26. Nokia vs HTC

Recent discussions in class has really struck me when I came across this article regarding the battle between Nokia and HTC. We talked about how language is really important in determining infringement, and we analyzed the different preambles of patents. In the case with Nokia, the German court has not been kind with Nokia in granting injunction against HTC because its patent is still pending. In addition, HTC has also been invalidating Nokia's patents as a form of defense. Most invalidation comes because of the wordings of the claims, and it is said that HTC has been doing a good job so far defending itself.

However, as Nokia is in a similar position of what we mentioned as patent trolls in class. Nokia does not worry about losing those litigations. They can lose countless amounts of patent cases, but all Nokia needs is to win just one highly impactful patent, or a few that are collectively very impactful. To Nokia, it is like a soccer game, where it doesnt matter how many times you try to score because the final number of goals is what that matters.

This strategy is then even made easier for Nokia because of its patent portfolio which has enormous breadth and depth. They can easily bring new assertions to HTC, and it is a matter of time that Nokia will win this one major lawsuit against HTC. This can be said to be a sure-win strategy, but it will just be time and resources consuming. It is then up to either party to try to resolve this situation where it is a lose-lose for both, and settle for a much beneficial outcome.

25. Motorola: a mistake by Google

Just last week, the court has reached a FRAND rate for Motorola's SEP and this has served a huge blow to Google. This is because the FRAND rate will affect Google's ability to generate licensing revenues, which they had optimistically accounted for when purchasing Motorola. This inability to generate as much revenues meant that Google's ROI from its Motorola purchase has dropped significantly. In fact, it is calculated that it will take around 7000 years to make back the $12.5Billion it paid from licensing the SEPs to Microsoft. This of course will be impossible, because the patents would have expired way before then.

Apart from this poor revenue stream from licensing, Google additionally burdens its financials with funding lawsuits. They are involved in patent lawsuits where its expected returns if they win do not surpass its cost of litigation by much.

This all may not make financial sense, but I am sure there is a strategic reasoning behind these moves that Google has taken. Google can definitely afford such a loss in the short term, and these deals might allow it to gain much more in the long term through signals of strength sent to its competitors. Motorola might also provide other strategic benefits aside from those patent related.

24. FRAND or foe?

Federal judge has set a FRAND rate for Microsoft's licensing of Google's SEP. Microsoft had previously brought a lawsuit against Google's Motorola for a breach of FRAND contract. It feels that the initial royalty demand of Motorola was "blatantly unreasonable and constituted a breach of Motorola's FRAND pledge. In the first trial last year, an ITC judge had concluded that "Motorola  was not interested in good faith negotiations and in extending a FRAND license" to Microsoft. 

A FRAND agreement is a win-win situation that allows companies involved to all benefit. Each and every companies in the FRAND network can gain from the licensing fees, and can gain from the ability to innovate because it is assured of the opportunity to license a patent from another company in the network that it knows would be essential for its development. Although there is a limit to how much licensing fees can be obtained, the benefits of being able to access other patents, and innovate far outweighs the cost. 

In addition, a company does not earn money from preventing or suing others from using its technology or infringing its patents. It earns money from licensing their patents and therefore, FRAND is generally largely beneficial for companies. FRAND also allows companies to make friends, rather than foes because of the openness in sharing and controlled licensing price. 

After this lawsuit between Microsoft and Google, it will then be interesting to see if they are friends under FRAND or foes with or without FRAND.

23. More help needed for USPTO

The USPTO is signaling to people that it will be cutting its spending with the Commerce Department mentioning that the USPTO is continuing its effort to develop a sequestration plan. This plan is said to be work in progress, and its details are still forthcoming. Sending this signal of budget cut means a huge deal to innovators and parties that are considering applying for patents or even disputing patents. The lack of funds will delay patents or trademarks examinations, further extending the wait-time for any process. 

That being said, the USPTO is still identifying potential savings and projects that could be managed in a way that minimizes the impact of this budget cut on both its services, and its employees. Non-examination related spending will be the first to focus on, so as not to affect the standards and performance of the examinations as much. 

This reduction of spending, although having a negative connotation, is not as bad as it seems if considered over a few years. The USPTO's current budget has increased by almost 50% over the past 3 years, and the sequester reduction is minuscule compared to the size of this increase. However, firms should still expect some form of change in the standard or service provided, which is most likely translated to longer wait times. This then bodes ill for companies awaiting patent issuance or litigations status, that are really time sensitive.

22. Apple having fiercer relations with Samsung

Apple has won Samsung in California claim construction battle on all patents except one SEP. A claim construction is a huge component of the lawsuit for any patent as it sets the definition of the the words in the claim. As infringement requires all elements in the claim to be violated, setting the definition of such elements in Apple's favor would give a huge advantage to Apple in its case for the patent lawsuit. Apart from proving infringement, winning a claim construction battle also reduces the chances of having the patent invalidated. As mentioned last week with the case of the slide-to-unlock in Germany, one alternative of fighting back against a lawsuit for patent infringement is to try invalidate the patent. Laying out the 'rules' of the patent well would then aid against having any patent invalidated.

It is also interesting to note that companies sometimes do contradicting actions in hopes to win against patent infringement. As in the case of Samsung and Apple, Samsung had consistently tried to narrow the scope of the claims in order to have a better basis for disputing infringement. However, sometimes, defendants will broaden them instead, so that they can argue that it is too broad and request for invalidation. Samsung's efforts were, however, rejected by the court, and it seems like it will get much harder when going for the trial next year to dispute infringement, because of the claim construction.

21. Another win for Apple

Apple has won an invalidation of 3G SEP of Samsung in Germany. This serves as a huge win for Apple, which definitely damaged the relationship between the two companies further. Earlier last week, Apple had lost the slide-to-unlock patent against Google's Motorola, and it was a huge blow to Apple. However, I would think that Apple would prefer this trade-off, being able to damage Samsung, who is his main competitor, and suffer a defeat from Google, than to have the status quo. The german court has ruled to invalidate in its entirety, the German part of Samsung's EP1005726 on a "turbo encoding/decoding device and method for processing frame data according to QoS", which is a patent Samsung had declared to be essential to 3G wireless standard.

This defeat could also be viewed as a consequence for Samsung being too greedy. Previously, it had withdrawn all its SEP-based injunction against Apple, but still continued to sue it for damages. This outcome might not have happened if the relationship between Apple and Samsung was better.

It seems like invalidation of patents, although sounding like a huge and uncommon issue, is indeed common. This makes me wonder about the reliability in the process of applying for patents. If most cases can be invalidated, why should it even be issued initially? Does this not reflect bad on the issuing agency that they were negligent on their part previously?

20. Apple's Slide-to-unlock invalidated

It is interesting that Apple's recent battle with Samsung and Google's Motorola supports what we learn in class regarding the options that a company has when it is told that it infringes a patent. One of the options mentioned was to invalidate the patent, and this is exactly what Samsung and Google did to fight against Apple.

The slide-to-unlock patent was invalidated in Germany as it fails to meet the technicity requirement under the European patent law. This is because the court felt that the swiping gesture for the purpose of unlocking a device, which is the new invention, is not technical enough, and it has to solve a technical problem with a technical mean to be eligible for a patent. This being said, the exact same patent will be perfectly fine in US because of the difference in the country patent laws.

This case just proves that each country is very different from one another, and that a patentable idea in one country might not work in another. This brings about a fundamental problem for inventors and innovation because their ideas can never be fully protected worldwide, and if they do not know the ground rules in the various countries, such inventors could easily be 'eaten' up by the local competitors
in the country.

19. Google vs Microsoft

Google seems like it is having a tough battle against Microsoft's Xbox. In this battle, it involved the actions of Motorola, which Google had bought over previously. It is mentioned that Motorola had not anticipated the ruling outcome of another lawsuit between S3 Graphics and Apple, which was the fundamental reason why it is unable to win the case against Microsoft. It failed to realize the difference between a method claim and product claim. It also failed to form a case around indirect infringement and focused too heavily on direct infringement.

Has Google made a wrong move by buying Motorola, which it could not leverage on with its patents in this area? It seems like Google's position is not very favorable for winning this battle for an import ban, but it still has other options apart from the ITC. This case might be looked upon as a learning experience for all of us, including Google, in its next company buyout. I had never knew about how focusing on method claim or product claim could make or break the litigation. In addition, I never knew about what indirect infringement is, and it is even more surprising to me that Microsoft could even use its marketing campaign as a way to support its case of not inducing infringement. Marketing and infringement of patents seem to not overlap in my mind, but apparently it does so by marketing Kinect as a way to control the Xbox without using a game pad.