BREAKING NEWS
In a dedicated filing (dated December 22, 2021) with the United States Securities and Exchange Commission (SEC), patent licensing firm InterDigital (a publicly-traded non-practicing entity) has announced multiple patent infringement lawsuits against OPPO (one of the world's largest smartphone makers) and its OnePlus and realme affiliates in the UK, India, and Germany. OnePlus is famous for high-end Android phones.
According to the regulatory filing, InterDigital brought those complaints last week (December 20 and 22, 2021), just before the Christmas holidays, and is seeking injunctions (as well as unspecified other remedies, i.e., damages). The patents-in-suit have been declared essential to the 4G/LTE and 5G wireless standards and the HEVC video codec standard.
InterDigital's revenue stream consists of royalties on its many standard-essential patents (SEPs), though what sets it apart from the vast majority of other SEP NPEs (which buy up patents on the secondary market) is that it obtains SEPs itself through participation in standard-setting processes. It doesn't make its own devices, however. An InterDigital official once told me in a semi-public LinkedIn discussion that there was a time when they made one, but declined to provide further information when I asked for specifics (particularly unit volumes).
The announcement doesn't state a reason for those infringement actions, but there can be no doubt that it's simply a disagreement on license fees. OPPO is far from the first--and naturally won't be the last--SEP holder to reject InterDigital's royalty demands, and InterDigital has particularly sued Chinese companies on various occasions. Last summer, InterDigital won an infringement ruling in the UK against Lenovo. I'm surprised the parties haven't settled, but a FRAND trial will take place soon. At around the same time, InterDigital settled a long-running cross-jurisdictional dispute with Xiaomi and struck a license agreement covering its wireless patents up to 5G as well as its HEVC patents. The Xiaomi settlement obviously freed up resources in InterDigital's litigation department, so it was only a matter of time when the U.S. company would sue the next implementer. In 2020, InterDigital settled with Huawei.
That said, these are two well-matched litigants. While I first heard about OPPO only three years ago, I'm profoundly impressed with its strength in IP and IP litigation. The company is one of the top 10 filers of patent applications in the world, and like InterDigital it is an Avanci licensor, which is a meaningful validation of its portfolio.
OPPO's corporate website has a patent news page also shows that the company concludes license agreements with significant SEP holders all the time, such as recently with Sharp, against which OPPO clearly outperformed Daimler with respect to partly the same patents. Another recent agreement was struck with Sisvel, a major patent pool administrator and licensor.
OPPO is already defending itself vigorously against an onslaught by Nokia in Europe (where a court afforded limited deference to a future Chinese determination of global patent portfolio licensing terms) and Asia. OPPO is countersuing Nokia in China as well as three German courts. Against InterDigital, however, there is no way to assert patents as the company doesn't make products a patent holder could target.
While it's clearly a quantitative challenge to fend off dozens of Nokia lawsuits and defend against InterDigital in several jurisdictions at the same time, OPPO ships tens of millions of smartphones every quarter (with a global market share of now 10% according to Counterpoint Research) and manages thousands of patent applications per year. There is no reason to assume that it couldn't cope with parallel litigation with Nokia and InterDigital.
The combination of the license deals I read about on OPPO's website and the two major infringement campaigns it is currently dealing with suggests to me that this company is neither an unwilling licensee nor a soft target. There will be a license deal in the end, but in the meantime I'm sure OPPO will present InterDigital with a formidable challenge.
In related news involving other companies, it may just be a matter of days until we see patent litigation flare up again between Ericsson and Apple, with a license agreement set to expire this week and no renewal having been announced yet.
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