USPTO invalidates Nokia patent as per OPPO's PTAB IPR petition: Nokia is appealing parallel decision by European Patent Office

Bring the popcorn. The seemingly neverending, multijurisdictional patent dispute between Nokia and OPPO continues to make news. Earlier this week, I reported on a decision by the European Patent Office (EPO) to uphold an OPPO patent in an amended form, and now let'see how the modified claim language will fare at a Mannheim infringement trial in early December and/or in a preliminary injunction proceeding before the Unified Patent Court (UPC). Now there's news from the U.S., a jurisdiction in which the parties don't have any infringement actions pending against each other, but where the Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) instituted an inter partes review (IPR) roughly a year ago relating to U.S. Patent No. 10,701,588 on "methods, apparatuses and computer program product for PDU formatting according to SDU segmentation."

On Thursday, the PTAB granted the petition and held all challenged claims unpatentable:

Guangdong OPPO Mobile Telecommunications Corp., Ltd., v. Nokia Solutions and Networks Oy (IPR2022-00632, Patent 10,701,588 B2): Final Written Decision Determining All Challenged Claims Unpatentable

Nokia can appeal the PTAB decision to the United States Court of Appeals for the Federal Circuit, just like it also appealed in September a decision made by the Opposition Division of the European Patent Office (EPO) in May, which declared the European equivalent of that patent, EP3395029, invalid. Now that both the USPTO and the EPO have sided with OPPO in the first instance, any appeal seeking to salvage one of those patents is going to be an uphill battle.

It's been 27 months since the previous cross-license agreement between the two expired and Nokia sued without delay. OPPO's resilience is admirable. They're giving one of the very best in-house patent litigation teams out there a run for the money to say the least. It's become clear in recent years that some German judges have an anti-Chinese bias (which is not a conspiracy theory but was evidenced by problematic public statements as well as rather divergent decisions in neutral jurisdictions), without which the situation would look even more favorable to OPPO.

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OPPO defends another 5G patent against Nokia's opposition: Mannheim trial scheduled for December, UPC PI motion conceivable, and what would the EUIPO do under the proposed regulation?

Nokia and OPPO are giving each other a hard time in different patent validity fora. Recently, even some Nokia patents that gave rise to German injunctions have been deemed invalid in other--but definitely reputable--jurisdictions. It's a monumental, earth-spanning dispute. There hasn't been anything so large and long-running in the wireless sector for years.

The latest development involves OPPO's EP3624524 on "wireless communication methods, network device, and terminal device." It's a 5G declared-essential patent that OPPO asserted against Nokia in Mannheim, with a trial scheduled for December 5, 2023. In early February, an opposition panel of the European Patent Office (EPO) declared the challenged claims non-novel, but did not take a specific position on (non-)obviousness. Yesterday, the panel upheld the patent in an amended form.

The Bardehle Pagenberg patent attorneys who achieved that partial victory are Tobias Kaufmann and Dr. Nikolaus Buchheim.

In June, another OPPO patent-in-suit was also defended in an amended form, and a modification of the claim language that looked like a minor clarification to me resulted in a non-essentiality determination by the Mannheim Regional Court. So I want to be careful about any predictions at this point. The patent may or may not be standard-essential in its narrowed form. And if it's not essential, then it may or may not be infringed, but an infringement allegation would have to be based on what Nokia's baseband stations actually do as opposed to a (rebuttable) presumption that what reads on the standard is infringed by a product that has been declared standard-compliant. As there is no pretrial discovery in Germany (in fact, nothing even remotely like U.S. discovery), it is far easier to properly plead an infringement case over a SEP than over a non-SEP.

I've recently attended several preliminary injunction hearings before Local Divisions of the Unified Patent Court (UPC): two in Munich (with Bardehle Pagenberg having won one case while the other is under advisement), and one each in Vienna and Helsinki. Companies are increasingly concerned about the implications of a patent surviving, in one form or another, a validity challenge, as the UPC appears rather willing to grant preliminary injunctions over such battle-tested patents, provided (of course) that other requirements, such as urgency, are met.

The Nokia v. OPPO/OPPO v. Nokia dispute showcases various of the things that can happen in SEP enforcement, raising the question of what would happen--or would have happened--if the proposed EU SEP Regulation was already in force.

With respect to what implications the amended claims of EP3624524 would have under the EU SEP Regulation, there are at least two interesting questions:

• If there had been an essentiality check based on the patent as originally granted, would the EUIPO routinely perform a new one in a situation like this?

• If the claim amendments pushed the patent out of the area of essentiality, but the patent could still be asserted as a non-SEP, wouldn't the patent holder actually be in a stronger position than if it was deemed essential for purposes of the EU SEP Regulation?

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Four of numerous flaws of proposed EU SEP Regulation are illustrated by OPPO's Swedish victory over Nokia: binary register won't reflect non-binary world, and jurisdictional differences matter

This is a follow-up to my Thursday post on a Nokia v. OPPO decision by the Swedish Patent and Market Court that held a pair of declared-essential patents (from the same family) invalid, but also an addition to my commentary (since March) on the unbelievable fundamental flaws of the proposed EU regulation on standard-essential patents (EU SEP Regulation).

The two SEPs in question were deemed invalid by the Swedish court, which was a major win for OPPO, but Nokia had obtained and enforced a German injunction over them. Due to Germany's bifurcation system, the infringement ruling came down prior to the resolution of a parallel nullity action. Nokia had also successfully asserted those patents against OPPO in the Netherlands and the United Kingdom, two jurisdictions where a full invalidity defense is available. Nevertheless, the four-judge panel in Sweden made its own decision and begged to differ from their colleagues in a couple of other countries.

Let's briefly look at this from the EU SEP Reg angle--actually, from four angles related to that ill-conceived legislative proposal:

1. If the EU SEP Reg was already in force, and if the envisaged SEP Register had been implemented, those two patents would have to be removed from the register if Nokia made a request pursuant to Art. 25(1)(b): "invalidation of the patent by a competent authority" (which the Swedish Patent & Market Court undoubtedly is).

   The proposal does not say anything about how to resolve conflicting decisions from different jurisdictions.

   As a result, Nokia would be allowed to enforce those patents without having to comply with any of the provisions of the EU SEP Reg. Simply put, those patents would be treated as a non-SEPs with a view to the regulation, though national courts might nonetheless apply Huawei v. ZTE. The patent holder might consider that flexibility gain to far outweigh the negative effect of a lower essentiality rate and reduced number of declared-essential patents. Here, with Nokia having a huge SEP portfolio, the removal of a couple of patents from the database wouldn't adversely impact the overall valuation of the relevant portfolio.

2. The fact that the Swedish decision differs from the ones in the UK and the Netherlands, and from the probability assessment of the Mannheim Regional Court, doesn't make it necessarily wrong. But it clearly cannot be ruled out that a Swedish appeals court might overrule the Patent and Market Court, given that some other judges have also deemed those patents valid. I personally believe the Swedish decision is very well-reasoned and other jurisdictions should be persuaded by it, but you don't know until they have all decided. Assuming only for the sake of the argument that the decision was reversed, the EU SEP Reg--based on the current proposal--would not even have a mechanism in place for putting those two patents back.

3. When criticizing the EU SEP Reg, I've said repeatedly that the outcome of essentiality checks can depend on what jurisdiction's claim construction and other legal standards are applied. The proposal does not specify that, and there is no uniform standard across the EU. The Swedish decision was based on validity, and an invalid patent is by definition non-essential. What happened here can also happen in connection with an infringement analysis. The starting point is always claim construction. And after that one, there are other steps that can differ between countries.

   It doesn't make sense to assume that a patent is essential or not. It's not binary. It may be essential in some jurisdictions and non-essential in others.

   While I agree with the criticism voiced by one of the researchers commissioned by the EC's Directorate-General for the Internal Market, Dr. Justus Baron, of the aggregate royalty determination part of the proposal, Dr. Baron and I have expressed different views on whether jurisdictional differences make a practical difference for the envisioned essentiality checks of samples of patents. The fact that a Swedish court invalidated two SEPs deemed valid in a couple of other European jurisdictions supports my view that jurisdictional differences pose a confidence problem: you need even larger samples then, and even the assessment of all patents of a given portfolio may be unacceptably unreliable if each European patent is analyzed under only one jurisdiction's standard while in litigation you may get one outcome in the Netherlands and another in Sweden.

4. At a recent SEP conference in Warsaw, Bardehle Pagenberg's Professor Tilman Mueller-Stoy ("Müller-Stoy" in German) said something I also mentioned in the post I just linked to: essentiality determinations are not too meaningful if validity isn't analyzed as well. The Swedish Nokia v. OPPO situation is now the latest example.

An EU proposal that treats a dynamic environment as static and a non-binary world as binary is not going to do any good. It's going to be a waste. The courts of law may in the end not be persuaded that the EU's essentiality checks, essentiality ratios, aggregate royalty rates, and bilateral FRAND determinations are relevant or helpful. If something flies in the face of what the real experts (as opposed to those who drafted the proposal) know, the actual decision makers may mimimize the impact of the EU SEP Reg, just like the 2021 patent injunction "reform" in Germany has made no real-world impact.

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OPPO wins in Swedish court as two of Nokia's standard-essential patents (on which it prevailed in Mannheim) are declared invalid; also, Nokia's UK SEP injunction can't be enforced pending appeal

More than two years have passed since Nokia sued OPPO, and more than one year since OPPO was forced out of the German market by the enforcement of various patent injunctions, at least some of which were dubious from the beginning. Nokia still doesn't have leverage over OPPO. In the foreseeable future, there will be only one FRAND determination in place between these parties, and that one will be made by a court in Chongqing, China.

In the first part of this post I have an update on the Swedish part of the earth-spanning set of disputes. Subsequently I'll also discuss the UK situation, which is pretty good for OPPO in practical terms.

In June 2022, it became known that Nokia filed complaints in Finland and Sweden over two patents from the same patent family: EP2981103 and EP3220562, both on an "allocation of preamble sequences." For the avoidance of doubt, Nokia asserted both patents in both jurisdictions.

Over those patents, Nokia won its first standard-essential patent (SEP) injunction against OPPO in Mannheim last year. The Mannheim Regional Court interestingly agreed with Nokia that it was un-FRAND-ly for OPPO to offer a lump-sum royalty, but the same Nokia took the very opposite position later in a UK litigation where it argued that only a lump-sum was acceptable.

In retrospect the Mannheim rulings against OPPO appear more questionable than ever. In July, a French court invalidated two Nokia patents, one of which is a non-SEP that I considered very clearly invalid, but over which the Mannheim court nevertheless granted an injunction (which its appeals court, the Karlsruhe Higher Regional Court, inexplicably allowed to be enforced).

Today the Swedish Patent and Market Court declared the two SEPs underlying the June 2022 injunction--EP'103 and EP'562--invalid with respect to its juridiction (Sweden). And it even did so on three independent grounds relating to partly different claims:

1. The original patent applications lacked support for the combination of cyclic interpretation and the second embodiment described iin the specification. Therefore, claim 1 of EP'103 and claim 4 of EP'562 were deemed to contain impermissibly added subject matter.

2. Either patent's claim 1 is a device claim with method features, but those method features do not affect the properties or the configuration of the device, which is why the court found they must be disregarded in the novelty analysis. As a result, the patents are invalid based on anticipation.

3. Claim 8 of EP'103 and claim 9 of EP'562 are independent method claims, but the Swedish court found them to cover a purely intellectual aact (as opposed to performing a specific technical function).

To be fair, the Mannheim court was not alone in siding with Nokia over those two SEPs. A Dutch court and a UK court did so, too. But now there is a very well-reasoned pair of rulings from the Swedish Patent and Market Court that states three reasons for invalidation when any single one of them would have been sufficient. It remains to be seen whether those patents will at some point be invalidated elsewhere.

EP'103 and EP'562 are now going to be harder for Nokia to enforce, as there is a possibility of courts in other jurisdictions being persuaded by the Swedish court's reasoning. This shows that Nokia is paying a significant price for its protracted dispute with OPPO.

Not only is this becoming ever more costly (including hard-to-quantify costs such as the invalidation of key patents) but the question of the "end game" must be asked as well. At this point it appears that the key jurisdiction is going to be China. That's because the Chongqing court's FRAND determination will be made soon, and while the Chongqing decision cannot be enforced during an appeal, it will most likely become enforceable prior to any other FRAND determination anywhere in the world that Nokia could point to.

I have now obtained copies of Mr Justice Richard Meade's latest Nokia v. OPPO decisions relating to remedies. He's given the topic a lot of thought and arrived at a position somewhere in the middle between the two parties' views:

• While Nokia technically has a UK SEP injunction against OPPO now (based on Mr Justice Meade's application of existing appellate case law in the UK), that one has been stayed pending OPPO's appeal. The balance of hardships weighed against forcing OPPO out of the UK market the way it was forced out of the German market last year.

• A very interesting question in that appeal is whether OPPO's willingness to take a license on whatever terms are in fact FRAND, but based on the upcoming Chongqing rate-setting decision, is a sufficient basis for not enjoining OPPO in the UK. A second point is that OPPO argues it actually already has a license under French law (based on Nokia's ETSI FRAND pledge), just that the exact financial terms have not been set. That argument had also been made by Xiaomi in the dispute with Philips. The question about whether OPPO is a willing licensee based on its commitment to take a license on the terms to be decided in Chongqing appears more likely to succeed as far as I can tell. And Mr Justice Meade takes that question seriously enough that he even authorized "leapfrogging" over the Court of Appeal and going straight to the UK Supreme Court (a decision that also has to do with the Optis v. Apple dispute, where the UKSC accepted to hear an appeal by Apple).

• It's interesting how the parties' perspectives have changed in both Nokia v. OPPO and Optis v. Apple. The plaintiffs brought their UK actions because they hoped to be able to force the defendant into a global portfolio license on terms that would be reasonably attractive to the respective right holder. But after the actual FRAND determination was made in Optis v. Apple, and also in light of the prior InterDigital v. Lenovo decision by Mr Justice James Mellor, it's now actually the defendants who are more interested in taking a global license on UK-determined terms than the plaintiffs are in granting one. As a result, OPPO would actually be quite happy now to get a UK FRAND decision, but Nokia would rather wait.

• Mr Justice Meade already had everything set to hold the UK FRAND trial in a few weeks' time. The parties have obviously already made quite an effort preparing for that trial. But all things considered, including that the FRAND terms to be decided there would presumably not result in a near-term license agreement and would become known close to the end of the relevant license period (which is mid-2021 to mid-2024), he decided to stay that trial.

• Time will tell whether it was the right decision on Nokia's part to request a stay of the UK FRAND trial. While perfectly understandable in light of the recent outcomes in InterDigital v. Lenovo and Optis v. Apple, that tactical decision now enables OPPO to argue that it was quite willing to obtain useful guidance from the UK court.

• Nokia can enforce a UK non-SEP injunction, but OPPO will apparently just work around it, rendering that Nokia win inconsequential in practical terms.

Again, I have great respect for Mr Justice Meade's thoughtful approach and balanced decisions. The question is not whether any of the parties or I would agree 100%. On this set of issues, you may get as many opinions as the number of people you ask. But this judge tried to be fair, and the outcome is a nuanced one.

If Nokia doesn't have a strategy that is likely to give it decisive leverage over OPPO (interim payments etc. are just symbolic), it should try to settle this dispute. OPPO has surprised a lot of people, including me, with its determined and sophisticated defense. At some point the U.S. also pulled out of Vietnam.

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Nokia v. OPPO ruling shows how UK courts would deal with EUIPO-led FRAND determination proceedings: commitments to be bound wouldn't count

This is the follow-up I promised at the end of the previous post, which put the recent Nokia v. OPPO "effect of the undertakings" ruling--which I called a "remedies roadmap"--into the context of the Mannheim court's holding that OPPO was an unwilling licensee because its counteroffer was a lump-sum royalty. It is disconcerting how the Mannheim and Karlsruhe courts forced OPPO out of the German market last year with unreasonable decisions, key parts of which have since been reduced to absurdity by decisions in other jurisdictions. But the proposed EU SEP Regulation is not the answer. Instead of tackling the real issues in a targeted way, it just creates different problems with a broadbrush approach to a highly complex and sensitive dispute resolution system that may be imperfect but is yet preferable over the proposed regulation.

EU policy makers should study Mr Justice Richard Meade's Nokia v. OPPO "Trial E" decision on remedies carefully as it serves as a preview of how the UK judiciary will deal with the types of FRAND rate proceedings envisioned by the European Commission's Directorate-General for the Internal Market (DG GROW). The short version is that an implementer would not be able to dissuade the High Court of Justice from granting a UK injunction by telling the court that it has already accepted to be bound by an EUIPO-led FRAND rate opinion. The London-based court would still present the defendant with only two options: make a commitment to take a global license on terms set by the High Court--or be enjoined from selling infringing products in, or importing infringing goods into, the UK.

Two SEP holders have recently been awarded royalties by the High Court that fell far short of their demands (InterDigital v. Lenovo, Optis v. Apple). In order for London to regain ground as a SEP enforcement venue, the Court of Appeal would have to move the needle in patentees' favor. I'm not taking a position on whether it should; just saying what SEP holders would want to happen. Mr Justice Meade's decision alone would not make SEP holders rich, to put it that way. But its key holding is significant at any rate:

The High Court rejected OPPO's commitment to be bound by a FRAND determination to be made by a court in Chongqing, China. Instead, Mr Justice Meade held that the only way for OPPO to avoid an injunction is to commit to a global license agreement on the terms to be set by the London-based court.

I've read the decision in detail, and various arguments made by Nokia were rejected. Mr Justice Meade noted that both parties had tactical reasons for preferring one forum over the other: Nokia wants the FRAND determination to be made in the UK while OPPO prefers China. One can't blame Mr Justice Meade for concluding that either party just does this based on its expectations of the future outcome, which in this case means that both parties believe the Chinese court will likely set a lower court than the British one.

What carried the day for Nokia was not that it could prove any fundamental deficiency of the Chinese FRAND determination process. Mr Justice Meade recognized that the risk of the outcome of the Chinese determinations not being within the FRAND range was low. It's just that any court in the world, when asked whether it believes a certain venue will make a correct decision, will naturally trust itself more than others.

That principle would also apply to hypothetical High Court decisions in situations where a defendant would have committed to be bound by an EUIPO-led FRAND determination.

In the beginning, the High Court wouldn't even have a reason to trust those EUIPO-led determinations: it would be an untested and unproven new dispute resolution mechanism.

But even at a point where those EUIPO-led determinations might have a certain track record, a patentee could still argue that a UK court should not rely on a foreign proceeding to the extent it can rely on its own FRAND determinations. Geographic and cultural proximity wouldn't make an EUIPO-led FRAND determination distinguishable from a Chinese FRAND rate-setting proceeding with a view to Mr Justice Meade's conclusions in Nokia v. OPPO. There has always been a systemic difference between British common law and continental European civil law, and the results of those EUIPO-led proceedings would not even be appealable to a court of law, a factor that in my view would even militate for considering the Chinese process a far more adequate substitute for a FRAND determination made by the London-based High Court. That deficiency has even been criticized by the President of the appellate division of the Unified Patent Court.

The idea of making a process led by an EU institution the world's FRAND arbiter is a bad one not only because the EU's international trading partners, first and foremost the United States, have concerns, but it's also just not workable:

• The draft regulation that leaked in late March came with an antisuit mechanism. The EC itself complained to the WTO over Chinese antisuit injunctions.

• The proposal that was put forward a month later was softened in that regard, but new flaws (such as an inconsistency between an EU-only SEP register and the determination of global royalty rates) were introduced.

The dilemma is that the EU can either try to force SEP holders to commit to its FRAND determination process, in which case the Commission would run afoul of its own interpretation of WTO rules, or SEP holders will not only retain their ability but even be strongly incentivized to enforce in non-EU venues such as the UK, which would presumably not be impressed when a defendant says it accepts to be bound by the outcome of an EUIPO-led FRAND determination. A British court will enjoin a defendant who doesn't commit to be bound by the UK FRAND determination.

EU policy makers--not only at the Commission but also at the legislative institutions (Parliament and Council)--should be realistic. There undeniably is room for improvement with the current system. But the rest of the world is not going to let the EU become the world's only FRAND forum. To improve the SEP dispute resolution system requires more international cooperation, not more antagonism.

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UK FRAND judgment contains revelation casting EVEN MORE doubt on Mannheim court's treatment of OPPO: anti-Chinese judicial bias?

The longer the Nokia v. OPPO/OPPO v. Nokia FRAND dispute takes, the harder it becomes to believe that the Mannheim Regional Court's Second Civil Chamber under Presiding Judge Dr. Holger Kircher and the Karlsruhe Higher Regional Court's Sixth Civil Senate under Presiding Judge Andreas Voss ("Voß" in German) have treated OPPO in fair, reasonable, and non-discriminatory ways. In fact, I can't help but suspect that some decisions were fundamentally unfair, unreasonable, and potentially even discriminatory. The latter would be consistent with anti-Asian statements by two high-profile German patent judges.

In the post I just linked to, I discussed that the first patent (of several) to be enforced by Nokia against OPPO in Germany has been held clearly invalid (non-novel, which is the worst outcome for a patentee) by the Tribunal judiciaire de Paris. And now I've found something in Mr Justice Richard Meade's Nokia v. OPPO remedies roadmap decision that also calls the Mannheim and Karlsruhe courts' fairness and reasonableness in the FRAND context into serious doubt.

A little over a year ago, I quoted certain passages from the Mannheim court's FRAND-related findings when it ordered an injunction over two cellular standard-essential patents from the same family.

The final point I quoted in that post was this one:

"In view of OPPO's substantially increased sales figures, any blanket license for the cellular portfolio on which the counteroffer is based is clearly not FRAND."

So, OPPO's counteroffer to Nokia was a lump-sum royalty. Nokia must have opposed that deal structure. That's the only plausible explanation for that sentence in the Mannheim decision. The Mannheim court then agreed with Nokia that it was within its rights categorically to reject a lump-sump license offer.

There are two things that we can learn in this regard from Mr Justice Meade's UK remedies roadmap decision (as a result of which OPPO either has to commit to take a license on FRAND terms to be set by the UK court or be enjoined). First, the previous (2018-2021) license agreement between Nokia and OPPO was also based on a lump-sum payment. The second point, however, is far more important here: when disputing OPPO's position that it was a willing licensee by virtue of a commitment to be bound by a FRAND determination by a Chinese court (Chongqing), Nokia argued that a per-unit royalty was unacceptable and only a lump-sum would be FRAND--and said that the Chinese court might (though it wouldn't necessarily) set a per-unit royalty.

Here's a screenshot of the relevant passage (click on the image to enlarge or read the text below the image):

Running royalty versus lump sum:

286. In these proceedings the FRAND valuation is in terms of a lump sum, whereas in the Chongqing proceedings the contentions are in terms of a per-unit or running royalty.

287. In the abstract, and for reasons I have given above, I think that the difference between lump sum and running royalty could be a major one with real impacts for a patentee, and if it were determined that each was FRAND then one can see why the patentee ought to be entitled to choose.

288. However, in the present context the difference is much less and may be nil. The reason is that the duration of the proceedings here and in Chongqing and the term for the new FRAND licence, expiring in 2024, mean that Oppo will not in reality work under the licence on an ongoing basis after it is put in place. The proposed licences in Chongqing do not include reporting provisions or the like and the result in Chongqing while analysed as a running royalty will in all likelihood result in a lump sum payment based on the per unit rate and Oppo’s sales.

289. Nokia argued that it could not be completely excluded that the Chongqing court will just set a per unit rate and that the parties might thereafter have to debate the relevant sales numbers. I agree that this cannot be ruled out, so the result in these proceedings could give Nokia a modest degree of extra certainty. It is a minor additional reason why Nokia’s ability to choose between the results would be one with some reality.

Nokia, like so many other litigants, will obviously make self-serving arguments. It's not illegal to make one legal argument in Germany and take the opposite position in the UK when discussing a Chinese proceeding. Mr Justice Meade notes that "Nokia has been unnecessarily obstructive in the Chongqing proceedings" (in connection with the technicalities of how OPPO affiliates OnePlus and realme would be licensed). He "stigmatised some of Nokia's steps as pretty" but stopped short of "conclud[ing] that it was playing games."

But this does call into question whether OPPO ever had a fair chance in the Mannheim court. I regret to say that it probably never had a chance there. It was going to be deemed an unwilling licensee for being Chinese, not for what it did or did not do. It was going to be enjoined even over a facially invalid WiFi patent. By contrast, Apple has gotten away with pretty much anything in Mannheim for more than a decade. Whether or not there are fanbois at work or it's just the fear of enjoining the world's richest company and public backlash, I don't believe that WiFi patent would have been considered valid if Apple had been the defendant, and I strongly doubt that Apple would have been deemed an unwilling licensee for offering a lump-sum royalty when a previous contract was based on one. In fact, there was a recent case in Mannheim where the very same division of the court took an extremely defendant-friendly position on FRAND that would likely have enabled Apple to come away unscathed. Double standards as far as I can tell.

Let that sink in: Nokia argued, and to a limited extent Mr Justice Meade agreed (in the last two sentences of the passage quoted above), that a lump-sum offer was preferable over a per-unit royalty, while the Mannheim court said that a lump-sum counteroffer (as opposed to a per-unit royalty counteroffer) was "clearly not FRAND."

Future defendants in OPPO's situation may now want to point courts in Germany (or elsewhere) to a UK SEP enforcement action by a patentee whenever that same patentee argues that a lump-sum royalty offer is unacceptable. And I believe the enforcement of those Mannheim SEP injunctions should now finally be stayed by the appeals court in light of hard evidence--in the form of the UK ruling--of Nokia itself not only considering a lump-sum royalty acceptable and FRAND, but even preferable. The WiFi patent injunction should also be stayed immediately in light of the French decision, after a full trial, that the patent is not valid (and not just for lack of an inventive step but even for non-novelty). The Mannheim-Karlsruhe axis has done major harm to OPPO on unfair and unreasonable grounds.

I'll soon do another post about the UK decision as I believe it also teaches a lesson with a view to the EU's misguided proposal for a SEP regulation.

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Mannheim mistake? OPPO fends off two Nokia lawsuits as French court invalidates patents-in-suit: injunction WRONGFULLY enforced in example of German courts disadvantaging Chinese defendants

If Nokia doesn't reach a settlement with OPPO for some more time, and if the Federal Patent Court of Germany reaches the same conclusion as a French court, Nokia may face a hefty damages claim for wrongful enforcement (way bigger than the 400,000 euros in legal fees that the French court ordered Nokia to reimburse). It was the first injunction Nokia obtained against OPPO, and OPPO subsequently left the German market. If it gets to that point, the Mannheim Regional Court's Second Civil Chamber under Presiding Judge Dr. Holger Kircher would suffer a blow to its normally great reputation. In this post I am forced to raise the question of a presumably subconscious, yet systematic bias of some German patent judges against Chinese defendants, which is a serious problem in my observation.

That Mannheim panel made a decision last year in Nokia's favor against OPPO that I fundamentally disagreed with. In a parallel case involving two standard-esssential patents from one family I also disagreed (on claim construction), but to a different degree. I considered the non-SEP decision nothing short of unbelievable. My view of the patent-in-suit having been clearly invalid has now been vindicated by the Tribunal judiciaire de Paris (TJP), which one could describe as the Paris District Court. That's the court with which French patent infringement actions are filed in the first instance.

In fact, the French court also invalidated a second patent, but the other one had not been asserted in Germany, at least not to my knowledge. I'll show you the operative parts of both decisions further below. Let's first focus on the Mannheim and Karlsruhe courts' apparent mistake. How can a patent-specialized panel of judges not deem a patent invalid that seriously teaches nothing other than the following:

"If you know that a WiFi network will tell you if it is currently available, don't ask whether it is currently available."

Nokia's EP1704731 on a "method and apparatus for indicating service set identifiers to probe for" is ridiculous. When I saw it, I called it the technically thinnest European patent I've ever seen in litigation. It is litigation opportunism that a truly innovative company like Nokia would resort to such a patent in an effort to gain leverage. And it is inexplicable that two of the German patent judges I hold in the highest regard for their technical understanding particularly in the field of wireless technologies--Judge Dr. Kircher (of whom I've said that he deserves an honorary doctorate in wireless engineering) and then, in a decision rejecting a motion for an enforcement stay, Presiding Judge Andreas Voss ("Voß" in German) of the Karlsruhe Higher Regional Court, who is generally one of the smartest judges I know--did not identify that patent as a joke. The hurdle for an enforcement stay is high, but when a patent is so clearly weak, that shouldn't serve as an excuse for not stopping enforcement.

On the same day that I reported on the definitive invalidation by the European Patent Office (first confirmed by the Mannheim Regional Court, subsequently also by the EPO Boards of Appeal) of a Nokia patent-in-suit challenged by OPPO, the TJP declared EP'731 invalid for lack of novelty. That is the worst-case scenario for a decision to invalidate a patent, as lack of an inventive step would have the same effect but involves more than one piece of prior art. So even if the appeals court in France or the Federal Patent Court in the parallel German case did not reach the same conclusion that the claimed invention was fully anticipated by the prior art (a conclusion that I believe is right), it's hard to see how the patent would not at least be invalidated for its failure to meet the non-obviousness requirement.

Here's the operative part of the French decision (click on the image to enlarge):

German judges' bias against Chinese defendants

I've previously observed that many (presumably not all) German patent judges have a bias against Chinese companies. In fact, Presiding Judge Ulrike Voss ("Voß" in German) of the Dusseldorf Higher Regional Court and also Judge Andreas Voss (the two are not related as far as I know) have made statements at conferences that had me concerned. At Munich's Ludwig Maximilian University, I overheard a conversation between the Dusseldorf judge and BMW in-house patent counsel Edmund Mangold, in the course of which she defended Germany's injunction-friendly jurisprudence on the following basis:

"I hear you, but we have to deal with unrepentant infringers where injunctions are absolutely necessary. I don't want to... but, let me just say they are frequently from Asia."

Her Karlsruhe-based peer expressed, at a webinar in the late summer of 2021 (discussing that year's German patent injunction "reform"), his concern that clarification by the Federal Court of Justice would likely only arise from a case in which the defendant would be "some company from the Far East whose business model is centered around infringement."

If U.S. judges said anything in public like what those two judges from German appeals (!) courts said in recent years, they'd be accused of racism and potentially impeached. I hereby call on the German judiciary and on German UPC judges to prove in the months and years ahead that Asian and particularly Chinese defendants are finally treated fairly. I firmly believe that various decisions that were made against Chinese defendants would probably not have been made against, for instance, a company like Apple, to provide just one example. Apple has not lost a case in Mannheim (unless I missed something) in a long time...

Another patent invalidated in France

The other Nokia patent that went down the tubes in Paris is EP1702486 on "arranging handover" (click on the image to enlarge):

That ruling was handed down late on Thursday.

Other jurisdictions in which Nokia asserted that patent include India and Russia (the Russian cases were withdrawn).

OPPO is represented by Hogan Lovells in France (as well as in Germany, where EP'486 is not being asserted as far as I can see, and where Hogan Lovells lost the EP'731 non-SEP case at a time when the Federal Patent Court did not yet issue its non-binding preliminary opinions in time for the infringement hearings, as the relevant statutory amendment had not yet taken effect when the action was filed).

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EPO Board of Appeal invalidates standard-essential patent asserted by Nokia in four jurisdictions against OPPO and in at least two against Vivo

The disputes between Nokia and OPPO on the one hand and Nokia and Vivo on the other hand have been going on for some time with no resolution in sight. I noticed that an Indian appeals court ordered OPPO to make some interim payments, but that's not going to force anyone into a global license agreement. Never has, never will.

At the same time, Nokia and OPPO are challenging each other's patents, and I have a few updates about that.

1. Surprisingly, what appeared to be a minor amendment to the claims of one 5G patent that OPPO is asserting against Nokia was deemed a significant narrowing of the claim scope by the Mannheim Regional Court, resulting in a bench ruling of non-infringement that OPPO may appeal now.

   Thus far, Nokia has managed to defuse all of OPPO's countersuits in Germany, getting some stayed (because of preliminary opinions or decisions concerning the validity of the patents-in-suit) or dismissed. But there still are some cases pending, and as far as I can see, there is no OPPO v. Nokia case yet where all appeals have been exhausted.

2. Today I learned from the Mannheim Regional Court's spokesman that tomorrow's announcement of what could have been final judgments against OPPO and OnePlus has been canceled. The related proceedings involve EP2087626 on "additional modulation information signaling for high speed downlink packet access" and have been reopened in light of the revocation of that patent by the European Patent Office (EPO).

   It's a dramatic turn of events (or at least it would be dramatic if it wasn't just one of numerous lawsuits in the wider context). OPPO has snatched victory from the jaws of defeat. This is the chronology of events:

   Nokia already asserted EP'626 against Daimler. It was the first of Nokia's patents-in-suit against Daimler to be upheld by the EPO's Opposition Division. The NokiaNews website wrote in 2021 that "Nokia won the first battle in the dispute against Daimler" (though Nokia had previously won a couple of injunctions, this was the first validity decision in Nokia's favor).

   Yesterday, one of the EPO's Boards of Appeal heard OPPO's appeal--and at the end of the appellate hearing declared the patent invalid, just two days before the Mannheim court was going to issue an infringement ruling (presumably an injunction). Theoretically, decisions by a Board of Appeal can be appealed further to the Enlarged Board of Appeal, but only under narrow circumstances, and general guidance from the Enlarged Board of Appeal for future cases wouldn't resurrect EP'626.

   Nokia brought infringement actions over EP'626 against OPPO in Germany, the UK, and the Netherlands, and also sued over member of the same patent family in India and Indonesia (in Indonesia, Nokia's cases were dismissed on procedural grounds; Nokia also brought an Indonesian infringement action against Vivo over a member of that patent family). Nokia also sued Vivo over that patent in Germany.

   Therefore, the invalidation of EP'626 affects quite a number of Nokia enforcement actions. The ones in Germany, the UK, and the Netherlands have been resolved (short of another surprise turn of events). In jurisdictions like India, the EPO decision will serve as persuasive authority.

3. A couple more Nokia patents have been invalidated in China as the following SIPO documents show:

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OPPO effectively defends 5G standard-essential patent against Nokia's opposition: EPO upholds claims based on minor clarification; Mannheim trial scheduled for 6/27

The patent spat between Nokia and OPPO is about two weeks away from its second anniversary. It became known this month that Nokia obtained injunctions against a dozen German resellers of OPPO and OnePlus devices. The parties' efforts to invalidate each others patents (not only the ones that are actually being asserted) are a major part of the earth-spanning dispute. Last month OPPO invalidated another two Nokia patents and a written decision in favor of Nokia's opposition to one OPPO patent came down as well.

This week, OPPO achieved something that might have paved the way for a Mannheim injunction against Nokia this summer. At the end of an opposition hearing held on Tuesday (6/13), the European Patent Office (EPO) upheld, with only a minor clarification added to the claims and the description, one of OPPO's patents-in-suit (click on the image to enlarge):

The patent-in-suit is EP3672346 on an "information transmission method, terminal and network device." The Mannheim Regional Court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher) will hear the OPPO v. Nokia infringement case over this 5G standard-essential patent the week after next (June 27 to be precise). That trial could get really interesting.

All that it took for OPPO (lead patent attorneys: Bardehle Pagenberg's Tobias Kaufmann and Dr. Patrick Heckeler) to fend off Nokia's opposition was the following insertion into the claim language as well as the first page of the description:

determining, by the terminal, that the time interval is not less than a preset time interval;

An interval defined by a standard is only meaningful if a minimum period of time is predefined. Presumably the relevant determination here is made by the end-user device, so I assume that this insertion is not going to change anything about the essentiality analysis. While OPPO has already exited the German market, I doubt that Nokia would want to do so, and that's why Nokia must defend itself against OPPO's offensive cases or it might have to settle before it gains decisive leverage in another jurisdiction.

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Nokia obtained patent injunctions against 12 German resellers of OPPO, OnePlus devices: Mannheim Regional Court

The patent dispute between Nokia and OPPO (as well as the latter's OnePlus affiliate) continues to escalate, with no settlement in sight. Today a spokeswoman for the Mannheim Regional Court confirmed to me that on May 26, the court's Second Civil Chamber (Presiding Judge: Dr. Holger Kircher) granted Nokia injunctive relief against a dozen German resellers of OPPO and OnePlus devices.

The patent-in-suit is EP1704731 on a "method and apparatus for indicating service set identifiers to probe for" and the same court had already granted Nokia an injunction against OPPO over that patent about a year ago. It's not a standard-essential patent (SEP), though the wider patent spat is largely a 5G SEP dispute.

After two Mannheim injunctions (the aforementioned one, and one over a cellular SEP), OPPO (and OnePlus) left the German market last year. Meanwhile, another Chinese smartphone maker, Vivo, has also left the German market as a result of Nokia's patent enforcement.

The Mannheim court provided the list of parallel cases in which the May 26, 2023 decisions came down:

• case no. 2 O 127/22: Nokia ./. Brodos AG

• case no. 2 O 128/22: Nokia ./. Cyberport GmbH

• case no. 2 O 129/22: Nokia ./. Drillisch Online GmbH

• case no. 2 O 130/22: Nokia ./. Grand King Ltd

• case no. 2 O 131/22: Nokia ./. Komsa AG

• case no. 2 O 132/22: Nokia ./. MMS E-Commerce GmbH

  (MMS is the parent company of the Media Markt and Saturn consumer electronics stores)

• case no. 2 O 133/22: Nokia ./. 1&1 Telecommuniction SE

• case no. 2 O 134/22: Nokia ./. Logitel GmbH

• case no. 2 O 135/22: Nokia ./. Otto GmbH & Co. KG

• case no. 2 O 139/22: Nokia ./. expert e-commerce GmbH

• case no. 2 O 140/22: Nokia ./. freenet DLS GmbH

• case no. 2 O 147/22: Nokia ./. OTECH Germany GmbH.

Those resellers kept selling OPPO and OnePlus products after last year's Mannheim injunctions. Formally, they were not enjoined last year as they weren't named as defendants to the original infringement action, but now they are to the extent they offer OPPO and OnePlus products implementing the patent-in-suit.

Legally, Nokia is obviously within its rights to do that. But there are different schools of thought. Some patent holders refrain from enforcement action against resellers. It's a company-by-company and case-by-case question. While today's Nokia-branded phones are made by a company of which Nokia is only a minority shareholder, I'm wondering whether HMD's relationships with those resellers will be adversely impacted by this enforcement action.

Nokia argues that OPPO should take a license (" or enter into binding arbitration to find a fair outcome that works for both parties") and recalls that the dispute has been ongoing for almost two years. OPPO, however, has consistently taken the position that Nokia's royalty demands are supra-FRAND. OPPO is also countersuing Nokia in Germany.

I doubt that this enforcement against German resellers will change OPPO's position.

In the context of the proposed EU SEP Regulation, the fact that Nokia is using a non-SEP to bar those resellers from selling OPPO and OnePlus devices validates something I wrote in April: I discussed various reasons for which even implementers won't necessarily benefit from that envisioned regulation as non-SEPs might end up getting more weight, and I mentioned that in disputes of this kind, net licensors typically assert a mix of SEPs and non-SEPs.

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Smartphone maker vivo exits German market after Nokia starts enforcement of standard-essential patent injunction

Six weeks ago, I reported on an official announcement made by Chinese smartphone maker Vivo concerning a patent ruling in Nokia's favor. Vivo said they had started preparations to suspend their sales and marketing activities in Germany in the event Nokia would enforce a standard-essential patent (SEP) injunction granted by the Manheim Regional Court.

Vivo's German website now indicates that they have indeed left the market (click on the image to enlarge):

The announcement reads as follows:

"At this point, vivo products are unfortunately unavailable in Germany.

"Accordingly, no product information is availableon our German website.

"Should you be using a vivo product, you can continue to rely on our customer service.

"You will also continue to receive software updates."

This is an unhelpful development. I doubt that Vivo will take a global license on Nokia's preferred terms only because of this enforcement activity: Vivo generates only a tiny portion of its worldwide sales in Germany. OPPO already left the German market last summer, also because of Nokia enforcing a Mannheim injunction and with a view to its competitiveness in price-sensitive markets in other world regions. Now that the legislative institutions of the European Union are about to begin their work on the proposed EU SEP Regulation (which has several major and numerous smaller shortcomings), some parties with a vested interest in the devaluation of SEPs will predictably seek to leverage the removal of multiple smartphone brands (OPPO, One Plus, vivo etc.) from the German market as they claim that the current SEP enforcement framework in Europe--particularly in Germany--warrants legislative intervention.

The proposed EU SEP Regulation would not help, at least not in its current form. It's an attempt to set global royalty rates through an EUIPO-led process, but a company like Vivo generates the bulk of its sales outside of Europe. China is in a better position to make FRAND determinations in those cases.

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Optis v. Apple FRAND ruling could be delayed by Justice Marcus Smith's new merger case (Microsoft-ActivisionBlizzard); GenghisComm sues Toyota over SEPs; updates on Nokia-OPPO, KPN-Ericsson

This is a roundup post that discusses four different standard-essential patent (SEP) disputes and multiple jurisdictions. Quick links:

1. Optis v. Apple FRAND ruling could be delayed by Justice Marcus Smith's new merger case (Microsoft-ActivisionBlizzard)

2. GenghisComm (not an Avanci licensor) sues Avanci licensee Toyota over SEPs

3. Nokia invalidated OPPO patent-in-suit

4. KPN defended one of patents-in-suit against Ericsson earlier this month

1. Optis v. Apple FRAND ruling could be delayed by Justice Marcus Smith's new merger case (Microsoft-ActivisionBlizzard)

It's been almost a year since the Optis Wireless v. Apple trial in the High Court of Justice in London, but no decision has come down yet. In a similar case, InterDigital v. Lenovo, it took Justice Mellor similarly long as those FRAND (fair, reasonable, and non-discriminatory) rate-setting cases are incredibly labor-intensive for the courts adjudicating them.

The judge presiding over the FRAND part of the Optis v. Apple case is Mr Justice Marcus Smith, whose reputation extends not only to patent but also competition law: he is the President of the Competition Appeal Tribunal (CATribunal, or just CAT) of the United Kingdom.

It is not unusual for judges to divide their time between two courts. In fact, numerous European patent judges are doing so now between national courts and the Unified Patent Court (UPC). Since a few days ago, Mr Justice Smith is presiding over an antitrust case that is by far the biggest in the CAT's history, not only in terms of what's at stake (Microsoft's $68.7 billion purchase of Activision Blizzard) but also the enormous public and media attention--and on top of all of that, it's a matter that the UK's Prime Minister (who stressed the CMA's responsibility for growth and investment), Chancellor of the Exchequer, and its Parliament's Business and Trade Committee are concerned about.

Microsoft filed its appeal of a Competition & Markets Authority (CMA) merger-blocking decision on Wednesday evening UK time. Mr Justice Smith published the summary of the grounds of appeal (PDF) approximately 48 hours later and scheduled a case management conference for Tuesday (May 30). I already predicted at the beginning of this month that he would personally preside over that ultra-high-profile appeal. After yesterday's publication of the summary of the appeal, I commented on the grounds of appeal in a 40-part Twitter thread and added some further commentary on the comity part.

I'll live-tweet about the case management conference on Tuesday.

The deal has been cleared by the regulators who decided the matter for 38 countries (30 of them European Economic Area member states), with a collective population of 2.4 billion and aggregate GDP of $45 trillion, so if not for the CMA's absurd ruling, the deal could actually close now. But the CMA's leadership would like their agency--which the CAT has to overrule fairly often if one considers the deferential standard of review called Judicial Review--to be the world's policeman for major mergers, especially major tech mergers. There is profound concern in the UK over the CMA's eccentricities and regulatory overreach, and the CAT is now called upon to restore sanity and curb megalomania.

The CMA is now an outlier on the global stage. The only regulator to agree with them is the FTC, which under its current leadership opposes virtually any merger it gets to review and openly admits it doesn't care about losing in court all the time. The CMA decision is so clearly biased and incorrect that more and more people are wondering whether the reason is not just regulatory hubris or a lack of understanding of the technology markets involved, but whether it is even attributable (at least in part) to bad faith. My personal opinion is that a good-faith merger decision where the regulator looks at all of the evidence with an open mind and strives faithfully to apply the law to the facts definitely looks different.

There are mistakes that can be adequately explained with a lack of diligence (the CMA totally embarrassed not only itself but the UK and its government when the provisional findings--the equivalent of the Statement of Objections in the EU--subtracted only one year of costs from five years of benefits. The CMA corrected that mistake after Microsoft pointed it out, and revised the provisional findings. That was almost certainly just a lack of diligence. But the final decision just showed that before the merger review even started in earnest they must have been hellbent on blocking the merger. After they had to give up their primary theory of harm (vertical foreclosure affecting Sony in the videogame console market) and even prior to that realized they had to drop a "conglomerate" theory (involving Windows (an open platform), Azure (an easily substitutable commodity), the Xbox, and Activision Blizzard's games), they simply shoehorned those failed theories of harm into a "cloud gaming" theory of harm.

Weeks before Microsoft filed its appeal, the gamer community had already identified and discussed plenty of issues on Twitter and discussion boards. The decision is not just flawed or extremely wrong. It's a lot worse than that.

Against that background, gamers and other observers of the process can't be blamed for asking questions about the impartiality of the person who according to what a reporter from a major news agency told me "basically made the decision for the CMA": the agency's Senior Director of Mergers, Colin Raftery. Only because I wanted my many Twitter followers with an interest in that merger topic to understand that an unbalanced panel might respond to a historic speech by EU antitrust chief Magrethe Vestager on the same day, I mentioned--and proved based on a LinkedIn screenshot--that Mr. Rafferty started his career and spent seven years at Cleary Gottlieb Steen & Hamilton, a firm that has been consistently adverse to Microsoft for decades and is representing the most vocal critic of the Activision deal--Sony Interactive Entertainment--in its worldwide complaints, also in the UK. Cleary also advises Google, the other (and less vocal) complainant, but not in this context it seems. That factoid was picked up by Windows Central, and other media reported as well. On social media (Twitter, TikTok etc.) there was widespread outrage. My personal opinion is that none of us knows what Mr. Raftery's personal relationship with the Cleary lawyers opposing the deal on Sony's behalf--and with Sony's executives--is, so the truth could be anything from reassuring to mildly disconcerting to problematic.

It turned out that Mr. Raftery was previously instrumental to a merger-blocking decision that favored a former client. And it doesn't look good that the CMA takes an extreme position on a vertical merger now (Microsoft-ActivisionBlizzard) while it allowed Sony to make a horizontal acquisition of particular relevance to the UK market.

It now befalls Mr Justice Smith and his CATribunal to ensure a legally correct outcome and to restore the general public's confidence in the UK regulatory process. The fact that the first case management conference already takes place a few days later suggests that he wants to adjudicate the matter as swiftly as possible, which is in everyone's interest except Cleary and two of its clients, and CMA officials who may hope that the merger will be abandoned before their mistakes and their abuse of power won't be exposed.

People are already talking about a novelization or a documentary about that merger, given that some of what has happened here amounts to truth being stranger than fiction. I guess some of my blog posts and tweets about the case will come in handy if and when that happens. Those of you who have practiced law before Mr Justice Smith, or know him as a colleague, can already think about which Hollywood actor might play him.

2. GenghisComm (not an Avanci licensor) sues Avanci licensee Toyota over SEPs

There isn't much happening anymore in terms of automotive SEP litigation. Avanci has licensed the vast majority of car makers, Continental finally gave up its U.S. federal antitrust litigation against Avanci and some of its licensors (continuing only its Delaware state law action against Nokia), and Telit dropped a lawsuit that had been brought by Thales in Munich against Avanci and Nokia.

While the European Commission doesn't seem to appreciate the contribution of patent pools to the licensing process the way it used to do, Avanci's success has made it part of the solution. Recently even Samsung--one of the world's largest implementers of cellular standards--joined Avanci as a licensor at no extra cost to licensees.

A few SEP holders--some of which are non-practicing entities--still aren't Avanci licensors. One such company is GenghisComm Holdings, which on Wednesday filed a SEP infringement lawsuit in the Eastern District of Texas against Toyota:

When it comes to comparable licenses, Toyota will be able to point to the license it has taken from Avanci, paying $15 per car for the vast majority of 4G SEPs. GenghisComm is presumably suing for the purpose of extracting a substantially higher royalty rate relatieve to the strength of its portfolio. Maybe the plan is to benefit from the unpredictability of patent damages verdicts.

3. Nokia invalidated OPPO patent-in-suit

About two weeks ago I reported on the (appealable) revocation of two Nokia patents as a result of OPPO's challenges. For the sake of complete reporting, I'd like to add that this month a written decision (PDF) also came down in an opposition proceeding in which Nokia has achieved the (equally appealable) revocation of an OPPO patent-in-suit: EP3563600 on "separate configuration of numerology-associated resources." the oral hearing took place on March 23.

4. KPN defended one of its patents-in-suit against Ericsson earlier this month

Here's a follow-up to the post of a few days ago on Ericsson obtaining the invalidation (by the USPTO's PTAB) of one of KPN's patents-in-suit. I hadn't previously commented on that dispute, so now I'd like to provide a bit more context.

Of the three patents-in-suit from KPN's first case against Ericsson in the Eastern District of Texas,

• one (RE'089) was invalidated as I reported,

• one was never challenged through an IPR petition (U.S. Patent No. 8,881,235 on "service-based authentication to a network"), and

• a third one, U.S. Patent No. 9,253,637 on a "telecommunications network and method for time-based network access", was deemed valid by the PTAB in a May 12, 2023 decision (IPR2022-00069).

A second KPN v. Ericsson case is also pending in the same district (i.e., before Judge Rodney Gilstrap):

Koninklijke KPN N.V. v. Telefonaktiebolaget LM Ericsson and Ericsson Inc. (case no. 2:22-cv-282-JRG): July 25, 2022 complaint

According to the docket, the trial will begin on April 1, 2024 with jury selection.

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Telit drops antitrust lawsuit against Avanci and Nokia over component-level licensing of standard-essential patents started by Thales in Munich, also withdraws U.S. discovery requests

A few months ago, IoT module maker Telit consummated the acquisition of the cellular IoT products unit of French industrial conglomerate Thales. As a result of the transaction, Telit inherited the antitrust dispute Thales had started in 2021, accusing the Avanci patent pool firm and one of its licensors--Nokia--of violating EU antitrust law by declining to grant exhaustive component-level licenses covering cellular standard-essential patents (SEPs).

From the beginning I had--and expressed--my doubts about the prospects of that complaint, just like I never believed in Continental's U.S. litigation against Avanci, Nokia, and others, a case that indeed went nowhere. At some point a Thales v. Avanci & Nokia trial was scheduled for September 2022, but it didn't take place. There were delays, and with what is known now it's fairly possible that Thales knew Telit--which was in the process of acquiring that business unit--wasn't really interested in pursuing that litigation.

I noticed the withdrawal of the three related U.S. discovery motions earlier this month. Thales was seeking discovery (for use in the Munich proceedings) of Avanci (Northern District of Texas), Ericsson (Eastern District of Texas), and InterDigital (District of Delaware). For instance, on May 4 Thales gave notice that the Delaware action was "dismissed without prejudice, with each party to bear own costs, attorney’s fees, and expenses." The other dismissals were also without prejudice, and there is generally no indication of an agreement having been worked out between the parties along the lines of a license agreement. If anything, there was probably just a procedural agreement to terminate the litigation.

Yesterday afternoon the Munich I Regional Court was able to confirm to me that Thales (Telit) withdrew its antitrust complaint on May 4, 2023. The case was pending before the court's 21st Civil Chamber (Presiding Judge: Dr. Georg Werner).

While Continental was primarily seeking injunctive relief (and is still suing Nokia in Delaware state court, though nothing important has happened there so far), Thales brought a complaint for damages, which was unusual. Whatever the strategy may have been, the net effect is that those automotive supplier lawsuits over component-level SEP licensing are just a waste of resources.

The automotive sector has stepped up its lobbying efforts, which is reflected by the European Commission's proposed SEP Regulation. That bill does not require SEPs to be licensed at a specific level of the supply chain, but the EUIPO may in the end encourage component-level licensing through its recommendations further to the regulation. It is too early to tell whether that will happen, as the legislative proposal is likely to undergo lots of changes in the further process. Given that car-level licensing demonstrably works (by now most car makers have an Avanci license), the case for governmental intervention, even if merely in the form of an official recommendation, is increasingly hard to make. The failure of those lawsuits brought by Conti and Thales also doesn't suggest that there's an actual problem to be solved.

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OPPO has invalidated another two Nokia patents this month: European Patent Office revoked patents and rejected proposed amendments

The 5G patent dispute between Nokia and OPPO will "celebrate" it second anniversary in about six weeks. Nokia won and started to enforce some German injunctions, but OPPO decided to exit the market--for the time being, and who knows for how long. In other jurisdictions, Nokia did not get leverage either. As a result, the dispute drags on and on, with no resolution in sight.

The parties are attacking each other's patents, not only the patents-in-suit but also additional ones. They've both made some headway, but OPPO's challenges started earlier and that's why OPPO is ahead in terms of actual invalidation decisions (as opposed to preliminary opinions, several of which favor Nokia's attacks on OPPO patents).

OPPO is rather defensive and makes use of its patents only for retaliatory purposes, while patent licensing is a strategic business area for Nokia. Therefore, whatever patents OPPO manages to strike down has implications for what represents a major revenue source to Nokia.

None of the decisions so far is final as they can all be appealed, but this month OPPO has won two more favorable decisions from the Opposition Division of the European Patent Office:

• On March 3, the EPO revoked, at the end of an oral hearing, EP3167669 on "apparatuses and methods to introduce flexible support for services" in its granted form and also rejected Nokia's proposed amendments to the claims.

• As the result of an oral hearing on March 9, the EPO also revoked EP3395029 on "methods, apparatuses and computer program product for pdu formatting according to sdu segmentation", in the form in which it was granted and simultaneously rejecting Nokia's proposed amendments (click on the image to enlarge or read the text below the image):

  

  "The European patent is revoked because, account being taken of the amendments made by the patent proprietor during opposition proceedings, the patent and the invention to which it relates were found not to meet the requirements of the EPC (Art. 101(3)(b) EPC)."

A Chinese article provides an overview of 10 oppositions (nine by OPPO, and a tenth by a third party) to Nokia patents.

There'll be more news from this dispute, unless they settle, which they presumably will, but possibly later, not sooner...

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Next smartphone maker preparing to exit Germany over Nokia patent injunction: China's Vivo makes official announcement while Nokia misses earnings estimates

Nothing is more inconducive to the reputation of the patent system--and here, specifically, Germany's standard-essential patent (SEP) enforcement regime--than a reduction of consumer choice. At a time when the European Commission is finalizing a legislative proposal on SEP/FRAND litigation that raises numerous (and partly structural) issues, I consider it rather unhelpful that another Chinese smartphone maker is preparing its exit from the German market in response to SEP injunctions. But I am committed to keeping you all informed of what's going on regardless of whether one camp or the other may try to gain political mileage out of the facts.

In August 2022, OPPO and its OnePlus affiliate left the German market in response to some German patent injunctions (primarily a Mannheim SEP injunction) that Nokia had obtained. OPPO still hasn't returned, apart from some smaller resellers importing tiny quantities of OPPO devices from neighboring countries. OPPO's exit from Germany drew significant media attention after Wirtschaftswoche ("business week") reported on that development.

History is about to repeat itself. Two weeks ago I reported on a Mannheim injunction that Nokia obtained over two patents from the same family (EP'103 and EP'562) against another high-volume smartphone maker from China, Vivo (which spells its own name in lower case: "vivo"). Juve Patent subsequently reported on that injunction as well as another one over a patent from a different family (EP'626). IAM also reported (paywalled).

When OPPO stopped selling devices in Germany, it had a visible presence in that market, but relative to its sales in other world regions, Europe's share was small. That applies to an even greater extent to Vivo, which is why I was wondering whether the next "DExit" (DE is the top-level domain for Germany) was going to happen. Sadly, the answer appears to be yes.

I've only just now become aware of a German-language statement that Vivo published on its website. Let me provide my own unofficial translation (in which I'll spell "vivo" the official way):

vivo on the ruling by the Mannheim Regional Court

Dusseldorf, April 11, 2023

vivo fully respects intellectual property and is committed to continual innovation through extensive research and development. In the last few years, vivo has entered into cross-licensing agreements with numerous leading companies. We have been negotiating a renewal of our cross-license with Nokia, but have thus far been unable to reach an agreement. We are firmly convinced that Nokia has yet to discharge its obligation to offer a license on "FRAND" (fair, reasonable, and non-discriminatory) terms.

We are disappointed to take note of the decision by the Mannheim Regional Court and have started preparations to suspend, if need be, the sales and marketing of the accused products through vivo Germany's official channels. We are preparing an appeal of the decision and will evaluate our other options. In the meantime we will continue the negotiations with Nokia in order to conclude the matter on the basis of "FRAND" terms.

Our plans for a long-term commitment to the German market remain unchanged. vivo will remain present in Germany, and our customers can rely on our support. Our business outside of Germany will not be impacted.

Nokia sent a statement to the media:

The Regional Court in Mannheim, Germany has ruled that Vivo is using Nokia’s patented technologies in its smartphones and is selling them illegally without a license. The Court also found that Nokia has acted fairly. We welcome the judgments which confirm, once again, the strength of Nokia’s patent portfolio, and call upon Vivo to accept its obligations and agree a license on fair terms.

So we are witnessing two companies accusing each other of not being willing to sign a license agreement on FRAND terms, which is precisely the situation Nokia is also facing with OPPO. The numbers are not known. Just like OPPO and Vivo typically work out license agreements without a need for litigation, Nokia will claim the same. For instance, earlier this year Nokia renewed a license agreement with Samsung.

However, the plot is thickening that the royalties Nokia is seeking from OPPO and vivo may be at a level with what is acceptable to companies whose devices sell, on average, at significantly higher prices in affluent (therefore, less price-sensitive) markets. For OPPO and vivo, it makes no sense to sacrifice their competitiveness in the lower-end segment and in certain world regions (Asia, Africa, Latin America) only to be "allowed" to develop their German business.

Put differently, I cannot imagine that both OPPO and Vivo would leave the German market just because they're unwilling licensees who don't want to pay reasonable royalties to patent holders. They've worked out deals with licensors who are known to understand the specific needs of such companies who must be cost-sensitive due to the competitive environment and limited disposable income of customers in their largest markets.

No one had done what OPPO was first to do: to exit the German market in response to the enforcement of SEP injunctions. It's been almost 22 months since Nokia's infringement litigation against OPPO started, and Germany is the only market in which Nokia has gained leverage. Now Vivo is leaving Germany as well.

Litigation is neither Nokia's problem nor will it be the solution. Let there be no doubt that Nokia's in-house and outside counsel are second to none. It's also a fact that Nokia has managed to identify some winning patents that it can enforce against multiple defendants in a row. For instance, EP'103 was used against Daimler, OPPO, and Vivo, and the Mannheim court ruled in Nokia's favor in each case.

But what for?

The three most basic questions to ask when a business considers a strategic choice are: "Is it real? Can we win it? Is it worth it?"

OPPO and Vivo are real. Nokia can win, and indeed has repeatedly won, injunctions in Germany. But is this the answer? Or shouldn't Nokia recognize that a company like Samsung is in a position to pay a far higher royalty per device than an OPPO or a Vivo?

On Thursday, CNBC reported that "Nokia shares sank 8% [...] as investors responded to its earnings report." The stock price didn't bounce back on Friday. Analysts had expected a quarterly profit of 523.4 million euros (according to a Refinitiv poll), down from the 583 million euros Nokia reported for the same period last year--but the result of 479 million euros fell short even of the analysts' expectations.

Nokia's net sales had actually grown by 10% to 5.86 billion euros, beating analyst estimates (5.72 billion). But profits took a hit "“due to regional mix and a lower contribution from Nokia Technologies partly related to a license option exercised in Q4 2022." Nokia Technologies' revenue source is licensing. If Nokia had accepted OPPO's and Vivo's counteroffers, it presumably would have beaten--not missed--the earnings estimates. And on top it would have avoided potential bad news that the world's richest smartphone maker, Apple, and its allies and astroturfers will leverage in their EU lobbying activities at this critical juncture.

I understand that Nokia doesn't want to devalue its patents, and far be it from me to suggest that. But the path to license agreements with OPPO and Vivo is not litigation, much less litigation in Germany, a market in which they'd definitely like to operate but can't afford to if it puts them at a disadvantage vis-à-vis low-cost competitors in other world regions.

Nokia's most important license agreement--the one with Apple--was last renewed in 2017 (at a time when Apple preferred to focus on the Qualcomm dispute), and the previous had expired at the end of 2016. If it was a seven-year agreement like Apple's recent license agreements with others, it would be up for renewal by the end of this year. A longer term than seven years would be almost unprecedented in this industry (though Apple once signed a ten-year agreement with HTC, but Apple was the net licensor in that case). Apple is known to argue that it should not a pay a cent more than even the makers of the cheapest phones. It has a "most favored nation" mentality. I understand Nokia's dilemma, but I can't see a winning strategy here against OPPO and Vivo. There is no way that those companies would pay Samsung-like royalties. The solution is to work out a deal with them that reflects those licensees' market realities, and to nevertheless expect someone like Apple to pay a lot more, for good reason.

In the meantime, FRAND determination proceedings brought by OPPO and Vivo are going forward in China, a market that Nokia cannot afford to just leave the way OPPO and Vivo can exit Germany. Also, OPPO and Vivo are countersuing Nokia, particularly in "injunction-happy" Germany. Case in point, the Munich I Regional Court wil hold an OPPO v. Nokia trial on Thursday (April 27) and held one a few days ago (April 20). Nokia may be able to fend off various such countersuits, but once OPPO or Vivo has an injunction and enforces it, the terms of an agreement may be less favorable to Nokia than if they worked out a negotiated solution now.

Just like patent licensing firm IPCom (which had acquired patents from Bosch, a company that used to make mobile devices until about 20 years ago) wasn't able to defeat Nokia despite years and years of litigation, Nokia may never be able to get OPPO and Vivo to accept the terms it has in mind. Some nuts are too tough to crack.

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