FLASH: A Heads up for shorts
The sealing of documents in IDCC-Ericsson has a loophole (sorry David). With the assistance of super-sleuths Charlie Chan and Ghors, today we reviewed three unsealed depositions (available in the Harris-Ericsson case) that were originally deposed and sealed for IDCC-Ericy.
Many of you will recall the rumors (going around for some years) that IDCC has a smoking gun - in the form of depositions from Ericy executives. It’s no longer a rumor; it’s a fact.
Of course, these need to be considered in the context of the whole case - but the presence of these, IMO, significantly strengthens IDCC’s case and I understand IDCC’s trial strategy.
IDCC has depositions from (at least) three Ericy executives. The ones that we saw – and have copies of parts - are from Joran Hoff, Goran Nordlundh, and Kristian Wennerholm. All three were involved in investigating and analyzing IMM’s patents from 1988 onwards. These depositions are on oath and are recorded on videotape for presentation to the jury. There may be more depositions but only these three were used in HRS-Ericsson.
In the depositions, the Ericsson employees ‘hum n' haw’, can’t remember, don’t recall, and use Clinton-speak well before Bill’s encounters with Monica forced him to parse sentences word by word. As an aside, one of the documents in the Exhibits (shades of Arthur Andersen/Enron) is Ericsson’s Document Retention Policy!
Under oath, Ericsson employees acknowledge writing memos which state that…’ IMM has the first patent covering a base station for TDMA (etc.), …any previous publication or patent that describes this has not been found,…and the patent cannot be successfully attacked… the recommendation is that the patent should be licensed’.
Also, Ericy’s judgments were based on having the Kinoshita ‘prior art’ available to them. Ericy’s conclusion (of IDCC’s patent validity) was also supported by an independent review by the Swedish telephone company (Televerket).
In addition, there’s one Ericy document recording an internal meeting (in which IMM patents were discussed) which contains a hand-written notation…’Per Hoff, we infringe IMM patent’. Mr. Hoff had a tough time explaining under oath that he hadn’t told the 4 U.S. meeting attendees that Ericsson infringed the IMM patent. In another twist, think about this, at the time the meeting was held (1988), Ericsson may not have built or sold any products containing IDCC’s IPR. So, the annotation could have been marching orders.
In a separate deposition from Goran Nordlundh, he confirms that in 1992 Ericsson agreed to pay a ‘fair and reasonable royalty to Motorola'. IMO, this is setting the stage for the royalties that Ericsson should pay to IDCC – if IDCC prevails. He also confirms that, in 1992, Ericsson did not have any essential GSM patents.
The depositions reveal that Ericy’s actions were not just restricted to themselves. Ericy was (and probably still is) actively involved in the GSM Working Party 5 (a club of GSM supporters). This Euro-centric club took active steps to minimize the royalty payments that might be due to non-club members (read IMM and Motorola) who held blocking or essential licenses for GSM.
This Working Party listed IDCC’s ‘863 patent (and from Motorola) as essential to GSM based on Ericsson’s report to WP5! The British representative raised the issue of the high licensing fees (up to $6 million per country per year). WP5 raised the idea of forming a legal entity to negotiate lower licensing fees with IMM and MOT! Imagine this, Europe trying to stiff U.S. technology companies in front of a Dallas jury. Gotta love it!
(Without my checking), it’s likely that Nokia was also a member of the GSM Working Party 5 Club. However, as we all know, Nokia settled with IDCC in 1999. Think about this in the context of the earlier paragraph and the timing of the revalidation of IDCC patents. Then ask yourself; why did Nokia settle when they earlier had been in the Euro club!
In another twist in the deposition, Ericsson actively planned to disrupt the progress of AT&T (who were ahead technically) by trying to introduce changes to the standards. All of this is painting a pattern of behavior.
In addition, in September 1993, Ericsson exchanged confidential information with OKI for the joint purpose of challenging and defeating IDCC. They entered into a formal agreement in December 1993.
Finally, Ghors spotted a deposition from another Ericsson executive, Richard Lyon, General Counsel of U.S. Operations. He stated, in a meeting with IMM,...' that the royalties were unacceptably high excessive and that Ericsson considered them unacceptable. (Need to relate this to royalties paid by E to MOT). Note, as Ghors did, Lyon didn't say that IMM's patent wasn't valid!
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I’ve used a different reporting style for this post; rather than give a play-by-play description. Ghors and Chartex assisted on the analysis. If anyone has specific queries, please post. JK
