IPCom v HTC in Patents Court: judge hands first round to HTC

This Kat does not really like electronics cases, being a feline of chemical inclination, so he is enormously grateful to his colleague Daniel Richards for penning this piece about the recent decision relating to a now highly-litigated IPCom patent.  Over to Daniel:

This Kat bears belated news of the most recent episode in the IPCom saga in the form of a decision from the Patents Court decision, handed down on 24 April 2015, in IPCom v HTC [IPCOM GmbH & Co Kg v HTC Europe Co Ltd & Ors [2015] EWHC 1034 (Pat) (24 April 2015)].

The decision relates to the European Patent (UK) 1 841 268 belonging to IPCom; a divisional of the patent EP 1 186 189. Both of these patents have been extensively litigated in a complex tussle between IPCom and Nokia, with some coverage in previous Kat posts: Parent – Patents Court – January 2010; Appeal – January 2011; Divisional – Patents Court – June 2011; Appeal – May 2012.

This judgement, however, is concerned with the litigation between IPCom and HTC, which began with IPCom suing HTC for infringement the day after Floyd J decided the divisional patent (‘268) was valid and infringed in the Nokia case [2011] EWHC 1470 (Pat). HTC counterclaimed that the patent was invalid, and also raised non-technical defences, similarly to Nokia, on issues including licensing. HTC later agreed to hold a separate non-technical “FRAND” trial together with Nokia to determine licensing terms and resolve questions of damages.

Meanwhile, the “technical trial” (relating to issues of infringement, validity and essentiality) was initially scheduled for February 2013. However, in May 2012 the presiding judge (Roth J) granted HTC a stay of the trial until an EPO Technical Board of Appeal (TBA) decision was reached on the same patent (‘268), and wrote to the TBA himself to request that the appeal be accelerated. At opposition proceedings in May 2012 at the EPO, the patent was found invalid and a proposed amendment was refused. IPCom appealed. During the appeal hearing in March 2013, amended claims were accepted by the TBA, and the case was remitted to the Opposition Division (OD).

Following the TBA decision, HTC and Nokia applied to adjourn the FRAND trial which was then vacated in May 2013. HTC also applied to adjourn the technical trial (which was scheduled for December 2013) until a final decision at the EPO was reached since case was back in the hands of the OD and could be appealed further. This further stay was denied by Roth J, with his decision affirmed by the Court of Appeal in November 2013. The trial was subsequently re-listed for March 2015.

Now that the entangled ball of procedural twine has been unpicked to some degree, we can turn to the technical trial and recent judgement itself. IPCom applied to amend the EP(UK) patent claims in line with those allowed by the European TBA, thus undoing some of the analysis by Floyd J ([2011] EWHC 1470) and the Court of Appeal ([2012] EWCA Civ 567), and affecting the issues put before Birss J in this trial.

As summarised previously, the subject matter of the patent relates to regulating access to a UMTS mobile radio network, with prioritisation of devices based on their user class encoded upon their SIM card. Those devices not prioritised by their user class could still gain access to the network through a ‘lottery’, with a level of controllability as to how difficult the lottery is to ‘win’.

Birss J incorporated large amounts of the previous Floyd J analysis where applicable e.g. for setting out the common general knowledge and explaining in detail the two embodiments described in the patent specification.

In addition to construing the amended claim and judging whether to permit the amendment, Birss J now had to decide whether the HTC devices (in various classes) infringe, and whether the patent is essential to the UMTS standard.

For those who relish in the technical facets of a telecoms scuffle, there is again plenty of material relating to the UMTS system for gleeful reading. A large part of the trial focusses on “bit patterns” due to the amendment introducing that “access authorization data are transmitted as a bit pattern”.

Acceptability of the Amendment & Validity

Although HTC argued that “as a bit pattern” is unclear as it is an obscure phrase and was being argued to cover more than a single bit pattern being transmitted, Birss J concluded that the claim would present no difficulty in understanding for the skilled person. Further, Birss J remarked that the length of the judgement passages and the large amount of argument devoted to the meaning should not be a sign that the claim lacks clarity, nor should the fact that an infringement decision may be “tricky” [129]. The amendment was found allowable, and the patent valid.

Infringement

After more discussion on claim language, and technical comparisons between the claimed invention and the workings of the UMTS system (those still relishing will enjoy the discussions of conceptual bits), Birss J decided that class A devices (UMTS) do not infringe. He was not satisfied that access authorisation data in UMTS is transmitted as a bit pattern.

Birss J also found that HTC device classes B to G do not infringe. These were the same product classes of Nokia’s that were found not to infringe by Floyd J, confirmed in the previous appeal proceedings.

Essentiality of the Patent (to the UMTS standard)

As simply put by Birss J himself:

121. “Since I have found the class A phones do not infringe, the patent is not essential to the UMTS standard and I should not grant a declaration of essentiality.”

With the baton having now been passed from Floyd J to Birss J, following Floyd’s appointment as Lord Justice of the Court of Appeal in April 2013, it will be interesting to see how many more twists and turns this contest will take in the chapters ahead.