Smartphone & Patents: Issues & Strategies

Smartphones & Patents:
Issues & Strategies

1Q. 2013

©2013 TechIPm, LLC All Rights Reserved www.techipm.com

I. Smartphone LTE Patents


1.1 LTE Patent Portfolios

As of January 15, 2013, total of 842 patents are identified which are directly
related to LTE smartphone implementation in the current US market.

The IPR shareholders (including the number of issued patents and published
applications) 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 the
leader 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 are
issued 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

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%


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%


II. Samsung’s Smartphone
Strategy


2.1 Samsung Galaxy S IV

According to The Kyunghyang Shinmun in S. Korea, Samsung is now
developing the next version of Galaxy smartphone. The new product d
evelopment 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 faster
processor. The new features are the essential elements for the implementations
of deep user experience (DUX). The DUX is considered as a key success factor
for the future premium smartphones.

Additionally, it is expected that the new smartphone can avoid Apple‟s potential
patent infringement lawsuits, unlikely for the case of Galaxy SIII (recently, Apple
claimed that several Samsung Galaxy SIII‟s features infringed its UI patents: htt
p://www.slideshare.net/alexglee/samsung-galaxy-s-iiis-features-targeted-by-app
les-second-patent-lawsuit).


2.2 Samsung’s New Smartphone Strategy

According to Hankyung News (The Korea Economic Daily), Samsung
Chairman Kunhee Lee reviled his new strategy for global market leadership in
smartphones. The most significant point in his new strategy is change to
innovative market leader from the fast follower. Specific to the smartphones,
he insisted development of collaboration ecosystem with vertical and horizontal
business partners for innovative market leadership.

Mr. Kunhee Lee‟s ideas for building the global collaboration ecosystem are as
follows.
(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.


III. Smartphone Patent War


3.1 LTE Patent War Started

TechIPm‟s analysis for patents in recent lawsuit finds that Ericsson used its LTE
patents in ITC litigation against Samsung. Even if several entities claimed the
LTE patent litigation, Ericsson is the first actually used LTE standard essential
patents in patent lawsuit.

Among three LTE patents used in ITC litigation against Samsung, two patents
turned out to be patents identified as LTE standard essential patent candidates i
n TechIPm‟s research for smartphone LTE patents (http://techipm-innovationfro
ntline.blogspot.com/2012/12/smartphone-lte-patent-ipr-governance-4q.html):
Ericsson holds more than 30 issued patents including three LTE
standard-essential patent candidates as of January 15, 2013. Most of
Ericsson‟s LTE patents are characterized by high forward citations.


3.2 LTE Smartphone Killer NPEs -1

TechIPm‟s research for patents that are directly related to smartphone LTE
implementation in the current US market as of January 15, 2013 reveals that
there are more than 400 issued patents shared by more than 20 IPRs holders.

According to GSA (Global mobile Suppliers Association), there are 83 LTE
enabled smartphones as of 2Q 2012. It is also expected that the number of LTE
enabled smartphones will be doubled in two years. These facts imply that there
are enough number of smartphone LTE patents for bring patent infringement
lawsuits and products which can be involved in the patent disputes any time
soon.

TechIPm researched patent portfolios of smartphone LTE IPR holders that do
not manufacture LTE Smartphones (potential NPEs) in the current US market.
The research reveals that InterDigital, Texas Instruments, and ETRI hold the
most threatening smartphone LTE patent portfolios to smartphone
manufactures.


3.2 LTE Smartphone Killer NPEs -2

InterDigital is the most notorious NPE in mobile handset industry. InterDigital
holds more than 20 issued patents including seven LTE standard-essential
patent candidates as of January 15, 2013. InterDigital‟s LTE patents are
developed well strategically to cover key technologies that are essential for LTE
smartphone implementation.

Even if Texas Instruments manufactures some chipsets related to LTE
smartphones, Texas Instruments can be a potential NPE for LTE smartphone
manufactures considering its aggressive patent exploiting strategy. Texas
Instruments holds nearly 20 issued patents including four LTE
standard-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 holds
nearly 20 issued patents including three LTE standard-essential patent
candidates as of January 15, 2013.


IV. Patent Litigation Strategy


4.1Standard Essential Patent Strategy: Lesson from Samsung’s
ITC Litigation against Apple -1

Generally, it is not presumed that holding a patent means its owners have
market power in the context of antitrust violation analysis (35 U.S.C. Section 27
1(d); Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28
(2006)). However, a standard locks in a specific industry because the products
should be compatible with the standard specifications. Thus, holding a standard
essential patent can be considered as having a market power because all
products compatible with the standard specifications should infringe the
standard essential patents.

To avoid the antitrust issue with the standard essential patents, therefore, a
patentee should license the patents on „fair, reasonable and non-discriminatory
(FRAND)‟ terms. Furthermore, a patentee should be careful when he or she
tries to obtain an injunction from courts or ITC for enjoining potential infringers
of the standard essential patents. For example, the European Commission
recently announced its preliminary view that Samsung's seeking of injunctive
relief basis on its 3G standard essential patents can be considered as abuse of
exclusive IPRs prohibited by EU anti-competition laws.


4.1Standard Essential Patent Strategy: Lesson from Samsung’s
ITC Litigation against Apple -2

In recent Samsung‟s ITC case, Samsung sued Apple for 3G iPhones‟
infringement of Samsung‟s 3G standard essential patents. Samsung insisted
that, because Apple‟s iPhones use Intel‟s standard compatible baseband
modem chip, Apple‟s iPhones should infringe Samsung‟s 3G standard essential
patents. Considering the fact, however, that injunction is the only relief for ITC
litigation it would be better bring a suit in a district court exploiting standard e
ssential patents‟ easy-of -proof characteristic (patentee should demonstrate to a
preponderate degree that the accused products meet every limitations of the
claim at issue) and the monetary damage options.

Furthermore, a patent used by Samsung in the ITC litigation turned out to be
not a 3G standard essential patent: it was proposed and accepted during the
standardization process, but never included in the final standard specifications.
This fact shows the importance of alliance in standardization and IP creation
processes. Samsung should have checked the status of proposal during the
standardization process and/or the essentiality of related patents afterward for
amending the relevant claims during the patent prosecution process.


4.2 Apple’s Defense Strategy against Samsung’s Patent
Litigations

The Mannheim court, a German patent court, recently postponed its final ruling
for Samsung due to invalidity possibility of Samsung‟s 3G patents used in
lawsuit against Apple. Most of Samsung‟s 3G patents used in the litigation are
filed during its participation in the 3GPP‟s UMTS standardization, especially afte
r 1999 publication of the initial WCDMA standard specifications. Apple is
exploiting the initial WCDMA standard specifications combined with other
prior arts such proposals presented by other participations during the 3GPP‟s
UMTS standardization process: Samsung‟s sequential and accumulative
inventions should be obvious!

For example, in ITC litigation, Apple alleged that the asserted claims of
Samsung‟s US7706348 are invalid in light of initial WCDMA standard
specifications and a well-known technical book: “Reed-Muller codes were the
only codes that had ever been used for encoding TPCI information in the initial
WCDMA standard specifications. … MacWilliams‟ book is considered to be the
Bible of error correcting codes (to a person of ordinary skill in the art). … 1999
Standard and MacWilliams text together disclose all of the elements of the
asserted claims, and therefore render those claims invalid for obviousness.”

4.3 Steelhead Licensing LLC’s Patent US5491834: FRAND
Defense against the Lawsuit? -1

Recently, Steelhead Licensing LLC, an NPE, sued several mobile phone
manufactures (Apple, HTC, LG, Motorola , RIM etc.) and Telcos ((AT&T,
MetroPCS, Sprint, T-Mobile) for infringement of US5491834, which was
acquired from BT (British Telecommunications). A key issue with this patent
litigation will be whether US5491834 is a standard essential patent for some
mobile communications standards.

TechIPm‟s preliminary research for US5491834 shows that it is a potentially
essential patent for 3G WCDMA standard. As the title, mobile radio handover
initiation determination, suggests it relates to handover determination between
cells in a cellular radio system handling communications between mobile
terminals and base stations. The preamble of the claim 1 also shows the
purpose of the invention: a handover determination system for a mobile radio
network including a plurality of cells, each cell having associated with it a base
station for supporting communications with a mobile unit, the system
comprising.



A potential part of the standard specifications that covers handover
determination 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 between
each of a plurality of candidate base stations and the mobile unit: upon
reception of a MEASUREMENT CONTROL message the UE shall perform
actions ……means for producing an indication of the rise or fall in the said
quality as a function of time: the quantities that the UE shall report to UTRAN
when the event is triggered…..



control means for initiating a handover from a serving base station, supporting
communications with the mobile unit, to another base station, the initiation
being based on the rise/fall as a function of time in the said quality of the
signals 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 for
producing, the mobile unit further comprising signalling means for addressing
the serving base station with an indication of the need for a handover to be
initiated: cells in the active set are involved in soft handover.

said signalling means being arranged to address the serving base station with
an indication of the level of priority of a handover and/or with an indication of
the possibility of a handover contingent upon the proceeding results of
monitoring the quality of the transmitted signal: quality measurements is the
measurements of downlink quality parameters … cells that the UE is monitoring
are grouped in the UE into …..


Thank you!

• If you have any questions
please contact Dr. Alex G. Lee
at alexglee@techipm.com


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