Richard Epstein and I have published an updated version of our article discussing the FRAND bargain, and why systematic misunderstandings and biases driving American courts’ application of FRAND presents notable dangers that extend far beyond the realm of licensing standard-essential patents. The article will be published in the Berkeley Technology Law Journal later this year.
I was honored to speak at an event hosted by the Hoover Institution at Stanford University, in conjunction with Global Competition Review, regarding the intersection of antitrust and IP law. My esteemed co-panelists, including Mark Lemley, provided a variety of insights as to the role that antitrust should play in setting IP policy. Despite our diverse perspectives, we all largely agreed that antitrust belongs at the periphery of IP law, and that antitrust concerns should only come into play where the patent holder seeks a greater advantage or monopoly than a patent itself confers, e.g., where a branded pharmaceutical company and generic collude as part of a “pay for delay” arrangement. Antitrust should have little say, by contrast, with respect to the proper interpretation or application of FRAND commitments—an issue that is largely a private contractual dispute, and not a basis for government antitrust intervention.
On November 2, 2016, Judge Gilstrap issued an order enhancing damages against LG and entering final judgment for Noroozi PC’s client, Core Wireless Licensing S.a.r.l.
The Court’s decision emphasized LG’s detailed pre-suit knowledge of the patents-in-suit, as well as its licensing negotiation conduct, in which LG invited Core Wireless representatives to Korea only to state that LG found litigation “preferable” to a license.
The Court also noted testimony obtained during a deposition by Kayvan Noroozi, in which LG’s corporate representative admitted that “after thorough review of the patents-in-suit he concluded that the patents are novel and non-obvious.” Dkt. 47 at 2.
In conclusion, the Court found that LG’s conduct was “driven by its resistance to being the first in the industry to take a license, and not by the merits or strength of its non-infringement and invalidity defense.” Dkt. 47 at 3.
The decision appears to be the first damages enhancement in a standards-essential patent case. LG had previously sought to categorically preclude such an outcome through a motion for summary judgment, arguing that willful infringement is unavailable in cases involving standard-essential patents. The Court disagreed, acknowledging extensive evidence of willfulness presented in Core Wireless’s opposition briefing and refusing to adopt LG’s “bright line” proposition.
On September 16, 2016, a jury in the Eastern District of Texas found that LG has willfully infringed two telecommunications patents owned by Noroozi PC’s client, Core Wireless S.a.r.l., a division of Conversant Intellectual Property Management. The jury awarded a running royalty of 6 cents per unit.
The patents are directed to improving battery life and voice quality in mobile phones, and are part of a portfolio of more than 1,200 patents and applications formerly owned by Nokia.
Noroozi PC, along with co-counsel from Russ, August, and Kabat, entered the case on June 19, 2016, and significantly shifted the litigation landscape despite a mostly closed record.
Core Wireless will seek enhancement and ongoing royalties.
Coverage & Press Releases:
On August 4, 2015, the Federal Circuit issued its long-awaited opinion in Carnegie Mellon University v. Marvell Technology Group, Ltd., et al., deciding key issues in a multi-billion dollar patent litigation matter.
Most critical, however, was what the court did not decide: namely, whether Marvell (MRVL) can be held liable for the sale of billions of accused chips that were manufactured abroad and never entered the United States. Instead, the appellate court sent that issue back down to the district court for further development of the factual and legal record.
That outcome raises two questions: (1) whether the result of the remaining litigation will materially impact Marvell shares based on current valuations, and if so; (2) what litigation outcome should we expect, and why?
This analysis addresses the first question and concludes that Marvell shares are likely to move materially based on the pending litigation outcome. The second issue—whether Marvell will win or lose—will be the subject of a separate, forthcoming analysis.
For decades, Abercrombie & Fitch built a multi-billion dollar clothing business through advertisements showcasing practically nude men and women—a remarkable feat of irony. That success demonstrated that Abercrombie’s true product has been a particular lifestyle image. As Abercrombie’s founder, Mike Jeffries, admitted in 2006, that image rested on exclusion.
“Candidly, we go after the cool kids. We go after the attractive all-American kid with a great attitude and a lot of friends. A lot of people don’t belong [in our clothes], and they can’t belong. Are we exclusionary? Absolutely.”
And as Jeffries further admitted, Abercrombie’s hiring policies were built on that same exclusionary principle.
“[W]e hire good-looking people in our stores. Because good-looking people attract other good-looking people, and we want to market to cool, good-looking people. We don’t market to anyone other than that.”
So when Samantha Elauf, a hijab-clad, practicing Muslim, applied for a sales associate position at an Abercrombie & Fitch store in 2008, Abercrombie’s policies left only one possible outcome.
In Horne v. Dep’t of Agriculture, the Supreme Court recently held that the Department of Agriculture’s confiscation of significant percentages of raisin growers’ crops, without compensation, violated the Takings Clause of the Fifth Amendment. The decision has been hailed as a victory for property rights and a rebuke to governmental overreach.
But to the contrary, Horne merely demonstrates that the Supreme Court has reduced the substantive protections of the Takings Clause to procedural formalism, rewriting the Takings Clause and its own precedent along the way.
The facts of Horne arose out of the Agricultural Marketing Agreement Act of 1937, a piece of New Deal legislation that created government cartels for certain agricultural products, including raisins, in order to subsidize and prop up their prices. To that end, the Act empowers the Secretary of Agriculture to promulgate “marketing orders” that require growers like the Hornes to give a percentage of their annual crop to the Government, for no compensation.
In 2002, the Government ordered raisin growers to hand over 47 percent of their crop. The Hornes refused. When the Government sought to collect more than $680,000 in fines and penalties, the Hornes brought suit, invoking the Takings Clause.
It would appear axiomatic that a change in the applicable standard of review should make a significant and systematic impact on reversal rates. Empirical evidence validates that hypothesis as a whole: after the Federal Circuit held in 1998 that it would review district court claim constructions in patent cases entirely de novo, the Federal Circuit’s reversal rate on claim construction shot from roughly 20% to over 40%.