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Apple countersues HTC in Virginia for abuse of 4G LTE FRAND patents

June 24, 2012

The legal battle between Apple and HTC is getting more and more complicated, as the two companies are filing more attacks against each other. Just yesterday, we talked about HTC’s defense against Apple’s most recent complaint with the ITC (the iPhone maker has three such lawsuits against HTC), with the Taiwanese company saying that Apple needs a whole new lawsuit in case it wants to obtain an import ban against 29 HTC devices including the HTC One X and the HTC EVO 4G LTE.

But HTC also has itself two ITC actions against Apple, and we have recently reported on the second one, as the ITC decided not to allow HTC to use five of the eight patents included in its case against Apple, as they are owned by Google. Furthermore, from the three patents left in play, two of them are apparently FRAND patents, or standards-essential patents, related to 4G LTE technology.

And that’s exactly why Apple has sued HTC again, or better said filed a counterclaim, in the United States District Court of the Eastern District of Virginia – counterclaims can’t be filed with the ITC, but have to be filed in federal court. Apple basically says that HTC is abusing these 4G LTE patents, which the Taiwanese company deemed to be standards-essential patents in its original ITC complaint.

Here are some quotes taken from Apple’s document:

[…] for the first time specifically accused Apple of infringing the ADC patents based solely on the fact that Apple devices contain baseband chips that implement the LTE standard. […]
[i]n light of the purported essentiality of the ‘219 and ‘944 patents, those patents should have been disclosed by HTC and ADC to the relevant standards setting organizations (‘SSOs’), and commitments to license on fair, reasonable and nondiscriminatory terms (‘FRAND’) should have been made for their purported inclusion in standards and in evolving standards under development”.[…]
[n]either HTC nor ADC has ever disclosed the existence of these patents to the relevant SSOs. […]
HTC and ADC have conspired to conceal from the SSOs the existence of the ADC patents and have purposefully evaded any obligations to license under FRAND terms, a course of conduct HTC continues even as it participates in work on evolution of these same standards.

According to Foss Patents, here’s what Apple’s counterclaim accuses HTC of:

  • breach of contract based on standards-related misconduct;
  • fraud and conspiracy to commit fraud;
  • promissory estoppel;
  • conspiracy under § 1 of the Sherman Act (the cartel paragraph of U.S. federal antitrust law);
  • violation of § 2 of the Sherman Act (the monopoly abuse paragraph of U.S. federal antitrust law);
  • violation of 15 U.S.C. § 8 (illegal restraint of import trade); and
  • violation of Virginia state antitrust law.

Disregarding that legal jargon, we’ll focus on the fact that Apple is saying that HTC is purposely trying to take advantage of two 4G LTE FRAND patents in its ITC complaint against the iPhone maker. The two patents were acquired by HTC from a company called ADC Telecommunications, and it will be interesting to see whether the company will be able to successfully use them against Apple in court.

Apple is involved in similar legal quarrels with other important Android makers including Motorola and Samsung, and both companies have independently sued Apple at some point in the recent years alleging infringement of certain FRAND patents held by one or the other. Both Motorola and Samsung are formally investigated by the European Union for FRAND patent abuse in such legal matters. Moreover, Motorola is also involved in other patent-based cases against other tech companies such as Microsoft, and the Google-owned company is also using FRAND patents in those lawsuits.

While these kind of patents may prove to be a good weapon against Apple, and other companies attacking Android, courts are generally frowning upon the use of FRAND patents to obtain injunctions or import bans. Just recently, Federal Judge Richard Posner thrown out an Apple vs Motorola case with prejudice (meaning neither party can refile the suit in federal court), but he did make it clear that Motorola wasn’t likely to obtain an injunction based solely on FRAND patents.

We’ll be back with more details from this complex Apple vs Android legal conflict in the future, as it unfolds.