AS THE 3G MARKET HEATS UP, so has the level of litigation among industry players, exemplified by longrunning headlines involving the Goliaths and the Davids in wireless.
The underlying disputes that have generated the current level of litigation may be few, but the number of legal or regulatory complaints they’ve generated have been numerous, in one analyst’s view.
The lack of a cross-licensing agreement between Nokia Corp. and Qualcomm Inc., for example, is a central dispute that has spawned innumerable, discrete legal actions in various jurisdictions, including the courts and regulatory agencies, according to Mike Thelander, principal at Signals Research Group L.L.C., which analyzes the semiconductor market.
(Nokia has disputed that characterization and insisted that each legalaction stands on its own merits, without reference to the parties’ cross-licensing negotiations. Qualcomm and most observers take Thelander’s view.)
The underlying driver of crosslicensing imbroglios, according to Thelander, is the current growth and future promise of 3G. “As the stakes rise, litigation rises,” Thelander said. “You wait to pounce until the market is really big.”
Who decides?
Most remarkable, perhaps, to those not directly involved in the litigation process: Those seemingly intractable arguments over intellectual property or business practices are often resolved by juries of laypeople. People who find the calendar function on a handset daunting may be assessing claims for patents on esoteric software. That’s particularly true in patent-infringement cases in district courts.
“It’s a challenging aspect of presenting a patent case,” said David Rosmann, vice president of patent litigation at Broadcom Corp. “You must convince lay people of your position. A tremendous amount of time is spent by litigants explaining the technology.”
On the other hand, Rosmann said, litigating cases before the International Trade Commission-a regulatory body-is different. “One of the advantages of litigating before the ITC is that findings of fact are made by a judge knowledgeable and experienced in patent law,” Rosmann said. “The judge is not a technical expert, per se, but versed in parsing issues in complex cases.”
The fact that lay people often sit in judgment on the most contentious technical and legal issues in the fast-paced wireless industry has its idealistic side, though it often fuels the appeals process, in another attorney’s view.
“The beauty of the American legal system is that we believe in democracy, that juries of our peers can determine these things,” said Jay Sandvos, a “generalist” patent attorney and partner in the Boston-based law firm of Bromberg & Sunstein. He is not involved in wireless issues.
“In reality, patents are particularly complicated, a deep area of law,” Sandvos added. “When it comes to patent litigation, the lawyers involved are specialists dedicated to dealing with the complexities. They present to a judge and jury with no prior training. That means that in patent litigation, lawyers have to educate the judge and jury on these complicated issues and boil them down to simple explanations so judge and jury can resolve technical and legal issues in a meaningful way.”
“The process can be haphazard,” Sandvos added. “The better the litigators can explain and persuade, the more successful they’ll be.”
Decisions run deep
Sandvos is not surprised that, for instance, a single patent in the recent case of Broadcom vs. Qualcomm at the ITC (Broadcom won a judgment that Qualcomm infringed on one of Broadcom’s patents; Qualcomm is appealing the decision) produced a far-reaching ban on the importation of 3G handsets with Qualcomm’s offending chips.
“Patents are like nuclear weapons,” Sandvos said. “It just takes one to do a lot.”
The two buzzwords in patent litigation are “infringement” and “validity,” according to Sandvos.
Infringement means that the accused products fall within the description of the patent claimant’s numbered claims found at the end of a published patent. Validity goes to whether the patent indeed described a new invention at the time it was granted. Though the U.S. Patent and Trademark Office follows guidelines in issuing patents, it does not have the time or resources to adequately make an assessment of patent’s validity. That can be left to negotiations or litigation. One line of defense is to declare that the patent office simply erred in granting a patent.
When a case is filed, litigants often “forum shop” to file their cases in jurisdictions they deem favorable to their case.
Courts then examine whether the patent claims of the litigant apply to the allegedly infringing product of the defendant, Sandvos said. If the patent owner can demonstrate that the language in his patent claims describes what the defendant’s product does, that’s infringement.
The defendant can deflect that attack by showing, with a simple example, that the patent claims do not apply. Or the defendant can establish that the litigant’s patent did not represent a new invention at the time it was granted.
Appeals certain
“Whoever wins the battle in explaining their position most clearly is likely to prevail,” Sandvos said. “After a trial, the one certainty is that the losing side will appeal.”
That sends a case to the Federal Circuit Court of Appeals. The appeals court addresses the issues de novo-meaning “freshly” or “anew,” according to Sandvos. That means the three-judge appeals court panel makes its own decision on the case’s merits, not bound by what occurred at trial. Though appeals court judges are likely familiar with the complex legal aspects of a patent infringement case, for example, they are no more familiar with the technology than the layperson, according to Sandvos.
Would a semiconductor analyst such as Thelander feel comfortable sitting in judgment as a juror in a patent infringement trial, given his experience with technology?
“I’ve looked at patents and they’re either very general or so technical you’d lose the layperson,” Thelander said. “I would not like to be the juror, especially at $50 a day. But it’d be fun to be a fly on the wall.”
