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Analyzing IDCC's Case at the CAFC

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NukeJohn   Thursday, 12/09/10 08:30:54 PM
Re: JimLur post# 301919
Post # of 428613 
Analyzing IDCC's Case at the CAFC

The IDCC Appeal of the ITC's verdict will be heard at the CAFC by Panel J on Thursday, January 13, 2011, 2:00 P.M., Courtroom 201

IDCC has an extremely strong case in their appeal to the CAFC. IMHO, Nokia knows the odds are they will lose. I don't think it even matters which three judges are selected for panel J. This case is so cut and dried, any three judges will see right through this case. More than a dozen other companies (such as Apple, RIM, Samsung, HTC, Casio/Hitachi, NEC, Kyocera, Pantech, Panasonic, Toshiba, LG, Sharp, etc.) have all licensed these same 3G patents in suit. The judges will wonder why those companies have signed licenses with IDCC and paid royalties for years....but this Finnish company has avoided paying for the valid IP (which is recognized as part of the standard).

Let's take a closer look at IDCC's case against Nokia and review ALJ Luckern's Ruling and the recent new IDCC patents approved by the USPTO.

First, I should point out that there have been several new continuation patents issued to IDCC by the USPTO since the ITC ruling came out. These new continuation patents were applied for by IDCC specifically to clarify the claim terminology (in favor of IDCC). Below, I have cut and pasted the pertinent information on just one of several new patents that straighten out the erroneous ITC claims construction....

United States Patent 7,706,830
Ozluturk , et al. April 27, 2010

Method and subscriber unit for performing an access procedure

A base station for controlling transmission power during the establishment of a communication channel utilizes the reception of a short code during initial power ramp-up. The short code is a sequence for detection by the base station which has a much shorter period than a conventional access code. The ramp-up starts from a power level that is lower than the required power level for detection by the base station. The power of the short code is quickly increased until the signal is detected by the base station. Once the base station detects the short code, it transmits an indication that the short code has been detected.

Inventors: Ozluturk; Fatih M. (Port Washington, NY), Lomp; Gary R. (Centerport, NY)
Assignee: InterDigital Technology Corporation (Wilmington, DE)
Appl. No.: 12/116,263
Filed: May 7, 2008
Related U.S. Patent Documents
Application Number Filing Date Patent Number Issue Date
11169488 Jun., 2005
10866851 Jun., 2004 7117004
10400343 Oct., 2006 6839567
10086320 Jan., 2005 6571105
09721034 May., 2003 6493563
09003104 Dec., 2002 6181949
08670162 Jan., 2001 5841768

What is claimed is:

1. A wireless code division multiple access (CDMA) subscriber unit comprising: a transmitter configured such that, when the subscriber unit is first accessing a CDMA network and wants to establish communications with a base station associated with the network over a communication channel to be indicated by the base station, the transmitter successively sends transmissions prior to the subscriber unit receiving from the base station an indication that at least one of the successively sent transmissions has been detected by the base station; wherein each of the successively sent transmissions is produced using a sequence of chips, wherein the sequence of chips is not used to increase bandwidth; the transmitter further configured such that the transmitter sends to the base station a message indicating to the base station that the subscriber unit wants to establish the communications with the base station over the communication channel to be indicated by the base station, the message being sent only subsequent to the subscriber unit receiving the indication; wherein at least two of the successively sent transmissions are produced using different sequences of chips; wherein each of the successively sent transmissions is shorter than the message; and wherein each of the successively sent transmissions and the message are produced using portions of a same sequence of chips, wherein the same sequence of chips is not used to increase bandwidth.


This is a continuation patent granted to IDCC that is designed specifically to address Judge Luckern's ruling that "code" meant a "spreading code". The terminology used in this patent (eg. "successively sent transmissions") was designed to correct some loose wording in previous IDCC patent claims. The fact that the USPTO granted this patent shows the world that Judge Luckern's claims construction was wrong. By using "successively sent transmissions" in the claims of this patent, IDCC is overcoming a wording inaccuracy of their previous patents where they used the terminology "continuous transmission". IMHO, the claim terminology IDCC used previously was a key reason that caused Judge Luckern to err in his claims construction. This new patent definitively explains that there are codes that don't "spread" the bandwidth, so all codes are not spreading codes (as Judge Luckern construed in his claims construction).

One more thing....let's look at what Bill Merritt (IDCC CEO) had to say about this in a recent conference call


Tom Carpenter – Hilliard Lyons

Good morning again. Bill, can you talk about your efforts over the past couple of months or quarters at the patent office, either working on continuation patents or the review the rulings on the patents that you had at your recent ITC case?

Bill Merritt - IDCC CEO

Yes, we have had actually very good success at the patent office with respect to both patent families that we are involved in the Nokia ITC case. And so we think we have actually addressed all of the issues that were raised by the ALJ, so whether – we disagree with his position, and we have taken that appeal up to the Federal circuit, we have also gotten patents to issue officially over his objections in terms of the patent office. So we are kind of due to go on either path.


In a patent case, one of the early tasks of a District Court Judge (or an ITC ALJ) is to define the claim terms in a Markman proceeding. He may or may not have an actual hearing. Most district court judges do have a Markman hearing, but often the ALJ's at the ITC decide claims construction based on the briefs (but they do have staff attorneys to help).

Now, let's look at the key guidelines from the CAFC as to how to perform claims construction.



A finding of infringement, whether literal or by equivalents, is a question of fact. Bai v. L&L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

Infringement is a two-step inquiry, in which a court must first construe disputed claim terms, and then compare the properly construed claims to the accused device. Cybor Corp., 138 F.3d at 1454. The patent’s intrinsic record is the primary tool to supply the context for interpretation of disputed claim terms. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). This tool usually provides the technological and temporal context to enable the court to ascertain the meaning of the claim to one of ordinary skill in the art at the time of invention. Moba v. Diamond Automation, Inc., 325 F.3d 1306, 1315 (Fed. Cir. 2003) (“Moreover, as this court has repeatedly counseled, the best indicator of claim meaning is its usage in context as understood by one of skill in the art at the time of invention.”). In most cases, the best source for discerning this proper context is the patent specification, wherein the patent applicant describes the invention. Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1360 (Fed. Cir. 2004). If necessary, courts may also look to extrinsic evidence, often presented in the form of expert testimony. Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1309 (Fed. Cir. 1999) (“[C]onsultation of extrinsic evidence is particularly appropriate to ensure that [the court’s] understanding of the technical aspects of the patent is not entirely at variance with the understanding of one skilled in the art.”); Vitronics, 90 F.3d at 1582. Dictionaries may also help interpret claim language. See, e.g., Tex. Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1202 (Fed. Cir. 2002).

To reach a proper construction, the district court must look first to the claims, the specification, and the prosecution history, and if further guidance is needed, to extrinsic evidence, such as dictionaries and expert opinions. The trial court should use the term’s “ordinary and accustomed” meaning to one of ordinary skill in the art as a touchstone for meaning. Thus, the district court must determine what “instruction” means to one of ordinary skill in the art, and then must determine whether the specification indicates that the patentee meant a different definition. See, e.g., Moba, 325 F.3d at 1315 (“[T]he best indicator of claim meaning is its usage in context as understood by one of skill in the art at the time of invention.”); Tex. Digital, 308 F.3d at 1204.


IMHO, ALJ Luckern did not follow the CAFC guidance to "look first to the claims, the specification and the prosecution history". He did not use the ordinary meaning of "code" and "signal". For example, he convoluted the definition of code to where it had to be a spreading code (he made a very narrow claims construction). Apparently, he did not follow the CAFC guidance to go back to the patent and look at the how the terms applied in the patent claims. If you used his definitions of "code" and "signal", the preferred embodiments of the patent would not even infringe (how can that be?). IMHO, the claims construction in this case will be overturned by the de novo review of the Merits Panel. As part of his ruling, Judge Luckern already ruled that in the event his claims construction is overturned, he is recommending a Limited Exclusion Order (LEO) and various Cease & Desist orders (which I agree with wholeheartedly). After the CAFC rules in favor of IDCC, this will be like a directed verdict (ie., they will tell the ITC that infringement is determined and to execute the remedy). The CAFC did this in the Crocs case recently. Here's the CROCS CAFC Order..



Accordingly, the Federal Circuit reversed the ITC’s final determination that the ‘789 patent was not infringed, that Crocs did not satisfy the technical prong of the domestic industry requirement of Section 337 relating to the ‘789 patent, and that the ‘858 patent would have been obvious. Further, the Federal Circuit remanded the investigation to the ITC for a determination of infringement of the ‘858 patent and any appropriate remedies.

If the CAFC does this (as I am about 95% sure they will) it will have a devastating effect on Nokia....to the point that IDCC will have them completely over a barrel. The C&D order would halt all sales of Nokia phones in the US, no matter where they are in the distribution channel. Here is ALJ Luckern's order....he said if his ruling is overturned, he recommends a LEO and C&D order.



On August 14, 2009, the ALJ issued his final ID, finding no violation of Section 337. In particular, he found that the asserted claims of the patents-in-suit are not infringed and that they are not invalid. The ALJ further found that a domestic industry exists with respect to the patents-in- suit. Additionally, the ALJ found that there is no prosecution laches relating to the ‘004, ‘966, and ‘847 patents and that the ‘579 patent is enforceable. The ALJ further found that there is no waiver and patent misuse with respect to the patents-in-suit. The ALJ also issued a Recommended Determination on remedy and bonding, recommending that, in the event a violation of Section 337 is found, the appropriate remedy is a limited exclusion order barring entry of infringing 3G mobile handsets and components thereof and that it would also be appropriate to issue various cease and desist orders. The ALJ also recommended that there is no evidence to support the issuance of a bond during the period of Presidential review.

If this plays out as I believe it will....Nokia will have to sign a license, and the longer they wait the higher the rate will be. If they allow the oral argument to take place, IDCC should simply not settle until the verdict comes out. Samsung signed a license last year and paid 400 Million for 2G/3G coverage through the end of 2012 (most of this was for 3G). During the past 5 years, Nokia has had at least a 50% higher volume of 3G phones than Samsung. Samsung pays 25 Million per quarter....so at a minimum Nokia would be looking at over 35 million per quarter (and probably over 40 Million/Qtr). This would bring IDCC annual earnings to over $6/share and would likely normalize their PE to an area near QCOM's PE (~25). After Nokia settles....Sony/Ericsson and Motorola can't be far behind bringing annual earnings to over $7/share. Then, on top of the 3G market, IDCC has the upcoming tornado of LTE licensing that will be here before you know it. IMHO, IDCC will be getting at least 1.5% on LTE. That's a lot of revenue when you look at the size of the handset market in 2014 with LTE functionality (>$150 Billion).

If you got this far and want to read the final IDCC reply brief...here it is.




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