Nokia's enforcement of non-standard-essential patents is increasingly of concern to Google, especially when Google's closed-source, mandatory Android apps are in the crosshairs. Google has already become an intervenor in at least a handful of litigations initiated by Nokia: an ITC investigation of a Nokia complaint against HTC and at least four German lawsuits, two of which relate to Google Talk (one against HTC, one against ViewSonic) and the other two of which are about the Google Play app and content store for Android (same two defendants again). On Friday, the Mannheim Regional Court, beyond all doubt the world's leading smartphone (and tablet computer) patent forum, held a Nokia v. HTC trial to discuss claims that the Google Play store infringes EP0812120 on a "method for using services offered by a telecommunication network, a telecommunication system and a terminal for it".
The primary claim construction issue in this dispute reflects both the opportunities and the challenges that Nokia's patent portfolio faces:
The issue, which also came up in a couple of Munich cases, is whether patents that were filed a long time ago and reference telecommunication systems (or networks) do or don't read on today's mobile Internet services. There's no general answer: it must be addressed on a case-by-case basis.
The opportunity for Nokia is to leverage the foundational innovations it created before the launch of the iPhone or even the BlackBerry. Some of those, such as the one in question, go back to the times when the World Wide Web was in its infancy and most people were buying phones for only one reason: voice calls. But in this field of incremental innovation, a patent doesn't have to cover the most recent building blocks to be valuable. A patent covering the foundation of an entire architecture may be even more powerful than the one that just adds a nice idea on top of hard-core technology created by others.
The challenge is that extremely literal claim constructions don't result in an infringement finding. For example, Judge Andreas Mueller ("Müller" in German) of the 21st civil chamber (panel) of the Munich I Regional Court tends to interpret claims narrowly (much more so than the 7th civil chamber of the same court or the Mannheim Regional Court, and based on what I hear, the Düsseldorf Regional Court) and makes a bright-line distinction between mobile networks and the Internet that looks more reasonable on paper than it is in touch with technological reality. The Internet was always a telecommunications network, even long before services like Skype were used by hundreds of millions of users. And if a court adopts a claim construction that defines "telecommunications" reasonably inclusively, Nokia's related patents have to withstand challenges to their validity based on prior art references from not only the traditional wireless universe but also the Internet arena (or even the wider field of general-purpose computing).
Patent litigation is a you-win-some-you-lose-some game. In some cases, depending on the specifics of the patents (nature of invention, content of description, prosecution history) and the different judges' claim construction styles, Nokia will prevail; in some others, it won't (at least not prior to an appeal). Nokia has brought such a powerful set of patents into position against HTC, ViewSonic and RIM that the only (admittedly unsolicited) advice I could give those defendants is to take a royalty-bearing license to those Nokia patents that are available for licensing and to respect those differentiation patetns that Nokia plans to keep exclusively. Those three companies are entitled to their days in court, even to many days in court, but I doubt very much that even one of them is still going to be fighting Nokia's assertions in a year from now.
Let's not forget that Nokia also sued Apple and ultimately got a deal under which Cupertino ended up the net payer. There were a few reasons for which Apple decided in June 2011, despite its vast resources, to back down. One key factor was platform choice: if Nokia had adopted Android, the dispute would have escalated, and if it had continued to bet on Symbian for smartphones, there would have been no improvement, but Nokia's choice of Windows Phone, which is backed by Microsoft (which has a license deal in place with Apple and, in any event, a far stronger patent portfolio than Apple), impaired Apple's ability to materially adversely affect Nokia's business through injunctions. At the ITC, both parties had lost their offensive claims at the initial-determination stage, but at the review stage, if anyone was going to win an import ban, it was going to be Nokia. And what I didn't know at the time (because I only started looking more closely at smartphone patent disputes in my native Germany after the first couple of decisions came down): Nokia had some Mannheim cases going against Apple and might have won some German injunctions, including one over this patent it was then asserting against Apple's App Store and is now asserting against the Google Play store. What I heard from two different sources is that the Mannheim trial over this patent had gone reasonably well for Nokia (also before Judge Voss), and a ruling was going to come down shortly if the parties hadn't settled.
In terms of how the Friday trial went, I would also describe it as a reasonably good one for Nokia. The case could go either way when a ruling (or order to stay or reopen proceedings) comes down on March 1, 2013, but Nokia clearly made headway at the trial with its infringement theory, while HTC and Google (whose corporate representative was, like at the Apple v. Motorola appeals hearing in Munich the day before, its director of litigation, Catherine Lacavera) lost some ground with their non-infringement theories and HTC did not appear to impress anyone in the room with its invalidity contentions.
The patent covers the basic concept of a changing offering of services. As Judge Andreas Voss ("Voß" in German) put it, the idea was to ensure that customers wouldn't have to throw away their phones every time there's a new catalog of offerings.
The two primary non-infringement arguments are the aformentioned question of whether a patent relating to a telecommunication system can read on today's mobile Internet and a secondary question of whether "embedded software", at the time the patent was filed (1996), meant something else than today's mobile operating systems like Android. The first part was familiar. The second part was unimpressive. Even in the mid-1990s the embedded software of devices had parts that were close to the hardware and could be labeled as an operating system. The embedded-software-now-and-then distinction is arbitrary. Android is a denomination of embedded Linux.
HTC and Google's non-infringement argument regarding the interpretation of "telecommunication system" is in no small part based on the fact that claim 7 describes various components of a traditional telecommunication system. But claim 7 is unrelated to the asserted claim 8, which is the key one for assertions against end user devices. While Google and HTC would like the court to import additional limitations from claim 7 into the asserted claim 8, Nokia's lead counsel, Klaus Haft of Reimann Osterrieth Koehler Haft, turned this non-infringement argument into a boomerang: the fact that claim 7 does mention certain components and characteristics that claim 8 does not mention actually suggests that claim 8 reflects a broader understanding of "telecommunication system". At some point Judge Voss also reminded Google's counsel, Quinn Emanuel's Dr. Marcus Grosch, of the fact that claim 8 refers to a telecommunication system as opposed to "a telecommunication system as described in claim 7".
What Judge Voss would not want to adopt is a claim construction that would read on any mobile Internet devices that comes with a web browser and provides access to web-based offerings with a changing catalog. But Nokia's counsel clarified that that this is not what this case is about. By the time the patent application was filed (1996), browsers were part of the prior art. But what did not exist were specific programs tailored to a service offering, i.e., apps. The infringement accusation brought by Nokia does not relate to a Google website but to the Google Play app.
HTC, which is represented in this action by Hogan Lovells' Dr. Martin Chakraborty, also raised a defense relating to an existing license agreement between the parties (as it previously did in Munich). Third parties (even including Google's corporate representative) were not allowed to follow that part of the discussion except for a few general statements, one of which is Nokia's postion that the patent-in-suit is not covered by the existing license agreement.
After the Holiday Season there will be a number of other Nokia patent hearings and trials in Germany and, starting in March, decisions. Or settlements.
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