This morning -- right before an HTC v. Nokia trial over a power-saving patent allegedly infringed by Lumia phones -- Judge Andreas Voss ("Voß" in German) of the Mannheim Regional Court announced a procedural decision in the first Nokia v. HTC lawsuit involving Google's VP8 video codec. The court has reopened the proceedings in order to take an even closer look at the validity of this patent with a view to a decision on whether to stay the case pending a parallel nullity (invalidation) action before the Bundespatentgericht (Federal Patent Court). While Judge Voss did not explain the reasons for this decision at today's announcement other than referring to a post-trial brief on (in)validity, there's every indication that the court has identified an infringement of EP1206881 on an "apparatus and method for compressing a motion vector field" in the aftermath of the March trial.
Here's why:
Under German bifurcation rules, there is no full invalidity defense in an infringement proceeding. Defendants challenging the validity of a patent-in-suit must do so at the (Munich-based) Federal Patent Court, while infringement cases are adjudged by regional courts. Infringement proceedings are frequently adjudged ahead of nullity cases (particularly in a court like Mannheim, a rocket docket for patents), but a regional court can stay an infringement case pending resolution of the nullity action if, in its assessment, there is a high likelihood of invalidation.
Last year (well ahead of any Nokia v. HTC trial) Judge Voss personally explained after the announcement of another decision how his court proceeds in its adjudication of motions to stay infringement cases pending nullity proceedings:
If it finds no infringement, it dismisses a case immediately and never reaches the question of (in)validity.
Once it identifies a first infringement, it immediately interrupts the infringement analysis (if there are other infringement theories -- such as claims against different technologies -- at issue) and focuses on the possibility of a stay pending the nullity case.
In light of the above, the reopening of proceedings to further evaluate the question of (in)invalidity is most likely attributable to an infringement finding. At the very least there has been a finding of likely infringement. If the court disagreed with Nokia's infringement claims, it would dismiss the case rather than waste court and party resources on the analysis of a question that would never have to be reached in that scenario.
Google, to which this case is of far greater strategic concern than to HTC, is an intervenor in this case. For Google's aspirations to elevate VP8 to an Internet standard, an infringement finding by the most experienced court in the world with respect to information and communications technology patents would be a huge setback. Even if the court stayed the case over doubts concerning the validity of the patent-in-suit, an injunction could enter into force if and when Nokia successfully defends this patent in the proceedings before the Federal Patent Court. For HTC a stay would be great because it would likely settle its dispute with Nokia before a final decision on the validity of this patent -- but Google needs a dismissal, which it didn't obtain today and appears unlikely to obtain later this year.
It's unclear whether there will be a second trial to discuss the new invalidity contentions that resulted in the reopening of the proceedings. It's also possible that the court will decide after further briefing, without another hearing.
Google's problem with Nokia's opposition to VP8 won't go away anytime soon. The next VP8 trial will be held by the same court in two weeks from today, and last week Nokia brought a third patent infringement claim against VP8 through a new ITC complaint. All in all Nokia identified to the Internet Engineering Task Force (IETF) a total of 64 patents and 22 pending patent applications that allegedly read on VP8. Nokia can't sue over the 22 applications unless and until a given application is granted, and the 64 patents don't represent 64 different inventions (it's a per-jurisdiction count). While a negative ruling (unless reversed on appeal) in one jurisdiction would make it more difficult for Nokia to prevail over the same patent in other European countries or over other members of the same patent family in non-European jurisdictions, courts in other countries (including other European countries) are still free to disagree with the first ruling.
It's not known at this stage whether there are other companies than Nokia who may assert patents against VP8 in the future. Google did a deal with 11 patent holders affiliated with MPEG LA, but there could be others. Some may be interested only if VP8 becomes an Internet standard and, as a result, is used more widely than today. And the MPEG LA deal is controversial: the FRAND-zero patent license Google proposes is not palatable to key players in the open source movement. The Software Freedom Law Center welcomes it, but the explanation it provides would equally apply to Microsoft's Android and Linux patent license deals, which Google doesn't like at all.
Unless the Mannheim court has changed its procedural approach to patent infringement cases with parallel nullity actions since the explanations Judge Voss gave last year (which is very unlikely), today is a Black Friday for VP8.
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