Yesterday the Court of Appeal in London rendered a judgment in an Optis v. Apple case. Apple was appealing the lower court's determination that Optis will be entitled to an injunction if Optis prevails on the merits of at least one patent (such as this one) and Apple still refuses to take a license "on such terms as are subsequently determined by the court to be FRAND."
The appellate opinion was authored by Lord Justice Richard Arnold, and Apple would be hard-pressed to find a more balanced (or more experienced) patent judge in the UK. And indeed, Lord Justice Arnold held that "[e]ach side has adopted its position in an attempt to game the system in its favour" and generally criticizes what he considers "the dysfunctional state of the current system for determining SEP/FRAND disputes."
But the part about Optis is irrelevant at this point: Optis wanted an unconditiional injunction based on the argument that Apple had been a clearly unwilling licensee, and it's not going to get it, but that doesn't impair Optis's ability to enforce its patents--it was just a failed attempt to take a shortcut.
In the end, Lord Justice Arnold--with the support of the other two panel members, Lady Justice Sarah Asplin and Lady Justice Elisabeth Laing--dismissed Apple's appeal, and this one sentence hurts Apple in more than one way:
"Apple's behaviour in declining to commit to take a Court-Determined Licence once they had been found to infringe EP744, and their pursuit of their appeal, could well be argued to constitute a form of hold out (whether Apple have in fact been guilty of hold out is an issue for Trial E)."
The FRAND trial in the High Court (for the purposes of this dispute, it's the court below) has already taken place. I heard that this blog was referenced by both sides on various occasions, but don't know the details. A judgment is in the works, and yesterday's appellate decision has paved the way for the conditional injunction that Optis is seeking.
As I wrote on the occasion of the lower court's FRAND trial, Apple is unlikely to benefit from exhausting all appeals in this dispute. I have no reason at this point to change mind on that.
While each dispute has its own fact pattern, the fact that the appeals court is--at minimum--unconvinced of Apple's willingness to take a license on FRAND terms is not really the news that the iPhone maker wants when it has multiple FRAND trials coming up between now and the end of the year:
November 8: the first Ericsson v. Apple SEP infringement trial (which will--if Ericsson prevails on the technical merits--entail an adjudication of Apple's FRAND defense) in Mannheim (Presiding Judge: Dr. Holger Kircher);
December 5: the Ericsson v. Apple FRAND contract trial (no patent infringement questions in that case) in the Eastern District of Texas (that case is now at the summary judgment stage) (Presiding Judge: the Chief Judge of the United States District Court for the Eastern District of Texas, Rodney Gilstrap); and
on December 21, an Ericsson v. Apple FRAND hearing before the Munich I Regional Court's 21st Civil Chamber (Presiding Judge: Dr. Georg Werner); a first infringement hearing in a related case took place last month, and the court subsequently denied a motion to dismiss that Apple had brought
Apple's license deal with InterDigital avoided another dispute, but as a relatively small publicly-traded licensing firm that has no product revenues, it would have been a tough choice for InterDigital to litigate against Apple, potentially not receiving for some time Apple's royalty payments, which account for about a quarter of InterDigital's revenues. Optis is privately held, which gives it some flexibility, and Ericsson is not dependent on Apple's license fees as it has an infrastructure product business.
InterDigital is embroiled in litigation with Lenovo, and the InterDigital v. Lenovo trial (involving some of the same UK lawyers) took place even a few months before the Optis v. Apple FRAND trial, but a decision has yet to come down. I wonder whether the judge will at least try to get that one done before the end of the year.
It's a "bad press" kind of week for Apple. It had to stop showing gambling ads on children's app pages and in situations where people were searching for therapy of their gambling addiction, and now it's been deemed an arguably unwilling licensee of standard-essential patents...
