I've been advocating the concept of FRAND licensing for years, and I welcome judicial decisions that give meaning to FRAND, such as Judge Posner's recent Apple v. Motorola ruling. But the FRAND defense should only be raised against patents that really must be licensed on FRAND terms. It shouldn't be raised routinely as part of any answer to a patent complaint that throws in the kitchen sink.
More than two months ago, Nokia brought patent infringement actions in the U.S. and Germany against HTC, Viewsonic and RIM over a total of more than 40 different patents. Four of those are essential to the IEEE 802.11 (WiFi, or WLAN) standard. Those are being asserted against Viewsonic in Mannheim because that particular defendant allegedly even refused to enter into any licensing discussions with Nokia in the first place. Even though none of the patents Nokia is asserting against HTC at this stage are standard-essential (I looked at them and they really didn't look like SEPs), HTC said this in a filing made yesterday (click on the image to enlarge or read the text below the image):
"Third Defense: Equitable Defenses
On information and belief, Nokia's claims are barred, in whole or in part, by the equitable doctrines of laches, unclean hands, estoppel, and/or waiver, due to, among other acts or omissions, Nokia's failure to disclose its essential patents to various standards setting organizations and/or failure to license its essential patents on fair, reasonable, and non discriminatory terms."
Yesterday's filings are HTC's answers to two of Nokia's complaints in the District of Delaware. HTC had more than two months since the filing of those complaints -- more than enough time to figure out whether the patents at issue have been declared essential to any industry standard or not. HTC could always have reserved the right to raise additional defenses based on further discovery.
I don't know whether Nokia will move to strike this apparently-baseless FRAND defense or whether the court will ultimately sanction HTC for violation of Rule 11, which sets certain pleading standards. HTC makes a factual contention -- alleging FRAND abuse by Nokia -- that doesn't appear to have even a scintilla of evidentiary support. The court might conclude that HTC lacked a good-faith basis for believing that evidentiary support for this allegation would come to light during the course of discovery.
Whatever the formal consequences of this may be, let's hope for HTC that this phantom FRAND defense is not indicative of the overall quality of the company's defensive efforts against Nokia.
Oddly, HTC itself faces allegations of FRAND abuse: last month, Apple brought counterclaims in an ITC investigation and removed them to the Eastern District of Virginia.
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