u-blox has filed a declaratory judgment action in the Southern District of California against Koninklijke KPN N.V. (3:21-cv-01220), a telecommunications provider based in the Netherlands, asserting various claims related to KPN's alleged failure to license its standard essential patents related to 2G, 3G, and 4G cellular technology on fair, reasonable, and non-discriminatory (FRAND) terms. In January of this year, KPN fired off a round of new suits-against u-blox, as well as against Acer, BLU Products, Bullitt Group, Xiaomi, and Yulong Computer Telecommunications Scientific Company (Coolpad Technologies)-in the District of Delaware, where recent dismissals have left only a case between KPN and HTC still headed toward trial there.
In its Southern California complaint, u-blox pleads a breach of contract claim, alleging that KPN failed to meet its obligations to standard-setting organization European Telecommunications Standards Institute ("ETSI") to offer its patents on FRAND terms; seeks a declaratory judgment that KPN breached that FRAND obligation, with proper license terms to be set by the court; and asserts antitrust violations under Section 2 of the Sherman Act. The company also seeks a judgment that certain KPN patents (5,930,250; 9,014,667) are unenforceable because KPN was late in declaring them as essential, arguing that the company did not do so until after KPN had already asserted them in litigation, against Samsung.
The complaint details multiple license offers to u-blox from KPN, each allegedly non-FRAND for various reasons, including one proposed license that included both expired patents and patents not declared standard essential, and another that proposed an "unreasonable" license rate based on the cost of finished devices incorporating u-blox products. u-blox also pleads that "KPN appears intent on pressuring u-blox into a license that is not FRAND by interfering with u-blox's important customer relationships", detailing how KPN accused u-blox's customer, CalAmp, of infringement related to u-blox products.
In KPN's original complaint against u-blox in Delaware, filed in January 2021, KPN accused the company of infringing a single "check data" patent (6,212,662) with a storied history in this campaign, including an Alice demise and subsequent resurrection. In May, KPN amended that complaint to allege infringement of a second patent (8,886,772), prompting u-blox to file a motion to dismiss those claims, for pleading inadequacies as to direct infringement and for failure to allege presuit notice as to indirect and willful infringement. Briefing on that motion has not yet completed.
Acer, Bullitt, and Coolpad are each accused of infringing only the '662 patent; all have answered, with Coolpad pleading multiple counterclaims related to KPN's alleged failure to "offer patents claims to be standard essential on FRAND terms". KPN has moved to dismiss those counterclaims for failure to state a claim, arguing, among other things, that Coolpad failed to allege that the '662 patent is standard essential: "As this Court has held regarding this 'threshold' issue, if the '662 Patent is not essential, KPN owes no FRAND obligations, and 'there is nothing for KPN to breach'" (citations omitted). Briefing has completed on that motion, but no order has issued.
Xiaomi is accused of infringing the '662 and '772 patents. It has filed an answer. The '662 patent is also the only patent at issue in the BLU Products, which was transferred by agreement from Delaware to the Southern District of Florida. There, in late June 2021, the parties stipulated to the infringement of the '662 patent by a long list of products (submitted with the stipulation), as well as to the validity of that patent's asserted claims, leaving BLU Products free to "contest infringement and validity based solely on the expiration dates of" the '662 patent.
Meanwhile, KPN filed a March 31, 2021 complaint in the Eastern District of Texas against Ericsson, asserting five additional patents in a sealed complaint (RE48,089; 8,881,235; 9,253,637; 9,549,426; 9,667,669). An answer to that complaint is due today, July 26.
Back in Delaware, April saw a settlement end KPN's case against Sierra Wireless, with June 2021 dismissals with prejudice, in light of agreements resolving the parties' disputes, ending litigation with first LG Electronics and then BlackBerry. A trial to have begun this spring has now been booted into September-HTC is the party left facing that date. District Judge Leonard P. Stark is in receipt of multiple motions, most of them sealed, the court having held a May hearing that prompted several additional filings, including the initial determination in an action filed by Black Hills Media, LLC before the International Trade Commission (ITC) (337-TA-882) with portions related to whether multiple devices, not assembled or bundled at the time of importation, can satisfy certain patent claims. Most recently, HTC has asked (by letter) Judge Stark for a hearing to reopen discovery to depose the named inventors of the '662 patent pursuant to letters rogatory (needed to navigate international issues facing discovery requests in US federal courts).
This latest FRAND litigation comes as the US Department of Justice (DOJ) appears poised to revisit its policy on SEP antitrust enforcement. While the DOJ's Antitrust Division pushed for the resolution of SEP disputes under contract law instead of antitrust under the prior administration, President Biden recently issued an executive order that called for the Attorney General and Secretary of Commerce to consider changing that policy. For more on that potential shift, and a primer on SEP policy under the past two administrations, see RPX's second-quarter review.
The Southern District of California case filed by u-blox against KPN has been assigned to District Judge Cynthia Ann Bashant. 7/2, Southern District of California.
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