Patents - Optis Cellular Technology v Apple Retail

Jane Lambert

Patents Court (Mr Justice Meade) Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others  [2021] EWHC 1739 (Pat) (25 June 2021)

This was the second of a series of trials between the claimant patent portfolio owners and the defendant implementors in FRAND litigation.  The trial had been intended to decide the validity and essentiality of European patent (UK) number 2 229 744 B1 and whether it had been infringed.  One of the defences was proprietary estoppel or, alternatively, acquiescence.  Essentiality was conceded just before trial leaving validity and proprietary estoppel or acquiescence as the only issues.  The case came on for trial before Mr Justice Meade in April 2021,   He delivered judgment on 25 June 2021. At para [563] of his judgment, he  held that the patent was valid and that the proprietary estoppel/acquiescence defence failed.

The Invention

The abstract summarized the invention as follows:

"Method and arrangement in a first node for requesting a status report from a second node. The first node and the second node are both comprised within a wireless communication network. The status report comprises positive and/or negative acknowledgement of data sent from the first node, to be received by the second node. The first node comprises a first counter configured to count the number of transmitted Protocol Data Units, PDUs, and a second counter configured to count the number of transmitted data bytes. The method and arrangements comprises initialising the first and the second counter to zero, transmitting data to be received by the second node, comparing the value of the first and the second counters with a first threshold limit value and a second threshold limit value and requesting a status report from the second node if any of the threshold limit values is reached or exceeded."

The Patent

The description is amplified between paras [91] and [100] of the judgment,   The claims in issue were 1, 6 and 9.  The judge quoted them between paras [101] and [104].

Claim 1

The judge broke claim 1 into the following integers at para [101]:

"(a) Method in a first node (110) for requesting a status report from a second node (120), the first node (110) and the second node (120) both being comprised within a wireless communication network (100),

(b) the status report comprising positive and/or negative acknowledgement of data sent from the first node (110) to be received by the second node (120), wherein the method comprises the steps of:
(c) transmitting (306) a sequence of data units or data unit segments to be received by the second node (120), the method further comprises the steps of:
(d) counting (307) the number of transmitted data units and
(e) the number of transmitted data bytes of the transmitted data units, and
(f) requesting (310) a status report from the second node (120)
(g) if the counted number of transmitted data units exceeds or equals a first predefined value, or the counted number of transmitted data bytes of the transmitted data units exceeds or equals a second predefined value."

Claim 6

His lordship broke down claim 6 into integers as follows at para [102]:

"(a) Method according to any of the previous claims 1-5, further comprising the steps of:

(b) resetting (311) the first counter (421) to zero, 

and resetting (312) the second counter (422) to zero."

Claim 9

Finally, the learned judge broke claim 9 into the following integers:

"(a) Method according to any of the previous claims 6-8,
(b) wherein the steps of resetting (311, 312) the first counter (421) and the second counter (422) is performed
(i) when the first predefined value is reached or exceeded by the first counter (421)
or
(ii) when the second predefined value is reached or exceeded by the second counter (422)."

Construction

As the parties could not agree on the meaning of the above claims, Mr Justice Meade construed them between para [107] and para [146].

Previous Litigation

The patent had been litigated in Unwired Planet International Ltd v Huawei Technologies Co Ltd and others [2015] EWHC 3366 (Pat), [2016] Bus LR 435  and Unwired Planet International Ltd v Huawei Technologies Co Ltd and others [2017] Bus LR 1971, [2018] RPC 6, [2017] WLR(D) 276, [2017] EWCA Civ 266.  At para [13] the judge said that he had looked at the first instance judgment but had not studied it closely,  It appeared to him that the approaches and arguments, in that case, were very different from those that were before him.  He endeavoured to approach those arguments entirely afresh.

Validity

The defendants attacked the patent on grounds of anticipation and obviousness.

Anticipation

Mr Justice Meade noted at para [148] that there was no dispute on the general overarching approach that an anticipatory disclosure must be clear and unambiguous and “plant the flag."  Where a method claim is in issue, the prior art must disclose all the method steps of the claim. It is not enough that a prior art method has the same result as the claimed method. Navigation by the stars and by a compass might both result in heading due North but by different methods.  His lordship referred to Lord Hoffmann's speech in Merrell Dow Pharmaceuticals Inc v HN Norton & Co Ltd.  (1996) 19(1) IPD 19004, (1997) 33 BMLR 201, [1996] RPC 76, [1995] UKHL 14 that "an anticipating piece of prior art does not have to have the equivalence of language, but of teaching so that Amazonian Indians would refer to quinine as that which came from cinchona bark while chemists used its chemical name."  He added that rearranging a mathematical equation may do no more than describe the same thing in a different way. 

Prior Art 

The prior art relied upon by the defendants were a PCT application for a method and apparatus for enhancing RLC for flexible RLC PDU size known as Pani under international application number WO2008097544A3 and "InterDigital” (TDoc R2-071618).  

Pani

Pani was filed before the priority date of the patent in suit but published afterwards.  S.2 (3) of the Patents Act 1977 provides

"The state of the art in the case of an invention to which an application for a patent or a patent relates shall be taken also to comprise matter contained in an application for another patent which was published on or after the priority date of that invention, if the following conditions are satisfied, that is to say -
(a) that matter was contained in the application for that other patent both as filed and as published; and
(b) the priority date of that matter is earlier than that of the invention."

To satisfy the conditions in paragraphs (a) and (b), Pani relied on an earlier priority document known as P3.  The judge discussed P3 from para [160] to para [201].

His lordship held that there had not been sufficiently clear disclosure of using byte counting and PDU counting together in the same method, so as to trigger a status report if either exceeds a predefined value. He agreed that there was a clear disclosure of byte counting and triggering a status report by polling once a byte threshold had been passed but that did not mean that there was a disclosure of using them at the same time in one method as required by claim 1.   As for claim 9, he was not persuaded that there had been a sufficiently clear disclosure of resetting both counters once the PDU counter threshold was passed.   It followed that the patent had not been anticipated by Pani.

InterDigital

InternDigital was a T-Doc or proposal to one of the specification groups of 3GPP (the Third Generation Partnership Project) in May 2007.   3GPP is an association of national and regional standard-setting organizations.  The technical problem that the invention sought to solve was unnecessary polling and stalling as a result of memory limitations. The T-Doc defined the problem similarly:

"The existing window-based polling mechanism is based on sequence numbers. When flexible RLC PDU size is configured, large RLC PDU sizes will be transmitted and the RLC receiver window memory will fill up well before the current criterion for window-based polling is met if a typical value is used for the Poll_Window parameter (e.g 90%). This will result in transmission stalling."

One solution: would be to configure the Poll_Window parameter with a much smaller value, such as 20%, to ensure that polling is always triggered before the memory is exhausted. However. that would result in premature polling when smaller RLC PDU sizes are transmitted.  The proposed solution was to work out the percentage occupancy of the window and trigger a poll when that reaches or exceeds the limit defined by Poll_Window.   A formula was suggested for calculating the triggering of the poll.

His lordship considered how InterDigital might work with some worked examples and concluded that it operated differently from the patented invention.  He concluded at [246] that neither claim 1 nor claim 9 of the patent in suit had been anticipated by InterDigital. He added at [247] that claim 6 did not matter.

Anticipation by Equivalence

A patent is anticipated if a prior disclosure would have infringed the patent had the patent preceded the prior disclosure.   In Eli Lilly v Actavis UK Ltd and others  [2017] Bus LR 1731, [2017] RPC 21, [2017] UKSC 48 changed the law on infringement.  Lord Neuberger, who delivered the lead judgment, said at para [54]:

"In my view, notwithstanding what Lord Diplock said in Catnic [1982] RPC 183, 242, a problem of infringement is best approached by addressing two issues, each of which is to be considered through the eyes of the notional addressee of the patent in suit, ie the person skilled in the relevant art. Those issues are: (i) does the variant infringe any of the claims as a matter of normal interpretation; and, if not, (ii) does the variant nonetheless infringe because it varies from the invention in a way or ways which is or are immaterial? If the answer to either issue is “yes”, there is an infringement; otherwise, there is not. Such an approach complies with article 2 of the Protocol, as issue (ii) squarely raises the principle of equivalents, but limits its ambit to those variants which contain immaterial variations from the invention. It is also apparent that the two issues comply with article 1 of the Protocol in that they involve balancing the competing interests of the patentee and of clarity, just as much as they seek to balance the encouragement of inventions and their disclosure with the need for a competitive market."

As InterDigital would not have infringed the patent on a normal construction, Mr Justice Meade allowed the defendants to plead that it would have infringed by equivalence. The learned judge directed himself to apply the three re-formulated Improver questions:

"i) Notwithstanding that it is not within the literal meaning of the relevant claim(s) of the patent, does the variant achieve substantially the same result in substantially the same way as the invention, ie the inventive concept revealed by the patent?
i) Would it be obvious to the person skilled in the art, reading the patent at the priority date, but knowing that the variant achieves substantially the same result as the invention, that it does so in substantially the same way as the invention?
iii) Would such a reader of the patent have concluded that the patentee nonetheless intended that strict compliance with the literal meaning of the relevant claim(s) of the patent was an essential requirement of the invention?"

The judge noted that it was by no means certain that the doctrine of equivalents applied to anticipation observing that it would need to be decided by the Court of Appeal or Supreme Court. The parties agreed that his lordship should take the approach of assuming that equivalence is not available (in line with the approach taken in other cases in the Patents Court), but to make such factual findings as are necessary, and answer the three questions.   The defendants relied on equivalence in relation to integers (d) and (g) of claim 1, (b) of claim 6 and (b) of claim 9.  Applying the re-formulated questions to those integers the learned judge held that the defendants would fail on the first and third question and that the second did not apply,   They would not succeed even if the doctrine of equivalents applies to anticipation. 

Obviousness

There appears to have been no dispute about the basic principles. Mr Justice Meade referred to Actavis Group PTC EHF and others v ICOS Corporation and another  [2019] UKSC 15, [2019] Bus LR 1318 which approved the Windsurfing/Pozzoli 

test of obviousness:

“(1) (a) Identify the notional ‘person skilled in the art’;
(b) Identify the relevant common general knowledge of that person;
(2) Identify the inventive concept of the claim in question or if that cannot readily be done, construe it;
(3) Identify what, if any, differences exist between the matter cited as forming part of the ‘state of the art’ and the inventive concept of the claim or the claim as construed;
(4) Viewed without any knowledge of the alleged invention as claimed, do those differences constitute steps which would have been obvious to the person skilled in the art or do they require any degree of invention?”

The Skilled Addressee

The judge noted at para [33] that there was no dispute that the skilled addressee would have a number of years of practical experience working on the RLC layer, that he or she would be UMTS and LTE standards and that he or she would be involved in standardization work.

Common General Knowledge

His lordship discussed such skilled addressees' common general knowledge between paras [38] and [90].

Inventive Concept or Construction of the Claims in Question

Although paras [271[ to [274] are headed  "Pozzoli Question 3" the judge did not attempt to define the inventive concept.  However, he had construed the claims between [107] and [146], discussed the inventive concept between [91] and [100]  and referred to it again when considering Inter Digital#s solution between [212] and [217].

Differences between Prior Art and Inventive Concept

The question was discussed between paras [271] and [274]. The only prior art relied upon by the defendants was InterDigital.  The judge remarked at [205] that an obviousness argument could have been based on Pani but it was deployed in the argument over anticipation and rejected as such.

His lordship accepted the defendants' contention that the only difference between InterDigital and claim 1 of the patent was using a counter-based approach instead of a window-based approach.  The claimants agreed that if claim 1 was obvious over InterDigital the claim 6 would also be obvious.  Resetting both PDU and byte counters to zero was the difference in claim 9.

Whether those Differences were obvious or whether they required Invention

Mr Justice Meade set out the defendants' case on claims 1 and 6 at [275]:

"i) InterDigital would seem useful to a skilled addressee working on LTE.
ii) Such a skilled addressee would have in mind, because it was CGK, the Editor’s note that either a counter or a windows-based approach was to be used.
iii) The skilled addressee would see that InterDigital had opted for a windows-based approach, and that it addressed stalling from both a PDU number and memory perspective.
iv) The skilled addressee would regard InterDigital as an attractive solution.
v) The skilled addressee would regard counting and windows-based approaches as very similar, although with somewhat different pros and cons.
vi) Whether to use a counter or a windows-based approach was really just a matter of taste and some in the art preferred counters.
vii) It would therefore be uninventive to change InterDigital to a counter-based approach.
viii) The points about attitudes to counter and window based approaches was supported by the TDoc review carried out by Mr Kubota."

He mentioned the claimant's contentions between [276] and  [289].   He accepted that the arguments were finely balanced but preferred the claimants.'   He gave his reasons at para [290]:

"In particular, there is nothing in InterDigital to suggest or motivate a change to a counter-based system, or, as it were, to revisit the choice presented by the Editor’s note. Lack of motivation is not fatal to an obviousness case and indeed in a true workshop modification case there may be no motivation at all, yet the change is obvious in law. However, Apple has failed to make out that this is a workshop modification case."

He regarded the situation on claim 9 as clear and rejected the defendants' obviousness case:

"[292] Assuming that the skilled addressee started from InterDigital they would do so having appreciated that the way that it would deal with superfluous polling would have to be by the use of a poll prohibit timer. InterDigital spells out the superfluous polling problem in sections 2 and 4 but is not explicit about the solution. However, the evidence was that the only solution that would occur to the reader of InterDigital for use in what it proposed would be the poll prohibit timer. The fact that it was under discussion whether LTE would even have a poll prohibit timer would only add to the complexity and might, if anything, put the skilled addressee off InterDigital altogether.
[293] On top of this, such dual “reset” as there might be said to be in windows-based systems, when VT(S) and VT(A) went back to zero at the same time following an all-ACK status report, would be done only on receipt of the status report and not immediately upon reaching the threshold."

Proposed Amendments

The claimants had proposed amendments to claims 1 and 12 had the court held that those claims had been anticipated which the learned judge mentioned at [105].  As he had held that claim 1 was novel he said at [210] that there was no need for any amendments.  His lordship added, however, that the proposed amendments would not have been enough to save the patent had the claims been anticipated.

Proprietary Estoppel

The defendants argued that even if the patent was valid and infringed, there was a proprietary estoppel in its favour that prevented the claimants from enforcing it or restricted the relief that they could obtain.  They relied on the following facts and matters:

"i) On 8 January 2008, Ericsson filed a US Provisional Patent Application No. 61/019746 (“the Ericsson US Provisional”).
ii) The same day, Ericsson uploaded onto 3GPP’s FTP server a technical proposal, a “TDoc”, R2-080236 (“the Ericsson TDoc”). There was a related Change Request but it makes no difference to the argument.
iii) The Ericsson US Provisional and the Ericsson TDoc contained very much the same information as one another, and focused on the “single mechanism” to which I have referred in dealing with the patent issues. They included the pseudocode that appears in [0045] of the Patent.
iv) At two 3GPP RAN Working Group 2 (“RAN WG2”) meetings in 2008, Ericsson’s representatives successfully made a case for the inclusion of the disclosure of the Ericsson TDoc into the LTE standard, leading to its forming part of ETSI Technical Specification TS 36.322.
v) TS36.322 was frozen (the stage 3 freeze date) on 11 December 2008.
vi) Ericsson did not mention the existence of the Ericsson US Provisional at the RAN WG2 meetings and did not declare it to ETSI until 20 May 2010."

At this point, it should be noted that the first claimant acquired Ericsson's patent portfolio including the Ericsson US Provisional and that the patent in suit is based on that filing.   The judge summarized the defendants' argument as follows at [300]:

"i) First, it makes what it calls its “no-IPR” case, which is that ETSI and/or members of RAN WG2 were under an assurance that Ericsson had no IPR over the Ericsson TDoc, as a result of which a chance was lost for them to seek an alternative, unpatented solution. I will refer to “IPR” and “IP” in this judgment generally, although in fact, it is only patents and patent applications, not other forms of intellectual property, that are relevant.
ii) Second, and as a fallback, it says that there was a “loss of process”, such that even if there was no likelihood of the assurance making any difference in terms of a non-patented solution being sought or found, ETSI’s rules and procedures were not followed, and that is enough."

He added that "Ericsson’s omission to reveal the Ericsson US Provisional by declaring it to ETSI, prior to the standard being frozen, was a breach of Clause 4.1 of ETSI’s IPR Policy:

"Subject to Clause 4.2 below, each MEMBER shall use its reasonable endeavours, in particular during the development of a STANDARD or TECHNICAL SPECIFICATION where it participates, to inform ETSI of ESSENTIAL IPRs in a timely fashion. In particular, a MEMBER submitting a technical proposal for a STANDARD or TECHNICAL SPECIFICATION shall, on a bona fide basis, draw the attention of ETSI to any of that MEMBER's IPR which might be ESSENTIAL if that proposal is adopted."

That Policy is subject to French law.  The defendants alleged that it had contractual force between Ericsson and ETSI.

The claimants disputed that they were in breach of Clause 4.1. They said that declaration prior to the stage 3 freeze date was not required, and was rarely done in practice by anyone. They said that in the circumstances the RAN WG2 members would have assumed, if they thought about it, that the Ericsson TDoc was most probably covered by IPR regardless of whether Ericsson declared. The Working Groups (“WGs”) did not and in practice could not consider the IPR status of TDocs. In their submission, Ericsson’s behaviour as to declaration was completely inconsequential.

The judge directed himself to consider the following matters at [309]:

"i) The relevant law of proprietary estoppel.
ii) What is the relevant French law applicable to Clause 4.1.
iii) The general history and arrangement of ETSI and 3GPP. It is almost entirely uncontroversial.
iv) How WGs functioned. There were some disputed aspects of this but they reduced as the trial went on.
v) The operation of the ETSI declaration process. This was also disputed to a minor degree.
vi) The history of how (a) ETSI’s rules and (b) its members’ approach to declaring IP developed, and how they stood in 2008.
vii) What Clause 4.1 requires and whether there was a breach of it
viii) Whether the elements of proprietary estoppel are made out and whether the no-IPR or loss of process arguments succeed."

The claimants also argued that he who comes to equity must come with clean hands and that the defendants were also guilty of declaring patents after the freeze date.   The judge added that if he found proprietary estoppel he would also have to decide whether the claimants could benefit from it, whether the defendants were bound by it and what would be the appropriate remedy,

The Law of Proprietary Estoppel

Mr Justice Meade was referred to the following cases: Yeoman’s Row Management Limited and otherss v. Cobbe [2008] [2008] 35 EG 142, [2008] 31 EG 88, [2008] WTLR 1461, [2008] WLR 1752, [2008] 1 WLR 1752, [2008] NPC 95, [2008] UKHL 55, [2008] 4 All ER 713, [2009] 1 All ER (Comm) 205, [2008] 36 EG 142, Thorner v. Major and others [2009] WLR 776, [2009] 1 WLR 776, [2009] UKHL 18, [2009] Fam Law 583, [2009] 13 EG 142, [2009] 2 FLR 405, [2009] WTLR 713, Mohammed v. Gomez and others [2019] UKPC 46 and Gillett v Holt and another [2000] 2 FLR 266, [2000] WTLR 195, [2000] 3 WLR 815, [2000] EWCA Civ 66, [2000] 1 FCR 705, [2000] 2 All ER 289, [2000] Fam Law 714, [2001] Ch 210. He discerned at [326] that the three main elements of the doctrine were:

i) assurance;
ii) reliance; and
iii) detriment in consequence of the reliance.

He also discerned that unconscionability on the part of the person alleged to be estopped is important to the doctrine and quoted para [92] of Lord Walker's speech in Yeoman:

“[92] Mr Dowding devoted a separate section of his printed case to arguing that even if the elements for an estoppel were in other respects present, it would not in any event be unconscionable for Mrs Lisle-Mainwaring to insist on her legal rights. That argument raises the question of whether “unconscionability” is a separate element in making out a case of estoppel, or whether to regard it as a separate element would be what Professor Peter Birks once called “a fifth wheel on the coach” (Birks & Pretto (eds) Breach of Trust (2002) p.226). But Birks was there criticising the use of “unconscionable” to describe a state of mind (Bank of Credit & Commerce International (Overseas) Ltd v Akindele [2001] Ch 437, 455). Here it is being used (as in my opinion it should always be used) as an objective value judgment on behaviour (regardless of the state of mind of the individual in question). As such it does in my opinion play a very important part in the doctrine of equitable estoppel, in unifying and confirming, as it were, the other elements. If the other elements appear to be present but the result does not shock the conscience of the court, the analysis needs to be looked at again.”

In answer to the defendants' contention that there are few if any cases where the three basic elements of assurance, reliance and detriment have been made out, yet proprietary estoppel has failed because of a distinct finding that unconscionability is not present, he said at [332] that that was true but not surprising:

"Lord Walker’s formulation makes clear that unconscionability is a cross-check which may lead the Court to revisit its analysis on the three main elements. If an allegation of proprietary estoppel fails when such cross-check is made, the failure is likely to be expressed in terms of the absence of one or more of the basic elements."

The judge considered how clause 4.1 would be construed in French law between paras [353] and [392].  He discussed ETSI (European Telecommunications Standards Institute), its governance and procedures between para [393] and [403] and those of the 3GPP between [404] and [428].  He considered the timing of patent declarations at [429] and found that the great majority of them were made after the stage 3 freeze date.  That was the case with all of the defendants' declarations.

At [527] his lordship rejected the defendants' contentions as to clause 4.1.  He added at [531] that no member of the RAN WG2 could reasonably have been under the impression that the Ericsson TDoc was IPR-free.  In the circumstances, there could have been no reliance and any assurance that may have been given would have been irrelevant.    It followed that the defendants' primary defence of proprietary estoppel failed.   

The secondary case was "that there was a loss of the benefit of the process that the ETSI rules, specifically Clause 4.1, should have ensured"   It seemed to his lordship that he was asked to assume that the primary case for proprietary estoppel must have failed, but that there was a breach of Clause 4.1. He reminded himself that the argument remains one of proprietary estoppel, not a breach of Clause 4.1 as such.  The defence appeared to him to be incoherent.

Conclusion
It was therefore unnecessary for his lordship to consider remedies.

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