Is it even logically conceivable that two litigants could disagree to disagree? Prior to the Ericsson v. Apple 5G patent dispute, I'd have answered that question--firmly--in the negative. I'm not so sure anymore. Well over six months after Ericsson brought its initial FRAND action in the Eastern District of Texas, and about three months after the filing of patent infringement complaints, they disagree at all levels.
The easiest part is that Ericsson believes its ex ante disclosure of a $5G-per-device royalty continues to be a FRAND licensing offer to Apple, while I infer from publicly available information that Apple's position must be but a fraction of that amount, though Apple might be prepared to meet somewhere in the middle. The parties behave consistently with those beliefs. Ericsson is far from the only major SEP holder to have publicized a royalty rate. For example, Huawei announced a 5G license fee about a year ago. Unless we want to discourage such disclosures, we must respect a SEP holder's stance that the publicized rate is not just a starting point for endless bargaining. At the same time, Apple is obviously in its right to disagree.
There's nothing unusual about parties having different procedural preferences (including, but not limited to, venues). Here, it looks at first sight as if both agreed on the Eastern District of Texas, but it's a fact that Apple closed its Apple Stores in that district just to be in a better position to move patent cases out of there. Ericsson has been consistent over many years with respect to that venue. What Apple criticizes Ericsson for is that, in addition to the Texas FRAND litigation, Ericsson is seeking "injunctions against Apple in courts from Waco to Bogota." That was a quote from Apple's response to Ericsson's SEP ITC complaint, which I have uploaded to Scribd now that a public version has become available. (I have also uploaded Ericsson's response to Apple's mmWave ITC complaint.)
Now, what's truly unusual here is that we still don't know whether the Texas FRAND case (there used to be two dueling complaints, but Apple's FRAND claims were merged into Ericsson's earlier-filed case)--which by the way is scheduled to go to trial in less than eight months--is going to be a declaratory judgment case or will be certain (apart from appeals) to result in a binding license agreement.
As I indicated in the headline, I'm starting to give up hope on that part of the dispute leading to a contract between the two. It may end up with a DJ. In a new filing (its reply in support of a motion Apple opposes), Ericsson criticizes Apple for evading the central question of whether it will take the $5-per-phone deal if the court confirms it's FRAND (this post continues below the document):
22-04-14 Ericsson's Rep... by Florian Mueller
So they don't just disagree on what is FRAND and on how or where (not) to litigate: they also appear to disagree on what the consequence of all of this should be. They disagree on the net effect of a ruling. It's not that a DJ would only be useful for sticking it to a wall in Stockholm or Cupertino: a DJ would impact various cases between the two parties. But a DJ would not resolve the multi-jurisdictional dispute in one fell swoop.
Ericsson wants Apple to say: "Yes, we will [take a license on those terms if the Texas court says the terms are FRAND]." Apple beats around the bush and addresses another question, which is whether it may take a license if the court more or less agrees with Apple's contrary position.
Not only is Ericsson's case the earlier-filed one but--more importantly--Ericsson's request that the court bless its original licensing offer is structurally consistent with what the same court did in the Ericsson-HTC case that Ericsson won (affirmed by the Fifth Circuit). Ericsson has the HTC case to point to. A well-trodden path for the court. Apple lacks precedent that supports its request that the Texas court just listen to both parties' positions and set a rate somewhere in between--which it can't do, at least not on a global basis, unless Ericsson consents to that course of action.
Apple may not like the fact that infringement actions are pending "from Waco to Bogota." (As for Waco, Ericsson even offered to effectively transfer the Western District of Texas cases to the Eastern District.) But a legal dispute is ultimately about what a party can unilaterally seek in court, failing an agreement. What Ericsson asked for in its original (October 2021) complaint is doable. Apple's preferred way forward, however, cannot be imposed on Ericsson.
Appe faces a dilemma. If it says "yes, we'll pay $5 per iPhone if the Texas court considers it FRAND," Apple may end up having to take that deal. It would lose all the way. If it says no, Ericsson can seek injunctions anywhere on this planet and will obtain them if valid patents are infringed and courts find that Ericsson made its licensing offer in compliance with its FRAND licensing obligation.
Whether in Texas or in Germany, or Colombia for that matter, Apple will have to prove that Ericsson's offer isn't FRAND. Ericsson is confident of its position. Apple won't be able to avoid that fight.
There is another SEP case--that also originates from the Lone Star State, though from another federal district: Continental v. Avanci. I'd just like mention that Conti has filed a petition for rehearing, but it was formally deficient (for example, it lacked a statement of facts), so the Fifth Circuit told Conti to refile within ten days. I'm underwhelmed by that petition because it doesn't address the real issue, which is the absence of harm as Conti never faced a SEP infringement action by the likes of Nokia, and Conti's customers are free to take a car-level license (as some of them, such as Daimler and Volkswagen, already have). I'll leave that for another day, and wouldn't be surprised if Apple also chimed in (again). We'll see next week.
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