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Electronics Production | March 28, 2011

Skirmish win for Apple. What's it really worth?

While no platform faces as many patent infringement assertions as Android (37 Android-related patent lawsuits have been filed since March 2010), the most extensive battle between any two smartphone companies is still Nokia vs. Apple.
On Friday, the Administrative Law Judge investigating Nokia's ITC complaint against Apple made a "final initial determination" according to which Apple was not found to infringe any valid Nokia patent claims. This was reported by Reuters and Bloomberg.

It's important to put this into context. The "final initial determination" is not yet a final ruling; and in any event, Apple and Nokia are fighting each other in half a dozen venues of which the ITC is a particularly important one, but not the only one. There is a significant probability now that Nokia and Apple may play out a "goalless draw" at the ITC, in which case the attention will shift to the US District Court for the District of Delaware and, even sooner, to Europe.

Furthermore, Apple's assertions against Nokia relate (almost entirely) to phones running the Symbian mobile operating system, but Nokia is going to increasingly bet on Windows Phone, a platform that Apple is extremely unlikely to attack. Nokia's choice of Windows Phone has probably already changed the calculus of the parties.

I have updated my battlelines chart:

© Florian Mueller

Fortunes can change at any stage of an ITC investigation

In October I explained the role of the US International Trade Commission as a patent enforcement agency. Back then I already mentioned that USITC decisions can be appealed to the Court of Appeals for the Federal Circuit (CAFC). An appellant can request a stay of an import ban, which happened (just for an example) in a dispute between Broadcom and Qualcomm.

But even the ITC itself is not yet done with Nokia's complaint against Apple. The Administrative Law Judge (ALJ) in charge of this investigation made his "final initial determination", and he's unconvinced of any infringement of valid Nokia patent claims by Apple. By coincidence, a decision related to another dispute was announced on the same day: Kodak's complaint against Apple and BlackBerry maker Research In Motion had also failed to convince the ALJ in charge of that case, but the Commission, the ITC's highest-level decision-making body (which has six members), decided to review that "final initial determination". It may now decide in Kodak's favor, against the ALJ's determination, as Bloomberg and Reuters reported.

Until the Commission itself has decided, fortunes can change atany stage of an ITC proceeding, as I told Tech.Fortune.CNN.com in my first reaction to Friday's announcements.

This has consistently been my take regardless of who's on the supposedly winning or losing side. Five months ago, at an earlier procedural stage, there was a negative staff recommendation concerning some of Apple's claims against Nokia. At the time I also cautioned everyone that it was far from a definitive ruling.

"Goalless draw" between Apple and Nokia at the ITC is a possibility

Anything is still possible at the ITC in the three investigations involving Apple and Nokia. Nokia may still have a Kodak moment and get a review of the ALJ's determination by the Commission. Even if Nokia's complaint against Apple was dismissed definitively by the ITC, Apple's assertions against Nokia may very well suffer the same fate.

Both parties have already "lost" some of their allegations along the way:

Friday's determination related to five Nokia patents. Nokia had originally asserted seven, but it dropped two of them during the process.

Apple initially asserted nine patents against Nokia. At this stage, only five of them are still in the game. Most recently, Apple dropped a patent from its complaint. The motion for partial termination was filed on February 22, 2011, and granted on March 1, 2011. Previously, Apple had dropped three other patents asserted against Nokia.

The five Apple patents still in the game include one patent asserted against both Nokia and HTC (the related investigation names both companies as defendants, following a consolidation decision), and four patents asserted against Nokia but not against HTC. And those four patents are the ones about which I said in the previous paragraph that the ITC staff issued a negative recommendation. So in the event the final ITC decision is consistent with the staff recommendation (which it may or may not be), and if the one patent that is asserted in the investigation that additionally involves HTC, then Apple may not obtain an import ban against Nokia either.

Should there really be a "goalless draw" at the ITC, and should the parties continue to fight each other instead of settling, then they will both try to win decisions in other fora, where it will take longer than in those ITC investigations, but not much longer.
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Author: Florian Mueller

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