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Smartphone & Patents: Issues & Strategies Presentation Transcript

  • 1. Smartphones & Patents: Issues & Strategies 1Q. 2013©2013 TechIPm, LLC All Rights Reserved www.techipm.com
  • 2. I. Smartphone LTE Patents©2013 TechIPm, LLC All Rights Reserved www.techipm.com
  • 3. 1.1 LTE Patent PortfoliosAs of January 15, 2013, total of 842 patents are identified which are directlyrelated to LTE smartphone implementation in the current US market.The IPR shareholders (including the number of issued patents and publishedapplications) for smartphone LTE patents are Alcatel-Lucent, Apple,Broadcom, Ericsson, ETRI, Huawei, Innovative Sonic, InterDigital,Intellectual Ventures, ITRI, LG, Motorola, NEC, Nokia, NSN,NTT DoCoMo, Qualcomm, RIM, ROCKSTAR, Samsung, Sharp, Sony,TI and ZTE.Among the 24 IPR shareholders for smartphone LTE patents, Qualcomm is theleader followed by LG, Apple, Nokia, Samsung, Motorola, InterDigital, RIM,Ericsson, ZTE, ETRI, TI and NSN (Figure 1.1).Among the 845 patents for smartphone LTE implementation, 471 patents areissued as of January 15, 2013: LG is the leader followed by Nokia, Apple,Samsung, Motorola, Qualcomm, Ericsson, RIM, and InterDigital (Figure 1.2).©2013 TechIPm, LLC All Rights Reserved www.techipm.com 3
  • 4. Fig. 1.1 IPR Share for Smartphone LTE Patents IPR Share for Smartphone LTE Patents Ericsson 4% RIM ZTE InterDigital 7% 4% ETRI 8% 3% Huawei Motorola TI 1% 8% 3% NSN 2% Sharp ROCKSTAR Samsung NEC 1% 1% 10% 1% Sony Alcatel-Lucent 1% 0% Qualcomm ITRI Nokia Other 0% 13% 2% Broadcom 10% Innovative Sonic 0% IV 0% 0% DoCoMo NTT Apple LG 0% 11% 12%©2013 TechIPm, LLC All Rights Reserved www.techipm.com 4
  • 5. Fig. 1.2 IPR Share for Smartphone LTE Patents (Issued Patents) IPR Share for Smartphone LTE Patents (Issued Patents) InterDigital TI Ericsson 3% RIM 4% 7% 7% ETRI Qualcomm Sony 3% NEC 8% 1% 1% Motorola ROCKSTAR NSN 9% 1% 1% Sharp 1% ZTE Samsung Other 1% 11% 3% Alcatel-Lucent 0% LG ITRI 16% 0% Broadcom Apple Huawei 0% 12% 0% Nokia 12%©2013 TechIPm, LLC All Rights Reserved www.techipm.com 5
  • 6. II. Samsung’s Smartphone Strategy©2013 TechIPm, LLC All Rights Reserved www.techipm.com
  • 7. 2.1 Samsung Galaxy S IVAccording to The Kyunghyang Shinmun in S. Korea, Samsung is nowdeveloping the next version of Galaxy smartphone. The new product development project is named „J Project‟ (here, J means Samsung CEO J. Shin).The new Samsung‟s smartphone is scheduled to be launched early 2013.The new smartphone‟s main features will be a flexible display and fasterprocessor. The new features are the essential elements for the implementationsof deep user experience (DUX). The DUX is considered as a key success factorfor the future premium smartphones.Additionally, it is expected that the new smartphone can avoid Apple‟s potentialpatent infringement lawsuits, unlikely for the case of Galaxy SIII (recently, Appleclaimed that several Samsung Galaxy SIII‟s features infringed its UI patents: http://www.slideshare.net/alexglee/samsung-galaxy-s-iiis-features-targeted-by-apples-second-patent-lawsuit).©2013 TechIPm, LLC All Rights Reserved www.techipm.com 7
  • 8. 2.2 Samsung’s New Smartphone StrategyAccording to Hankyung News (The Korea Economic Daily), SamsungChairman Kunhee Lee reviled his new strategy for global market leadership insmartphones. The most significant point in his new strategy is change toinnovative market leader from the fast follower. Specific to the smartphones,he insisted development of collaboration ecosystem with vertical and horizontalbusiness partners for innovative market leadership.Mr. Kunhee Lee‟s ideas for building the global collaboration ecosystem are asfollows.(1) Develop collaboration ecosystem exploiting Samsung‟s strong IPRs.(2) Keep leadership in vertical integration for manufacturing.(3) Build innovative leadership in component technologies such as AP(Application Processor) and mobile display.(4) Acquire creative personals and provide the best environment for them.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 8
  • 9. III. Smartphone Patent War©2013 TechIPm, LLC All Rights Reserved www.techipm.com
  • 10. 3.1 LTE Patent War StartedTechIPm‟s analysis for patents in recent lawsuit finds that Ericsson used its LTEpatents in ITC litigation against Samsung. Even if several entities claimed theLTE patent litigation, Ericsson is the first actually used LTE standard essentialpatents in patent lawsuit.Among three LTE patents used in ITC litigation against Samsung, two patentsturned out to be patents identified as LTE standard essential patent candidates in TechIPm‟s research for smartphone LTE patents (http://techipm-innovationfrontline.blogspot.com/2012/12/smartphone-lte-patent-ipr-governance-4q.html):Ericsson holds more than 30 issued patents including three LTEstandard-essential patent candidates as of January 15, 2013. Most ofEricsson‟s LTE patents are characterized by high forward citations.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 10
  • 11. 3.2 LTE Smartphone Killer NPEs -1TechIPm‟s research for patents that are directly related to smartphone LTEimplementation in the current US market as of January 15, 2013 reveals thatthere are more than 400 issued patents shared by more than 20 IPRs holders.According to GSA (Global mobile Suppliers Association), there are 83 LTEenabled smartphones as of 2Q 2012. It is also expected that the number of LTEenabled smartphones will be doubled in two years. These facts imply that thereare enough number of smartphone LTE patents for bring patent infringementlawsuits and products which can be involved in the patent disputes any timesoon.TechIPm researched patent portfolios of smartphone LTE IPR holders that donot manufacture LTE Smartphones (potential NPEs) in the current US market.The research reveals that InterDigital, Texas Instruments, and ETRI hold themost threatening smartphone LTE patent portfolios to smartphonemanufactures.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 11
  • 12. 3.2 LTE Smartphone Killer NPEs -2InterDigital is the most notorious NPE in mobile handset industry. InterDigitalholds more than 20 issued patents including seven LTE standard-essentialpatent candidates as of January 15, 2013. InterDigital‟s LTE patents aredeveloped well strategically to cover key technologies that are essential for LTEsmartphone implementation.Even if Texas Instruments manufactures some chipsets related to LTEsmartphones, Texas Instruments can be a potential NPE for LTE smartphonemanufactures considering its aggressive patent exploiting strategy. TexasInstruments holds nearly 20 issued patents including four LTEstandard-essential patent candidates as of January 15, 2013.ETRI is a well-known non-profit research institute in S. Korea. In year 2010,ETRI sued 22 mobile phone manufactures over 3G mobile patents. ETRI holdsnearly 20 issued patents including three LTE standard-essential patentcandidates as of January 15, 2013.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 12
  • 13. IV. Patent Litigation Strategy©2013 TechIPm, LLC All Rights Reserved www.techipm.com
  • 14. 4.1Standard Essential Patent Strategy: Lesson from Samsung’s ITC Litigation against Apple -1Generally, it is not presumed that holding a patent means its owners havemarket power in the context of antitrust violation analysis (35 U.S.C. Section 271(d); Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28(2006)). However, a standard locks in a specific industry because the productsshould be compatible with the standard specifications. Thus, holding a standardessential patent can be considered as having a market power because allproducts compatible with the standard specifications should infringe thestandard essential patents.To avoid the antitrust issue with the standard essential patents, therefore, apatentee should license the patents on „fair, reasonable and non-discriminatory(FRAND)‟ terms. Furthermore, a patentee should be careful when he or shetries to obtain an injunction from courts or ITC for enjoining potential infringersof the standard essential patents. For example, the European Commissionrecently announced its preliminary view that Samsungs seeking of injunctiverelief basis on its 3G standard essential patents can be considered as abuse ofexclusive IPRs prohibited by EU anti-competition laws.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 14
  • 15. 4.1Standard Essential Patent Strategy: Lesson from Samsung’s ITC Litigation against Apple -2In recent Samsung‟s ITC case, Samsung sued Apple for 3G iPhones‟infringement of Samsung‟s 3G standard essential patents. Samsung insistedthat, because Apple‟s iPhones use Intel‟s standard compatible basebandmodem chip, Apple‟s iPhones should infringe Samsung‟s 3G standard essentialpatents. Considering the fact, however, that injunction is the only relief for ITClitigation it would be better bring a suit in a district court exploiting standard essential patents‟ easy-of -proof characteristic (patentee should demonstrate to apreponderate degree that the accused products meet every limitations of theclaim at issue) and the monetary damage options.Furthermore, a patent used by Samsung in the ITC litigation turned out to benot a 3G standard essential patent: it was proposed and accepted during thestandardization process, but never included in the final standard specifications.This fact shows the importance of alliance in standardization and IP creationprocesses. Samsung should have checked the status of proposal during thestandardization process and/or the essentiality of related patents afterward foramending the relevant claims during the patent prosecution process.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 15
  • 16. 4.2 Apple’s Defense Strategy against Samsung’s Patent LitigationsThe Mannheim court, a German patent court, recently postponed its final rulingfor Samsung due to invalidity possibility of Samsung‟s 3G patents used inlawsuit against Apple. Most of Samsung‟s 3G patents used in the litigation arefiled during its participation in the 3GPP‟s UMTS standardization, especially after 1999 publication of the initial WCDMA standard specifications. Apple isexploiting the initial WCDMA standard specifications combined with otherprior arts such proposals presented by other participations during the 3GPP‟sUMTS standardization process: Samsung‟s sequential and accumulativeinventions should be obvious!For example, in ITC litigation, Apple alleged that the asserted claims ofSamsung‟s US7706348 are invalid in light of initial WCDMA standardspecifications and a well-known technical book: “Reed-Muller codes were theonly codes that had ever been used for encoding TPCI information in the initialWCDMA standard specifications. … MacWilliams‟ book is considered to be theBible of error correcting codes (to a person of ordinary skill in the art). … 1999Standard and MacWilliams text together disclose all of the elements of theasserted claims, and therefore render those claims invalid for obviousness.”©2013 TechIPm, LLC All Rights Reserved www.techipm.com 16
  • 17. 4.3 Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -1Recently, Steelhead Licensing LLC, an NPE, sued several mobile phonemanufactures (Apple, HTC, LG, Motorola , RIM etc.) and Telcos ((AT&T,MetroPCS, Sprint, T-Mobile) for infringement of US5491834, which wasacquired from BT (British Telecommunications). A key issue with this patentlitigation will be whether US5491834 is a standard essential patent for somemobile communications standards.TechIPm‟s preliminary research for US5491834 shows that it is a potentiallyessential patent for 3G WCDMA standard. As the title, mobile radio handoverinitiation determination, suggests it relates to handover determination betweencells in a cellular radio system handling communications between mobileterminals and base stations. The preamble of the claim 1 also shows thepurpose of the invention: a handover determination system for a mobile radionetwork including a plurality of cells, each cell having associated with it a basestation for supporting communications with a mobile unit, the systemcomprising.©2013 TechIPm, LLC All Rights Reserved www.techipm.com 17
  • 18. 4.3 Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -2A potential part of the standard specifications that covers handoverdetermination is 3GPP TS 25.331 V3.21.0 (2004-12: Radio Resource Control(RRC) protocol specification). Especially, Sections 8.4(measurement procedures for Intra-frequency measurements) and 14.1.6(report quantities in intra-frequency measurements) describe the claim terms:means for monitoring a quality of a signal respectively transmitted betweeneach of a plurality of candidate base stations and the mobile unit: uponreception of a MEASUREMENT CONTROL message the UE shall performactions ……means for producing an indication of the rise or fall in the saidquality as a function of time: the quantities that the UE shall report to UTRANwhen the event is triggered…..©2013 TechIPm, LLC All Rights Reserved www.techipm.com 18
  • 19. 4.3 Steelhead Licensing LLC’s Patent US5491834: FRAND Defense against the Lawsuit? -3control means for initiating a handover from a serving base station, supportingcommunications with the mobile unit, to another base station, the initiationbeing based on the rise/fall as a function of time in the said quality of thesignals associated with the plurality of candidate base stations being monitored:the UTRAN may request a measurement by the UE to be setup…..said mobile unit including the means for monitoring and the means forproducing, the mobile unit further comprising signalling means for addressingthe serving base station with an indication of the need for a handover to beinitiated: cells in the active set are involved in soft handover.said signalling means being arranged to address the serving base station withan indication of the level of priority of a handover and/or with an indication ofthe possibility of a handover contingent upon the proceeding results ofmonitoring the quality of the transmitted signal: quality measurements is themeasurements of downlink quality parameters … cells that the UE is monitoringare grouped in the UE into …..©2013 TechIPm, LLC All Rights Reserved www.techipm.com 19
  • 20. Thank you! • If you have any questions please contact Dr. Alex G. Lee at alexglee@techipm.com©2013 TechIPm, LLC All Rights Reserved www.techipm.com 20