ITC Launches Nokia Investigation, Could Ban WCDMA Handsets

The decision came on an Aug. 7 InterDigital complaint asking the ITC to issue permanent exclusion and cease and desist orders against Nokia. InterDigital also filed a lawsuit “with the same premise” in the U.S. District Court for Delaware. InterDigital filed with the commission because it “has proven to be a more predictable route” for such cases, an InterDigital spokesman said. The spokesman stopped short of calling Broadcom’s success against Qualcomm at the agency an inspiration for the filing, but said InterDigital had been watching that case closely and “sees similarities.”

The commission outlined a rough schedule for the investigation. Commission Judge Paul Luckern will schedule and hold an evidentiary hearing and make an initial determination whether patent law has been violated, the agency said. That determination is subject to review by the full commission. The agency will make its decision “at the earliest practicable time,” it said. The commission said it has a goal of finishing the investigation within 45 days. Any order will take effect 60 days after issued unless disapproved by the U.S. Trade Representative for policy reasons, it said.

The Supreme Court’s recent eBay decision could affect InterDigital’s ability to get an injunction, a Nokia spokeswoman said. The justices ruled that “legal damages may well be sufficient to compensate for the infringement and an injunction may not serve the public interest,” since “an industry has developed in which firms use patents not as a basis for producing and selling goods but, instead, primarily for obtaining license fees.” A commission injunction would be inappropriate since the patents that InterDigital claims to have been infringed “have both been declared by InterDigital as essential to the WCDMA standard,” a Nokia spokeswoman said. By doing that, “InterDigital committed to license them on fair, reasonable and non-discriminatory terms,” which is “very important to the standardization process and industry innovation,” she said.

InterDigital probably wants a settlement, said lawyer Sandvos. Last year, InterDigital forced a $253 million deal with Nokia over another patent dispute. Movement by the commission could motivate Nokia to settle once again, he said. And since the companies agree that the patents are essential to WCDMA, the InterDigital’s price could be much higher, he added. InterDigital may be open to a settlement. “We always approach licensing agreements as a business discussion,” a spokesman said. “Most of our licensing agreements were reached following amicable negotiations and we do already have several 3G licensing agreements with leading players in the industry.” InterDigital took legal action when talks with Nokia failed, he added.

Nokia may get some help from others in the wireless business, Sandvos said. Every company using WCDMA patents will feel the “chill” of the commission’s Nokia investigation, and some may cooperate with Nokia to oppose InterDigital, he said.

The investigation could speed resolution in InterDigital’s district court complaint against Nokia, Sandvos said. Nokia has until Nov. 5 to respond to InterDigital’s complaint in that venue. Once the case gets going, however, InterDigital will start with a wealth of information from the commission case, Sandvos said.

The investigation could throw a wrench in other Nokia litigation, Sandvos said. Nokia asked the commmission Aug. 20 to investigate Qualcomm and ban imports of chips that claimed to infringe Nokia patents (CD Aug. 20 p3). The commission hasn’t responded to the complaint. If it pursues the matter, Qualcomm could use documents revealed in the InterDigital case against Nokia, Sandvos said.