Ericsson, a global provider of telecoms technology and a major contributor to telecoms standards in the good old days of 2G and 3G standards, held numerous essential patents for those standards which they licensed to most leading suppliers of telecoms services in relation to infrastructure and handsets. Ericsson had tried, without success, to agree licence terms with mobile device business TCT, in regard to its multi-mode handsets which used both the 2G and 3G standards. TCT then sought revocation of the United Kingdom designations of three of Ericsson's patents; Ericsson counterclaimed, perhaps predictably, that all TCT's multi-mode handsets had infringed them.
Regarding its three patent infringement claims, Ericsson had sought admissions by TCT, on an integer-by-integer basis as to whether it admitted that each integer was fulfilled by certain of TCT's allegedly infringing handsets, since Ericsson considered that all three patents were essential to the 3G standard. TCT refused, saying that it had already provided an integer-by-integer response to Ericsson and repeating that those patents were invalid. In any event, said TCT, as a sales and marketing company it was not in a position to know beyond a simple level what functionality was in the phones' chipsets or to admit the presence of more than a small number of the integers. What's more, since their suppliers had not responded to TCT's request for what was confidential information, TCT could neither admit nor deny infringement -- and certainly couldn't produce a product or process description. TCT admitted the acts complained of by Ericsson, but put Ericsson to proof of infringement and did not admit that the patents were necessarily infringed by products compliant with the standard. Nor did TCT concede that every part of the standard was necessarily implemented in a 2G or 3G device compliant with the standard in a way that was described in the standard.
Ericsson was not happy about this, objecting that TCT's admissions to date were inadequate, that more was needed to focus the issues at an early stage, ahead of a trial that was scheduled to take place in 14 months' time and to enable it to identify any procedural steps required. Surely TCT could admit more than it had done, since no special knowledge was needed to admit basic elements of the claims as it had made the handsets, purchasing appropriate chipsets after considering their specifications. The chipset manufacturers themselves must have published technical information for marketing purposes, or how would TCT have known which ones to chose? TCT should therefore identify areas where it really and truly could not provide disclosure, so that applications for third-party disclosure might be made. TCT responded that Ericsson's belief that certain integers must be present in the chipsets was based on a belief that the standard required them, and not because their presence could be determined by examination of the products: expert evidence was required to see whether its phones performed by means of the standard or by different means.
Faced with Ericsson's application for an order requiring TCT to provide a statement of case on infringement of Ericsson's essential patents, Norris J decided as follows:
* It was necessary to have a measure of clarity regarding all the issues relating to pre-trial disclosure. If these issues were only to be defined when the trial judge received the parties' expert reports, all other steps taken before that time would be made in uncertainty as to what they were. This principle was the same both in patent litigation and in any other litigation.
* The existing non-admissions should be refined, giving TCT four and a half months in which to respond to Ericsson's statement of case on infringement by making any relevant admissions or denials, with any denial being accompanied by a positive case.
*TCT's non-admissions would have to identify whether they arose from (i) ignorance of the functioning of the chipsets by reference to each of the claimant's integers, (ii) a point of construction of the patent claims, (iii) a point of construction of the meaning of the standard, or finally (iv) an assertion that the integer was not necessary for the implementation of the standard or that there was an alternative method for producing the result mandated by the standard.
* If TCT failed to comply with this requirement, it would not be permitted (i) to adduce evidence of fact at trial as to the working of the chipsets or as to whether any of the integers identified in Ericsson's case were necessary for the implementation of the standard, (ii) to advance any point of construction, and (iii) to put to Ericsson's expert witnesses any point as to the implementation of the standard unless as to the functioning of the chipset, the manner of implementation of the standard, or the point of construction so referred to unless identified in the documents to be served.
* The measures specified above would clarify the scope of the argument, while also allowing applications for third-party disclosure and the preparation by witnesses of fact and experts. TCT would then have a full opportunity to exercise its own case in response and would not need to revisit it and seek to add expert evidence on different issues shortly before trial.
* However, there had to be a degree of flexibility to address new points before trial, and Ericsson should equally be held to comply with the need to clarify. The court would grant Ericsson's application, confining the order to TCT's case in defence to the infringement counterclaim.
Says the IPKat, while this may all seem very complex and convoluted, especially such a long way ahead of the full trial, this is a jolly good way of refining the issues and making sure they stay refined, in order to smooth the path to a trial of the issues that really matter -- validity and infringement -- in the most direct and meaningful manner. Merpel adds: the bits that go into a legal dispute before the full trial of the substantive issues are like the bits that go inside a handset. Most people never see them and have no idea of their significance, but they provide the meaningful functionality.
I've seen situations develop before EPO oral proceedings where inventive step/sufficiency arguments needed to be adapted depending on what the Board would find on novelty. Clearly the arguments will be different for a large claim scope versus a small claim scope. In one case the Board sabotaged all the careful planning by asking for all arguments in one go.
ReplyDeleteSo in response to the last paragraph of this post I would say the 'path' can change markedly on the day, and not 'refining' the issues beforehand can in some cases be more just.
Lawtel should give all IPKat readers free access for 3 days so we can read the decision. That would be great for their marketing.
ReplyDeleteI'm not an expert on litigation, but this does seem a bit unfair to TCT. Ericsson seem to be saying - our patents may be invalid as they stand, but surely we can get you for something, can you please tell us what we can get you for, even if you have to find it out off someone else?
ReplyDeleteIncidentally, it would seem normal, where infringement is claimed, to counter-claim invalidity, as this would provide a defence. Is it that normal the other way round? I can't see why Ericsson have to claim infringement as part of the same action - it seems more a case of "waking the dragon".
I also have some sympathy for TCT, having been in a similar situation some years ago when I was in industrial practice. We had a patent asserted against one of our telecoms products which used a chip bought in from an overseas supplier. The problem was that users of chips are normally only interested in them as "Black Boxes" that produce specified outputs in response to specified inputs, need a certain supply voltage, draw a specified current, and are useable over a specified temperature range. Manufacturers can and do change the internal design of chips (eg to reduce current consumption or to use a different manufacturing technology) without affecting its "black box" technical function.
ReplyDeleteIn our case the manufacturer declined to give details of the chip's inner workings (commercial confidentiality), but one of out engineers did send us a copy of a technical journal that described its operation. On that basis, we decided there was no infringement. Unfortunately it turned out that the original article's figures were in colour, and the photocopier used by the engineer had restricted colour sensitivity and had omitted some key signal paths! The original Xerox copiers were particularly bad in this respect, being completely blind to blue of any intensity, but it is not a problem with modern copiers.