Interdigital sues Motorola-owner Lenovo over 4G patents

Mobile and video tech developer Interdigital has filed patent infringement action against Lenovo in the UK because they can’t agree a price for use of its 4G patents.

Perhaps wary of being labelled a patent troll, Interdigital is keen to stress that this is the first patent infringement litigation it has initiated for six years. It claims its hand has been forced after the failure of almost a decade of negotiation with Lenovo, which makes Motorola phones as well as its own-branded devices.

Interdigital reckons it owns around 10% of the standards-essential patents in both 3G and 4G technology, which means it gets a piece of the action whenever someone sells a device that uses them. How much users of these patents have to pay is usually determined on a FRAND (fair, reasonable and non-discriminatory) basis, but apparently Lenovo won’t even accept third party FRAND arbitration.

Patent litigation canned comments are among the most formulaic, but let’s have a look anyway. “Having product companies take fair licenses to patented technologies flowing out of fundamental research is absolutely essential for the long-term success of worldwide standards like 4G and 5G,” said William Merritt, CEO of Interdigital.

“InterDigital has a long history of valuable technology innovation and patient, good faith negotiation and fair licensing practices, including our willingness to allow the economic terms of a FRAND license to be determined via binding neutral arbitration. We also have longstanding licensing relationships with many of the top companies in the mobile space, including successful license arrangements with Samsung, Apple, LG and Sony, among others.

“For our company, we turn to litigation only when we feel that negotiations are not being carried out in good faith. In bringing this claim in the UK High Court of Justice, which has a history of examining standards-essential patent issues, we are hopeful for a speedy resolution and a fair license.”

Here are the patents in question:

  • European Patent (UK) 2 363 008 – Enables the efficient control of carrier aggregation in 4G (LTE). In advanced mobile phones, carrier aggregation is key to achieving high data rates.
  • European Patent (UK) 2 557 714 – Supports the use of multiple antennae transmissions in 4G (LTE). The patent enables the use of flexible levels of error protection for reporting by the handset, increasing the reliability of the signaling.
  • European Patent (UK) 2 485 558 – Allows mobile phone users quick and efficient access to 4G (LTE) networks. One of the main technological challenges of developing LTE networks was efficient bandwidth usage for various traffic types such as VoIP, FTP and HTTP. This patent relates to inventions for quickly and efficiently requesting shared uplink resources — for example, reducing lag when requesting a webpage on a smartphone on LTE networks.
  • European Patent (UK) 2 421 318 – Decreases latency during HSUPA transmission by eliminating certain scenarios in HSUPA where scheduling requests may be blocked. A blocked scheduling request may prevent a smartphone from sending data.

Interdigital presumably has others that Lenovo is using in its devices, so either there’s no dispute over the them or Interdigital is focusing on the four juiciest ones, who knows? Patent litigation is pretty arcane stuff at the best of times, but it seems like Lenovo must have really pushed its luck for its relationship with Interdigital to come to this. It’s hard to see how they can justify refusing to go to FRAND arbitration, but there could well be extenuating circumstances that will come to light in due course.

Apple poised to enter the foldy-phone fray

A patent for a new foldable phone has emerged in the United States Patent and Trademark Office, signalling Apple’s entry into the desperate battle for innovation.

Filed on March 28, the document describes an electronic device with ‘bendable or flexible layers’ to move towards creating a new form-factor for the iLeader. Although Apple has been relatively quiet in the foldable arena to date, it wasn’t going to be too long before the smartphone giant made some noise.

While this innovation might have appeared to be a flash-in-the-pan, the idea of a foldable device will keep imaginative engineers busy. The smartphone industry has been crying out for innovation for years, and while the initial introduction of foldable devices might have been a flop, there is certainly potential in the long-run.

Although the underlying theme of Mobile World Congress this year was the gradual movement towards 5G, devices always seem to wrestle some attention in the headlines. The return of Nokia devices snatched it in 2017, while a Matrix style device caught attention last year, but it was foldable devices in Barcelona this February.

samsung foldable phone

Samsung was the first to start talking about the concept last summer, while Huawei certainly attempted to steal some of the thunder. However, it was Samsung who won the race at Mobile World Congress, though the devices have failed to live up to expectations. Reviewers for a host of different media titles reported faults with the devices, leading to numerous delays and recalls. The official release date was supposed to be May, before being pushed back to June, and now it seems there might be further delays with no concrete date in sight.

And while Samsung is facing engineering difficulties, Huawei’s are much more troublesome. A major disruption to its global supply chain, owed to the White House, puts the prospects of many devices in question, most notably due to Google putting its relationship with Huawei on pause.

The foldable devices segment has seemingly ground to a halt, fading from the headlines after claiming its 15 minutes of fame.

And then Apple makes its debut on the folding stage.

If we were being honest with ourselves, this was always going to be nothing more than a minor set back for foldable devices. The smartphone segment has been searching for innovation, with the last genuine disruption coming back in the noughties when Apple ditched the keyboard. A lack of buttons might have disturbed consumers at the beginning, but who would go back to that era now?

The same will be said about foldable phones. Once they enter the market, consumers will find reason to like them. Whether it is multi-taskers on the tube, gamers with more real estate to enjoy, or watching movies on a wider screen. There are usecases now, and new ones will emerge in the coming years. The devices might not intrigue everyone, but there will be a place in the technology.

It also gives smartphone manufacturers a reason to ask consumers to spend more money. Right now, consumers are being asked to spend extortionate amounts on incremental upgrades. Demand has gone down, we have seen this in the smartphone shipment figures each quarter, and the refurbished devices market is growing steadily. Consumers are sick of taking out second mortgages for much the same.

And when Apple decides to showcase its own device, you can pretty much guarantee there will be queues around the corner.

Line at Apple store

Apple is the master of creating and cultivating a brand identity and loyalty amongst its customers. Some might say the closed ecosystem is forced loyalty, but many Apple customers life and breathe the brand. There are a few faltering at the moment, you can see that through Apple’s sliding market share, but they may well be brought back by genuine innovation.

However, what is worth noting is that Apple does make excellent products. It would be unfair to credit all of its success to the marketing department; the engineers do chip in as well.

Most of the time the specs are market leading and the reviews are some of the highest around. Apple’s engineers live through a culture of perfection, dating back to the leadership of Steve Jobs, which is represented through the price of the products and the loyalty of the customers.

One of the issues which all manufacturers will face is the thickness of the phone. Smartphones are increasingly becoming sleek devices, incredibly light and not that intrusive. Foldable devices which we have seen so far certainly do not fit this description. Such is the challenge of doubling the size of the screen, and the power demands which accompany this real estate, these devices are bulky. It might turn off some consumers.

LG has come up with an interesting concept, somewhat of a halfway house, with its latest device, the V50ThinQ 5G. The smartphone can be plugged into a separate module, which includes a second screen. This product effectively has the same advantages of a foldable screen, double the screen space, but the phone can be taken out of the module for everyday use. It isn’t the full-blown promise, but it is an interesting addition.

fznor

Another minor irk for some reviewing the devices is that they are not completely flat. Even when fully extended, there is still a slight bend in the screen. This is really nit-picking, as it won’t impact experience that much, but hyper-techno-enthusiasts will pick on this minor ‘flaw’ in the devices.

Price is another consideration; can Apple create a product which is friendly enough to the wallet? Apple customers are of course used to paying a premium, but foldable devices could take this to a new extreme. Huawei’s first foldable device was priced at $2,600 while Samsung’s was $1,920. Apple is traditionally more expensive than these two, but that would surely be too much to ask of customers.

The second-wave of foldable devices are likely to be cheaper, and soon enough economics of scale in the manufacturing facilities will kick-in. But whether smartphone manufacturers are pricing themselves out of the market remains to be seen with future launches.

Finally, the durability of the devices needs to be questioned. Smartphones are already delicate pieces of kit, just look at the number of cracked screens which are being carried around today, and introducing a fold introduces another weakness for the clumsy and drunken to take advantage of.

These are a challenges Apple engineers will have to consider if it wants to woo its followers back into line.

That is not to say Apple customers blindly follow however. Not only have you got some switching to more price-friendly alternatives, you have to remember how long it took the Apple Watch product line to gain traction. Even now some might say this is a product line which is struggling to live up to the promise.

But Apple is Apple…

If anyone can crack the foldable devices market, Apple would certainly be a sensible bet.

Qualcomm’s share price nosedives after FTC antirust loss

Qualcomm might have some of the most battle-hardened legal experts in the technology world, but it can’t win every fight.

In a ruling coming out of the District Court for the Northern District of California, Judge Lucy Koh has ruled the chipset giant had violated the Federal Trade Commission Act. The judgment could have a significant impact on the Qualcomm business model, with Judge Koh suggesting it used its dominant position to impose excessive licensing fees.

While this certainly won’t be the end of Qualcomm dominance in the chipset market, the firm houses too much competence and smarts, it might have a drastic impact on the spreadsheets. And investors seem to be fearing the worst also, with Qualcomm’s share price declining almost 12% in pre-market trading at the time of writing.

“Qualcomm’s licensing practices have strangled competition in the CDMA and the premium LTE modem chip markets for years, and harmed rivals, OEMs, and end consumers in the process,” Judge Koh said in the ruling.

In a filing made in 2017, the Federal Trade Commission argued Qualcomm was employing anticompetitive tactics, using its dominant position in certain segments of the semiconductor market to hamper competition and effectively hold customers to random. The FTC suggested some components licenced by Qualcomm were standard essential parts, meaning they would have to be licenced on ‘fair, reasonable and non-discriminatory terms’. In short, Qualcomm should not have been charging such a handsome premium on the licences.

The FTC also claimed it was not reasonable for Qualcomm to enter into an exclusive agreement for some components with Apple, shutting other smartphone manufacturers out of the equation.

The Qualcomm business model has been under fire for some time, with the business facing numerous legal challenges in different markets worldwide. Although this is only a single ruling, it remains to be seen whether this sets a precedent and a subsequent domino effect around the world. Qualcomm is on the ropes here, though it will be interesting to see how the firm reacts to this latest antitrust blow.

Qualcomm lands roundhouse in Apple legal battle

The on-going legal battle between Qualcomm and Apple has taken a twist as the US District Court for the Southern District of California has ruled in favour of Qualcomm.

The court has decided Apple’s iPhone 7, 7 Plus, 8, 8 Plus and X infringe two Qualcomm patents, while the iPhone 8, 8 Plus and X devices infringe on a third. As a result, the jury has awarded Qualcomm $31 million in damages.

“Today’s unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them,” said Don Rosenberg, General Counsel for Qualcomm.

“The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents. We are gratified that courts all over the world are rejecting Apple’s strategy of refusing to pay for the use of our IP.”

The three patents support different functions on iPhones, all of which has become normalised features of the devices. Patent No. 8,838,949 enables ‘flashless booting’, removing the need for a separate flash memory and allowing smartphones to connect to the internet quicker after being turned on. Patent No. 9,535,490 speeds up internet connections. Finally, Patent No. 8,633,936 enables high performance and rich visual graphics for games, while also increasing battery efficiency.

The $31 million bill will actually mean very little to Apple. Looking at the iLeader’s 2018 full year results, it would take just under 62 minutes Apple to generate revenues to cover the $31 million, though it does set precedent around the world.

Alongside this ruling in San Diego, courts in China and Germany has also ruled Apple has infringed Qualcomm patents, questioning whether Apple is legally allowed to continue sales not only in these countries, but other territories around the world. In Germany, Apple has been barred from selling any iPhone 7 and 8 models, while in China all devices from the iPhone 6 to the iPhone X have also been banned from sale.

The legal battle between two of the digital economy’s heavyweights has been dragging on for some time now, but this round has been undeniably chalked up to Qualcomm.

Apple draws level with Qualcomm after Germany win

A German court has dismissed Qualcomm’s efforts to block iPhone sales in the country as ‘groundless’ as Apple hit back in the on-going global patent dispute.

According to Reuters, the regional court in the city of Mannheim threw out the case stating the patent in question was not violated by Apple’s installation of Qualcomm chips in its smartphones. Qualcomm has already said it will appeal the decision, as the pair trade blows in various courts throughout across the world.

This case focuses on the use of Intel-chips in certain Apple devices, with Qualcomm suggesting one of its patents had been infringed. The patent in question relates to power management.

Back in September, Qualcomm effectively accused Apple of corporate espionage, questioning how the gulf in performance when measuring its own chips against Intel’s could have been bridged so quickly. However, this argument clearly wasn’t enough to convince the Mannheim judge of wrong-doing.

Having already secured an order to block the sale of certain iPhones through a ruling in Munich, as well as a similar decision in China, Apple needed a win to halt the Qualcomm momentum. The pair have been trading blows over patents and royalties for years now, though the on-going case in the US could prove to be the most significant battle of the dispute.

The chipmaker is currently facing a FTC antitrust investigation, which has escalated to trial, currently being heard in the US District Court in San Jose, California. As you can imagine, Apple, Intel and various others have been playing the part of very proactive cheerleaders, urging on the FTC from the side-lines.

This trial has now concluded for the sixth day, with the FTC calling various witnesses from tech companies such as Apple, Samsung and Ericsson, as well as IP experts from consultancies and universities. The aim is to prove Qualcomm is effectively a monopoly, abusing this prominent position through excessive royalty payments and unreasonable licensing agreements for years.

With the FTC now taking a seat, the next couple of days will see the Qualcomm lawyers preach their case. Here, the team will aim to prove the royalty payments are justified, such is leadership position Qualcomm has worked up in the segment, and the licensing arrangement is the most beneficial and simplistic way to do business. The Qualcomm lawyers are certainly well practised in the art of arguing against antitrust accusations, so it will be interesting to see which way this trial heads.

While the win in Germany is certainly a positive for Apple, which has been on the losing side of a few of the recent skirmishes, the FTC trial is the big one for both parties.

Qualcomm pays $1.5bn to ban some iPhone sales in Germany

Qualcomm has elected to post $1.5 billion as a security bond to enable the enforcement of remedies ordered by the Munich District Court blocking the sale of iPhone 7 and iPhone 8 models in Germany.

The ban comes as the latest chapter of the long-running Qualcomm-Apple legal saga, with the chipmaker finding success in its copyright infringement claim in Germany. On December 20 the District Court of Munich decided Apple had in fact infringed Qualcomm’s technology for power savings in the older models and ordered the company to halt all sales in Germany.

Although the ruling was make a couple of weeks ago, the bond itself makes the ban official, allowing the court to pay Apple for any damages incurred should it be able to successfully appeal against the ruling. Apple has already stated it will appeal the ban and will also stop selling the devices at its 15 retail locations across the country.

But this doesn’t seem to be good enough for Qualcomm.

“Apple was ordered to cease the sale, offer for sale and importation for sale of all infringing iPhones in Germany,” Qualcomm said in a statement. “The Court also ordered Apple to recall infringing iPhones from third party resellers in Germany.”

This is one of the elements of interpretation in the case. Apple will continue to ship devices to third-parties to sell, only ceasing sales at its own retail locations. Qualcomm lawyers read the ruling differently however, suggesting this is a blanket ban on all iPhone 7 and iPhone 8 devices across the country, third-party retailers included.

For Apple, this is just a bad end to a bad week. Having just reduced its guidance for what traditionally is its strongest quarter in the year, a sales ban in a large, developed market is not ideal. Some suggest it has nothing to worry about considering these are older models, though cash conscious consumers are more alert to bargains than ever before and the iLeader seemingly pushed the pricing boat too far with the ridiculously priced iPhone X.

For Qualcomm, assuming it can fight to have the ruling upheld, this is a massive win. Precedent is a very powerful concept in the legal world and this might well be an order which it can use as evidence for additional ruling in other markets. The legal battle between the two has certainly been a long one, but this ruling has handed the Qualcomm team a bit of additional incentive.

Looking at the wider patent dispute, a similar case has been heard in China, were Apple has been told to stop importing the infringing models while Qualcomm is also pushing the case in the US. Qualcomm has the better of the early exchanges, though it will be the US ruling which will dictate the winner of this battle ultimately.

Intel triggered into joining Qualcomm Apple spat

Qualcomm has accused Intel of cheating at modems with Apple’s help, but Intel’s weak public riposte is unlikely to sway much opinion in its favour.

Judging by the general quality of their press releases all three of the companies involved in this spat refuse to issue a single public utterance until every syllable has been pored over by battalions of lawyers. As a consequence, when they decide to slag each other off via the media the result falls pretty far short of Wildean in its wit.

To be fair to Qualcomm, its latest allegations weren’t strictly public, although you have to wonder what the source of the court filing leak that resulted in the rest of the world knowing about it was. Essentially Qualcomm is questioning how Apple was able to replace its modems with Intel ones in the latest iPhones and figured it must have given Intel trade secrets to ensure its modems were up to the job.

Intel’s General Counsel Steven Rodgers posted a riposte entitled ‘Qualcomm’s Rhetoric Pierced’, which promised all kinds of rebuttals, refutations and rebukes but instead delivered a disappointingly generic whinge that amounted to ‘how dare you?’ It started fairly promisingly with a round up of all the fines Qualcomm has been hit with over the past couple of years for violating competition laws.

But then it degenerated into a general purpose moan about how unfair the allegations are when everyone at Intel works really hard, actually. “We are proud of our engineers and employees who bring the world’s best technology solutions to market through hard work, sweat, risk-taking and great ideas,” pouted Rodgers. “Every day, we push the boundaries of computing and communication technologies. And, the proof is in the pudding: Last year, the U.S. Patent Office awarded more patents to Intel than to Qualcomm.”

The correct form of the proverb is ‘the proof of the pudding is in the eating’, but if Intel chooses to keep its patents inside some form of dessert, who are we to judge? “For the most part, we have chosen, and will continue to choose, to respond to Qualcomm’s statements in court, not in public,” said Rogers, showing the acute judgment that you would expect of a senior Lawyer. Qualcomm has yet to publicly respond.

Nokia set to make €3 per 5G smartphone in licensing boom

Nokia has announced it is set to make €3 per smartphone through the company’s 5G portfolio of standard essential patents (SEPs), as the commercial realities of the awaiting 5G era start to become clearer.

Perhaps this was a move to calm the nervously shifting investors who have been waiting for the windfall for some time now. Nokia’s management team have been promising 5G fortunes through equipment upgrades, though the new dawn is yet to emerge, while operators continuing to insist CAPEX will not increase during the euphoria will not help the situation. This announcement might be nothing more than a settler for investors, putting an attractive financial target on the 5G boomtime.

Over the course of 2017, the Nokia licensing business generating roughly €1.6 billion, which included a €300 million payment in non-recurring revenues. Growing the recurring revenues column in this business unit would certainly be a way to healthily improve profitability.

“Nokia innovation combined with our commitment to open standardization has helped build the networks of today and lay the foundations for 5G/NR,” said Ilkka Rahnasto, head of the Patent Business at Nokia. “This announcement is an important step in helping companies plan for the introduction of 5G/NR capable mobile phones, with the first commercial launches expected in 2019.”

The standardisation process of new technologies might not be the most exciting aspect of the development roadmap, but when Nokia makes these announcements are made the pain of rubbing shoulders with competitors and enduring the forensically detailed conversations start to pay off. Nokia expects to have a significant position in SEPs once the standards are finalized later in 2018, with the licensing rate for the 5G SEP portfolio capped at €3 per device.

While €3 device is attractive, some investors might wonder what all the fuss is about, it’s not an earth-shaking amount of cash after all, but the expanse of 5G takes licensing businesses onto a whole new frontier. With 5G set to penetrate almost every aspect of our lives, and IoT seeking to become a revolution of its own, the number of devices in the field which could make use of Nokia’s patents becomes quite extraordinary.

This promise seems to be more at enticing investors to sit back more comfortably, as there are few concrete promises. The €3 rate does not cover these devices, though it will depend on numerous conversations with the various licensees. What should be worth noting is that is likely to much more varied when you take into account some IoT devices might not cost €3 to manufacture.

Of course, Nokia isn’t the only company with skin in the game. Ericsson announced back in March it would charge $2.50 for SEPs in lower-end devices and up to $5 as you scale up the portfolios. Who actually has the upper hand in the licensing game is unknown for the moment, and will remain so until the ink is dry on the final standard.

The old master of the licensing game, Qualcomm, is another which will aim to continue to benefit from the 5G euphoria. This is a perfect example of what can be achieved through an effective licensing business, as Qualcomm has dominated standards setting in 3G and 4G wireless, with both handset manufacturers and telecommunications gear makers paying royalties to the firm. The majority of profits at the chipmaker have come as a result of this business unit for several years.

With Nokia joining Ericsson in announcing patent rates, Huawei is the final vendor of the this segment we are waiting on. Those of a paranoid persuasion will be fidgeting ahead of this announcement, hoping the Chinese giant will also officially state its sticking to fair, reasonable and non-discriminatory (FRAND) terms.

Endless design patent case orders Samsung to pay Apple $539 million

Apple accused Samsung of coping some design elements from the iPhone back in 2011 and the lawyers have been making hay ever since.

First Samsung was found guilty of at least some of the claims in 2012 and ordered to hand over $1 billion for Apple’s troubles. Samsung appealed the amount and that’s what has, for some reason, taken six years to thrash out. Samsung paid up $399 million for design patent infringements following one wave of appeals but apparently want some of that back. Instead it has been told to find an extra $140 million, which must be pretty gutting.

The following public statement has been attributed to Samsung: “Today’s decision flies in the face of a unanimous Supreme Court ruling in favour of Samsung on the scope of design patent damages. We will consider all options to obtain an outcome that does not hinder creativity.”

Apple, meanwhile has been quoted as saying “It is a fact that Samsung blatantly copied our design. We’re grateful to the jury for their service and pleased they agree that Samsung should pay for copying our products.”

Design patents are a difficult area. To what extent can you prove that one rectangular touchscreen devices copied another? One of the patents, for example, concerns how rounded the corners are. Is only Apple allowed rounded corners? It also shows the frequent futility of patent litigation between companies that conclude it’s cheaper to keep the matter in the courts indefinitely than pay any fines.