Search Results for: commil cisco

Vringo v. ZTE: Troll Status is Irrelevant

Patent

Guest Post by Peter Arrowsmith. Arrowsmith is a patent attorney and partner at the London based firm Cleveland IP

In a recent judgment from the High Court in England & Wales, a Vringo patent was found valid and infringed by ZTE, the Chinese telecommunications giant.  This case involved an interesting combination of parties: Vringo, an alleged patent troll, against ZTE, a leading Chinese innovator.  The case is also of interest because the relevant patent was deemed essential to the 3GPPP telecommunications standard, which means that hardware produced according to the standard would inevitably infringe the patent.

Vringo is a US company headquartered in New York City.  Its website says the following about its activities:

Vringo, Inc. is engaged in the innovation, development and monetization of intellectual property and mobile technologies. Vringo’s intellectual property portfolio consists of over 500 patents and patent applications covering telecom infrastructure, internet search, and mobile technologies. The patents and patent applications have been developed internally, and acquired from third parties.

In this case the relevant patent was filed by Nokia, and acquired by Vringo after grant.

Vringo’s website has details of various patent enforcement activities around the world against companies such as ZTE, ASUS, Google and AOL.  Despite their global activities and sizeable patent portfolio, Vringo employ only 27 people, and do not produce any physical products.  As such, Vringo could reasonably be called a non-practicing entity (NPE), or even a patent troll, if one wanted to be pejorative.

The judgment dealt with Vringo’s business model directly, as follows:

Although they never say so bluntly, ZTE contend that Vringo are ‘patent trolls’.  They contend that Vringo have conducted themselves in various inappropriate ways around the world against ZTE.  However ZTE have not alleged or pleaded that any of this conduct amounts to a defence relevant to the issues I have to decide at this trial.  For example, no defence in competition law is relied on.  Vringo do not accept that ZTE’s allegations are correct.  Whether ZTE are right or wrong about this is irrelevant and I will ignore these allegations.

Thus, the case was correctly decided without reference to Vringo’s business model.  This seems just, especially given the difficulty in agreeing upon a definition of a NPE or patent troll.

ZTE is a Chinese telecommunications company with around 70,000 employees.  They have grown into one of the largest telecommunications companies in the world, and are also very active users of intellectual property.  In fact, ZTE filed more PCT applications than any other company in the world in 2011 and 2012.

It is not straightforward to identify the bad guys and good guys in patent litigation.  In general, this is simply a matter of perspective.  However, Chinese companies are often cast in the role of bad guys, due to a reputation of disregard for IP rights.  Meanwhile, US companies are often cast as the good guys, as they pioneer new technologies for the benefit of humanity.  In this case it is clear that the stereotypic labels do not apply.  Indeed, it is an indication of evolution in the IP landscape to see a Chinese innovator being sued by a Manhattan company, which did not contribute to the patented technology but acquired it from overseas.

The technology in this case relates to the handover of mobile phone calls from one cell to another.  In particular, it relates to a ‘soft’ handover between cells.

The invention was developed by Nokia during a rapid period of development in 1999.  At this time Nokia were involved in the process for establishing the 3GPP standard and met regularly with contributors from the other leading telecommunications companies of the day.  The patent is relevant to one specific working group, which was involved in issues relating to the handover of calls.  The working group, WG3, produced various memoranda and papers regarding the progress of their work.  These papers formed part of the prior art, against which the validity of the patent was assessed.

Nokia developed the invention while discussions regarding the standard were ongoing, and they filed a patent application.  The invention was subsequently disclosed to the working group, and was eventually adopted as part of the finalised standard.  As a consequence, equipment produced in accordance with the standard would inevitably infringe the patent.  The key question in this case was therefore whether the patent is valid over the papers produced by the working group before the date of filing.

In this case the judge was not persuaded by ZTE’s case that the invention was obvious.  Therefore, the patent was found to be valid and infringed by ZTE.

This decision is also the first of a series of patent trials scheduled to be heard in the UK between these parties in the next year or so.  It will be fascinating to follow this intriguing battle in the coming months.

No Willful Infringement Since Infringer’s Litigation Arguments were “Not Without Reason”

Patent, ,

by Dennis Crouch

Sryker v. Zimmer (Fed. Cir. 2014)

In 2010, Stryker sued its competitor Zimmer for infringing three patents covering pulsed lavage devices used for wound cleaning.  U.S. Patent Nos. 6,022,329, 6,179,807, and 7,144,383. A jury sided with the patentee awarded $70 million in lost profits and also found that the infringement willful.  Taking that verdict, the district court then awarded treble damages for willfulness, attorney fees based upon the exceptional case, and a permanent injunction against Zimmer.   On appeal, the Federal Circuit has affirmed the underlying damage award, but reversed the district court’s judgment that the infringement was willful — finding that the noninfringement and invalidity defenses raised by Zimmer were “not unreasonable.”

Treble Clef

Treble Damages: The Patent Act sets up a two-step process for determining patent infringement damages.  First, the court must award “damages adequate to compensate for the infringement” that are at least “a reasonable royalty.” 35 U.S.C. 284.  Next, “the court may increase the damages up to three times the amount found or assessed.”  Id.  To add some mystique to the system, we term this ‘treble damages’ rather than ‘triple damages’ or – as the statute suggests – ‘three times.’

The statute itself offers no further limitations or guidance as to when triple damages are appropriate, only that a court “may increase the damages.”

Seagate vs the Statute: Despite the broad discretion seemingly offered by the statute, the Federal Circuit has held that increased damages are only available when a defendant is guilty of its complex willful infringement schema that requires clear and convincing evidence that (1) an adjudged infringer took its wrongful actions “despite an objectively high likelihood that its actions constituted infringement of a valid patent” and (2) that the objectively-defined risk was subjectively known (or should have been known) to the infringer.  In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc).

Ex Post Reasonableness: Because willfuness includes the objective inquiry, it turns out that an infringer who made the intentional decision to infringe, believing fully that the act was infringement, and that was that later judged to be infringing can still avoid being stuck with enhanced damages with a later-concocted (but ultimately incorrect) argument that the patent is invalid or not infringed – so long as that argument is “susceptible to a reasonable conclusion.”   Uniloc USA, Inc. v. Microsoft Corp., 632 F.3d 1292 (Fed. Cir. 2011).

Although the jury decided the willfulness question in the Federal Circuit has held that insufficient under the Seagate test. Rather, a judge must determine at least the objective portion of the test (objectively reckless) and that determination is reviewed de novo on appeal. Bard Peripheral Vascular, Inc. v. W.L. Gore & Assocs., Inc., 682 F.3d 1003, 1007 (Fed. Cir. 2012).

Here, reviewing the lower court’s decision de novo, the Federal Circuit found that the defendant had offered a construction that was “not unreasonable” or at least “not without reason.”

 

Tesla’s Patents are Your Patents

Patent,

Tesla Motors has notified has granted a public and free license to its patent to anyone who uses their technology “in good faith.”:

Yesterday, there was a wall of Tesla patents in the lobby of our Palo Alto headquarters. That is no longer the case. They have been removed, in the spirit of the open source movement, for the advancement of electric vehicle technology.

Tesla Motors was created to accelerate the advent of sustainable transport. If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.

http://www.teslamotors.com/blog/all-our-patent-are-belong-you

The idea is partially a philosophical bent, but it is also business – Tesla feels that it needs real competitors in the zero-emission auto market in order to truly grow the market.

Christian Hicks, Co-Founder of Elysium Digital sent the following note regarding the likelihood that Tesla’s patents have already served their purpose for Tesla in its early-stage development:

No matter what, Tesla has benefitted from its patent program, because it prevented others from claiming what Tesla patented and used. At the same time, Tesla’s patents may very well have been valuable back when they were raising VC money, but they are obviously past that now.

Interesting perspectives.