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Frand defense in Japan

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1FRAND defense in Japan through Tokyo 10unreasonably too low), etc. proposed to
District Court’s decision of February 28, SAMSUNG on March 4, 2012. Regarding the
2013, and IP High Court’s invitation of above (iii), a specific request may still
“Amicus Brief” of January 23, 2014 AIPLA be found, even if a requester reserves the
MWI IP Practice in Japan Committee possibility of invalidity of a patent to
Pre-Meeting Wednesday, January 29, 2014. be licensed. 10.
Kei IIDA Attorney at Law & Patent 11Court’s Holdings on Issue ? (cont’d).
Attorney Nakamura & Partners. 1. SAMSUNG breached the duties through the
2Parties. Plaintiff Apple Japan G?d? following courses of negotiation with
Gaisha, a subsidiary in Japan of Apple Apple Inc. On Jul. 25, 2011, when
Inc. in the US, importing, selling, etc. proposing a license with a certain royalty
personal computers, hardware and software rate under NDA, SAMSUNG did not show
of computer related apparatus, instruments grounds to calculate the royalty rate. On
attached to computers, etc. manufactured Aug. 18, 2011, Apple Inc., with giving its
by Apple Inc. Defendant SAMSUNG opinion that the royalty rate was too high
ELECTRONICS CO., LTD., manufacturing, based on a certain ground, requested
selling, etc. electronics and electric SAMSUNG to disclose information on
equipment and apparatus, communication licenses with others under NDA so that
equipment and apparatus, and related Apple Inc. may determine whether the
instruments, and parts thereof. 2. royalty rate follows FRAND terms. On Jan.
3Subject Patent. SAMSUNG’s JP patent 31, 2012, SAMSUNG requested Apple Inc. to
No. 4642898 corresponding to show a counterproposal for a license
US7675941(B2), EP1720322(B1), KR100913900 without showing grounds to calculate the
(B1), etc. Method and apparatus for royalty rate. On Mar. 4, 2012, Apple Inc.
transmitting and receiving packet data by showed the draft agreement providing
using pre-established length indicator in licensed patents, a certain royalty rate
a mobile communication system Claim 1: (not unreasonably too low), etc. On Apr.
method for data transmission Claim 8: data 18, 2012, SAMSUNG gave its opinion that
transmission apparatus. 3. the royalty rate was unreasonably too low.
4Subject Products. iPhone 3GS by Nvog86 On Sep. 1, 2012, Apple Inc. expressed that
iPhone 4 by Saibo iPad Wi-Fi?3G model by it was ready for a proposal for a cross
Evan-Amos iPad 2 Wi-Fi?3G model by William license with FRAND terms for the whole 2G,
Hook. 4. 3G and 4G standards under the whole
5Court’s Decision. Confirmed in a essential patents. On Sep. 7, 2012,
declaratory judgment action that defendant SAMSUNG made a certain reaction to Apple
SAMSUNG is not entitled to claim damages Inc.’s expression. On Sep. 7, 2012, Apple
against plaintiff Apple Japan under Inc., with explaining a certain ground to
Subject Patent for manufacture, calculate the royalty rate, showed the
assignment, lease, import, and offer for proposal. SAMSUNG did not react to Apple
assignment and lease by plaintiff Apple Inc.’ proposal. 11.
Japan of Subject Products. In a separate 12Court’s Holdings on Issue ? (cont’d).
provisional injunction procedure, also on A FRAND defense is available for Apple
February 28, 2013, Tokyo District Court Japan against SAMSUNG’s claim for damages
dismissed claimant SAMSUNG’s claim for a under Subject Patent according to Article
provisional injunction against opponent 1(3) (prohibition of abuse of right) of
Apple Japan’s import, assignment, etc. of the Civil Code, since (i) SAMSUNG breached
iPhone 4 and iPad 2 Wi-Fi?3G model under the duties through the courses of
Subject Patent. 5. negotiation with Apple Inc., (ii) SAMSUNG
6Issues. Whether Subject Products fall seeks for a provisional injunction against
under the technical scope of claim 8 ? Apple Japan’s import, assignment, etc. of
Whether Apple Japan’s import, assignment, iPhone 4 and iPad 2 Wi-Fi?3G model under
etc. of Subject Products constitute an Subject Patent, (iii) SAMSUNG notified to
indirect infringement of claim 1 ? Whether ETSI that IPR for Subject Patent was
claims 1 and 8 have invalidation grounds probably essential for UMTS Standards
for lack of novelty or an inventive step ? around 2 years after “substitutive E bit
Whether a patent right under claims 1 and construction” was adopted in UMTS Standard
8 is exhausted or impliedly licensed for “3GPP TS25.322 V6.4.0” according to its
Subject Products because of SAMSUNG’s own proposal. 12.
license to Intel for baseband chips 13Comments. A FRAND defense under
therein ? Whether a FRAND defense is Article 1(3) of the Civil Code is
available for Apple Japan based on a available also against patentee’s claim
contract through SAMSUNG’s FRAND for injunction. The bar for a FRAND
declaration, etc. ? Whether a FRAND defense under Article 1(3) of the Civil
defense is available for Apple Japan Code is probably lower than the bar for a
through SAMSUNG’s FRAND declaration, etc. FRAND defense adopted by Federal Supreme
according to Article 1(3) of the Civil Court of Germany in the “Orange Book
Code ? 6. Standard” case. In general, requirements
7Court’s Holdings on Issues ? & ? or decisive factors for a FRAND defense
iPhone 3GS and iPad Wi-Fi?3G model among under Article 1(3) of the Civil Code are
Subject Products do not fall under the not necessarily clear, especially in the
technical scope of claim 8, since baseband point of whether patentee’s breach of the
chips therein are not based upon UMTS duties to disclose important information
Standard “3GPP TS25.322 V6.4.0” and and to negotiate in good faith only will
therefore do not perform the subject suffice the FRAND defense, and whether
function according to “substitutive E bit SAMSUNG’s acts after the Decision by the
construction” adopted thereinafter. Method Court may meet the duties. 13.
for data transmission in iPhone 3GS and 14Comments (cont’d). Regarding issue ?,
iPad Wi-Fi?3G model among Subject Products in general, a FRAND defense may be
do not fall under the technical scope of available also based on a contract between
claim 1, too. 7. a patentee and a standards organization
8Court’s Holdings on Issues ? & ? for a person who adopts a standard through
(cont’d). iPhone 4 and iPad 2 Wi-Fi?3G patentee’s FRAND declaration to the
model among Subject Products fall under organization according to an IPR policy
the technical scope of claim 8, since and adoption by the person of the
baseband chips therein are based upon UMTS standard. Whether a FRAND defense is
Standard “3GPP TS25.322 V6.4.0” and available even against patentee’s claim
therefore perform the subject function just for specific damages of reasonable
according to “substitutive E bit royalty according to FRAND terms only may
construction” adopted thereinafter, and be a remaining issue, since in this case
then claim 8 claims an invention realizing the Court especially mentioned in the
“substitutive E bit construction”. Method decision that SAMSUNG did not make its
for data transmission in iPhone 4 and iPad assertion for damages. How to calculate
2 Wi-Fi?3G model among Subject Products the sum of reasonable royalty according to
fall under the technical scope of claim 1, FRAND terms and whether the courts can
too. 8. appropriately calculate the sum may be an
9Court’s Holdings on Issue ? The ultimate question. 14.
governing law of issue ? is the laws of 15IP High Court’s Invitation of “Amicus
Japan. According to the good faith Brief” for Appeal Case. The case was
principle under the Civil Code, SAMSUNG appealed to the IP High Court (Case No.
owes the duties to disclose important 2013 (Ne) 10043). The IP High Court
information to and to negotiate in good decided to hear the appeal case by the
faith with Apple Inc. for a license with Grand Panel. The IP High Court further
FRAND terms for UMTS Standard “3GPP announced as of January 23, 2014 that
TS25.322 V6.4.0” under Subject Patent, “Amicus Brief” from the public is invited
since (i) according to ETSI’s IPR Policy for the issue of a FRAND defense in the
and Guideline, on August 7, 2007, SAMSUNG appeal case. Anyone may submit “Amicus
notified to ETSI that IPR for Subject Brief”. The person who submits “Amicus
Patent is probably essential for UMTS Brief” shall submit the same written or
Standards, and declared to ETSI that translated in Japanese to either of the
SAMSUNG is ready to grant a license with attorneys for the parties by March 24,
FRAND terms, (ii) ETSI’s IPR Guideline 2014, and then the attorneys for the
provides that ETSI’s member shall grant a parties will submit the same to the Court
license with FRAND terms for ETSI’s as evidence. If interested, please see the
standard under its essential IPR, and English translation of the announcement
(iii) Apple Inc. specifically requested provided to the IP Practice in Japan
the license to SAMSUNG. 9. Committee. 15.
10Court’s Holdings on Issue ? (cont’d). 16Thank you! Kei IIDA Attorney at Law
Regarding the above (iii), a request must & Patent Attorney Nakamura &
be specific to show requester’s definite Partners Shin-Tokyo Bldg., 6F, 3-1,
intention for a license, and Apple Inc.’s Marunouchi 3-Chome, Chiyoda-ku, Tokyo
request was found specific in light of the 100-8355 Japan Tel: 81-3-3211-8741 Fax:
draft agreement providing licensed 81-3-3214-6367 E-mail:
patents, a certain royalty rate (not k_iida@nakapat.gr.jp. 16.
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