As we noted last week, various non-parties have begun submitting statements on the public interest in connection with ITC Inv. No. 337-TA-800, In the Matter of Certain Wireless Devices With 3G Capabilities and Components Thereof. Over the last several days, both the complainant InterDigital and each of the respondents (Nokia, Huawei, and ZTE) have submitted their own comments on the public interest considerations.
- 337-TA-800 InterDigital Comments on the Public Interest
- 337-TA-800 Nokia Comments on the Public Interest
- 337-TA-800 Huawei Comments on the Public Interest
- 337-TA-800 ZTE Comments on the Public Interest
With this investigation being the first chance for the Commission to consider SEP/FRAND issues since the USTR’s veto of the 337-TA-794 exclusion order, InterDigital asserts that the -800 investigation “presents an ideal opportunity for the Commission to provide additional guidance on the issue of unwilling licensees and reverse hold-up in the context of FRAND licensing.
One might expect that InterDigital would ask the Commission to further develop the FRAND-related record and make specific factual findings, given the content of the USTR veto letter in the -794 investigation — but this is far from the case. Instead, InterDigital argues that the record here is well-developed, and that the parties have specifically briefed the “unwilling licensee” issue. InterDigital argues that the evidence demonstrates that Nokia, Huawei, and ZTE refused to pay what the ALJ determined to be FRAND royalties, and took alleged “unreasonable positions” in FRAND licensing negotiations. According to InterDigital, all of this shows that — in the event the Commission overturns the ALJ’s findings on infringement and/or validity – an exclusion order is appropriate in this case. (InterDigital also argues that U.S. Patent No. 7,616,970 — the sole patent that the ALJ determined was infringed, but was also invalid — is “not even arguably essential” to any standard practiced by the accused products, and therefore no FRAND obligations should stand in the way of an exclusion order issuing, at least for that patent.)
Not surprisingly, Nokia and Huawei both disagree that the evidence satisfies the standard set forth by the USTR in the -794 case, as well as InterDigital’s claim that the ’970 patent is not essential. Nokia argues that the ’970 patent was declared as essential to the ETSI GERAN Standard, and simply adds wireless networking functionality to other functionality that is required by the WCDMA wireless standard — making it a standard-essential patent “under present definitions of ‘essential’.” (For support, Nokia cites the recent In re Innovatio decision) — although, as InterDigital points out, the Innovatio decision evaluated “essentiality” and the scope of RAND obligations under the IEEE patent policy, as opposed to the ETSI patent policy apparently at issue here.)
Nokia asserts that the ALJ’s FRAND analysis was no more detailed than the analysis in the -794 case, arguing that the ALJ here “simply ruling as a matter of law that the patent owner only had an obligation to negotiate in good faith.” Nokia also claims that the ALJ made no factual finding that Nokia has refused to take a FRAND license, and that the record “compels the opposite conclusion” — that Nokia is a willing licensee, and no exclusion order should issue against it based on infringement of a FRAND-encumbered patent.
For its part, Huawei echoes many of the same arguments set out by Nokia — that the FRAND-related record is not detailed enough to satisfy the concerns set forth in the USTR’s -794 letter, and that Huawei is a willing licensee (as allegedly demonstrated, in part, by its efforts in Delaware district court to receive a FRAND determination for InterDigital’s portfolio). Huawei also argues that if the Commission were to fully evaluate the propriety of an exclusion order, it would “be obligated to undertake further proceedings to develop a comprehensive record and to permit the parties to set forth their views on how the principles in the [DOJ/USPTO] Policy Statement should be applied to that record” — i.e., Huawei believes that before deciding whether to issue an exclusion order, the ITC should order more detailed briefing on FRAND issues.
[UPDATE] Since we originally posted this, the public version of ZTE’s submission has become available. ZTE’s makes arguments similar to those made by Nokia and Huawei — that there has been no judicially-determined FRAND rate, that the ALJ simply concluded (ZTE alleges erroneously) that InterDigital negotiated in good faith, and that ZTE has not been deemed an “unwilling licensee.” ZTE claims that on the contrary and under the USTR’s framework, ZTE “cannot be considered an unwilling licensee” because it has sought and continues to seek a FRAND determination in district court in Delaware. As such, ZTE argues that if the Commission reverses the ALJ and finds a violation of Section 337, it should decline to issue exclusionary relief. [/UPDATE]
The Commission will make a decision on whether to review the ALJ’s ID by the end of the month, so stay tuned.