Court finds 5G iPhone/iPad sales ban in Colombia constitutional: Ericsson's preliminary injunction over 5G standard-essential patent remains in effect, Apple merely gets clarification

A second attempt by Apple to overturn a 5G iPhone and iPad sales ban in Colombia has just failed as a Colombian court denied a petition by Apple, but the iPhone maker hasn't exhausted all procedural options yet.

The first failed attempt was an emergency motion that Apple had brought with the United States District Court for the Eastern District of Texas. The idea was to hold Ericsson responsible in the U.S. for its enforcement of a Colombian patent. On July 28, that motion was denied, with the sole exception of Apple being authorized to provide to its Colombian counsel some documents obtained in the U.s. discovery process, but not even the one Apple was most interested in sharing (an Ericsson-Samsung license agreement). Judge Rodney Gilstrap furthermore warned Apple of sanctions should another such misuse of court rules (filing an emergency motion without there being the kind of emergency for which it is designed) occur.

In parallel, Apple brought a "tutela" in Colombia's capital. A tutela is a kind of petition designed to immediately stop any violations of a party's fundamental rights. Apple even invoked Art. 8 of the famous Universal Declaration of Human Rights.

The Tribunal Superior de Bogotá (Superior Court of Bogotá) has just published its decision, which was authored by Judge Jorge Eliécer Moya Vargas and furthermore signed by Judges Oscar Humberto Ramírez Cardona and Jorge Hernán Vargas Rincón. The net effect is that

• there was no procedural irregularity or other violation of Apple's constitutional rights by the court that ordered the preliminary injunction or Ericsson (or its Colombian outside counsel, OlarteMoure's Carlos R. Olarte), so the injunction remains in force, and

• the only part of Apple's motion that succeeded is that the Civil Court No. 43 is ordered to provide within five days some clarification on the scope of the injunction that Apple had requested.

Basically, Apple is referred to the regulator appellate process, but can't obtain emergency relief on the basis of an alleged violation of its fundamental rights under Colombia's constitution.

In addition to its regular appeal of the preliminary injunction, Apple can appeal the denial of its tutela. The next court will then have to decide within 20 days on any questions involving Apple's constitutional rights.

By coincidence, there are presently two countries in which some smartphones are unavailable due to standard-essential patent (SEP) injunctions. Just a few days ago, OPPO and its OnePlus subsidiary stopped--for the time being--their German smartphone sales as Nokia is apparently enforcing one or more Mannheim injunctions (and obtained two SEP injunctions in Munich on Friday). OPPO hasn't closed down its German subsidiary, and customers continue to receive support; and unlike in the Colombian Ericsson v. Apple case, the injunction binds only OPPO itself, so its resellers are still able to sell products they have in stock or purchase outside of Germany. On Tuesday, the Dusseldorf Regional Court will rule on a couple more Nokia v. OPPO cases. I will then discuss the German situation in more detail. There are major differences between the two disputes. What this coincidence does show, however, is that Colombia is not the only jurisdiction in which a SEP injunction is presently being enforced.

Finally I'll show you a couple of screenshots from the Colombian order denying Apple's "tutela" (click on an image to enlarge):

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BREAKING: Apple alleges human rights violation by Colombian court that ordered 5G iPhone/iPad sales ban, Ericsson, and its lawyers; invokes Art. 8 of Universal Declaration of Human Rights

BREAKING NEWS

Apple leaves no stone unturned in its efforts to get Ericsson's Colombian iPhone/iPad injunction over a 5G standard-essential patent (SEP) lifted, and is now accusing Ericsson, its lawyers, and the court that ordered the injunction to violate basic human rights, invoking even Art. 8 of the famous Universal Declaration of Human Rights. I wonder what's next--voting rights for iPhones?

Just yesterday, Judge Rodney Gilstrap (Eastern District of Texas) denied Apple's antisuit motion as he declined that invitation to interfere with a foreign patent case. Now I've been able to obtain a copy of a publicly-accessible court document that is truly astonishing:

Apple has asked the Tribunal Superior de Distrito Judicial de Bogotá (Superior Court of the Judicial District of Bogotá) for a "tutela"--a form of emergency relief--against

• Ericsson,

• its Colombian law firm (OlarteMoure),

• Carlos R. Olarte (a name partner of that firm and Ericsson's lead counsel in the Colombian part of the Apple patent dispute), and

• the Civil Court No. 43 of the Bogotá Circuit.

Here's the header section (click on the image to enlarge):

Incredibly, Apple bases its motion for that emergency measure on Colombia's constitution as well as

• Article 8 of the Universal Declaration of Human Rights (UDHR)--a document famously adopted by the United Nations General Assembly in 1948-- and

• Article 25 of the American Convention on Human Rights, which has been ratified by two dozen Central and South American countries.

Here's the passage that invokes those international human rights declarations (click on the image to enlarge):

Art. 8 UDHR says this:

"Everyone has the right to an effective remedy by the competent national tribunals for acts violating the fundamental rights granted him by the constitution or by law."

This obviously doesn't mean that every time you disagree with a judge, this article applies. In fact, the Equality and Human Rights Commission, a governmental entity in the UK entasked with protecting and promoting human rights, explains its meaning as follows:

"Article 8 protects your right to respect for your private life, your family life, your home and your correspondence (letters, telephone calls and emails, for example). [...] The courts have interpreted the concept of ‘private life’ very broadly. It covers things like your right to determine your sexual orientation, your lifestyle, and the way you look and dress. It also includes your right to control who sees and touches your body. For example, this means that public authorities cannot do things like leave you undressed in a busy ward, or take a blood sample without your permission."

Now, no one has left an Apple executive undressed in Colombia or taken a blood sample without permission. By extension, Art. 8 UDHR "also covers your right to develop your personal identity and to forge friendships and other relationships. This includes a right to participate in essential economic, social, cultural and leisure activities." (emphasis added)

The unlicensed use of patents, however, is not exactly an "essential economic activity" protected by Art. 8.

So what is it that Apple wants to prevent Ericsson and its lawyers from doing?

The motion wants them to stop sending allegedly "threatening communications" to Apple's "contractual partners and resellers" and "damaging the good name of Apple Colombia S.A.S. through whatever communications channel." (Note that the original motion is in Spanish, and I'm just translating it myself--I've used that language in various professional contexts for almost two decades, though I'm obviously not a certified translator.)

Apple generates only about a fifth of a percent of its worldwide sales in the South American country, but is currently unable to sell its latest iPhones and latest cellular iPads there. Not only is Apple's Colombian subsidiary, Apple Colombia S.A.S., enjoined but the injunction specifically states that resellers are not supposed to sell the products deemed to infringe, and Colombia's customs authority has been instructed to confiscate any new shipments.

Apple's 48-page "Hail Mary"-style motion asserts that "Apple has done everything in its power to reach an agreement with Ericsson, other than caving to Ericsson's supra-FRAND demands." As we know from the U.S. part of the dispute, Ericsson is actually convinced of having made Apple a FRAND offer.

Apple's motion complains not only of the "broad and illegal interpretation" of the injunction by Ericsson and its lawyers in letters sent to Apple's contractual and commercial partners in Colombia, but also accuses them of "providing deceptive information to the media," which according to Apple "created a media circus":

"As a result, in addition to the damages caused, the costs that Apple Colombia has incurred in order to comply in good faith with the broad and illegal interpretation Ericsson and its lawyers have given to the court orders, the loss of profits, and among others, Apple Colombia has been publicly treated as a patent infringer [...]"

Well, ten years and two weeks ago, this blog reported on Apple sending letters to Samsung's commercial partners in the U.S., portraying Samsung as a patent infringer and urging Samsung's resellers to stop selling certain Galaxy devices. The difference is that Samsung--though it sharply disagreed with Apple's course of action--didn't allege a human rights violation by Apple...

Apple says it's suffering "irreparable harm" and, therefore, "cannot wait until the legal options ordinarily available to it (appeals) have been adjudicated."

Section 6 of Apple's motion claims that the court order has various "legal defects." These are the subheads:

• "6.1 Material defect: Court No. 43 did not base its decisions in applicable statutes and did not state the reasons for tis decisions"

• "6.2 Absolute procedural defect: Court No. 43 ignored the procedural stage, which led to the violation of basic rights of Apple Colombia"

• "6.3 Factual defect: Court No. 43 ignored the evidence that would have allowed it to conclude that a preliminary injunction was not warranted"

• "6.4 Ignorance of legal precedent: Court No. 43 ordered the preliminary injunction ignoring the Constitutional Court's legal precedent"

• "6.5 Direct violation of the Constitution: Court No. 43 ignored Art. 29 of the Political Constitution"

As I read the motion, I can't help but conclude that Apple's Colombian counsel portrays as constitutional issues what are run-of-the-mill appellate arguments in a preliminary injunction context.

Unfortunately for Apple, patent rights also have a constitutional dimension in many jurisdictions (examples: Article 1, Section 8, Clause 8 of the United States Constitution; and in Germany it's recognized that intellectual property, too, falls under Art. 14 of the country's Basic Law, as explained on this German WikiBooks page).

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U.S. court declines to complicate Ericsson's enforcement of Colombian 5G iPhone/iPad sales ban, warns Apple against sanctions for misuse of court rules

Earlier this month, Ericsson secured a preliminary injunction against Apple in Colombia over a 5G standard-essential patent (SEP), in response to which Apple ran to the United States District Court for the Eastern District of Texas and requested an antisuit damages order. Ericsson's enforcement is ongoing, and the impact can be seen on Colombian store shelves--and is furthermore evidenced by media coverage, such as an opinion piece in Colombia's largest newspaper. It's a high-profile achievement for Ericsson's Colombian counsel, OlarteMoure's Carlos R. Olarte.

While Apple generates only about a fifth of a percent of its global sales in the South American country, the patent license fees Ericsson is seeking on a worldwide basis are modest compared to the average selling price of an iPhone.

Judge Rodney Gilstrap held a motion hearing one week ago, and this morning published his decision. The antisuit part was denied, and only a limited part of a discovery-related request by Apple was granted. Technically, this means the motion was granted-in-part and denied-in-part, but rather tellingly, the docket text of the order emphasizes the denial of the antisuit-related core part of the motion:

"ORDER denying 116 Motion for Relief Against Ericssons Attempt to Use Secret, Ex Parte Actions in Bogota, Colombia to Subvert Proceedings in This Court. Signed by District Judge Rodney Gilstrap on 7/28/2022. (nkl, ) (Entered: 07/28/2022)"

Footnote 5 distinguishes this matter from last year's anti-antisuit injunction (or "anti-interference injunction") in Ericsson v. Samsung, and notes the following:

"Here, Apple invites this Court to inject itself into an ongoing proceeding in Colombia. The Court declines Apple’s invitation."

While expressing "some level of for the frustration visited upon Apple by Ericsson’s strategic conduct in other diverse forums," Judge Gilstrap doesn't think it constitutes "imminent, irreparable harm" to Apple that it may--as a result of enforcement actions in other jurisdictions--have to sit down and negotiate a license with Ericsson. The Texas FRAND case will go to trial in December, and no later than September, Apple and Ericsson have to engage in formal mediation.

It almost sounds like Apple is an unwilling licensee. Ericsson v. Apple cases are pending in three German courts, and should Apple be deemed an unwilling licensee there, it will feel far greater settlement pressure than presently in Colombia.

There's also a procedural issue. Apple should have brought a regular motion as opposed to an emergency motion. "Emergency motions are to be filed only in truly extenuating circumstances and should not be used as a means to secure an expedited briefing schedule and hearing before the Court," Judge Gilstrap clarifies--and "finds that Apple has misused and misapplied the rules for emergency motion practice in this Court." Therefore, he places Apple "on notice that further such conduct will warrant, and likely result in, sanctions against it."

The antisuit damages order that Apple wanted--which wouldn't have formally barred Ericsson from continuing its Colombian PI enforcement, but would have made it costly--was the motion's primary objective. In addition, Apple wanted the U.S. court to "expand the terms of [its] [P]rotective [O]rder to permit Apple to provide its Colombia counsel [who personally attended last week's hearing in Texas] with copies of the Colombia filings Ericsson recently produced in this litigation together with the two Ericsson-Samsung licenses also produced." While I've seen § 1782 discovery requests for use in foreign litigation on a number of occasions, this one seemed a bit odd to me. According to the order, Apple withdrew "its request to share license agreements with Colombian counsel." So, in the end it was just about 76 documents from the Colombian part of the dispute--where Ericsson had brought multiple ex parte motions--that Apple listed in a notice last week. Pursuant to Judge Gilstrap's order, "[s]uch documents shall be delivered by Apple to its Colombian counsel only upon condition that those receiving them are fully bound by, and subject to, the Protective Order entered in this case."

Arguably, this consolation prize for Apple also constitutes some form of interference with proceedings in a foreign jurisdiction. From a U.S. perspective, defendants' limited access to ex parte injunction requests in Colombia may appear unfair. But if that's the law in Colombia, it might be appropriate to defer to that country's legislature, given that the U.S. proceedings aren't affected. And it's hard to see how that part of Apple's motion would satisfy the standard for emergency motions in the Eastern District of Texas, which the antisuit part failed to do.

Whether Apple will get any mileage out of the provision of those documents to its Colombian counsel is doubtful.

If Apple wants to sell 5G iPhones and iPads in Colombia again, it either has to successfully appeal in Colombia--or take a license, which will be the outcome anyway (the question is just when and on what terms).

Finally, let me show you the court order:

https://www.documentcloud.org/documents/22122790-22-07-28-edtx-376-order-denying-in-part-apples-emergency-motion

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Lawyers tried to avoid Epic v. Apple judge for banks' class action against Apple over Apple Pay monopoly abuse--but jury is out on ultimate assignment

The class action-specialized law firm of Hagens Berman yesterday announced an antitrust class action on behalf of payment card issuers against Apple. The complaint (PDF) alleges monopoly abuse in the form of the "manifestly supracompetitive" fees Apple charges payment card issuers for transactions made on Apple Pay. Apple has very high shares in the smartphone, tablet, or smart watch markets in the United States, the geography the lawsuit focuses on, and does not allow other payment apps (particularly "wallet" apps) to use the iPhone's NFC chip. Developers can use NFC for some purposes, but Apple prohibits third-party apps to facilitate payments via NFC. Apple charges transaction fees despite other companies doing almost all of the work--and those amounted to $1 billion last year and are projected to soon reach $4 billion, in the U.S. alone.

I'm going to be following this litigation as it unfolds, so this here is not my "definitive" analysis but merely a few observations to begin with.

Explanatory complaint: One key strength of this complaint is that it does a great job explaining the issues and their effects. It's definitely one of the best U.S. complaints I've ever seen in explanatory terms.

Plaintiffs: The caption is Affinity v. Apple as Affinity Credit Union of Canada (which also does some business in the U.S.) is the initial plaintiff. Hagens Berman now wants payment card issuers to sign up so they will get a share of what could be a multi-billion dollar payout. Depending on who will join the plaintiff class (of the thousands of entities that would meet the eligibility criteria), this case here could get a lot more serious than some consumer or "small developer" class actions that typically end in settlements that benefit the lawyers to a far greater extent than anybody else.

Sherman Act claims: There's a tying claim (Sherman Act Section 1) that is described as a "requirements tie." It's not a general tie that would require anyone purchasing an iPhone, iPad, or Apple Watch to use Appel Pay. But if the users of those devices want to do "tap and pay" transactions, "Apple has made Appe Pay the only option for fulfilling that requirement." In that sense, Apple ties the "tap and pay iOS mobile wallet market" to the "iOS mobile device markets." An additional section 2 claim accuses Apple of monopolization by excluding competition, "including by way of its unlawful practices in restraint of trade." As a fallback, the complaint also alleges "attempted monopolization."

Geographic market: I've already mentioned the geographic focus on the U.S., which in this case doesn't seem arbitrary at all. The complaint contains a chart according to which Apple imposes particularly high transaction fees in the U.S. as compared to the UK and the EU:

Market definition: Given Apple's very high market share in the U.S., the case--unlike cases with a global market definition such as Epic Games v. Apple--doesn't hinge on a single-brand market definition. However, the term "aftermarket" is mentioned once.

Relationship with EU investigations: The complaint makes reference to the European Commission's recent Statement of Objections (a preliminary finding of an antitrust violation) in an Apple Pay case. While there are jurisdictional differences, one can reasonably argue that the Apple Pay situation is worse in the U.S., as evidenced by the fact that fees in the U.S. are several times higher. Besides the investigation in which the EU issued the aforementioned SO, there's a second investigation into Apple Pay (with a slightly different focus) that was announced about two years ago.

Google: This here is not a "Goopple" case where both duopolists--Google and Apple--behave in similar ways. The complaint mentions how much more freedom and, as a result, innovation there is in the market for Android wallets.

Security: The complaint attributes (at least in part) to Apple's exclusionary practices that there have been serious security issues involving Apple Pay. This is going to be a very interesting part of the case to watch, as Apple uses security (alongside privacy) as its favorite pretext for anticompetitive, innovation-stifling terms and policies.

Negative judge-shopping: The Northern District of California, where this complaint was brought, has multiple divisions. Hagens Berman specifically requested "[i]ntra-district assignment to the San Jose division." That's the closest one to Apple's Cupertino HQ, and normally parties prefer not to be in an area where a high percentage of potential jurors may have friends or relatives working for the other party. I'm almost 100% sure that the real reason is not that they want to litigate in the backyard of Apple Park. The presumptive motivation here was to keep the case out of Judge Yvonne Gonzalez Rogers' hands. She's based in Oakland and presiding over the Pepper v. Apple consumer class action (that went all the way up to the Supreme Court) as well as Epic Games v. Apple, which is currently before the Ninth Circuit.

But there is a possibility of her getting the case despite the plaintiff's efforts to sidestep her division. The first thing that happened was that the court assigned the case to Magistrate Judge Thomas Hixson, who has a strong antitrust background but (a) is based in San Francisco and (b) handled discovery-related matters for Judge YGR in Epic Games v. Apple. In this case it's a given that the parties will decline to proceed before a magistrate judge, and then the case might be assigned to that Epic v. Apple judge on the other side of the Bay Bridge...

While she decided Pepper for Apple (only to be overruled by the Ninth Circuit and then the Supreme Court) and then granted Epic only a pointless consolation prize, it would be utterly unfair to suggest that Judge Gonzalez Rogers intends to be protective of Apple. The way she "grilled" Tim Cook at the end of last year's trial was definitely the opposite of what a judge would do if there wasn't a sincere intent to find out the truth even if it might be bad for Apple. She also made a very correct remark during the trial about competition having the potential to leading to security improvements. But there are indeed some issues.

The question of whether consumers had standing in Pepper was tricky, and narrowly decided. If Justice Kavanaugh hadn't joined the liberal minority, Judge YGR's dismissal of the case would probably have been affirmed.

But (at least) the part of the Epic Games v. Apple judgment dealing with Epic's single-brand market definition was a total disaster: wrong on the law, wrong on the economics, wrong on the technology. The sheer absurdity of saying that Epic's foremarket definition of smartphone operating systems was meant to suggest a higher market share for Apple than it actually has in the smartphone market is unbelievable, given that no iPhone gets sold without iOS and vice versa: same market share either way. In January I wrote that "[t]here is a one-to-one relationship (as programmers like me would say) between iPhones and iOS installations." Epic used the same term in its reply brief several months later.

Given that history, I can see why antitrust plaintiffs suing Apple over its death grip on its mobile ecosystem would rather have their case assigned to the San Jose division, which still doesn't mean that anyone accuses an honest judge of being biased. It's just that she has made mistakes that benefit Apple big-time, and no one wants to be on the receiving end of the next such mistake.

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Ericsson to court: Colombia "account[s] for approximately 0.2% of Apple’s worldwide sales"--but here's why the preliminary injunction still matters

Further to an order by Judge Rodney Gilstrap (United States District Court for the Eastern District of Texas), Ericsson has filed its opposition to Apple's emergency motion seeking antisuit damages as well as an extraterritorial discovery order that I hadn't even mentioned before (the Colombian preliminary injunction is already having impact on the market and therefore draws far more attention). It's so outlandish that I still can't imagine it will go anywhere, but what it comes down to is that Apple wants the Texas court to authorize Apple to provide confidential documents from the Texas FRAND case to its Colombian counsel...

Here's Ericsson's filing in preparation of the Thursday (July 21) motion hearing:

https://www.documentcloud.org/documents/22088234-22-07-15-ericsson-opposition-to-apple-emergency-motion

I already expressed my doubts about the prospects of Apple's motion and the strength of Apple's arguments when I published the motion as well as in a subsequent post on dual standards.

It was almost a euphemism when I described as an "apples-to-oranges comparison at best" that Apple's attempt to persuade the Texas court that the circumstances here resembled those under which an anti-antisuit injunction in Ericsson v. Huawei came down last year. Ericsson's opposition brief argues it's actually worse and Apple now wants the Texas court to enter the kind of antisuit injunction that a Chinese court had granted Samsung against Ericsson, in response to which Ericsson requested and obtained an anti-interference or anti-antisuit injunction. As Ericsson's filing points out, last year's Texas AASI didn't prevent infringement proceedings from continuing, or infringement rulings from being enforced, in all jurisdictions. Much to the contrary, the Texas court sought to defend infringement actions from foreign interference.

I found it "telling[]" that Apple applied the Unterweser antisuit injunction factors while denying that it's seeking an antisuit injunction. Ericsson's brief also notes that inconsistency. Instead, the focus would have to be on the traditional injunction factors.

Another issue with Apple's motion that I had raised before and that Ericsson's opposition filing addresses is that the Texas case simply isn't guaranteed to result in a binding license agreement, which the Texas court had clarified before (even twice).

In response to Apple's "coercion" argument, Ericsson notes that its last licensing offer "is still on the table, and Ericsson has not increased that offer since obtaining the injunction." A related footnote then states the following:

"Moreover, Apple’s 'coercion' argument ignores that Colombia is a very small market for Apple, accounting for approximately 0.2% of Apple’s worldwide sales. See Ex. E (filed under seal)."

The Colombian PI still matters. It obviously does in Colombia (for example, see the infographic in this article). Ericsson is pursuing injunctions in other jurisdictions as well. But even in the global licensing dispute, a loss of 0.2% of potential sales is relevant, and that's because the amount Ericsson is asking for ($5 per iPhone) is also far less than a percent of Apple's sales.

If, in theory, Ericsson managed, by demonstrating patent infringement and showing that its own conduct was FRAND-compliant, to exclude Apple from a few markets the size of Colombia, and not just in the form of a preliminary injunction but actually in the long run (permanent injunctions), a license would already be a better deal. While sales and profits are different things, Apple's margins are sky-high, so the difference in Apple's case is not that great--and Apple extracts a lot of revenue out of its customers subsequently to the sale of a phone, especially through its infamous app tax. So the opportunity cost far exceeds the profits made with the sale of one device, also because a user who migrates from iOS to Android may not switch back (I actually migrated from Android to iOS a few years ago, and remigrated to Android last year, but most people wouldn't do that).

Let me dedicate just one paragraph to the app tax topic here. Apple is facing class actions over its App Store terms that it may not be able to settle as cheaply as with certain "developer plaintiffs" in the United States. Even in the U.S., the Pepper case remains interesting; a UK consumer class action has passed a legal and factual plausibility test by a competition-specialized court; and a similar action has recently been brought in Australia. Just imagine what it would mean if Apple had to pay out money to end users after being found to have illegally overcharged them. Developers are just serfs in Apple's Hermit Kingdom, and Tim Cook's deposition in Oakland last year made it clear that he doesn't give a damn about whether developers are satisfied with how Apple treats them, but Apple does care about end users (who could alternatively buy Android devices).

It's really a mystery what Apple hopes to achieve through that "emergency motion" in Texas. It's really hard to see how Judge Gilstrap would grant it. In the next step, Apple could try to appeal a denial to the Fifth Circuit, but that would take time, and in the meantime the Colombian case will be closer to a decision on the merits and the Texas FRAND case will have gone to trial.

On a somewhat related note, I read that Ericsson didn't meet some expectations with respect to current licensing revenues. I don't hold shares in Ericsson, but if I did, I'd actually be more concerned if they left money on the table at this stage. It's a now-or-never situation for reaching a more reasonable royalty level. It may take time before a company like Apple settles, but it will literally pay dividends in the long run to reject offers that undervalue one's patents.

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Texas court to hear Apple's grievances about Colombian 5G iPhone/iPad sales and import ban on next week's Thursday (a week later than Apple requested)

Ericsson is presently enforcing a Colombian patent injunction over a 5G standard-essential patent (SEP). As a result, Apple can't sell any 5G iPhones (iPhone 12 and 13) and iPads in Colombia. It can't even import them into the South American country because the injunction simultaneously instructs Colombia's customs authority to seize any shipments. Apple is now trying to get help from the United States District Court for the Eastern District of Texas, and requested an emergency hearing before the end of the week, while Ericsson wanted to firstly complete fact discovery (the deadline is on Friday, July 15). After Apple demanded that a hearing be held this week, Ericsson informed the court that its lead counsel "has tested positive for Covid and due to quarantine requirements would not be available for an in-person hearing before July 18," and that "lead counsel and other members of Ericsson’s legal team are scheduled for an all-day hearing July 21 in another matter."

Judge Rodney Gilstrap then came down closer to Ericsson's than Apple's position. He agreed that Ericsson should get one week from the filing of the motion (which was last Friday) to file a response. While Ericsson wanted the right to file a sur-reply in case of Apple filing a reply brief, Judge Gilstrap does not want the parties to file a reply or sur-reply "unless so ordered by the Court." The hearing will be held on next week's Thursday (July 21, 2022) at 9 AM Central Time.

I doubt that Apple will be able to solve its Colombian problem through its action in Texas. But the Colombian judiciary will be none too pleased that Apple is trying to get a foreign court to interfere with a Colombian matter.

U.S. patents are valid only in the U.S., and therefore enforceable only in U.S. courts.

Colombian patents are valid only in Colombia, and therefore enforceable only in Colombian courts.

I know I was just stating the obvious to all patent practicioners (and even many people with a non-professional interest in the subject), but it bears remembering in this context.

Apple portrayed Ericsson's litigation tactics as outrageous, though it and its counsel have previously done the same, or even worse (it's arguably worse to shop the same patent around in Germany, failing in one court and retrying in another).

There can be special circumstances that justify actions in one jurisdiction relating to what's happening in another. However, any encroachment on another jurisdiction's sovereignty must be carefully considered. Extraterritorial overreach complicates SEP enforcement and has already resulted in some escalation, which is why there are now not only antisuit injunctions but even anti-anti-anti-antisuit injunctions (as absurd as it may sound).

If Apple had previously made the commitment that Ericsson sought in Texas, some cross-jurisdictional interference might be justified. Ericsson wanted Apple to commit that it would take a license (at a rate of $5 per iPhone) if the outcome of the Texas case was that Ericsson acted in compliance with its FRAND licensing obligations when asking for that royalty. However, the Texas court had no other choice but to deny Ericsson's motion to firm up Apple's commitment to be bound by the Texas ruling, as Apple remains free not to take a license even if Ericsson's rate is determined to be FRAND. I expect that question to come up in Ericsson's opposition brief and at next week's hearing.

I'm not sure it was the right decision on Apple's part to seek an antisuit damages order in Texas. This is certain to alienate the courts in Colombia as I mentioned further above--and it's actually in Colombia where Apple should now try to appeal the decision (and have faith in the judges down there, even though this may be the first SEP case in Colombian history). It's also going to be viewed unfavorably by judges in other places whose jurisdiction could be affected in a similar way next time--such as Germany, where this may contribute to a finding that Apple is an unwilling licensee (and may give rise to an anti-antisuit injunction in case Ericsson tries).

The same logic with which courts in Germany and elsewhere (inspired by the Munich court) have granted anti-interference injunctions to fend off foreign antisuit injunctions would also apply to what Apple is trying to get in Texas (antisuit damages). It just takes a broader wording now to prevent foreign antisuit injunctions as well as foreign antisuit damages orders.

With respect to the term "antisuit damages" I would like to point to this post by Professor Thomas Cotter on his Comparative Patent Remedies blog. He notes that it may not be the same as wrongful-enforcement or other consequential damages, as the requested relief "specifically refers only to 'fines, fees, penalties, and costs,' though it also states that Ericsson should 'take financial responsibility for the consequences here of its action in Colombia' (emphasis in original)."

It is indeed unclear right now what Apple would seek from Ericsson. All that we know for sure is that Apple isn't seeking an antisuit injunction, which would be an outright violation of the Colombian anti-antisuit injunction. It could be that in Apple's preferred scenario, Ericsson would have to pick up any contempt-of-court sanctions (contempt fines) from Colombia. In that case there wouldn't be any wrongful-enforcement damages, as Apple would continue to violate the injunction, but Ericsson would bear the costs.

The problem is that at some point Apple's continued contempt of the Colombian court--even if Ericsson had to reimburse Apple for any monetary sanctions--could lead to the imprisonment of Colombia-based Apple executives, and there is no way that the Texas court could decide that Ericsson--not Apple--executives would have to go to jail in Colombia...

Apple is afraid of the Colombian situation repeating elsewhere, and particularly mentioned Ericsson's Brazilian action. Also, the European Court of Justice decided earlier this year that preliminary injunctions must be available to patentees who show a likelihood of success on the merits, so in Germany and other EU member states we may also see SEP injunctions soon (if not in Ericsson v. Apple, then in other disputes).

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Apple applied double standards in its attempt to prevent Colombian iPhone ban over 5G standard-essential patent

Yesterday (Saturday) I immediately reported on filing by Apple (with the United States District Court for the Eastern District of Texas) from which I learned that Ericsson had won a preliminary injunction in Colombia against 5G iPhones and iPads over a standard-essential patent (SEP), which is apparently being enforced now. I have now taken a second look at an English translation of a Colombian court order that Apple provided to the Texas-based court.

I find three contradictions remarkable:

1. In one or more of its filings with a court in the Colombian capital of Bogotá, and in Friday's filing with the U.S. court, Apple criticized Ericsson's tactic of filing multiple Colombian patent infringement actions with different courts (one action per patent). A sworn declaration by Apple's Colombian counsel (Brigard Castro's Juan Pablo Cadena Sarmiento) describes this as "an improper attempt of forum shopping until [Ericsson] obtains a favorable decision allowing Ericsson to exclude Apple from the Colombian market."

   Apple does not explain why splitting up an enforcement campaign into multiple cases over one patent each is "improper." In Germany it's even the law: the only way that a German court will hear more than one patent in a given case is if they're from the same patent family.

   Apple itself actually went further than what it is now criticizing Ericsson for. In 2012, Apple failed with a motion for a preliminary injunction against two Samsung products in Munich, where the court doubted the validity of the patent-in-suit. Apple then withdrew its Munich case and reasserted the very same patent shortly thereafter in Mannheim, hoping for a more favorable outcome there. It didn't work, but Apple tried.

2. Ericsson sought and obtained in Colombia an ex parte preliminary injunction, meaning that it requested the court to grant it without hearing the other party (though the defendant can then move for reconsideration, whic his what Apple did, even if unsuccessfully so). Apple then told the court that Ericsson had violated its right to due process and access to justice.

   But as Ericsson's counsel in the Colombian Apple cases, Olarte Moure's Carlos R. Olarte, noted, "the same Apple representative has requested and obtained ex parte preliminary injunctions before the Delegation of Jurisdictional Affairs of the SIC [Dept. of Industry and Commerce], which is why it is not understood why it states forcefully on this occasion that ERICSSON's action is unfair, when it itself has implemented these legal mechanisms in defense of their clients."

3. Apple's motion for emergency relief in Texas (in the form of an antisuit damages order that Apple hopes will deter Ericsson from continuing to enforce the Colombian injunction) accuses Ericsson of "incessant attempts to subvert the [Texas-based] Court’s jurisdiction."

   Actually, a few years ago Apple closed two stores in the Eastern District of Texas to "subvert"--I'd rather say "avoid"--that court's jurisdiction.

   Figuratively speaking, Apple is now prepared to kiss Judge Gilstrap's ring just to get help from him against a foreign jurisdiction's patent infringement ruling.

It's also difficult to understand what Apple means by "irreparable harm." The English translation of that court order indicates that Apple pointed to "the net sales of Ishop, one of the distributors of Apple Colombia within the Colombian territory": US$2.6 million in 2017.

I don't expect Apple's motion for an antisuit damages order to succeed, but the fact that Apple did this may have the effect that future anti-antisuit injunctions in Germany and other jurisdictions will also bar a defendant from seeking enforcement damages abroad.

The impact of the Colombian injunction is limited. All that Apple needs to do to solve the problem is to take a license. So far Apple is spending only about 2% of its device sales on SEP royalties (less than $15 per phone). The same Apple collects 30% from those app publishers who account for the bulk of App Store revenues, and has an App Review Department that rejects thousands of submissions every day. Apple acts as a gatekeeper every day, and now there's a court in Colombia that is playing that role, too, and has ordered Apple to stop selling its 5G iPhones and iPads in Colombia, simultaneously instructing the country's customs authority to seize any shipments. For Apple, Colombia is a tiny market. For app developers, Apple's customer base of about one billion people (many of whom are among the world's richest billion people) is a huge market, but Apple denies access to that market based on partly very unreasonable--and inconsistently applied--criteria.

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5G iPhones and iPads banned in Colombia after court grants Ericsson preliminary injunction over standard-essential patent; Apple seeking antisuit damages order in Texas

Less than six months after the current wave of Ericsson v. Apple patent infringement actions started, the first sales and import ban is already being enforced:

Apple is currently unable to sell 5G iPhones and iPads in Colombia, or import them into the South American country (though Apple says there is currently no 5G network available to consumers in Colombia, an unpersuasive argument that I'll comment on further below).

The Juzgado 043 Civil del Circuito de Bogotá--a court in the Colombian capital of Bogotá--found Apple's 5G iPhones and iPads to infringe claim 13 of Colombian patent no. NC2019/0003681, which has been declared essential to the 5G standard and was granted to Ericsson in 2019 an will remain valid until December 2037. That patent is a member of global patent family that also includes (among others) U.S. Patent No. 10,516,513 on "controllable CSI-RS density" and EP3510716 on "obtaining and indicating of component combination used for CSI-RS." The abbreviation CSI-RS stands for "channel state information reference signals."

The infringement determination was already made in April. In May, Ericsson posted a bond of approximately US$50K as a prerequisite to enforcement. On Wednesday (July 6), the court ordered a preliminary injunction, which Apple's Colombian subsidiary (Apple Colombia S.A.S.) now has to obey (while Apple is, unsurprisingly, appealing the decision).

The preliminary injunction bars Apple from the import, sale, commercialization, and advertisement of products infringing that patent. Under the order, Apple must "warn and communicate with" shops, retailers, owners of social media platforms, mass media, and e-commerce platforms within the territory of Colombia in order to ensure compliance. The affected devices are various iPhone 12 and 13 models, as well as newer iPads. The preliminary injunction furthermore directs the Dirección de Impuestos y Aduanas Nacionales (DIAN)--Colombia's customs authority--to prevent the importation into Colombia of infringing Apple devices.

In addition, Judge Ronald Neil Orozco Gómez decided that Apple must not seek or enforce an antisuit injunction from foreign country that prevent or restrict Ericsson's enforcement of the Colombian preliminary injunction. This kind of court order is called an anti-antisuit injunction: an injunction against an (actual or--as in this case--potential) antisuit injunction. The first court in the world to grant an anti-antisuit injunction in a standard-essential patent (SEP) case was the Munich I Regional Court (Nokia v. Continental, 2019; 21st Civil Chamber, then under Presiding Judge Tobias Pichlmaier). Since then, the Munich court has further developed its anti-antisuit case law to shield its jurisdiction over German patents (or, in most cases, the German parts of European patents) from foreign interference, including that anti-antisuit injunctions are available on a pre-emptive basis if certain conditions are met. Not only has at least one other German court (the Dusseldorf Regional Court) adopted that approach but courts in other jurisdictions have found at least some of the Munich court's logic compelling--which has now apparently also occurred in Colombia.

Apple's hands are tied now because of the anti-antisuit injunction: seeking an antisuit injunction against Ericsson to thwart the enforcement of that Colombian patent would be a flagrant violation of the Colombian anti-antisuit injunction, with potentially grave consequences for its Colombian subsidiary and its executives.

Another part of the problem for Apple is that Ericsson will find it easier in certain jurisdictions (particularly Germany) to obtain SEP injunctions if Apple, through its conduct, meets those courts' criteria for being an unwilling licensee. So far, in the SEP cases I've watched in Munich and Mannheim in recent years, each and every defendant--most recently, Chinese smartphone maker OPPO in its dispute with Nokia--has been deemed an unwilling licensee, and has consequently been enjoined. In an InterDigital v. Xiaomi case, the Munich court's Seventh Civil Chamber under Presiding Judge Dr. Matthias Zigann held that the pursuit of an antisuit injunction against the enforcement of a SEP injunction gives rise to a strong presumption of unwillingness to take a license.

So, instead of an antisuit injunction, Apple's lawyers are now seeking antisuit damages in the Eastern District of Texas. On Friday, Apple brought an emergency motion with the court, saying that the Colombian inunction gives Ericsson "economic and logistical leverage [...] to pressure Apple to abandon this litigation and capitulate to Ericsson’s [royalty] demand," and asks Chief Judge Rodney Gilstrap to decide as swiftly as possible that Ericsson must "indemnify Apple from any fines, fees, penalties, and costs it incurs as a result of the Colombian injunction." Elsewhere, Apple describes this as "tak[ing] financial responsibility" in Texas for what it's doing in Colombia. Apple wants to "hold Ericsson accountable" in Texas for any damages, hoping that Ericsson would then "reconsider" its patent enforcement campaign.

Apple is apparently hoping that the distinction between seeking an antisuit injunction (a court order under which Ericsson would be penalized in the U.S. for enforcing a patent injunction in Colombia) and an antisuit damages claim may help Apple avoid contempt-of-court sanctions in Colombia. But I'm not sure:

• Ericsson could now seek another preliminary injunction in Colombia (or an extension of the existing one) against Apple's antisuit damages claim in Texas. While the current Colombian anti-antisuit injunction is an anti-antisuit-injunction injunction, Ericsson would now additionally obtain an anti-antisuit-damages injunction.

• Tellingly, Apple's legal argument is based on the Unterweser case law for U.S. antisuit injunctions.

• The course of action that Apple has chosen could be taken into consideration by courts in other jurisdictions, particularly Germany, in their analysis of Apple's (un)willingness to take a license.

• Ericsson might seek a German anti-antisuit injunction (which would protect against both antisuit injunctions and antisuit damages claims) now. It could also go back to a court in the Netherlands, which denied an anti-antisuit injunction last year because Apple said it didn't intend to seek an antisuit injunction.

There are interesting questions involved, but what I find extremely weak (if not absurd) is that Apple likens its antisuit damages claim to an anti-antisuit injunction Ericsson sought and obtained from Judge Gilstrap last year in its dispute with Samsung. That's an apples-to-oranges comparison at best. Ericsson went to the Texas court because Samsung had obtained an antisuit injunction from a Chinese court that interfered with the Texas proceedings, including the potential enforcement of U.S. patents. In Ericsson v. Apple, there is no foreign antisuit injunction that would affect Apple's ability to litigate the FRAND dispute in Texas, or (if it so elected) to enforce any U.S. patents in the Texas court. Apple's argument is that the Colombian injunction might force Apple to "capitulate"--i.e., settle--in which case the Texas case might never go to trial.

Judge Gilstrap himself has actually made it clear before that Ericsson simply has the right to enforce its patents, and that Apple, by not taking a license, "subject[s] itself to actions for infringement."

No (public) 5G network in operation in Colombia

A sworn declaration by Apple's Colombian counsel is attached to Apple's filing in Texas and says, among other things, that "5G networks are still not available for consumer use in Colombia." The U.S. court filing indicates that Apple wants the Colombian court to "confirm[] that an injunction on a purportedly 5G essential method patent cannot be enforced until a 5G network is activated in Colombia."

The patent claim underlying the injunction is a method claim ("un método para obtener, en un dispositivo inalámbrico [...]"--"a method for obtaining, in a wireless device..."). Infringement occurs when the method is executed. However, Apple cannot rule out that

• infringement may already occur, such as when Colombian network operators conduct 5G tests in preparation of a rollout, and

• infringement will occur as soon as any Colombian network operator activates 5G service.

I've found articles according to which 5G trials by major Colombian carriers were already authorized in June 2020 (with one company, Claro, already conducting the first tests in 2018), and the plan was for 5G networks to be "deployed before the end of 2022." A more recent article, however, suggests that Colombia's 5G deployment could be delayed by a couple more years.

Even limited pilots make it a possibility that the method covered by the relevant patent claim would be executed in Colombia at this point. Furthermore, it could be that Colombian patent law is violated even if Colombian iPhone buyers only infringed when traveling to countries where 5G is already widely available.

Apple could theoretically--though for practical reasons it presumably wouldn't want to--sell 4G phones only in Colombia, thereby working around the injunction.

Finally, let me share the key documents. First, Apple's motion for emergency relief in the form of an antisuit damages order:

https://www.documentcloud.org/documents/22082776-22-07-08-apple-emergy-motion-re-colombian-pi

Second, an exhibit to that motion, which also includes translations of Colombian court orders:

https://www.documentcloud.org/documents/22082777-22-07-08-exhibit-translation-of-colombian-ericsson-v-apple-pi-order

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Ericsson's two ITC complaints against Apple: one over four SEPs, another over five non-SEPs (two of them from same family)

This is my third post on Ericsson v. Apple in a row. Not only does it feature an additional ITC complaint I had not previously seen (because it surfaced on the U.S. International Trade Commission's electronic docket more than an hour after the first one) but it also provides some context relating to the two federal lawsuits (Western District of Texas) and the other USITC complaint (the one over four standard-essential patents (SEPs)). This is a monumental patent dispute (that has all the ingredients for further escalation), so litigation watchers like me have to put the mosaic together step by step.

This is the current landscape of Ericsson-Apple cases pending in the United States, just so we have a forest here and not just a lot of trees:

• FRAND actions

  • Ericsson v. Apple, E.D. Tex. (Marshall Division), case no. 2:21-cv-376: filed in October; in December, Apple moved to dismiss Ericsson's complaint; next steps: Ericsson to oppose dismissal, Apple to reply, court to resolve motion

  • Apple v. Ericsson, E.D. Tex. (Marshall Division), case no. 2:21-cv-460: filed in December, Ericsson to file answer to complaint or motion to dismiss

• SEP enforcement actions (filed on Monday)

  • Ericsson v. Apple, W.D. Tex. (Waco Division), case no. 6:22-cv-60: four SEPs-in-suit (4G and 5G)

  • Ericsson's ITC complaint in the matter of Certain Mobile Telephones, Tablet Computers with Cellular Connectivity, and Smart Watches with Cellular Connectivity, Components Thereof, and Products Containing Same (complaint no. 337-TA-3595): targeting various iPhones, iPads, and Apple Watches; same four SEPs-in-suit as W.D. Tex. 6:22-cv-60

• Non-SEP enforcement actions (filed on Monday)

  • Ericsson v. Apple, W.D. Tex. (Waco Division), case no. 6:22-cv-61: eight patents-in-suit (from seven patent families as '273 and '621 are related)

  • [NEWLY DISCOVERED AND SHOWN FURTHER BELOW] Ericsson's ITC complaint in the matter of Certain Mobile Phones, Tablet Computers, Smart Watches, Smart Speakers, and Digital Media Players, and Products Containing Same (complaint no. 337-TA-3596): targeting various iPhones, iPads, Apple Watches, Apple TVs, HomePods; five patents-in-suit (from four patents families as '273 and '621 are related); those five patents are a subset of the patents asserted in W. D. Tex. 6:22-cv-61

The Waco cases will be stayed pending the ITC investigations. Theoretically, proceedings could continue with respect to the three patents asserted in 22-cv-61 but not in 337-TA-3596 (listed further below). However, if that had been Ericsson's intent, I guess they'd have made those patents the subject of a separate federal lawsuit.

Ericsson's forum selection has the practical effect that Apple has to fear a U.S. import ban in the first step and multi-billion dollar damages verdicts, which Waco is sort of famous for, further down the road. The latter would play a role if Apple could work around an exclusion order or if such ban was denied on public interest grounds despite Ericsson prevailing on the technical merits. In those hypothetical scenarios, Apple would not come under immediate pressure in the U.S. (though it might in jurisdictions like Germany) because of Ericsson having obtained (the equivalent of) an injunction, but it would still have to take into consideration the financial risks it faces in the Western District of Texas. It's conceivable that Ericsson could make a lot more money just from a few "Texas-size" damages verdicts--provided that those aren't contracted too much on appeal--than it ever could from a new license agreement...

It was the right decision by Ericsson not to bring a single ITC complaint over eight or more patents. Others (including world-class companies like Apple and Microsoft) tried such mass assertions in the past, and it didn't really work out too well. So Ericsson chose five patents (effectively more like four, since two are from the same family) for its non-SEP ITC complaint (and four patents for its SEP ITC complaint).

Apple could ask the ITC to consolidate the investigations of Ericsson's two complaints, which would up the pressure on Ericsson to narrow the case by dropping patents. However, the fact that one complaint is over SEPs and the other over non-SEPs (which has ramifications for the ITC's public interest analysis) counsels against consolidation.

As for a hypothetical consolidation of the Eastern and Western District cases, Apple could obviously make an argument that a FRAND case and a SEP enforcement action belong together--but then Ericsson will say that the infringement cases are on hold during the ITC investigation, so the FRAND action should just go forward in the meantime.

Now let's take a closer look at Ericsson's ITC complaint over Non-SEPs (this post continues below the document):

22-01-17 Ericsson v. Apple ... by Florian Mueller

Patents-in-suit in both the 22-cv-61 federal lawsuit and the 337-TA-3596 ITC complaint:

1. U.S. Patent No. 7,151,430 on a "method of and inductor layout for reduced VCO [voltage-controlled oscillator] coupling": Ericsson positions this one as "the one patent to ban them all" as it's the only patent allegedly infringed by "at least Apple iPhone mobile phones, Apple iPad tablet computers, Apple Watch smart watches, Apple HomePod smart speakers, and Apple TV digital media players, and products containing same." By contrast, the other patents asserted by the non-SEP ITC complaint are described as being infringed by iPhones (though Ericsson reserves the right to amend its infringement contentions).

   The '430 patent is sort of Ericsson's favorite patent-in-suit. It was asserted in 2015 against Apple (in federal court), and last year in an ITC complaint against Samsung. Those disputes settled before any infringement or (in)validity determination was made, but it looks like Ericsson was underwhelmed by both Apple's and Samsung's arguments relating to this patent. Also, the 2015 complaint incontrovertibly put Apple on notice, making any infringement arguably willful (which also applies to Ericsson's '805 SEP, which it already asserted against Apple in 2015).

   Furthermore, Ericsson asserted some European members of the same patent family (EP1721324 and EP2819131) against Samsung in Germany and Belgium, and against Wiko in Germany. Samsung and Wiko challenged those patents in the Federal Patent Court of Germany, so Ericsson knows pretty well what kinds of invalidity contentions it has to expect (unless, of course, Apple comes up with different prior art).

2. U.S. Patent No. 7,957,770 on a "mobile communication terminal for providing tactile interface"

3. U.S. Patent No. 9,509,273 on "transformer filter arrangement"

4. U.S. Patent No. 9,705,400 on "reconfigurable output stage"

5. U.S. Patent No. 9,853,621 on "transformer filter arrangement" (yes, same title as the '273 patent)

Patents-in-suit in only the 21-cv-61 federal lawsuit (but not the 337-TA-3596 ITC complaint):

1. U.S. Patent No. 8,472,999 on a "method and system for enabling dual standby state in a wireless communication system"

2. U.S. Patent No. 8,792,454 on "secure and seamless WAN-LAN [wide area network, local area network] roaming"

3. U.S. Patent No. 10,880,794 on "inter-band handover of the same physical frequency"

It won't take long before we hear about some countersuits by Apple, though the situation will always be highly asymmetrical due to the discrepancy in exposure.

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Ericsson seeks U.S. import ban against iPhone, iPad, Apple Watch; accuses Apple of 'reverse hold-up' in 4G/5G patent licensing negotiations

I've just been able to obtain the complaint Ericsson filed against Apple yesterday with the United States International Trade Commission, seeking a U.S. import ban of 4G and 5G Apple products (iPhones, iPads, and Apple Watches; I'll provide the full list further below). As I speculated in my previous post on Ericsson v. Apple, one of the two patent infringement lawsuits Ericsson filed yesterday with the United States District Court for the Western District of Texas is a companion complaint to an ITC complaint--and as I figured, it's the one in which Ericsson is asserting four patents:

1. U.S. Patent No. 8,102,805 on "HARQ [Hybrid Automatic Repeat reQuest] in spatial mutiplexing MIMO [multiple-input multiple-output] system"

2. U.S. Patent No. 9,532,355 on "transmission of system information on a downlink shared channel"

3. U.S. Patent No. 10,425,817 on a "subscription concealed identifier"

4. U.S. Patent No. 11,139,872 on "codebook subset restriction signaling"

Those four patents have all been declared essential to the 4G or 5G cellular connectivity standards. The Texas case will be stayed pending the resolution of the ITC complaint, but Ericsson could go back later (should the parties still not have agreed on a deal by then) and seek damages in Texas. The ITC can order import bans, but does not have the statutory authority to award damages.

Formally, the ITC now has to decide whether to institute an investigation. That preliminary phase takes about a month, and it's a given that an investigation will be launched.

The complaint reveals that the previous license agreement ran through Friday (January 14, 2022). The most interesting passage is how Ericsson experienced its talks with Apple to agree on a new license agreement:

"[...] Starting in late 2020, Ericsson extended offers to Apple to sign a new license on FRAND terms. In sum, consistent with its obligations under the ETSI IPR Policy and to the technology community, Ericsson has sought in good faith to conclude a license agreement with Apple on FRAND terms.

"Ericsson’s efforts have failed because Apple refuses to pay a FRAND royalty for a portfolio license commensurate with licenses taken by existing licensees. Apple’s gambit is indistinguishable from a “reverse hold-up,” in which Apple abuses the protections afforded by FRAND while freely using Ericsson’s patented technology. Such tactics give Apple a ubstantial, unfair edge over its telecommunications competitors who have agreed to—and who maintain—licenses under Ericsson’s global portfolio of patents on FRAND terms. Apple has therefore not fulfilled its obligations to remain a third party beneficiary of the contract between Ericsson and ETSI." (emphases added)

Ericsson also says it has "provided Apple with a set of 300 claim charts demonstrating essentiality of certain of Ericsson’s Essential Patents," but "[t]he negotiations made clear there is a dispute between Apple and Ericsson as to the essentiality, and value, of Ericsson’s Essential Patent portfolio." And then Ericsson says this:

"After more than a year of negotiations, Apple continues to insist on an unreasonably low, non-FRAND rate for a cross-license." (emphasis added)

Various media reports today quoted an Ericsson statement according to which the Swedish company is now suing Apple "in multiple jurisdictions." I would expect at least Germany, the United Kingdom, and the Netherlands to be among them, and possibly some Asian jurisdictions. I'll try to find out more.

The official title is "In the Matter of Certain Mobile Telephones, Tablet Computers with Cellular Connectivity, and Smart Watches with Cellular Connectivity, Components Thereof, and Products Containing Same." Here's the complete list of accused Apple products:

• 5G iPhones: iPhone 13 Pro, iPhone 13 Pro Max, iPhone 13 (5G), iPhone 13 mini, iPhone 12, iPhone 12 Pro, iPhone 12 Pro Max, iPhone 12 mini

• 4G iPhones: iPhone 11 Pro, iPhone 11 Pro Max, iPhone 11, iPhone SE, iPhone XS, iPhone XS Max, iPhone XR, iPhone X, iPhone 8 Plus, iPhone 8

• 5G iPads: iPad Pro 11-inch (3rd gen), iPad Pro 12.9-inch (5th gen), iiPad mini (6th gen)

• 4G iPads: iPad Air (4th gen), iPad (9th gen), iPad Pro 12.9-inch (4th gen), iPad Pro 12.9-inch (3rd gen), iPad Pro 12.9-inch (2nd gen), iPad Pro 12.9-inch (1st gen), iPad Pro 11-inch (2nd gen), iPad Pro 11-inch (1st gen), iPad Pro 10.5-inch, iPad Pro 97-inch, iPad Air (3rd gen), iPad Air 2, iPad Air (1st gen), iPad (8th gen), iPad (7th gen), iPad (6th gen), iPad (5th gen), iPad mini (5th gen), iPad mini 4, iPad mini 3, iPad mini 2

• 4G Apple Watches: Apple Watch Series 7, Apple Watch Series 6 Apple Watch SE, Apple Watch Series 5, Apple Watch Series 4

In principle, Ericsson can try to add to that list any Apple products released in the coming months.

Here's Ericsson's ITC complaint (without the exhibits):

22-01-17 Ericsson v. Apple ... by Florian Mueller

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Here's the ITC letter instructing U.S. customs to start seizing older iPhones, iPads in 60 days

Yesterday's disconcerting ITC decision to order (unless vetoed during the 60-day Presidential Review period) an exclusion order (import ban and cease and desist) against older iPhones and iPads over a 3G-esential Samsung patent could have been avoided. The ITC could have interpreted its statute (including the part concerning the public interest) differently; regulators could have taken decisive action against Samsung; and U.S. Congress could have amended the statute governing the ITC after hearings held last year in the Senate and the House of Representatives (admittedly held close to the end of the last legislative term), where experts warned that the ITC was unlikely to solve the problem without legislative intervention.

Some will say Apple should have taken a license, but Samsung's initial 2.4% demand was far outside the FRAND ballpark (as a Dutch court said in a ruling), and it's not known what Samsung has demanded more recently (other than that Apple still considers it excessive).

There are still various things that can be done now. Regulators could still put pressure on Samsung not to enforce (or else it would be penalized). The Federal Circuit could stay this import ban. Apple could bring a FRAND rate-setting case in federal court and seek a preliminary injunction preventing Samsung's enforcement of this exclusion order.

Some of the politicians who asked the ITC to consider the anticompetitive implications of SEP-based import bans may now ask the federal government (the President has delegated this decision to the United States Trade Representative) to veto the ban. There are pro's and con's. Since the White House, several hours before the ITC ruling, announced various initiatives to curb patent abuse including one aiming to raise the bar for ITC exclusion orders, it would only be consistent to veto this ITC decision, which is an outlier in the U.S. legal landscape. Also, Google's Motorola was required by U.S. antitrust enforcers to drop its requests for import bans against Apple and Microsoft, so it wouldn't have to do anything with protectionism to expect the same of Samsung. But since the commercial impact of this exclusion order on Apple's business would be limited (by the time it enters into force, Apple may close to shipping a new iPhone, so it might discontinue the iPhone 4 anyway), the U.S. government might just give Samsung this symbolic victory (which makes Samsung's leadership and employees proud without hurting Apple's bottom line) and instead focus on reforming legislation as quickly as possible with a view to other (future and already pending) SEP cases before the ITC bans products that really are critical to a defendant's business.

Preparations are already being made for enforcement of this order. Here's a letter that the ITC sent yesterday to a senior U.S. Customs and Border Protection official to request enforcement (after conclusion of the Presidential Review) by means of border seizures of infringing imports (this post continues below the document):

13-06-04 ITC Letter to Chief Steuart Re. Exclusion Order Granted to Samsung by Florian_Muelle_439

This kind of letter is routinely sent after import bans are ordered. Similar letters went out, to give only two recent examples, after Apple won an import ban against HTC in December 2011 and after Microsoft obtained one against Google's Motorola in May 2012. Those exclusion orders, however, did not involve FRAND-pledged SEPs. In that regard yesterday's decision was a first and, hopefully, also a last.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

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Intel and AT&T join the FTC, Apple, Microsoft, HP, Cisco, Nokia and others in opposing import bans over standard-essential patents

Google's (Motorola's) pursuit of import bans against the iPhone, the iPad and the Xbox gaming console has drawn even more statements on public interest considerations from major industry players than met the eye last week. Two more statements filed on Friday showed up on the ITC document server today: a statement filed by AT&T in the Motorola v. Apple investigation, and one filed by Intel in the Motorola v. Microsoft investigation. Both letters oppose import bans over FRAND-pledged standard-essential patents (SEPs).

Other submissions to this effect were made by the Federal Trade Commission, Cisco, HP, Nokia, and various industry organizations including the Business Software Alliance, the Entertainment Software Association, and the Retail Industry Leaders Association.

The ITC, a trade agency with quasi-judicial authority, routinely calls for comments on public interest considerations prior to potential import bans. But in connection with import bans over SEPs there is unusually widespread concern in the industry. The ITC can't and won't ignore these submissions.

While Verizon generally opposes import bans, AT&T's statement is focused on the specific issues raised by SEPs. AT&T "respectfully submits that the public interest precludes issuance of an exclusion order for a FRAND-committed standards-essential patent" and says that "[t]he appropriate remedy for infringement of a standards-essential patent subject to a FRAND commitment is FRAND royalties collected in district court". The three-page letter explains that those who contribute patents to FRAND standards "suffer no harm that FRAND royalties are insufficient to compensate", while import bans over SEPs would have major negative implications:

"Issuing exclusion orders for FRAND-committed standards-essential patents harms the public interest with respect to each of these factors: competition would suffer from fewer, higher-priced, less innovative, and lower quality products; production would go down. In the end private consumers as well as state and federal government customers who have come to critically depend on wireless devices and services would be harmed through diminished options and impaired competition."

Intel's nine-page statement is very elaborate and extremely compelling. It explains the general issues of exclusion orders over SEPs, such as "the crucial role of RAND commitments in preserving competition", and goes into detail on the specific policies of the International Telecommunications Union (ITU), the standard-setting organization that created the H.264 video codec standard.

Intel's letter warns against the effects of allowing companies to abuse the market power that they owe to the incorporation of their patented inventions into a standard:

"An Exclusion Order is unnecessary to protect intellectual-property rights in this case, because Motorola has agreed to license those rights to all comers. Moreover, an Exclusion Order here would harm the public interest and U.S. consumers by facilitating the unfair exploitation of market power that was created by an industry standard. This market power, which Motorola agreed to forego in favor of a RAND royalty, would not have existed absent Motorola’s RAND commitment because the standard-setting organizations ('SSOs') that promulgated the standards at issue condition the incorporation of a patent into a standard on the receipt of a RAND commitment.

[...]

The adoption of a standard enables the SEP holder to exert leverage over the entire industry by demanding excessive royalties and threatening to enjoin the sale of standard-compliant products. Unlike with ordinary patents--which an infringer can often design around to produce a materially similar product-- it is commercially infeasible for an individual manufacturer to decline to incorporate a commercially accepted standard (and hence the SEPs) into a new product. Indeed, the very purpose of interoperability standards is to incorporate identical standard-compliant features into products so that different manufacturers’ products will work together. Failing to adopt the H.264 standard would make Microsoft’s products unable to process the large volume of video content using that standard, and failing to adopt the 802.11 standard would make its products unable to communicate with the large installed base of Wi-Fi routers in both private and public places."

Google should really think about whether it wants to be seen as the worst patent abuser among large IT companies in the history of the industry. While competition enforcers around the globe and many industry leaders agree that SEPs are not supposed to be used as nuclear weapons, there still isn't even one statement in Google's (Motorola's) favor. Not even one.

Also, Google's approach to patent litigation just suffered a major setback in an ITC investigation of a complaint HTC filed against Apple last year. An ITC judge threw out five Google patents that HTC was using against Apple because Google apparently didn't truly sell all of the substantial rights to HTC.

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