Once Nokia completes the sale of its devices business to Microsoft ‘ something that has now been cleared by most relevant authorities ‘ it will be more reliant on its huge store of patents. It is likely to get far more active in chasing licensing revenues and even lawsuits, and it already seems to be getting into practice, with two European cases coming to a head this month. It has prevailed against HTC in a UK suit that could lead to a ban on the Taiwanese vendor’s One Mini smartphone, but is on the receiving end of an action by Sierra Wireless.
In the past, Nokia has tended to use its IPR mountain to strengthen its hand in cross-licensing negotiations, rather than aggressively chase rivals, though when it has been stirred into action, its patents power has been clear ‘ as when it got a highly favorable settlement out of Apple. HTC is feeling that power now. The vendor has filed an urgent appeal after a court ruled that imports of its One Mini handset should be banned in the UK.
Should its appeal fail, that decision could extend to other devices, though the flagship HTC One did escape the threatened injunction. The OEM has until Friday to appeal the High Court decision to block sales of the Mini, for infringing Nokia’s EP 0 998 024 patent. In October the same London court ruled that certain Broadcom and Qualcomm chips left several HTC products infringing on the patent, which covers a “modulator structure for a transmitter and a mobile station”. That could open up further devices to action. Nokia had sought an injunction against the HTC One, One SV, Wildfire S, One Mini, One V, HTC One X+, Desire X, 8X and 8S, and says that, if the appeal this week fails, all except the One itself could be affected.
“Pending the appeal, HTC has undertaken not to ship any more of the infringing products into the UK, except the HTC One which it may continue to sell until the conclusion of any appeal. If HTC does not succeed on appeal, the injunction will take effect on all infringing products. Nokia is also claiming financial compensation for the infringement of this patent,” Nokia said in a statement to ZDnet.
The dispute is part of a wider battle initiated in 2012 when Nokia filed suit against its rival in Germany, the UK and the US. It has also made a complaint to the US International Trade Commission (ITC), seeking a ban on the HTC One based on nine non-essential patents. It is citing 20 patents, none of them essential to standards, in Germany and 18 (most of them the same) in separate lawsuits in various US courts. HTC has so far been found to infringe on a total of four Nokia patents, one in Germany, one in the UK, and two at the ITC, though that last decision could be reversed when it is reviewed by the full ITC panel. There are also cases outstanding in Italy, Japan and the Netherlands.
Meanwhile, Sierra Wireless went on the offensive last week when it submitted a complaint against Nokia with the European Commission, alleging anti-competitive behavior. It has also petitioned the US Federal Trade Commission to start a formal investigation on similar grounds.
The EC complaint says Nokia is discriminating against Sierra in the way it licenses standards-essential patents, and therefore abusing its dominant position in 2G and 3G IPR. The embedded wireless company alleges that Nokia is applying different royalty rates for different partners using the same patents, even when they are being harnessed in the same type of GSM modules. It also says the Finnish firm is imposing unfavorable and unreasonable royalty terms that make it hard for Sierra to compete, and that Nokia has refused repeated requests to license 3G essential patents for wireless modules. If true, all these would breach the Frand (fair reasonable and non-discriminatory) guidelines which govern licensing of essential IPR, as required by ETSI under Article 102 of the Treaty on the Functioning of the European Union. Frand licensing has been at the heart of many spats between wireless rivals over the past couple of years, and of some EU and FTC probes, including those of Samsung and Motorola Mobility in Europe.
A Nokia spokesperson said Sierra’s complaints were “frivolous”, and said that Nokia had licensed SEPs to more than 50 companies. “Sierra Wireless has been in breach of its existing licence terms with Nokia for several years and, despite many years of good faith attempts by Nokia to resolve the disagreements, Sierra has failed to pay Nokia the royalties which Sierra owes under the licence. Nokia regrets that Sierra Wireless is wasting the time of the European Commission and ETSI,’ the firm said.