InterDigital Says UK Ruling On SEPs Hurts Lenovo's Case
By Matthew Perlman
Law360 (September 2, 2020, 4:46 PM EDT) -- A patent-licensing company told a Delaware federal court that a recent ruling from the U.K.'s top court confirms that it had asked for the proper venue to set a global licensing rate in its dispute with Lenovo over standard-essential patents for cellular technology.
InterDigital filed a notice of supplemental authority Tuesday supporting its bid to duck claims from Lenovo that it violated antitrust law through efforts to get patents incorporated into industry standards and then refusing to offer licenses on fair, reasonable and nondiscriminatory, or FRAND, terms.
The notice pointed to the U.K. Supreme Court's decision last week in a case involving Unwired Planet International Ltd. and Huawei Technologies Co. that found English courts have the power to set global licensing rates for multinational patent portfolios.
InterDigital said it has already asked a U.K. court to set the rates in its dispute with Lenovo, arguing that this shows it has not refused to license its SEPs on FRAND terms. The electronics maker had contended that the English court lacks jurisdiction to set a worldwide licensing rate, even pointing to the appeal in the Unwired case as similar.
But InterDigital said Tuesday, the recent ruling confirmed "U.K. courts can adjudicate FRAND terms for a worldwide SEP license that the defendant can choose to accept as an alternative to being enjoined from further infringement."
In the Unwired case, the U.K. high court affirmed decisions made by the lower courts finding that a judge in England can grant an injunction against a company that infringes on a SEP in Britain, if the offender does not agree to global license rates for the patent portfolio on FRAND terms set by the court.
The ruling dismissed an appeal from Huawei in Unwired's suit accusing the Chinese technology giant of infringing several patents connected to 3G and 4G wireless communication standards. Experts have said the decision could lead the U.K. to become the go-to jurisdiction to resolve SEP disputes.
Lenovo and its Motorola Mobility unit filed suit in Delaware in April over InterDigital's standard-setting activity and its alleged refusal to offer licenses on fair terms for patents used in 3G and 4G cellular technology. According to the suit, InterDigital claims to have a portfolio with over 34,000 patents and patent applications globally, but is "careful not to identify" exactly which ones are likely essential to cellular standards.
InterDigital then uses the market power purportedly conveyed by the standards and its portfolio to "extract monopoly rents" from manufacturers, according to the complaint.
Lenovo's suit came after InterDigital had filed infringement cases in courts in the U.K. and U.S. and asked the U.K. court to set a FRAND rate globally. The patent owner said in a motion to dismiss in June that the antitrust case is just retaliation for the patent suits and that InterDigital had also offered Lenovo an arbitrator set the terms of the license, in addition to the U.K. court.
The U.S. Department of Justice waded into the dispute with a statement of interest in July urging the court to dismiss Lenovo's claims and contending the allegations that InterDigital violated its FRAND commitments do not trigger the antitrust laws.
Lenovo hit back at the DOJ, arguing that the attack on its allegations merely reflects what the agency's current leadership wants the law to be. The company noted that Assistant Attorney General Makan Delrahim, head of the DOJ's antitrust unit, has consistently advocated for a policy approach that favors patent holders like InterDigital at the expense of companies that implement the standards.
The DOJ's Antitrust Division responded to Lenovo's criticisms, saying they were merely "a distraction from the deficiencies in the complaint."
Representatives for Lenovo and InterDigital did not respond to requests for comment Wednesday.
Lenovo is represented by Jack B. Blumenfeld, Rodger D. Smith II and Cameron P. Clark of Morris Nichols Arsht & Tunnell LLP, and Richard A. Cederoth, David C. Giardina, Leif E. Peterson, Melissa Colon-Bosolet, Ketan V. Patel, Scott M. Border and Joseph A. Micallef of Sidley Austin LLP.
InterDigital is represented by Neal C. Belgam and Eve H. Ormerod of Smith Katzenstein & Jenkins LLP, and David S. Steuer, Michael B. Levin, Maura L. Rees and Ryan R. Smith of Wilson Sonsini Goodrich & Rosati PC.
The case is Lenovo Inc. et al. v. InterDigital Technology Corp. et al., case number 1:20-cv-00493, in the U.S. District Court for the District of Delaware.
--Additional reporting by Bryan Koenig, Bonnie Eslinger and Dani Kass. Editing by Gemma Horowitz.
