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Nokia privateer Conversant can’t enforce SEP against standards-compliant Apple products due to Nokia’s late disclosure: inequitable conduct

Conversant, previously known under other names such as Core Wireless, may very well be the wireless SEP privateer with the highest failure rate in litigation. And it’s probably because Nokia sold them weak patents, more so than I would attribute this lack of success to the work performed by Conversant’s litigators.

Last month Conversant lost a French appeal, and it became known that LG had offered Conversant less than 1% of what it wanted. Conversant has also been grossly unsuccessful against Apple in the U.S., with dozens of patent assertions having failed. They’re now increasingly looking to the UK as a last resort, attempting to leverage the England & Wales High Court’s and UK Court of Appeal’s decisions in favor of global portfolio rate-setting–but Huawei and ZTE may get that precedent overturned as the UK Supreme Court granted their petitions to appeal (the UK equivalent of a cert petition) last month.

Conversant’s latest failure in its U.S. litigation campaign against Apple reflects highly unfavorably on Nokia’s behavior as a participant in standard-setting processes. On Friday (May 10, 2019), U.S. Magistrate Judge Nathanael M. Cousins granted–on remand from the Federal Circuit–an Apple motion to hold U.S. Patent No. 6,477,151 on “packet radio telephone services” unenforceable against Apple products practicing the (fairly old) GPRS (General Packet Radio Service) data communications standard related to GSM (this post continues below the document):

19-05-10 Order Holding Late… by on Scribd

Judge Cousins is in charge of discovery and similar matters in the FTC v. Qualcomm antitrust case Judge Lucy H. Koh is presiding over. Here, however, he’s himself presiding over a Conversant v. Apple case, and there is a Qualcomm connection because of an old Qualcomm v. Broadcom case in which “Qualcomm’s manipulation of its intellectual property made its nondisclosure [of a patent to the standard-setting organization until after its litigation against Broadcom began] particularly exceptional and therefore egregious.”

Judge Cousins’s order analyzes Nokia’s misconduct with respect to the ‘151 patent for the purpose of determining (as the Federal Circuit instructed him to do on remand) “whether Nokia or [Conversant] inequitably benefited from Nokia’s failure to disclose [the ‘151 patent to ETSI on a timely basis], or whether Nokia’s conduct was sufficiently egregious to justify finding implied waiver without regard to any benefit that Nokia or [Conversant] may have obtained as a result of that misconduct.” In other words, the question here is whether Nokia’s inequitable conduct was just inequitable conduct or whether it was as outrageous as what Qualcomm did back in the day. Of course, Conversant (and, by extension, Nokia) would have preferred for the court not to identify any wrongdoing, but that wasn’t realistically going to happen based on what the Federal Circuit had already stated in its decision to remand. For an example, the Federal Circuit had written that Nokia “had a duty to disclose its IPR no later than June 1998 [and] its later disclosure was clearly untimely and not sufficient to cure the earlier breach of its duty.”

While the fact that Nokia disclosed its IPR to ETSI (the leading wireless standard-setting organization) four years later than it actually had to gave Judge Cousins pause, but ultimately he found that Nokia had not done much: it basically had just failed to disclose in time, as opposed to Qualcomm, which in Judge Cousins’s words had “conspired to ‘extend’ its pre-existing patents, which, in the words of its own employees, covered ‘almost exclusively’ different material.”

All in all, Nokia’s “misconduct does not clearly and convincingly rise to the level of ‘affirmative egregious misconduct’ required,” but misconduct it is, and the court then does find that “Nokia and Conversant have obtained …] an unfair competitive advantage” in the sense of Conversant (and, by extension, Nokia) now trying to leverage the fact that the patent is standard-essential, which it might never have become if ETSI, prior to adopting the related technique, had been aware of the existence of this patent.

Judge Cousins wasn’t persuaded by Conversant’s argument that its FRAND licensing commitment rules out inequitable benefits.

The sanction here is that the United States District Court for the Northern District of California has granted Apple’s motion for unenforceability on the basis of an implied waiver that now precludes Conversant from enforcing the ‘151 patents and any derivatives thereof against products practicing the GPRS standard, including the Apple products accused in that particular case.

Conversant can appeal this order, but since the Federal Circuit had already taken some pretty clear positions in its decision to remand the case to San Jose, it’s not likely that the order granting Apple’s motion would be reversed.

This will hopefully serve to discourage companies participating in standard-setting from similar misconduct. It’s absolutely key that those sitting at the standard-development make timely disclosures of any intellectual property rights they hold that might read on certain techniques before those are formally adopted.

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View the original article here: Nokia privateer Conversant can’t enforce SEP against standards-compliant Apple products due to Nokia’s late disclosure: inequitable conduct

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