Sony) who just wanted to clear the market before anyone would abuse Nortel's patents, particularly its 4G/LTE patents, the way Google's Motorola Mobility still tries to abuse its standard-essential patents. The price for preventing abuse was $4.5 billion, several times what analysts expected before the auction. Google had won a "stalking-horse" bid, which was not the real game, with a $900 million bid. It famously bid pi billion dollars and other multiples of mathematical constants, showing a strange sense of humor with shareholders' money. Its highest bid, as is now documented in a publicly-accessible court filing, was $4.4 billion -- then it dropped out, Rockstar won, and Google later, in panic mode, wasted $12.5 billion on the acquisition of Motorola Mobility, over whose patents Google currently has precisely zero (you know, the number that looks like the letter O) enforceable injunctions in place against its rivals on a worldwide basis and whose video codec and WiFi patents entitle it to less than $2 million a year in royalties from Microsoft.

Fast forward to Halloween 2013. Apparently the Rockstar Consortium's efforts to subsequently negotiate patent license deals with Google and the wider Android ecosystem have been unsuccessful because at least eight Rockstar lawsuits were filed in the Eastern District of Texas: separate actions against Google, Samsung, Huawei, ZTE, LG, HTC, Pantech, and ASUSTeK. I don't know what happened in those negotiations, but maybe Google was a sore loser and tried to defy logic. The simple logic here is, in my view, that if you bid $4.4 billion for a patent portfolio (just not enough to win the auction), you can hardly dispute later that the patent portfolio in question is a treasure trove. And if you want to license a treasure trove, it costs you more than licensing something of little value such as some Motorola patents covering pre-World-War-II-style interlaced video and minor WiFi features. You can't just bid $4.4 billion -- thereby validating the portfolio in the commercially most meaningful way -- and later refuse to pay a significant amount for a license. This is, figuratively speaking, a case of venire contra factum proprium. No jury, whether in East Texas or elsewhere, is going to buy that.

No one can assert thousands of patents at the same time. Rockstar has now made its initial picks, and it presumably thought very carefully about which patents would likely give it leverage in litigation. It has apparently taken its time and tried hard to resolve the issue through licensing rather than litigation. But litigation turned out inevitable, and it surely prepared for that scenario, too. That's the nature of patent licensing.

There are two categories of lawsuits. A lawsuit against Google's core business -- its search engine -- involves different patents (all from the same family of associative search engine patents, which goes back to the time before Google was even founded!) than the seven lawsuits against certain Google hardware partners. Google has been proud of its own search engine patents, including the patent without which Google might not even exist today (the PageRank patent) or at least not be a monopolist. It now has to respect the work Nortel did in this area and which Google built on. It will have to pay up because Congress is not going to bail it out. The Rockstar Consortium is a co-plaintiff in all eight cases (Google and the OEM cases). Against Google, it is joined by its subsidiary NetStar Technologies, and by another subsidiary, MobileStar Technologies, against the device makers.

Defendants will presumably try to move these cases out of the Eastern District of Texas to other districts. It would be more efficient to keep at least the device maker cases in Texas since it's all about the same patents, but I can understand that defendants have different preferences. In Rockstar's case, resources are not going to be an issue. If necessary, it can pursue these cases in eight different districts in parallel, or bring even more lawsuits if others don't get the message from the Halloween lawsuits and continue to refuse to pay up.

I'll now publish the complaint against Google, followed by a list of the patents asserted against Google, and then the Samsung lawsuit (the lawsuits against the other device makers appear to be consistent), also followed by a list of the patents-in-suit.

13-10-31 Rockstar Patent Complaint Against Google by Florian Mueller

Patents-in-suit against Google

• U.S. Patent No. 6,098,065 on an "associative search engine"

• U.S. Patent No. 7,236,969 on an "associative search engine"

• U.S. Patent No. 7,469,245 on an "associative search engine"

• U.S. Patent No. 7,672,970 on an "associative search engine"

• U.S. Patent No. 7,895,178 on an "associative search engine"

• U.S. Patent No. 7,895,183 on an "associative search engine"

• U.S. Patent No. 7,933,883 on an "associative search engine"

13-10-31 Rockstar Patent Complaint Against Samsung by Florian Mueller

Patents-in-suit against Google's hardware partners (Samsung, Huawei, ZTE, LG, HTC, Pantech, ASUSTeK)

• U.S. Patent No. 5,838,551 on an "electronic package carrying an electronic component and assembly of mother board and electronic package"

• U.S.Patent No. 6,037,937 on a "navigation tool for graphical user interface"

• U.S. Patent No. 6,128,298 on an "Internet protocol filter"

• U.S. Patent No. 6,333,973 on an "integrated message center"

• U.S. Patent No. 6,463,131 on a "system and method for notifying a user of an incoming communication event"

• U.S. Patent No. 6,765,591 on "managing a virtual private network"

• U.S. Patent No. 6,937,572 on "call trace on a packet switched network"

Rockstar and MobileStar are seeking a permanent injunction ove the above patents.

Some of these device makers also build Windows Phone products, but the infringement allegations are limited to "mobile communication devices having a version (or an adaption thereof) of Android operating system", showing once again that Google's intellectual property stategy for Android is a failure that exposes its ecosystem to liability issues. Some of the infringement allegations appear to be Android-specific, possibly resulting in interventions by Google in the device maker lawsuits and suggesting that no one will be able to build Android devices without a license from Rockstar/MobileStar.

22 royalty-bearing Android patent license deals have already been announced. It also appears that Nokia has reached, or is very close to reaching, a tipping point in its dispute with HTC, which will result in another such deal pretty soon -- and not just a Nokia-HTC deal but deals between Nokia and the rest of the Android ecosystem (it's also negotiating with Samsung). And RockStar will strike patent license deals with each and every Android device maker. One Android device maker, Sony, is a member of the consortium -- and patent licensing could increase Sony's competitiveness within the market for Android devices.

By the way, as Intellectual Asset Management (IAM) magazine points out on Twitter, "[a]ccording to the FTC definition, Rockstar should not be regarded as a patent assertion entity (PAE)". Google got more help from U.S. antitrust regulators than any other company in this industry, but there's a limit even to that, and it will now be left to its own devices to sort out this situation. It can sort it out with money. A rather substantial amount of money, I guess.

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