Asus Accuses InterDigital Of Exploiting Essential Tech Patents
By Michael Lipkin
Law360, San Diego (April 16, 2015, 5:01 PM ET) -- Smartphone and computer maker Asus Computer International on Wednesday accused InterDigital Inc. in California federal court of monopolizing the cellular and wireless markets by helping steer industry standards toward technology it controls and then reneging on promises to license its patents fairly.
Asus claims that InterDigital used its position in two groups, the European Telecommunications Standardization Institute and the Institute of Electrical Engineers Standards Association, to determine what technologies are required industrywide for 2G and 3G cellular service and 802 wireless. The chosen technology lines up with thousands of InterDigital patents, according to the suit, and the company is allegedly using its position to charge exorbitant licensing fees.
InterDigital allegedly pledged to license these essential patents on fair, reasonable and non-discriminatory terms, but Asus claims the company’s demands for high royalties violate that commitment.
“IDC embedded itself within IEEE and ETSI and concealed its intent to engage in hold-up and to charge supra-competitive royalty rates and other licensing conditions for its declared essential patents,” Asus said. “Indeed, IDC provided what have proved to be hollow FRAND declarations so that the [groups] would adopt technology over which IDC claimed patent rights rather and alternative technology that would have been available for use, fairly.”
InterDigital’s specific demands and its promises in 2008 leading up to Asus’ patent license were redacted in the complaint, but Asus alleges that InterDigital’s own recent litigation efforts have exposed that its conduct was knowingly misleading and fraudulent.
Asus pointed to InterDigital’s settlement with Samsung Electronics Co. Ltd. in June, indicating that the licensing terms may have been more favorable than those offered to Asus, and the Guangdong High Court of China’s 2013 ruling that IDC violated its FRAND commitments and demanded royalty-free cross licenses.
“Despite IDC’s best effort to maintain a shroud of secrecy over its licensing terms with others, it has become clear to Asus that IDC’s licensing terms in the 2008 [agreement] and those IDC demands by amendments improperly exploit IDC’s declarations that the patents are essential to the respective standards,” Asus said.
Asus further claims that InterDigital threatens action before the U.S. International Trade Commission in order to force acceptance of its unreasonable terms, another violation of its promises.
Representatives for the parties did not immediately respond Thursday to requests for comment.
Asus is represented by M. Patricia Thayer, Ezekiel L. Rauscher, Brian R. Nester, Anna M. Weinberg, Richard A. Cederoth and David C. Giardina of Sidley Austin LLP.
Counsel information for InterDigital was not immediately available.
The case is Asus Computer International et al. v. InterDigital Inc. et al., case number 5:15-cv-01716, in the U.S. District Court for the Northern District of California.
--Editing by Jeremy Barker.
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