All in all, Nokia clearly has the upper hand in its patent enforcement against HTC, as I reported three days ago. But HTC has already proven in its dispute with Apple that it's not a soft target. Yesterday an HTC v. Nokia countersuit became discoverable in Germany. And (also yesterday) ITC Administrative Law Judge Thomas B. Pender entered an "Initial Determination Granting Respondent HTC America, Inc.'s Motion for Partial Termination of the Investigation as to U.S. Patent No. 7,366,529 Pursuant to 19 C.F.R. Sections 210.21(a)(2) and 210.21(d)". This means that one of the nine patents Nokia is asserting in its ITC case against HTC has been dismissed (unless the Commission, the six-member decision-making body at the top of the U.S. trade agency, overrules Judge Pender).
The full text of the initial determination is not available yet, and apart from a dispute over whether a hearing should be held, the related pleadings are also sealed. But it's clear enough from the documents I saw -- and consistent with what I've been watching in German courtrooms for several months -- that HTC argued that this patent is "standard-essential" (which I doubt very, very much, and which calls into question the consistency of the standards the ITC applies to actually or allegedly standard-essential patents, as I'll discuss further below) and that Judge Pender surprisingly agreed (his ruling references articles of the Commission rules that relate to termination of claims subject to arbitration agreements; one of the rules cited lists arbitration as one of various possibilities, and the other one is entirely about arbitration). The headline entered the public electronic record only today.
The drop-out patent is U.S. Patent No. 7,366,529 on a "communication network terminal supporting a plurality of applications". This is how Nokia's May 2012 complaint described the nature of this patent:
"Before the invention of the '529 Patent, there was a need for the ability to efficiently send and receive information related to different applications on a mobile device. The invention of the '529 Patent discloses a technology that enables a mobile device having many applications to receive data-containing messages relating to one or more of the device's applications and address and store the received data for that application."
So this is, simply put, a patent on routing data to an app. It has nothing to do with cellular standards like 3G/UMTS. There's no such thing as a reference to apps in wireless standards. In a similar case over a power-saving patent the Mannheim Regional Court (obviously applying a different legal framework) told HTC that someone might even claim a patent on a beeswax melting machine to be essential to a wireless standard in order to prevent an injunction from issuing while the essentiality dispute (no matter how baseless) is being arbitrated.
Wholly apart from cross-jurisdictional comparisons, I find it difficult to reconcile Judge Pender's (formally preliminary, but most likely final) decision relating to a patent that I believe is not standard-essential with the ITC's approach to patents that have been declared essential, and pledged to licensing on FRAND terms, by their owners. For example, the ITC just instituted an investigation of a new InterDigital complaint against four companies including Huawei irrespectively of the fact that Huawei had requested a FRAND determination in federal court and declared itself bound to its result. Also, the ITC is reviewing a preliminary ruling on Samsung's complaint against Apple, which raises FRAND issues. The European Commission, one of the world's most reputable antitrust regulators, has found Apple, in a preliminary ruling, to be a "willing licensee".
The bottom line is that spurious allegations of standard-essentiality, in connection with an arbitration agreement, are rewarded by the ITC, while blatant FRAND abuse as well as a request for a binding FRAND determination -- structurally consistent with the envisioned FTC-Google settlement -- don't result in summary determinations dismissing the related claims. In all fairness, the ITC's rules do have a special clause on arbitration agreements, and HTC argued that the ITC must refer a claim to arbitration if it's "not wholly groundless". Hardly anything in the world is "wholly groundless", but why doesn't the ITC also dismiss claims over undisputedly declared-essential patents? That's the part I don't understand.
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