Showing posts with label mmWave. Show all posts
Showing posts with label mmWave. Show all posts

Wednesday, December 7, 2022

Apple expert witness coined 'feminazi' term to disparage committed feminists, testified for Apple yesterday against Ericsson in U.S. International Trade Commission

Yesterday was Day Two of two Ericsson-Apple courtroom clashes that started on Monday.

In the Eastern District of Texas, most of the day was spent on testimony by Ericsson's Chief Intellectual Property Officer Christina Petersson. First she was examined by her lead counsel, Theodore "Ted" Stevenson III of Alston & Bird, then cross-examined by Wilmer Hale's Joseph J. "Joe" Mueller, again by Mr. Stevenson on redirect and finally by Mr. Mueller on recross. That's what I gathered from Judge Gilstrap's minutes. I don't know what was said. I remember her as a witness who came across as trustworthy, knowledgeable, and fairly balanced in the FTC v. Qualcomm case in the recording that the FTC played in support of its case.

In the United States International Trade Commission (USITC, or just ITC), a U.S. trade agency (thus based in Washington, D.C.) with quasi-judicial powers (in particular, it can impose import bans on patent-infringing products), Administrative Law Judge (ALJ) Monica Bhattacharyya is presiding over a case in which Apple wants to win an import ban on Ericsson base stations and has already heard some Apple witnesses. One of the expert witnesses who testified on Apple's behalf yesterday is Clemson University professor of economics Thomas W. Hazlett. He specializes in telecommunications and served as the Federal Communication Commission's chief economist from 1991 to 1992. But it was not his work on telecoms matters that earned him an entry in The Oxford Dictionary of American Political Slang:

Mr. Hazlett is "credited" for having coined the term "feminazi"--a portmanteau of "feminist" and "Nazi" that according to the dictionary refers to "a committed feminist or a strong-willed woman"--that was popularized by conservative radio talk show host Rush Limbaugh. In his 1991 book "The Way Things Ought to Be", Rush Limbaugh wrote the following:

"I prefer to call the most obnoxious feminists what they really are: feminazis. Tom Hazlett, a good friend who is an esteemed and highly regarded professor of economics at the University of California at Davis, coined the term to describe any female who is intolerant of any point of view that challenges militant feminism."

While I often liked Rush Limbaugh's resistance to political correctness and think he sometimes explained more convincingly than anyone else what drove some politicians' decisions and influenced their positions, I never really understood his obsession with the term "feminazi" and never once used it myself.

It is out of character for--otherwise liberal or at least politically correct--Apple to rely on an expert witness with that history, even more so in front of a female judge.

In a recent post on this mmWave patent case I already published Apple's prehearing brief. It described the purpose of Dr. Hazlett's testimony as follows:

"In immediately apparent distinction from Ericsson and its experts in the Investigations on Ericsson’s complaints against Apple, which have provided little more than conclusory 'expert' ipse dixit, Apple and Dr. Tom Hazlett, an economist and Professor at Clemson University, here will provide real-world, economic evidence that demonstrates the minor role of mmWave in 5G deployment. For example, Dr. Hazlett will provide and explain specific data demonstrating that the mmWave portion of 5G communications is responsible for less than 1% of consumers’ mobile access as measured by data usage, that US network carriers’ investment in FCC licenses specific to mmWave spectrum comprises merely 4% of their total investment in 5G licenses, and Ericsson’s mmWave radio sales comprise less than 10% of its total 5G radio unit volume (and is projected to decrease). Moreover, Dr. Hazlett will identify evidence from the network carriers themselves showing that, should Ericsson’s Accused Products be excluded, other suppliers such as Samsung and Nokia are positioned to fill demand for its mmWave base station products, and alternative technologies from 4G, 5G, and other networks are also available. In sum, Apple’s requested relief will do no more than stop Ericsson’s unauthorized use of Apple’s patented technology."

I'm sure that not only Ericsson but especially U.S. mobile telecommunications carriers like Verizon sharply disagree with Apple and Professor Hazlett, as does the ITC staff (see the post I linked to further above).

In a July 20 document identifying Apple's expert witnesses, this expert's background was summarized as follows:

"Dr. Hazlett an expert in economics, including analysis of markets and regulation in telecommunications. He is a former Chief Economist at the Federal Communications Commission (“FCC”) and is currently holds the H.H. Macaulay Endowed Chair in Economics at Clemson University. He earned a Doctor of Philosophy (Ph.D.) in economics from University of California, Los Angeles in 1984. Dr. Hazlett’s curriculum vitae, attached hereto as Exhibit F, sets forth his qualifications. If called upon to testify, the general nature of Dr. Hazlett’s testimony is expected to relate to at least background information about 5G communications, the appropriate remedy in this Investigation, and its effect on the public interest, bonding, and any other issues relevant to Apple’s claims and Respondents’ defenses for which expert testimony is required or useful. Dr. Hazlett may also testify in rebuttal to the issues, opinions, and evidence offered by Respondents or its retained expert witnesses in this matter."

I was pointed to this by a third-party source who requested anonymity.

Tuesday, December 6, 2022

Ericsson v. Apple trial started in Eastern District of Texas yesterday; Apple dropped one patent right before ITC trial, blames logistical problems on lifted Colombian injunction; Munich court schedules four trials for July

I have multiple updates from the Ericsson v. Apple 5G patent dispute:

  1. Ericsson v. Apple FRAND trial started in Eastern District of Texas yesterday: jury selection, opening statements, initial testimony

  2. Apple v. Ericsson mmWave trial: Apple dropped one of its three patents-in-suit right before trial

  3. Apple gives Colombian 5G iPhone customer refund, incredibly claims Ericsson's lifted (!) preliminary injunction made repair or replacement impossible

  4. Munich I Regional Court schedules four Ericsson v. Apple patent trials for July 2023

Ericsson v. Apple FRAND trial started in Eastern District of Texas yesterday: jury selection, opening statements, initial testimony

Apple is back in Judge Rodney Gilstrap's court on 100 E Houston St, Marshall, TX 75670 (party representative: Apple's Head of Licensing Heather Mewes). So is Ericsson (party representative: Head of Intellectual Property, Christina Petersson), but the difference is that Ericsson has repeatedly made the choice to enforce its intellectual property rights in Marshall, Texas, while Apple even closed two of its retail stores in the Eastern District of Texas in order to be able to move patent cases brought against it out of the Eastern District (as a permanent place of business weighs against a venue transfer).

I actually thought there was a high probability of a settlement at this procedural juncture, but no. It looks like Apple is still engaging in hold-out. It hasn't paid Ericsson royalties in about a year, and presumably hopes that at some point Ericsson will back down and lower its rates so much that Apple takes the deal. Apple has a history of squeezing the suppliers that make its parts, and also a history of "coerc[ing] low-ball agreements" with patent holders as Qualcomm, one of America's most innovative companies, and other industry players explained six months ago. Apple even uses astroturfers--lobbyists who are paid by Apple but claim to speak for others-- for its campaign to devalue standard-essential patents.

By contrast, the royalty rate Ericsson is seeking (they offered Apple a license at a rate of $5 per 5G iPhone, or $4 if Apple had signed up early) is not excessive when compared to the $4 per 4G phone that a jury in the very same court found reasonable in a dispute with HTC (which makes cheaper phones, and for that reason alone Apple should pay more). That jury decision was upheld not only by Judge Gilstrap but also by the court above, the United States Court of Appeals for the Fifth Circuit.

The jury will also see evidence that Apple pays Qualcomm a lot more than Ericsson (in fact, Qualcomm traditionally gets higher patent royalties from Apple than all other standard-essential patent (SEP) holders combined).

Chief Judge Gilstrap entered the following minutes of the first trial day:

Minutes for Jury Selection/Jury Trial Day No. 1 Held Before U.S. District Judge Rodney Gilstrap -- December 5, 2022

I'd have liked to follow the trial in one of the world's most important patent litigation venues, but due to other obligations and plans I couldn't make it. Unfortunately I can't find any media report on the first trial day, so I don't know what the parties' lawyers said in their opening statements. I've looked at the list of counsel, and while I like and have the greatest respect for Joe Mueller (who worked on many Apple patent cases in the past) and Ruffin Cordell (who represented Apple against Qualcomm in 2019), I believe Ericsson's counsel--which won the HTC case in the same district over similar issues--will probably win. Despite the rhetorical skills of Apple's top-notch lawyers, I can't see how a jury could reasonably find that Ericsson did not live up to its FRAND (fair, reasonable, and non-discriminatory) licensing commitment: Ericsson could have asked for even more in light of the $4-for-4G outcome in the HTC "cheap phone" case as well as in light of what Apple pays to Qualcomm.

As an app developer, I know that Apple charges app developers more than 30% (which is why Apple is under antitrust investigation around the globe and ejected the popular Fortnite game from its App Store, which saddened so many kids) while paying only about 2% of its iPhone sales to SEP holders.

If it takes much longer before Apple and Ericsson agree, I may even find the time to draw up a "battlemap" like the one I created for the Nokia-OPPO dispute on Friday.

Apple v. Ericsson mmWave trial: Apple dropped one of its three patents-in-suit right before trial

For the same day--yesterday--the United States International Trade Commission (USITC, or just ITC) had scheduled the trial of Apple's countersuit against Ericsson. I assume it also kicked off as planned. There is no indication to the contrary on the ITC docket.

In that complaint, Apple initially asserted three mmWave patents against Ericsson's base stations, seeking a U.S. import ban that would hurt telecommunications carriers like Verizon but ultimately also consumers. The judge presiding over that case denied an Apple motion that would have precluded Ericsson from making a right-to-repair argument. Previously, the ITC staff also supported Ericsson at least to some extent in the public interest context.

On Saturday, Apple brought an (unopposed) motion for partial termination, withdrawing various claims of the asserted patents. U.S. Patent No, 9,882,282 on "wireless charging and communications systems with dual-frequency patch antennas" has now been withdrawn in its entirety, meaning that only two patents-in-suit remain in the case. It is the normal course of business to narrow ITC cases ahead of trial, but normally parties drop patents weeks or months ahead of trial as opposed to doing so on a Saturday before a Monday trial.

The ITC trial is the second Apple v. Ericsson trial this year. Another one was held in Germany a few months ago, and Apple lost that case.

Apple gives Colombian 5G iPhone customer refund, incredibly claims Ericsson's lifted (!) preliminary injunction made repair or replacement impossible

I just mentioned the right to repair in the previous section. A Colombian iPhone customer--José Caparroso (Forbes co-editor for Latin America) went to (presumably) an Apple Store because he needed his 5G iPhone repaired, but Apple incredibly told him--I'll explain further below why I don't buy it--that due to a preliminary injunction that Ericsson had obtained over Apple's alleged infringement of a 5G standard-essential patent, they couldn't repair or replace the gadget, giving him a refund instead and leaving him with only the choices of buying an iPhone abroad (such as in the U.S.) or switching to Android:

Actually, an appeals court in Colombia found that there was nothing wrong with the lower court having entered that preliminary injunction, but lifted the sales and import ban at this stage based on additional information that was on the table (which still doesn't mean that Apple won't ultimately be liable for infringement).

So, as we speak, Apple is absolutely free to sell, import, advertise, repair, or replace 5G iPhones in the South American country. I responded that the problem appears to be purely logistical (manufacturing issues due to a global bottleneck) than legal. José Caparroso replied to me that the case isn't closed despite the appellate decision and that he merely stated the reasons that Apple gave him for refusing to repair his iPhone, and that he doesn't rule out it could be due to a combination of factors. I acknowledged that the litigation is ongoing, but that there can be no doubt about Apple not facing any legal restrictions at the moment and that it now controls its destiny.

Munich I Regional Court schedules four Ericsson v. Apple patent trials for July 2023

It may very well be that the Ericsson v. Apple dispute will effectively be decided in Munich, the world's leading SEP enforcement venue.

The Munich I Regional Court held two Ericsson v. Apple hearings in September, and Ericsson is on the winning track in both cases. One of the cases involves a patent that is not subject to a FRAND licensing commitment, while the other one is about a SEP that the court believes (at this stage) to be infringed by Apple. After that hearing, the court threw out an Apple motion to dismiss that case.

The trials in those two cases were scheduled for April, so the decisions will most likely come down in May or June.

There will be four more Ericsson v. Apple patent trials in Munich in July 2023: two on July 7, and two on July 12. I reached out to the Munich court and obtained the following information:

Two weeks ago, the court had to cancel two hearings on short notice because someone called in sick (case numbers 21 O 1686/22 and 21 O 2922/22, as well as 21 O 1687/22 and 21 O 2925/22; there are two case numbers per case because service of process to foreign defendants takes longer, so the claims against foreign defendants are formally severed from the case, but later everything is put on the same schedule again). The court agreed with the parties not to hold those hearings, but to proceed straight to trial in July.

In two other cases (21 O 1688/22 and 21 O 2926/22, as well as 21 O 1689/22 und 21 O 2927/22), the Munich court did indeed hold hearings last week. I don't know what inclination the court indicated. Those cases, too, will go to trial in July.

On December 21--just two weeks from tomorrow--the Munich court will hold an Ericsson v. Apple FRAND hearing at 1:30 PM local time, discussing similar questions as the ones before the jury in Marshall, TX. I believe Ericsson will win the FRAND decision in Munich, and will try to find out more on or after the 21st.

Friday, December 2, 2022

Over Apple's objection, ITC judge allows Ericsson to defend telecommunications carriers' right to repair mobile base stations: mmWave patent trial starts next week

Apple knows that sooner or later Ericsson will have decisive leverage from some of its numerous patent enforcement actions, and while there will always be a huge asymmetry in exposure, the iPhone maker would like to get at least a little bit of mileage out of its countersuits. That's easier than done, though. Earlier this week, a German court threw out Apple's first patent lawsuit against Ericsson, over a patent that was granted to Tony Fadell, who oversaw the development of the iPod and is one of the co-creators of the iPhone (before he went on to co-found Nest) as I mentioned yesterday.

Apple's pursuit of a U.S. import ban over three mmWave patents raises public interest questions: that's critical network infrastructure, a factor that the United States International Trade Commission (USITC, or just ITC) has to take into account. Apple brought a motion in limine, asking the Administrative Law Judge (ALJ) presiding over the investigation of Apple's countercomplaint to exclude any argument Ericsson might make at next week's trial for a service-and-repair carve-out (should an exclusion order issue at all).

The Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff") actually recommends a superset of a service-and-repair carve-out: the ITC staff says that geographic areas in which Ericsson base stations are already in use should not be affected. In addition, the ITC staff filed a response to Apple's motion in limine and said "Ericsson could have more clearly expressed its intention to request a service-and- repair exemption in its contention interrogatory responses," but "it was reasonably foreseeable that Ericsson would request a service-and-repair exemption." Therefore, the staff also opposed that motion in limine.

On Thursday, ALJ Monica Bhattacharyya ruled on the parties' motions in limine. She denied either of Apple's motions: the one I just mentioned (service and repair), and one targeting Ericsson's defenses to Apple's indirect infringement theories. Those two are somewhat related: as Ericsson explained in one of its filings, the majority of the accused products are actually assembled in the U.S., but certain components are imported. Apple needs an indirect infringement theory in order to obtain an import ban on such components. The fact that Ericsson makes base stations in the U.S. (unlike its main competitors) is another reason for which the ITC may just be the wrong forum for what Apple is trying to accomplish.

Ericsson's only motion in limine has been granted in part. Ericsson said some of Apple's claim construction and validity arguments were untimely.

ALJ Bhattacharyya's decisions are sealed for the time being, but the following screenshot from the ITC docket shows the outcome (click on the image to enlarge):

This is not a good pretrial outcome for Apple.

Starting Monday, the United States District Court for the Eastern District of Texas will hold an Ericsson v. Apple FRAND trial. It is the first situation in this dispute where a settlement would make a lot of sense, but it depends on how far apart the parties' positions are. That's what I also replied to someone on Twitter who wrote he had the feeling the Texas trial wasn't going to take place. The time would be right for a settlement, but sometimes a dispute isn't ripe for settlement because the parties can't bridge their disagreement on the terms. And then those trials go forward and verdicts and rulings come down...

Saturday, November 26, 2022

Solomonic ITC staff says Apple should not win untailored U.S. import ban in case it proves Ericsson's infringement of mmWave patents: carriers and consumers would be impacted

On Wednesday, two Ericsson v. Apple patent infringement hearings in Munich couldn't go forward (someone called in sick). There will be a couple of other such hearings next Wednesday as the court told me, and the court may then discuss with counsel when to hold the two postponed hearings. The most interesting Ericsson v. Apple hearing in Munich is still scheduled for December 21 and will be focused on FRAND.

Meanwhile the United States International Trade Commission (USITC, or just ITC) has uploaded to the agency's electronic docket the public redacted versions (filed with the agency on Wednesday) of Apple's, Ericsson's, and the Office of Unfair Import Investigations' (OUII, commonly referred to as the "ITC staff") prehearing briefs ahead of next month's evidentiary hearing (i.e., trial) in a case in which Apple is seeking a U.S. import ban on Ericsson's base stations over three mmWave-related patents.

On Wednesday it became known that Apple even opposes mobile telecommunications carriers' right to repair. Apple asked Administrative Law Judge (ALJ) Monica Bhattacharyya of the United States International Trade Commission (USITC, or just ITC) to strike Ericsson's argument (which Apple argues was made untimely) that any exclusion order Apple might win should, at minimum, feature a "service and repair" carve-out.

The three pre-hearing briefs shed more light on the parties' argument. Obviously, the private parties take positions at the opposite end of the spectrum:

Apple wants to make maximum impact on Ericsson's business and wants an immediate and untailored import ban:

ITC Investigation No. 337-TA-1302: Apple's prehearing brief

Ericsson argues that mmWave is really critical: "Because mmWave has a shorter geographic range than other technologies, it is targeted to more densely populated areas, such as urban and suburban areas, and to applications that require high density connectivity, where the benefits of high speed and low latency can be maximized for the most users in a smaller geographic area." Should any exclusion order issue nonetheless, it should come with "at least a two-year delay to enforcement of any remedial orders to allow U.S. network operators time to attempt to put viable alternatives into place" and with the carve-out for service and repair that I mentioned further above, as well as a certification provision "to certify to Customs that the components in question were either (a) accused but found to be non-infringing and/or (b) to be used in non-Accused Products":

ITC Investigation No. 337-TA-1302: Ericsson's prehearing brief

It comes as no surprise that the private parties disagree. So what does the ITC staff say? Here's its really interesting brief on public interest and remedy:

ITC Investigation No. 337-TA- 1302: Commission Investigative Staff's Prehearing Brief

The ITC staff recognizes the importance of protecting intellectual property, but "the evidence will demonstrate that an untailored remedy would have troubling adverse effects on competitive conditions among network providers and between different geographic regions of the United States, as well as on U.S. consumers in regions currently served by Ericsson mmWave equipment." The ITC staff does not see that Nokia and Samsung can easily replace those components, and Ericsson explains in its brief that depending on the level of customization, it can take years to mix infrastructure products from different vendors in a given location. Also, the ITC staff notes that a redacted (but apparently significant percentage) of the accused Ericssion based stations "produced in the United States in Lewisville, Texas, using components imported from Estonia"--and, by contrast, "there will be no evidence that any Nokia or Samsung mmWave cellular base station communication equipment (or components thereof) is manufactured in the United States."

The Staff appears to lend significant credence to expert testimony that "three types of consumers [...] will be most affected by a delay in the rollout of mmWave capabilities: 1) those utilizing mmWave 5G in congested areas, such as dense urban cores, stadiums, and airports and transit hubs; 2) those reliant on ultra reliable, low-latency applications, such as Chicago’s Rush University Medical Center; and 3) those relying on fixed wireless access ('FWA')." A footnote explains that "FWA enables network operators to provide a broadband internet experience throughout a customer’s location via a cellular network instead of via fiber, cable satellite, or telephone lines."

Then the ITC staff makes a distinction based on whether a given area is already serviced by Nokia and Samsung base stations or not:

"[T]he potential harm to U.S. consumers runs parallel to the harm to competitive conditions, in that the 45 million consumers in areas currently serviced by Ericsson mmWave equipment would bear the brunt of any loss of, or delay in the development of, mmWave capabilities, while consumers in areas serviced by Nokia and Samsung would be largely unaffected."

The ITC staff then "proposes a carve out that would allow network providers to continue to purchase Ericsson Accused Products for installation in geographic areas where existing Ericsson equipment is already physically installed as of the effective date of the Commission’s remedial orders:"

"Under the Staff’s proposed exemption, Ericsson would not be permitted to sell or service Accused Products for installation in any area currently served by another supplier of mmWave cellular base station communication equipment or in any area that does not already have mmWave 5G service. Within areas already served by Ericsson mmWave equipment, however, the carve out would enable Ericsson to repair or replace existing equipment, to upgrade installed mmWave equipment, to add mmWave equipment to an existing 4G installation using Ericsson equipment, and to in-fill its existing territories with a greater density of mmWave installations. In other words, Ericsson would be able to keep mmWave service within existing 'Ericsson' territories on par with mmWave service offered in other regions of the United States, but would not be allowed to import Accused Products for the purpose of expanding the geographical borders of those territories beyond the status quo."

Therefore, the ITC staff says "any remedy should be tailored to permit Ericsson to continue to sell and service Accused Products for installation in geographic areas where existing Ericsson mmWave equipment is physically installed as of the effective date of the Commission’s remedial orders."

I'm not taking a position on who's right, just on whether certain positions can be taken on a reasonable basis. The ITC staff's recommendation strongly suggests that what Apple wants goes too far. The question is then whether the staff's Solomonic proposal is the answer, or whether some further modifications such as a grace period are needed--and whether the fact that Ericsson actually does make equipment in the U.S. should be given more weight as it is really the ITC's task to protect any domestic industry. I'd rather wait until the carriers (with Verizon having invested particularly heavily in Ericsson equipment according to the ITC staff) file their public interest statements at a subsequent procedural stage. For the time being, however, the ITC staff's approach is a noteworthy development in its own right.

Wednesday, November 23, 2022

Apple now even opposes telecommunications CARRIERS' right to repair in ITC patent case against Ericsson: who cares about critical infrastructure anyway?

Apple's long-standing opposition to consumers' right to repair (which doesn't mix with its statements on climate change) and its reliance on astroturfers in pursuit of that goal are not new. Just yesterday I published a document that proves Apple's deceptive lobbying of the cabinet of the European Commission's Executive Vice President in charge of digital policy (and competition enforcement as everyone knows), Margrethe Vestager, in the name of "small app developers."

It seems that some things just have to get worse before they get better. Apple stops at nothing to avoid paying Ericsson the patent royalties it's seeking, and which are merely consistent with what the United States Court of Appeals for the Fifth Circuit affirmed in the HTC case. And now telecommunications carriers could suffer collateral damage. Has collateral damage been of concern to Apple? At least not in recent history. At times, Apple even seeks to enrich itself from inflicting damage on third parties, such as in the App Tracking Transparency (ATT) context, where Apple's conduct has serious macroeconomic implications.

So, let the following sink in:

Apple has just asked Administrative Law Judge (ALJ) Monica Bhattacharyya of the United States International Trade Commission (USITC, or just ITC) to throw out Ericsson's allegedly "untimely" argument that any exclusion order (U.S. import ban) Apple might win against Ericsson's base stations over its mmWave patents should come with a "service and repair" carve-out. Based on how claim construction went, it can't be ruled out that Apple will prevail on the technical merits of one or more of its three patents-in-suit.

In that investigation, Apple wants to block any imports of Ericsson base stations into the U.S. market. That raises public interest concerns in its own right as it would mean that, after Huawei was forced out for geopolitical reasons, the only one of the traditional Big Three telecommunications network infrastructure makers that would remain in a position to ship base stations to U.S. carriers would be Nokia--and only until that company and Apple start their third patent infringement dispute (after 2009-2012 and 2016-2017), which may very well happen when their current license agreement expires. A "par for the course" argument is difficult to make here because mobile phones and network infrastructure are an apples-to-oranges comparison (at best).

It's too early to take a firm position on whether a hypothetical ITC import ban on Ericsson's base stations would have to be vetoed by the White House. The trial will take place next month, and thereafter it will still take many months before a decision. But the right to repair is a serious issue even at this relatively early stage. It will also be interesting to see what the Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff") thinks; it did not take a position before Apple filed its motion, but reserved the right to take one later.

In its prehearing brief, which Apple's motion quotes, Ericsson said "it would be prejudicial to the customers of the Accused Products, cellular network operators, to prevent them from obtaining necessary parts in order to ensure the proper operation of their investment." Apple argues that "Ericsson should not be allowed to try to blunt the force of the limited exclusion order using theories it failed to disclose in discovery" and sees itself prejudiced because "Apple did not have the chance to test Ericsson’s contentions and theories aimed at denying Apple the appropriate scope of its remedy."

I struggle with "the appropriate scope of its remedy." First, we're talking about critical infrastructure for society, for the economy, for the government, for everyone. Apple should take its Corporate Social Responsibility (CSR) more seriously. Second, those carriers are Apple resellers, i.e., customers (though Apple has all the leverage in the U.S. smartphone market because Android is only gradually more open). Third, even if one supported Apple's request for an import ban to give them leverage and force Ericsson into a settlement, it really, really goes too far to advocate that carriers should even be prevented from repairing the infrastructure they already have in place.

This isn't necessarily a smart strategy. By taking this extreme position, Apple actually creates an even more pressing need for carriers to file public interest statements in Ericsson's support. Apple's market power over those carriers is a problem, but here Apple is going for the jugular and carriers can't take any chances now.

Apple doesn't make it clear in its motion what it would have done differently in discovery if it had anticipated a right-to-repair argument. And at next month's trial, Apple can ask Ericsson's and its own public interest experts questions about this. Even if there was any prejudice (which, again, is far from clear), they could be addressed without negating the right to repair.

Today the Munich I Regional Court will hold two Ericsson v. Apple hearings (not full trials yet), and I'll try to find out afterwards what the court's 21st Civil Chamber's inclination appeared to be. There will be some third parties watching the hearings.

Here's Apple's motion:

ITC Investigation No. 337-TA-1302: Apple's Motion in Limine No. 2 to Exclude Argument, Evidence, or Testimony Regarding Ericsson's Untimely Arguments Seeking to Narrow the Scope of a Limited Exclusion Order And to Strike the Corresponding Section in Ericsson's Prehearing Brief

Tuesday, November 8, 2022

ITC judge orders Apple (in dispute with Ericsson) to disclose what it pays to ACT | The App Association, describe relationship; another ITC judge construes some claim terms in Apple's countersuit over mmWave patents

This post discusses recent orders by the Administrative Law Judges (ALJs) of the United States International Trade Commission (USITC, or just ITC) who preside over the investigations of (a) one of Ericsson's three ITC complaints against Apple and (b) Apple's sole countercomplaint. In the former case, a discovery dispute has been resolved; in the latter, a Markman (claim construction) order has been entered (direct link).

Apple must "explain its historic and current relationship with" ACT, FSA, and disclose direct or indirect financial contributions over the last five years

Fortunately, this fall is not a good season for astroturfing.

First it became known that ACT | The App Association, which falsely claims to represent the interests of small app developers (and IoT product makers), receives the vast majority of its funding from Apple. It's not an app developers' association, but an Apple Association. It's the most cynical and appalling type of astroturfing when an organization claims to represent the victims of a large corporations' abuse of market power.

Then several influential Members of the European Parliament formally complained to the European Commission over violations of transparency rules by other organizations, including the so-called Computer & Communications Industry Association, which is actually a Cash & Carry Industry Association that Apple has recently joined.

And on October 24, ALJ Bryan F. Moore handed down a discovery order in the investigation of Ericsson's SEP complaint against Apple. The public redacted version became available only yesterday:

ITC Inv. No. 337-TA-1299, Order No. 18: Granting in Part Complainants' Motion to Compel and Commission Investigate Staff's Motion to Compel

This is the key passage:

Regarding the Fair Standards Alliance and ACT | The App Association, Apple shall explain its historic and current relationship with these organizations, and state the amount Apple pays or otherwise describe its “direct or indirect financial contributions or payments . . . over the last five years.” Apple shall further supplement its interrogatory response to respond to parts c-f of Interrogatory No. 131 regarding these parties. Apple shall further provide any non-privileged documents or communications exchanged between Apple, or Apple’s attorneys, and ACT | The App Association, the Fair Standards Alliance regarding the submitted public interest statements. Apple shall produce these documents and supplement these responses by October 31, 2022.

Interestingly, ALJ Moore found that Apple had reasonably complied with discovery requests regarding some other parties supporting its public interest arguments. He also determined that Apple did not have to make disclosures regarding parties it asked to file public interest statements, but who declined to do so. It's just with respect to ACT and the FSA that Apple was stonewalling.

It's actually fair and important to make a fundamental distinction between those two organizations. FSA is what it is, and doesn't pretend to be anything else, while ACT | The App(le) Association is an astroturfing operation.

Not only did Apple refuse to answer Ericsson's questions but even the Office of Unfair Import Investigations (OUII, commonly referred to as the "ITC staff") had to bring a motion to compel Apple. The Staff reinforced its motion after Apple stated its opposition.

Apple had something to hide with respect to ACT, but by now, thanks to the Bloomberg article that revealed where ACT's funding actually comes from, the facts are clear. The ITC should ignore ACT's public interest statement in support of Apple. If anything, Apple could be sanctioned for misleading the agency by claiming that small app developers are concerned (ideally, another U.S. government agency would also look into how ACT benefited from the Paycheck Protection Program that was intended to keep small businesses afloat).

Mixed results for Apple and Ericsson: claim construction order in the investigation of Apple's countercomplaint

Apple is countersuing Ericsson in the ITC over three mmWave patents. ALJ Monica Bhattacharyya is presiding over that investigation (no. 337-TA-1302).

Yesterday she handed down her Markman (claim construction) order:

ITC Inv. No. 337-TA-1302, Order No. 18: Construing Certain Terms of the Asserted Claims of the Patents at Issue

In some context she agrees with Apple, in another with Ericsson. And she leaves various questions open with a view to the evidentiary hearing, which will take place in a month (December 5-9, 2022). With a view to who will win or lose, the order seems more inconclusive than other claim construction orders I've seen.

Last time I checked, Ericsson wasn't challenging those three mmWave patents through IPR (inter partes review) petitions with the PTAB, while Apple has filed dozens of PTAB petitions against Ericsson patents, ten of which have failed.

Apple is also countersuing Ericsson in Germany. The Mannheim Regional Court--which will conduct an Ericsson v. Apple SEP trial today (about six hours after this post)--heard the first one of Apple's countersuits last month, and it doesn't look like Apple will gain leverage from that one. It's not easy for Apple to find patents that Ericsson can be plausibly alleged to infringe, and there's a huge discrepcancy between the parties' exposure to patent infringement lawsuits simply due to unit volumes.

Saturday, February 19, 2022

ITC institutes investigation of Apple's allegations that Ericsson's 5G base stations infringe mmWave patents, after deciding to investigate three Ericsson complaints

The patent tit-for-tat between Apple and Ericsson continues. One day after the United States International Trade Commission ("USITC" or just "ITC") instituted three investigations further to Ericsson v. Apple complaints (and Judge Gilstrap set a case schedule for the Apple v. Ericsson FRAND countersuit pending in Texas), the ITC on Friday gave notice (PDF) of the anticipated institution of investigation no. 337-TA-1302 over Certain cellular base station communication equipment, components thereof, and products containing same. In that case, Apple is seeking a U.S. import ban on Ericsson mobile infrastructure products, asserting three mmWave patents that have not been declared essential to any industry standard.

Like in the three Ericsson v. Apple cases (investigations no. 337-TA-1299, -1300, and -1301), the task of building a factual record on public-interest considerations has been delegated to the Administrative Law Judge (ALJ) to whom the case will be assigned (presumably on Monday).

Also yesterday, the ITC's Chief ALJ Clark S. Cheney assigned the investigation of Ericsson's third complaint against Apple to ALJ Cameron R. Elliot. While ALJ Elliot is relatively new to the ITC (he joined less than three years ago), he actually has an impressive intellectual property background, and studied physics before attending law school. His combination of technical and legal skills was apparently recognized by the DOJ, which hired him as a trial attorney on its IP team (Commercial Litigation Branch). Judge Elliot also practiced law at what was (until its orderly dissolution in 2010) "one of the oldest intellectual property boutique firms in the United States" according to IP Watchdog: Darby & Darby.

The next steps for the ITC related to the Ericsson-Apple 5G dispute are now the assignment of Apple's case to an ALJ, and the ALJs will shortly set their procedural schedules, presumably with target dates about 16-18 months off. The respondents will soon have to answer to the complaints. And I consider it likely that Apple will request the consolidation of two or three of the investigations of Ericsson's complaints into a single one, though Ericsson's cases are clearly distinct with respect to the technologies at issue and overlap only with respect to some (but not all) of the accused products.

The ITC is sometimes referred to as a "protectionist agency" (just one example: this Ropes & Gray podcast transcript). But that does not mean U.S. companies are favored. What a complainant does have to meet is a domestic industry requirement. It's all about protecting American jobs--and the iPhone is not made in the United States. It's designed and engineered there, for the most part at least, but not manufactured. A domestic industry can also consist in licensing activities an alternative to manufacturing. However, even in that regard Apple is not an ideal Section 337 complainant: everyone in the industry knows that Apple does not really engage in outbound licensing. Itdoes cross-license, from time to time, in order to bring down its royalty payments on the bottom line. Apple is not known for an mmWave patent licensing program in the United States, let's put it that way.

Apple's ITC complaint seeks to satisfy the technical prong of the domestic industry requirement by claiming with confidential claim charts) that various iPhones (from the iPhone 12 and 13 generations) "practice one or more claims of the Asserted Patents." For the economic prong of the domestic industry requirement, Apple's argument comes down to emplying engineers and other staff in America, plus having an ecosystem. Where Apple claims that it "supports more than 2.7 million jobs across the United States," it points to three types of job creation: direct employment; spending with suppliers (which Apple is known to squeeze really brutally) and manufacturers; and "developer jobs in the thriving iOS app economy." The third part is typical: developers are useful pawns in the chess games Apple plays, but Apple's treatment of iOS app developers is extremely controversial, and actually has been condemned as abusive by Capitol Hill lawmakers (who are working on the Open App Markets Act to right that wrong), the state AGs of 35 U.S. states, and even the Biden DOJ is supporting Epic Games against Apple.

Being an app developer myself, I wish Apple could just follow Microsoft's example, in which case Apple would be in a stronger position to take some credit for the creation of "developer jobs." There's an enormous asymmetry with Apple dictatorially imposing and enforcing its rules and developers being at Apple's mercy. As Horacio Gutierrez, testifying in the United States Senate for Spotify at the time, accurately said, developers have to succeed despite Apple's abusive practices.

When Apple talks about its impact on the U.S. economy, it obviously doesn't mention the enormous damage its ATT policy has done to companies like Meta (Facebook) and Snapchat (look at what happened to those companies' stock prices when the effects of ATT began to show), and countless smaller and lesser-known ones because of the power and money grab that is its prextual privacy campaign. Apple is increasingly isolated and has made itself so many enemies. I'm not denying the great and positive things Apple used to do, and may still do going forward. With respect to its bottom-line impact on the economy at large, Apple is not a blessing, but--with its current practices--closer to a curse.

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Thursday, January 20, 2022

Apple countersues Ericsson, seeks U.S. import ban against mobile base stations, and proposes that both parties withdraw all patent infringement actions, let Texas court set license fee

The flurry of Ericsson-Apple filings with the United States International Trade Commission (USITC, or just ITC), a U.S. trade agency with the quasi-judicial power to U.S. import bans, continued yesterday. For information on Ericsson's three compaints against Apple, may I refer you to my most recent post on the dispute, which contains a hierarchical overview of the seven U.S. cases I had previously discovered (one FRAND action by either party, two federal lawsuits by Ericsson, and three ITC complaints by Erisson).

As I wrote, it was a given that Apple would countersue, though the wide discrepancy in the parties' exposure to patent assertions makes it unlikely that Apple can gain decisive leverage that way. And indeed, Apple has now also brought a request for a U.S. import ban against Ericsson's mobile infrastructure products, asserting three mmWave-related patents (from two families) in the following ITC complaint (this post continues below the document):

22-01-19 Apple v. Ericsson ... by Florian Mueller

The title of the complaint (which was filed by Fish & Richardson) is In the Matter of Certain Cellular Base Station Communication Equipment, Components Thereof, and Products Containing Same (complaint no. 337-TA-3599). These are the asserted patents, two of which are from the same family and all three of which are related to millimeter wave (mmWave) technology:

  1. U.S. Patent No. 9,882,282 on "wireless charging and communications systems with dual-frequency patch antennas"

  2. U.S. Patent No. 10,263,340 (same title, same family as '282 patent)

  3. U.S. Patent No. 9,667,290 on an "electronic device with millimeter wave antennas"

Apple has not previously asserted these patents in litigation. Since the days of "thermonuclear war" on Android, Apple has been purely defensive. Presumably Apple will also bring or has already brought a companion complaint against Ericsson in federal court, but I haven't found one on PACER yet. Also, I would expect Apple to countersue in some of the foreign jurisdictions (particularly in Europe) in which Ericsson has already filed infringement actions.

Let's take a look now at the following passage from Apple's ITC complaint against Ericsson:

"[Ericsson] recently filed a series of lawsuits and legal actions around the world, despite the pending Apple Inc. v. Telefonaktiebolaget LM Ericsson, No. 2:21-cv-00460-JRG (E.D. Tex. Dec. 17, 2021) matter that provides a global resolution of the parties’ dispute, which Apple was under the impression that Ericsson accepted. [Ericsson's] actions in the United States and around the world demonstrate that they do not want a Court setting fair, reasonable, and non-discriminatory ('FRAND') terms for their patents. By way of such actions, [the Ericsson entities] are improperly using their purported standard essential patents ('SEPs') and non-standard essential patents ('NEPs') as ammunition through injunctions to coerce Apple to take an unfair, unreasonable, and discriminatory license to their purported SEPs. To the extent [the Ericsson entities] are willing to withdraw all of their lawsuits and legal actions, Apple is willing to do the same. However, if [the Ericsson entities] are not willing to agree to having the Texas court determine the FRAND terms for a cross license, Apple is forced to respond to Respondents’ infringement of Apple’s patents." (emphasis added)

This shows that Apple does not expect to gain much leverage from a tit-for-tat in courts around the globe. There are two logical flaws here:

  1. At the most, the parties could withdraw all of their SEP assertions in favor of a FRAND determination by a court (or through alternative dispute resolution, typically arbitration)--but not their non-SEP cases. That is because non-SEPs are not subject to FRAND licensing obligations. Apple itself asserted lots of non-SEPs against Android device maker during the aforementioned thermonuclear war and was not only seeking but occasionally also obtained injunctions in the U.S. and Germany. Apple insisted that it had the right to pursue and enforce injunctive relief over non-SEPs. The value of non-SEPs is established--unless parties voluntarily agree on the terms or on a valuation mechanism they submit to an arbitration panel--by enforcing those patents and seeing who gains how much leverage. Practically, it's a question of the cost of having to comply with injunctions (be it by means of a workaround, which costs money and may make products less attractive to purchasers, or by discontinuing the sale of particular products in particular markets).

    Ericsson is entitled to a FRAND rate for its SEPs plus whatever value, FRAND or not, its non-SEPs prove to have when they get asserted (of course, with some adjustment for Ericsson being licensed to Apple's patents, where again SEPs are subject to FRAND and non-SEPs are worth whatever they are worth in commercial terms).

  2. Apple describes its own Texas action as the best form of dispute resolution and says it "was under the impression that Ericsson accepted." However, Ericssopn had previously brought its own Texas case, which Apple now wants dismissed. If Apple wants a FRAND determination in that district, a far more constructive alternative to a motion to dismiss would have been to counterclaim in the action Ericsson had already brought. In light of that, I think it's fair (and more accurate than Apple's ITC complaint) to say that the parties not only disagree on commercial terms but also on the procedural path, and so far Apple has not convinced me through its conduct that it is not simply engaging in hold-out (or "reverse hold-up" as Ericsson put it in one of its complaints).

Nevertheless, it is interesting--if not astounding--that Apple would like the global rate to be set in the Eastern District of Texas:

At first sight it looks like Apple is prepared to jump into the Eastern District of Texas frying pan to avoid the overseas injunction fire.

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