Replies to post #424979 on InterDigital Inc (IDCC)

[Paullee]

InterDigital Calls U-blox ‘Unreasonable’ In FRAND Fight
By Ryan Davis

Law360 (May 6, 2019, 5:53 PM EDT) -- InterDigital Inc. fired back at an antitrust suit filed against it by Swiss technology company U-blox on Friday, saying U-blox’s "unreasonable" refusal to negotiate in good faith for a license to InterDigital’s standard-essential wireless patents means it isn’t entitled to fair and reasonable license terms.

Responding to U-blox’s January lawsuit alleging that InterDigital has violated the Sherman Act by demanding unfairly high rates for its patents essential to standards like 4G, the major patent licensing company filed counterclaims alleging that U-blox is infringing and being unreasonable in refusing to take a license.

InterDigital requested a court order that is has complied with its pledge to the organization that sets industry standards to offer its standard-essential patents on terms that are fair, reasonable and nondiscriminatory, or FRAND. It said it has offered such terms, and that the only reason a deal has not been reached is that U-blox has refused to agree to them.

“U-blox has acted as an unwilling licensee, engaging in unreasonable hold-out behavior and failing to negotiate in good faith, and therefore is not entitled to the benefit of InterDigital’s FRAND commitment,” InterDigital said.

The counterclaims also allege that U-blox is infringing two of InterDigital’s patents by selling chipsets that support 4G LTE technology and other standards.

U-blox licensed InterDigital’s patents in 2012, but the parties were unable to reach an agreement when the license expired at the end of 2018. U-blox filed suit on Jan. 1, alleging that InterDigital is violating antitrust law and seeking to monopolize the market for wireless technology by demanding unreasonably high rates for the patents.

U-blox said it was “ready and willing” to license the patents, but that InterDigital never intended to license them on fair terms, seeking rates several times higher than is justified by the strength of the patents.

"U-blox must make an entirely unfair Hobson's choice: refuse to capitulate to InterDigital's unfair demands and risk losing its customers and business, pay InterDigital excessive non-FRAND royalties while the parties negotiate, or agree to a new license that is not on FRAND terms," the complaint said.

In its counterclaims, InterDigital painted a different picture. In largely redacted portions, it described what it said were its good faith offers to U-blox for a new license, but said U-blox's responses were "characterized by delay and avoidance, rather than diligence and good faith" and that the suit was filed just after midnight on Jan. 1, "within minutes after the license expired."

The company said it has been injured by U-blox's failure to negotiate in good faith, since U-blox has been selling products covered by the patents without paying a royalty, and has "wasted the time of InterDigital employees who invested time and resources in attempting to negotiate with U-blox." The company said it is willing to keep negotiating with U-blox or to have an arbitration panel set a FRAND rate for the patents.

The case has attracted the attention of the U.S. Department of Justice's antitrust division, which said in a court filing that U-blox's theory that InterDigital's licensing demands are anti-competitive is "troubling" and "does not properly sound in antitrust law." The government said it will file a full statement of interest in the case when relevant issues are presented for decision.

In February, U.S. District Judge Cathy Ann Bencivengo denied U-blox's request for an injunction to bar InterDigital from demanding that U-blox's customers' pay royalties, saying the complaint’s allegation that the rates offered by InterDigital are unfairly high is "woefully deficient on specifics."

Counsel for the parties could not immediately be reached for comment Monday.

U-blox is represented by Stephen S. Korniczky, Martin Bader, Matthew W. Holder, Daniel L. Brown and Ryan P. Cunningham of Sheppard Mullin Richter & Hampton LLP.

InterDigital is represented by David Steuer, Michael Levin, Maura Rees, Natalie Morgan and Lucy Yen of Wilson Sonsini Goodrich & Rosati PC.

The case is U-blox AG et al. v. InterDigital Inc. et al., case number 3:19-cv-00001, in the U.S. District Court for the Southern District of California.

--Editing by Aaron Pelc.