A couple of weeks ago an Administrative Law Judge (ALJ) of the United States International Trade Commission (USITC, or just ITC) issued a preliminary ruling finding no violation of any of seven InterDigital patents-in-suit by Nokia, Huawei, or ZTE. The related complaint had been brought in July 2011. In the meantime InterDigital brought yet another complaint, targeting the three aforementioned companies as well as (primarily, in fact) Samsung. As I explained, four of the patents asserted against Samsung in 2013 were previously asserted against the other defendants in 2011. While different products may result in different infringement findings, these companies don't use all that many different baseband chipsets, and InterDigital once declared these patents standard-essential.
Yesterday InterDigital wrote a letter to the United States District Court for the District of Delaware in an effort to mitigate the damage from last month's preliminary ruling on the 2011 case. InterDigital has companion (mirror) lawsuits pending in Delaware for all of its ITC claims. The Delaware action mirroring the 2011 case, however, is on hold. Federal lawsuits are subject to mandatory stays if an ITC institution is instigated and the defendant requests a stay. The companion lawsuits (four different ones due to the America Invents Act's joinder rule) against Samsung, Nokia, Huawei and ZTE are ongoing because defendants did not move for a stay, hoping that the federal cases would enable them to prevail on their FRAND defenses. The letter was filed only in the companion cases involving Nokia, Huawei, and ZTE, but not the Samsung case.
InterDigital's letter
mentions in a footnote that "the ITC's determinations on patent infringement and validity lack preclusive effect in District Court" (true);
without explaining why this lack of preclusive effect should not apply to the ITC's findings regarding FRAND, stresses that the ALJ ruled against Nokia, Huawei and ZTE's FRAND defenses and "expects that [if the ALJ's related findings are affirmed by the Commission] collateral estoppel may apply to findings made by the ALJ concerning FRAND and may thus affect defendants' ability to prosecute related counterclaims [in the federal District of Delaware]; and
points the court to the first good news for FRAND SEP holders in a long time, the ITC ruling on Samsung's complaint against Apple.
The collateral-estoppel theory would also be of concern to Apple. If InterDigital was right (which I don't think it is), Samsung could, in a worst-case scenario, defeat some or all of Apple's FRAND defenses and counterclaims in the Northern District of California, where a second two-way lawsuit between these parties will go to trial next year (two Samsung declared-essential patents are presently at issue in the case, besides some non-SEPs).
Wholly apart from the question of whether an ITC ruling ever has preclusive effect, it obviously doesn't make sense that a SEP holder who defeats a FRAND defense at one point in time can then bring any number of subsequent cases without having to deal with a FRAND defense or counterclaims. The facts relating to FRAND change every time a party makes a new offer. Theoretically, even without the parties doing anything, the mere passage of time may require a new analysis (for example, key patents may have expired or be closer to expiration; or the market might change). In all fairness, InterDigital doesn't advance that extreme position. It says "may". But the next litigation might say "does" instead of "may".
So this is an issue that can come up in, and affect, various other litigations over FRAND-pledged SEPs. If you're interested in further detail, here's InterDigital's letter:
13-07-10 InterDigital Letter to District Court Re. Recent ITC Decision
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