Apple hit with $2 billion patent infringement lawsuit

“Apple Inc. is facing a claim for about $2 billion in damages from a German patent-holding firm that alleges the U.S. technology giant infringed on a cellphone technology it owns, a German court said Wednesday,” Friedrich Geiger reports for The Wall Street Journal.

“IPCom GmbH accuses Apple of improperly using patented technology that gives emergency calls priority on mobile networks,” Geiger reports. “A spokesman for IPCom, which is backed by U.S. fund manager Fortress Investments Group LLC, said the company’s demand for more than €1.57 billion ($2.12 billion) covers only Apple’s alleged infringement relating to devices sold in Germany. He declined to comment on whether IPCom would file similar suits in other countries.”

“IPCom’s lawsuit comes after the European Patent Office last month rejected requests from Apple, Nokia Corp., HTC Corp., Vodafone Group PLC and Ericsson to declare the patent invalid. IPCom said it is suing other companies for alleged infringement of the patent beside Apple, including Nokia,” Geiger reports. “Companies like IPCom, which critics derisively call patent trolls, make money by buying patents and then claiming royalties on them. IPCom bought the patent in question in 2007 from Robert Bosch GmbH, a German automotive-parts company that was a pioneer in car phones but left the business at the dawn of hand-held devices.”

Read more in the full article here.

MacDailyNews Take: FRAND abuse.

Related article:
Apple faces €1.57 billion patent damages claim in Germany – February 5, 2014

10 Comments

  1. Another troll hits the courts to fleece Apple for it’s hard earned cash.

    The usual thing – they’re doing it so that Apple settles out of court as Apple won’t want the publicity.

  2. BS! These patents are standard essential patents having to do with the LTE cell phone standards. As such, they are FRAND/SEP patents. Lawsuits based on FRAND patents have not worked for Google or Samsung. I doubt they will work for these trolls.

    1. Do you know whether this patent was submitted under the standard to be part of the standard and thus must come under the SEP/FRAND rules? Do you know if the inventor (or patent holder) participated in the standards body and injected this technology into the standard?

      Patents that were never submitted to the standards committee nor had the inventor inject his/her technology into the standard do not come under SEP/FRAND rules.

      Note:
      I am NOT commenting on whether the patent is or is not valid.
      I am NOT commenting on whether Apple needs to pay royalties or not.
      I am NOT commenting on whether the technology described in this patent is necessary, or not necessary, for cellular communications.

      The thing I AM commenting on is that not all technologies necessary and required to build an operational cellular phone come under SEP/FRAND rules. People (including MDN’s editors) are just plain wrong to jump to that conclusion without proof.

      1. “The litigation involves a standard-essential wireless patent covering a technology that prioritizes emergency calls placed on overloaded wireless communication networks. Interestingly, the claimed technology is not only deemed essential to UMTS and LTE wireless standards, but implementation of the technology is required by law.” -Foss Patents

        “The IPCom patents in the Mannheim case are so-called standards essential patents (SEPs), which must be licensed to competitors under terms that are fair, reasonable and non-discriminatory (FRAND).” – Philip Elmer DeWitt

        http://tech.fortune.cnn.com/2014/02/05/apple-patent-troll-2-billion/

        1. If what Shadowself stated: “Patents that were never submitted to the standards committee nor had the inventor inject his/her technology into the standard do not come under SEP/FRAND rules.” is true then IPCom has no requirement to price ‘fairly’.. If on the other hand they are required to price fairly and in the month that expired since the Patent Office denied invalidation not one of the infringing companies have met with IPCom to agree on payments, how is it ‘unfair’ of IPCom to initiate a lawsuit?

          1. If it is in the standard, it was submitted to the standard committee, otherwise it could not be in the standard. QED. Quit posing stupid arguments. It’s been in the standard and is even required by law. This is a patent “hold up.” If the German court allows this, they will find themselves being penalized by other courts in the world as their rulings get marginalized. . . ridiculed. In the EU, the courts have to give recognition to the laws of member nations and FRAND rulings are VERY important to other member nations. The Mannheim court is going rogue on this and will be slapped down.

            1. Ok, so then the 2nd part of my post where I start “If on the other hand…” will apply.

              How did you pull in the Mannheim court? The one that made the ruling that the patent was valid was the European Patent Office not Germany.. The EPO consists of 38 member states that includes Germany and is not exclusive to it.. (see http://www.epo.org/about-us/organisation/member-states.html) The German courts will decide in the end the finer points and may result in overturning the patent but at the moment the expected result sans ruling is some payment from all companies found infringing. If what you claim is true and it was in fact submitted to the standard committee don’t you find it odd that infringement on a patent currently considered valid by the EPO is claimed now against so many companies? Would you say the standards body was negligent then in “finding” the patent now in question? I would think like most other entities that end up infringing patents that some due diligence was simply lacking. I doubt as you say the EU would ridicule Germany or the EPO for proceeding with the suit.

            2. The Mannheim court is the district in Germany that is allowing lawsuits over SEPs with large monetary demands beyond FRAND terms. The patent’s validity was not in question until its owner started using it as a club outside of the agreement that encumbers it. It may be that this particular patent is no longer held by the entity that submitted it to the standard body, and is now a subsequent assignee, but the FRAND encumbrances, like property covenants, are permanently attached to the patent by contract. In many instances, that contract specifies that attempts to use the patent in the way it is now being used can result in patent invalidation, putting it into the public domain, as one of the consequences available should such activity be deemed egregious. The new owner is ignoring the FRAND agreement standard for this patent and is making outrageously unreasonable high demands on all cell phone makers for using a minor, but governmentally imposed, aspect of the way in which all cell phone are required to connect to the network, one that gives priority to an emergency call. From what I gather, this is a mere idea patent. It is certainly not worth the percentage that is being demanded on the entire device simply because this company acquired a minor patent. What if every SEP holder demanded similar percentages on the retail price of the final device?

              There are over 4,000 SEP patents involved in making a cell phone. . . can you imagine the price of the phones if each one could demand $2 billion for their minor patents? That is why the standards organizations established the FRAND system and so vigorously defend it against patent trolls and rogue courts such as the Mannheim district court that permits them to bring their anti-FRAND suits contrary to the rest of the worlds’ courts.

            3. I understand your points but they all depend on the assumption that the original owner of the patent (or any subsequent owners prior to IPCom) submitted the patent in question to the relevant standards group. As the article states “IPCom bought the patent in question in 2007 from Robert Bosch GmbH, a German automotive-parts company that was a pioneer in car phones but left the business at the dawn of hand-held devices.” The question here is did the standards group exist prior to that happening and if not, any subsequent owner had added the patent to the group.

              I too am also making an assumption that the patent was never added to the body since so many companies have applied to Patent Office to invalidate the patent instead of getting the standards body to step in and force IPCom to comply with FRAND rules.

            4. The standards bodies have very little in the way of teeth, leaving enforcement to the courts and contract law. Each licensee is expected to negotiate a FRAND contract with the license holders. . . if one cannot be negotiated, the prospective licensees are permitted under the terms of the standard to use the patent pending settlement by a court despite being in “technical” infringement. The owner has agreed to this by placing the patent in the pool. . . and agreed to abide by the rate a judge deems to be FRAND after litigation. Apple won the case with NOKIA, paying the industry FRAND rate when Nokia was demanding six times the going rate and cross licensing of the iPhone patent. But Nokia claimed the win when the judge ruled Apple “infringed” and awarded Nokia the FRAND rates Apple offered in the first place. . . what Apple had offered all along. The news media trumpeted Apple “lost!” When it actually won the case!

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