Patent Marking

http://corporate.findlaw.com/intellectual-property/patent-management-preserve-your-damages-by-proper-marking-and.html

IPRs

IPR2016-01494 (USP 8,274,991)
IPR2016-01704 (USP 8,565,256)
IPR2016-01861 and -01865 (USP  9,125,051)

Patent Owner contends that the error in claim 4 as originally issued stems from a mistake by the Office.

Petitioner opposes Patent Owner’s request arguing that permitting such a correction to claim 4 would be unduly prejudicial to Petitioner at this stage of the proceeding because the Petition addresses claim 4 in its original form and the proposed correction substantively alters claim 4, which renders the Petition potentially inadequate as it relates to an altered version of claim 4.

H-W Technology, L.C. v. Overstock.com, Inc., 758 F.3d 1329 (Fed. Cir. 2014)
Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280 (Fed. Cir. 2000)

"Patent Owner correctly states that the Federal Circuit in Southwest Software and subsequently in H-W Technology held that a certificate of correction is only effective for causes of action arising after it was issued."

Professionalism and Claims Management

The lawyers have a duty to maintain the confidentiality of our clients' information, including communications protected by the attorney-client privilege. As a result, we are obligated not to discuss our clients' information with anyone outside the firm

Civil Procedure - Venue

https://uslawessentials.atavist.com/civil-procedure-venue

https://nationalparalegal.edu/public_documents/courseware_asp_files/researchLitigation/Venue/VenueFederalAct.asp

Personal Jurisdiction and Venue issues for Foreign corporations and their US subsidiaries

https://www.docketnavigator.com/document/order/5f903b4a-6b32-5650-3be3-586bcb5668ed
Nidec Corporation v. LG Innotek Co Ltd et al
6-07-cv-00108 (TXED Tyler)
REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE

After Heartland

• Nike, Inc. v. Skechers USA, Inc., 3-16-cv-00007 (ORD June 30, 2017, Order) (Papak, MJ)

Broad Venue Discovery Authorized to Determine Existence of Regular and Established Place of Business
Following the Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands, LLC, (2017), the court partially granted plaintiff's motion to compel venue-related discovery as relevant and proportional to the needs of the case. "Defendant must disclose its total product sales in Oregon, with one exception. . . . [I]nformation on its direct internet sales is unlikely to lead to relevant evidence on whether Defendant has a 'regular and established place of business' in Oregon. . . . Defendant must disclose the activities of third-party vendors of Defendant's products, and Defendant's relationships with these vendors, because such information could lead to relevant evidence. . . . [I]nformation on the activities of Defendant's agents, whether the agent is based in Oregon or not, [and] information on professional services in Oregon retained by Defendant could lead to relevant evidence and is proportional to the needs of the case. . . . Defendant must disclose any substantial amount of personal property it owns, leases, or manages in Oregon, including marketing materials, demonstration equipment, and product literature. . . . Defendant's leases of trade show booths or conference spaces could lead to relevant evidence and should be produced. . . . [Phone number and address] listings created by third parties independently of Defendant are not discoverable, but Defendant must disclose any other listings that it directed."

• Raytheon Company v. Cray, Inc., 2-15-cv-01554 (TXED June 29, 2017, Order) (Gilstrap, USDJ)

Judge Gilstrap Recognizes Four-Factor Test for Determining Regular and Established Place of Business Under 28 U.S.C. § 1400(b)

In determining whether defendant maintained a regular and established place of business in the forum for purposes of 28 U.S.C. § 1400(b), the court recognized a four-factor approach consisting of physical presence, defendant's representations, benefits received, and targeted interactions. "Since the Supreme Court’s decision in [TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017)], this Court has received a number of motions to dismiss or transfer based on improper venue. It is evident from these motions, and their subsequent briefing, that there is uncertainty among the litigants regarding the scope of the phrase 'regular and established place of business.' . . . [T]his Court now attempts to provide guideposts to point the venue analysis in a single coherent direction. . . . First, the Court considers the extent to which a defendant has a physical presence in the district, including but not limited to property, inventory, infrastructure, or people. At the most basic level, a retail store, warehouse, or other facility in the district weighs strongly in favor of finding a regular and established place of business. However . . . the lack of a physical building in the district is not dispositive. . . . Other forms of physical presence may also help support a finding of a regular and established place of business, such as inventory or property in the district[,] [and] the presence of equipment or infrastructure that is owned (or leased) by a defendant and used to provide services to customers. . . . Additionally, courts have considered the presence of employees in the district when determining whether a defendant has a regular and established place of business. . . . Second, the Court looks at the extent to which a defendant represents, internally or externally, that it has a presence in the district. . . . Third, the Court considers the extent to which a defendant derives benefits from its presence in the district, including but not limited to sales revenue. . . . Finally, the Court looks at the extent to which a defendant interacts in a targeted way with existing or potential customers, consumers, users, or entities within a district, including but not limited to through localized customer support, ongoing contractual relationships, or targeted marketing efforts."

Employing Exclusive Sales Representative Within District Sufficient to Establish Regular and Established Place of Business

Following the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Grp. Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion to transfer for improper venue and found that defendant had a regular and established place of business in the forum through its employment of a sales representative in the forum. "At the time this case was filed, [defendant's sales representative in the forum] worked exclusively for [defendant] as a sales executive in this District. [The sales representative] had been working full-time for [defendant] from within the Eastern District of Texas for over seven years. [Defendant] paid [him] a salary and maintained [his] compensation plan online through its human resources department, which outlined his territory and assignments. . . . [Defendant] provided [its sales representative] with 'administrative support' from [defendant's] Minnesota office such that [he] could continue working from his office in the Eastern District of Texas. Under this arrangement, [he] contacted and sold products to customers using an 'office' telephone number with an Eastern District of Texas area code. . . . Technology has revolutionized the way businesses operate and the way consumers interact with those businesses. . . . This important shift has been recognized by many courts."

• iLife Technologies, Inc. v. Nintendo of America, Inc., 3-13-cv-04987 (TXND June 27, 2017, Order) (Lynn, USDJ)

TC Heartland Does Not Qualify as Intervening Change of Law Excusing Waiver of § 1400(b) Venue Challenge

Following the recent Supreme Court decision in TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1514 (2017), the court denied defendant's motion to dismiss or transfer plaintiff's patent infringement action for improper venue two months before trial because TC Heartland was not an intervening change in law. "[Defendant's] argument . . . appears to be that following the decision in [VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990)] in 1990 up until the Supreme Court decided TC Heartland in May of 2017, the highest authority available had deemed [Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222 (1957)] overridden by congressional action, and accordingly the Supreme Court’s reaffirming of Fourco constituted a change of law. . . . [E]xcept where congressional abrogation of a Supreme Court decision is express, 'only [the Supreme] Court may overrule one of its precedents' -- whether through its own opinion or recognition of congressional override -- and until that occurs, Fourco is and still was the law. . . . The intervening twenty-seven years may have created reliance on VE Holding by litigants, including [defendant], but that 'does not change the harsh reality' that a party could have 'ultimately succeeded in convincing the Supreme Court to reaffirm Fourco, just as the petitioner in TC Heartland did.'” 

• https://www.law360.com/articles/941916?utm_source=chrome-widget&utm_medium=extensions&utm_campaign=latest_news

In a decision last week, U.S. District Judge Rodney Gilstrap looked to tackle what it means to have a "regular and established place of business" in the modern age, outlining a four-factor test that will guide his decisions about whether cases will remain in the district.

The test takes into account whether a company has a retail store in the district, as well as the sales revenue the company has generated in the district. But Judge Gilstrap emphasized that no single factor was dispositive. He said he would take a flexible approach, looking at all the circumstances of the case.

https://www.orrick.com/Insights/2017/05/Supreme-Court-Restricts-Patent-Venue
Finally, it is likely that TC Heartland will not apply to foreign defendants. The Supreme Court was clearly aware of this issue, and in footnote 2 of the decision declined to express any opinion on the subject. In the same footnote, however, the Court cited Brunette Machine Works, Ltd. v. Kockum Indus., Inc., 406 U.S. 706 (1972), which held that foreign corporations could be sued in any district, due to a "long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special." Nonetheless, TC Heartland did not express any position on the continuing viability of Brunette. As a practical matter, foreign companies who have been sued in the Eastern District of Texas or some other place they don't want to be, will at least have an argument for transfer to the venue where other related actors can properly be sued. As a matter of strategy, foreign corporations should continue to reduce their risk by organizing any U.S. activities to occur through a U.S. subsidiary with a "regular and established place of business" outside of undesirable districts. Going forward, because that subsidiary will have a meaningful domicile and chosen place(s) of doing business, the foreign parent will have a stronger argument for transfer.  

https://www.mwe.com/en/thought-leadership/publications/2017/05/supreme-court-changes-the-patent-venue-landscape

Practice Note

The Supreme Court’s decision will have a significant impact on patent litigation. First, the most immediate consequence is the likely diminishment of the Eastern District of Texas as a popular patent litigation forum since most companies often sued in the Eastern District of Texas are neither incorporated in Texas nor have a regular and established place of business in the Eastern District of Texas. Second, there may be a concomitant increase in the number of filings in Delaware (where many companies are incorporated), the Northern District of California, the Southern District of New York, and other districts in which technology and pharmaceutical companies are headquartered. Third, there will likely be increased motion practice as to whether a defendant has a “regular and established place of business” in a district sufficient to support venue under § 1400(b). Fourth, there may be an increase in the number of filings against the foreign parent corporations of US subsidiaries since, under the applicable venue statutes, foreign defendants can be sued in any judicial district where personal jurisdiction is found. Finally, in actions where a patent holder seeks to sue multiple defendants, the patent holder may have to bring multiple actions in multiple jurisdictions to comply with the venue requirements. This will result in additional cost for the patent holder and may result in additional motion practice and/or the implementation of multidistrict litigation (MDL) processes, which could, in turn, introduce both delay and a certain amount of uncertainty.

Service on Foreign corporations

http://blogs.orrick.com/norcal-ip/2017/04/11/foreign-party-cannot-hide-behind-hague-convention-to-avoid-service/

https://federalcircuitipblog.com/2017/05/24/the-hague-service-convention-does-not-prohibit-service-of-process-by-mail/

https://www.fr.com/fish-litigation/service-of-process-on-foreign-defendants/

https://www.mcle.org/includes/pdf/2120443b01_s.pdf

[Link] Litigators' Verdict & Settlement Exchange

Research.

Ex.  Oracle v. Google
https://www.lexisnexis.com/jvsubmission/b/adjudication/archive/2016/06/08/jury-finds-for-google-in-california-federal-copyright-infringement-action-by-oracle-challenging-google-39-s-use-of-java-code-in-android-mobile-operating-system.aspx

Dae Gunn Jei's profile

Dae Gunn Jei focuses his practice on patent prosecution, procurement, and litigation in the electrical and mechanical arts. With an M.S. and B.S. in electrical communication engineering, Dae Gunn began his patent career at Samsung Electronics in Korea. He spent more than eight years there, first as a mobile telecommunications engineer and subsequently as an IP manager for patent matters related to Samsung’s telecommunications and network businesses. He is fluent in Korean.

At Samsung, his patent work included negotiations prior to litigation, US and European litigation, procurement of patents, patent prosecution, and standard-setting activities.

Just prior to joining Morgan Lewis, Dae Gunn was a research fellow at the American Antitrust Institute, an independent nonprofit education, research, and advocacy organization.

TC Heartland for Foreigners (a.k.a. Foreign Corporations)

• http://www.lexology.com/library/detail.aspx?g=4023eaf4-87e9-4cd6-bd9c-4b0cf54ccfe2

TC Heartland and foreign corporations

The Supreme Court explicitly declined to address the impact of its decision on venue for foreign corporations in patent infringement cases, explaining instead:

The parties dispute the implications of petitioner's argument for foreign corporations. We do not here address that question, nor do we express any opinion on this Court's holding in Brunette Machine Works, Ltd. v. Kockum Industries, Inc., 406 US 706, 92 S.Ct. 1936, 32 L.Ed.2d 428 (1972) (determining proper venue for foreign corporation under then existing statutory regime).

TC Heartland, 2017 WL 2216934 at *7n.2. In Brunette Machine Works, 406 US at 714, the Supreme Court held that venue in a patent infringement action against a foreign corporation is governed by 28 USC §1391(d) and not §1400(b). The Supreme Court reasoned that §1391(d), which at the time read “[a]n alien may be sued in any district,” is “properly regarded, not as a venue restriction at all, but rather as a declaration of the long-established rule that suits against aliens are wholly outside the operation of all the federal venue laws, general and special.” Id. However, in 2011, §1391 was amended to delete and replace subsections (a)-(d). The parallel portion of the statute, §1391(c)(3), now reads “a defendant not resident in the United States may be sued in any judicial district, and the joinder of such a defendant shall be disregarded in determining where the action may be brought with respect to other defendants.” 28 USC §1391(c)(3). If the Supreme Court maintains the same reasoning as in Brunette, then venue will likely remain appropriate in any judicial district. That was not decided in TC Heartland and will be decided in future cases.

http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=3638&context=penn_law_review

http://www.proskauerguide.com/litigation/1/III

https://patentlyo.com/patent/2017/05/supreme-court-reins-patent.html

PTAB - 'Ex Parte Schulhauser' (patentable weight of conditional claim limitations)

https://www.uspto.gov/sites/default/files/documents/Ex%20parte%20Schulhauser%202016_04_28.pdf

Based on the claim limitations as written, the broadest reasonable interpretation of claim 1 encompasses an instance in which the method ends when the alarm is triggered in response to the cardiac signal data not being within the threshold electrocardiac criteria, such that the step of "determining the current activity level of the subject" and the remaining steps need not be reached. In other words, claim 1 as written covers at least two methods, one in which the prerequisite condition for the triggering step is met and one in which the prerequisite condition for the determining step is met. Thus, the broadest reasonable interpretation encompasses a method where only the steps of "collecting physiological data associated with the subject from the implantable device at preset time intervals, wherein the collected data includes real-time electrocardiac signal data, heart sound data, activity level data and tissue perfusion data," "comparing the electrocardiac signal data with a threshold electrocardiac criteria for indicating a strong likelihood of a cardiac event," and "triggering an alarm state if the electrocardiac signal data is not within the threshold electrocardiac criteria" are performed. 4

The Examiner in this case was able to present a prima facie case of obviousness as to claim 1 by providing evidence to show obviousness of the "collecting," "comparing," and "triggering" steps. The Examiner did not need to present evidence of the obviousness of the remaining method steps of claim 1 that are not required to be performed under a broadest reasonable interpretation of the claim (e.g., instances in which the electrocardiac signal data is not within the threshold electrocardiac criteria such that the condition precedent for the determining step and the remaining steps of claim 1 has not been met).

Appellants' arguments that are directed to the failure of the Examiner to demonstrate adequately that the "determining" step and the remaining steps of claim 1 are rendered obvious are not commensurate with the broadest reasonable interpretation of claim 1 and are, therefore, unpersuasive.

Although claim 11 recites functions that are substantially similar to the steps recited in the method of claim 1, as noted supra, claim 11 is directed to a system. The broadest reasonable interpretation of a system claim having structure that performs a function, which only needs to occur if a condition precedent is met, still requires structure for performing the function should the condition occur. This interpretation of the system claim differs from the method claim because the structure (i.e., a processor programmed to perform an algorithm for carrying out the recited function should the recited condition be met) is present in the system regardless of whether the condition is met and the function is actually performed. Unlike claim 1, which is written in a manner that does not require all of the steps to be performed should the condition precedent not be met, claim 11 is limited to the structure capable of performing all the recited functions.

In other words, in this case, the system of claim 11 is narrower in scope than the method of claim 1. Thus, in order to show anticipation or obviousness of a claim reciting structure that performs a function tied to a condition precedent, the Examiner must cite prior art that discloses or renders obvious such structure.

https://www.law360.com/articles/884711/what-schulhauser-means-for-conditional-claim-limitations

IoT - Patents perspective

http://www.zacco.com/how-address-internet-things-iot-patent-perspective

Method use v. Apparatus use

http://www.lexology.com/library/detail.aspx?g=df5ab67a-9322-44bd-bf2a-db71cbb77169

http://www.fr.com/files/Uploads/attachments/muenchen/presentation8.pdf

Method/Process v. System/Apparatus

Infringing use of a patented method or process is fundamentally different from infringing use of a patented system or device.  NTP, Inc., 418 F.3d at 1317 (citations omitted).

1) Product/Device/Apparatus claim: tangible items
- “[A]pparatus claims cover what a device is, not what a device does.” Paragon Solutions, LLC v. Timex Corp., 566 F.3d 1075, 1090 (Fed. Cir. 2009).

2) Method/Process claim: a series of act or steps (In re Kollar, 286 F.3d 1326, 1332 (Fed. Cir. 2002))


Two Federal Circuit opinions reinforce that use infringement of method or process patents is
more limited in scope than use infringement of a system or apparatus patent.

1) Joy Technologies, Inc. v. Flakt, Inc.: when the patent is on a process, “It does not give the
[patent owner] a monopoly in the appliances by which the process is operated.”21

Our holding in Standard Havens, first, reflects the previously discussed principle that a method claim is not directly infringed by the sale of an apparatus even though it is capable of performing only the patented method. The sale of the apparatus is not a sale of the method. A method claim is directly infringed only by one practicing the patented method.

• Joy Technologies, Inc. v. Flakt, Inc, 6 F.3d 770, 774-75 (Fed. Cir. 1993)

Joy Technologies, Inc. v. Flakt, Inc, 6 F.3d 770, 775 (Fed. Cir. 1993) (“Second, Standard Havens holds that the act of selling equipment which will not be used so as to directly infringe a method claim cannot constitute one of the dependent types of infringement, that is, either contributory infringement or inducement of infringement. Joy seeks to distinguish Standard Havens because the intended use of the equipment in that case was outside the United States while here the use will be beyond the term of the patent.”)

2) NTP, Inc. v. Research in Motion, Ltd.: “[A] process cannot be used ‘within’ the
United States as required by section 271(a) unless each of the steps is performed within this
country.”24

Two recent Federal Circuit cases clarify rules relating to use infringement of a system claim.

1) NTP: use of the system as a whole occurred when the defendant’s customers sent and received messages in the United States.28 Unlike method claims, courts analyze the invention as a whole to determine where the claimed system as a whole is put into service, and do not focus on the situs of use of each claimed element within the claimed invention.

2) Centillion Data Systems, LLC v. Qwest Communications Int’l, Inc.:
Relying on NTP, the court decided that use of a system required the infringing party to put
the invention into service, i.e., control the system as a whole and obtain benefit from it.32 The
court held that on-demand operation was use of the system as a matter of law.33

IPR - Which ways out

http://www.skgf.com/uploads/1378/doc/Westlaw_IPR_Which_Way_Out.pdf

China

https://www.law360.com/ip/articles/914779/china-becoming-more-attractive-for-foreign-patent-owners?nl_pk=b1903a90-09ca-421f-8c29-9e09cc40f173&utm_source=newsletter&utm_medium=email&utm_campaign=ip

Consent decree and Settlement

http://digitalcommons.wcl.american.edu/cgi/viewcontent.cgi?article=1606&context=aulr

"A consent decree is a judgment or order that reflects the settlement terms agreed to by the parties, and that contains an injunction.2"

Consent decree is ‗no more than a settlement that contains an injunction.‘‖ (quoting In re Masters Mates & Pilots Pension Plan & IRAP Litig., 957 F.2d 1020, 1025 (2d Cir. 1992))); Gates v. Shinn, 98 F.3d 463, 468 (9th Cir. 1996) (―[W]hen a decree commands or prohibits conduct, it is called an injunction.‖). When the settlement involves no injunctive relief but simply the payment of money, the often-used term is ―consent judgment.‖ See Limbright v. Hofmeister, 566 F.3d 672, 673 (6th Cir. 2009) (term ―consent judgment‖ used where monetary obligations are involved).


https://www.law360.com/articles/415119/a-snapshot-of-the-post-mstg-landscape

http://www.ipo.org/index.php/2017/02/economics-settlement-patent-litigators-need-know/

http://apps.americanbar.org/litigation/litigationnews/mobile/article-patent-settlement-confidential.html

http://federalpracticemanual.org/chapter9/section2

"Thinking about IP and collaboration at the Patent-Antitrust Interface"

http://www.ipwatchdog.com/2017/04/09/ip-patent-antitrust-interface/id=81893/

https://www.wilmerhale.com/uploadedFiles/Shared_Content/Editorial/Publications/Documents/2017-04-07-A-Hitchhikers-Guide-to-Antitrust-and-Intellectual-Property-Guidelines.pdf

https://www.competitionpolicyinternational.com/protecting-intellectual-property-rights-abroad-due-process-public-interest-factors-and-extra-jurisdictional-remedies-2/?utm_source=CPI+Lista+Combinada&utm_campaign=5f782efe71-EMAIL_CAMPAIGN_2017_04_19&utm_medium=email&utm_term=0_ee26de8909-5f782efe71-236808141

https://www.law360.com/ip/articles/914132/new-antitrust-leadership-poised-to-reset-tone-on-ip-issues?nl_pk=b1903a90-09ca-421f-8c29-9e09cc40f173&utm_source=newsletter&utm_medium=email&utm_campaign=ip

KFTC's Amended IP Guidelines (March 2016)

http://www.kimchang.com/newsletter/201604/en/newsletter_ip_en_spring2016_article03.html

http://www.law.go.kr/LSW/admRulInfoP.do?admRulSeq=2100000043591

http://www.ftc.go.kr/news/policy/competeView.jsp?news_no=2893&news_div_cd=1

http://www.ftc.go.kr/eng/solution/skin/doc.html?fn=d2d4cd08f1f52bc82d9c9895aa16353d20425ac9ab3f7db6198cb9b1cdf58060&rs=/eng/files/data/result/files/bbs/2015/

https://www.law360.com/ip/articles/916602/aba-sections-urge-china-to-tweak-ip-antitrust-guidelines?nl_pk=b1903a90-09ca-421f-8c29-9e09cc40f173&utm_source=newsletter&utm_medium=email&utm_campaign=ip

FRAND/ UK/ UP v. Huawei

Huawei Faces UK Sales Ban After Judge Sets FRAND Rate

Share us on: By Ryan Davis

Law360, New York (April 5, 2017, 10:14 PM EDT) -- A British judge has ruled that Huawei may be barred from selling its smartphones in the U.K unless it licenses standard-essential Unwired Planet wireless technology patents at a rate he determined to be reasonable, a decision that sets guidelines for licensing essential patents.

The 163-page opinion by Justice Colin Birss of the High Court of Justice is the first ever issued by a U.K. judge on the closely watched issue of what constitutes a patent royalty rate that is fair, reasonable and nondiscriminatory, or FRAND. Owners of patents that are essential to industry standards often commit to license them on such terms.

The judge found that neither U.S.-based Unwired Planet International Ltd.’s offers to license its standard-essential 3G and 4G wireless patents to Chinese smartphone maker Huawei Technologies Co. Ltd., nor Huawei’s counteroffers, were FRAND, but that Unwired Planet’s offers and its suit seeking an injunction did not violate competition law.

Since he had already found last year that Huawei infringed the patents, the judge proceeded to set a FRAND rate himself and concluded that Huawei must accept it or face an injunction barring U.K. sales of the infringing products.

“Since Unwired Planet have established that Huawei have infringed ... and since Huawei have not been prepared to take a licence on the terms I have found to be FRAND, and since Unwired Planet are not in breach of competition law, a final injunction to restrain infringement of these two patents by Huawei should be granted,” he wrote.

The judge set a hearing on the injunction later this month if Huawei does not agree to license the patents. If an injunction is imposed, Huawei will also have to pay damages in the form of back royalties at the FRAND rate, Judge Birss ruled.

Unwired Planet acquired numerous standard-essential patents from Ericsson and used them to sue Huawei, Google Inc. and Samsung Electronic Co. Ltd. in the U.K., but Google and Samsung have settled. The judge’s decision on Huawei addressed numerous issues of first impression for the U.K. regarding standard-essential patents and FRAND rates.

Judge Birss held that the court has the authority to establish a FRAND rate and is not limited to determining whether offers by the parties were FRAND, and that only one set of licensing terms is FRAND in a given situation.

He also held that a company that infringes standard-essential patents and refuses to take a license on the court's FRAND terms can be subject to an injunction.

He ruled that FRAND rates should be established by setting a benchmark rate governed by the value of the patent owner's portfolio and by reviewing comparable licenses, and that the rate does not vary depending on the size of the licensee.

Based on those principles, he concluded that the Unwired Planet’s licensing offers were too high and Huawei’s counteroffers were too low. Since neither offer was FRAND, he calculated the rate himself.

The judge rejected Huawei's argument that Unwired Planet violated competition law and abused its dominant position in the market for the essential patents by seeking a worldwide license, rather than a license only for sales in the U.K.

He held that "willing and reasonable parties would agree on a worldwide licence" so Unwired Planet is entitled to insist on one. He also said it was not a violation of competition law for Unwired Planet to seek an injunction in its infringement case.

EIP Legal, the law firm that represents Unwired Planet, said in a statement that the decision makes clear that unless Huawei agrees to enter into a worldwide license for Unwired Planet's patents, it could be barred from selling mobile devices in the U.K.

Gary Moss, who led the EIP team, called the ruling an "important contribution to the worldwide body of case law" on standard essential patents and a validation of Unwired Planet's licensing approach.

Moss said that before the ruling, there had been a widespread view that even if an infringer of essential patents were successfully sued, it would only have to pay the rate it would have had to pay anyway, and only in the countries in which it was sued.

"That gave an incentive for implementers to hold out in the hope of achieving a more favorable royalty rate," Moss said. "Today's judgment confirms that this need not be the case, and that the English court will take a commercially sensible, 'real-world' approach to such issues."

Huawei said in a statement that it welcomed the decision that Unwired Planet's royalty rate demands were unreasonable, but is evaluating the entire ruling and considering its next steps.

Unwired Planet is represented by Adrian Speck QC Sarah Ford, Isabel Jamal and Thomas Jones of of 8 New Square, EIP Legal and Enyo Law LLP.

Huawei is represented by Andrew Lykiardopolous QC of 8 New Square and James Segan of Blackstone Chambers and Powell Gilbert LLP.

The case is Unwired Planet International Ltd. v. Huawei Technologies Co. Ltd., case number 2017EWHC711, in the U.K. High Court of Justice.

--Editing by Jill Coffey.

Comparable Settlement Agreements

Last month, Federal Circuit Judge Taranto, writing for a unanimous panel, laid out a complete road map to the admissibility of settlements in patent infringement litigation. That detailed opinion, Prism v. Sprint, is likely to put an end to the seven-year unsettled period that has followed the Federal Circuit decision in ResONet v.  Lansa. That 2010 opinion upset case law reaching back to 1889 that rarely deemed settlement agreements admissible in patent infringement litigation. ResONet asserted, to the contrary, that "the most reliable license in this record arose out of litigation." Since then, district courts have tended to follow their own inclinations on the issue, with some assessing the admissibility of settlements in a fact-dependent case-by-case analysis, and others remaining more inclined to exclude settlements.
In Prism, the Federal Circuit lays out a detailed scheme for the balancing act required under Rule 403, whereby a district court "may exclude relevant evidence if its probative value is substantially outweighed" by such dangers as unfair prejudice and misleading the jury. The opinion addresses such issues as:

• What evidence is needed to show value of the asserted patents when the old settlement covers more than the patents in the present controversy;
• How the timing of the settlement of an earlier dispute affects its probative value for a settlement late in trial, meaning the record was more fully developed; and
• How settlements are not that different from licenses, because "the potential for litigation...must loom over patent licenses generally, including those signed without any suit ever being filed."

Prism v. Sprint: http://patent-damages.com/2017/03/14/cafc-issues-detailed-opinion-on-comparable-licenses-addresses-cost-savings-approach/