Optis v Apple - The "Trial D" Appeal

Photo Maebmij Licence CC BY-SA 3.0 Source Wikimedia Commons

Jane Lambert

Court of Appeal (Lord Justices Newey, Arnold and Birss)  Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others [2023] EWCA Civ 758 (4 July 2023)

This was an appeal by Applie Inc and two of its subsidiaries ("Apple") against the judgment of Mr Justice Meade in  Optis Cellular Technology LLC and others v Apple Retail Uk Ltd and others [2022] EWHC 561 (Pat) (15 March 2022) that European patents (UK) 2 187 549 B1 and 2 690 810 B1 were valid, essential to the LTE standard and infringed by Apple.  The action before Mr Justice Meade was called "Trial D" because it was the last of a series of trials to determine whether a portfolio of patents that had been granted to Panasonic and subsequently assigned to the respondents were valid and essential to the LTE standard and whether they had been infringed.  To put this litigation into context, the respondents claimed remuneration for the use of their patents every time the appellants made or sold a phone that complied with the standard.  Apple had denied that the respondents were entitled to such payments on the grounds that the patents were invalid, not essential to the standard and not infringed.  At the end of the technical trials, there is likely to be a trial to determine the amounts that should be paid to the respondents for the use of their patents.   That will be called a "FRAND" trial because the respondents offered to license the use of their patents to implementors of the standard on fair, reasonable and non-discriminatory ("FRAND") terms.

The Appeal;

The appeal came on before Lords Justices Newey, Arnold and Birss between 16 and 18 May 2023.  By a judgment handed down on 4 July 2023, their lordships unanimously dismissed the appeal (see Optis Cellular Technology LLC and others v Apple Retail UK Ltd and others [2023] EWCA Civ 758).  Lord Justice Birss delivered the lead judgment with which the other members of the Court agreed.

The Patents

The patents are concerned with an uplink control channel in LTE called the Physical Uplink Control Channel (PUCCH) which is used by mobile phones when communicating with their ground stations. Both patents relate to a radio communication apparatus and response signal spreading method.   The trial judge discussed the invention in considerable detail in his first-instance judgment.  To understand the following claims it is necessary to know that "ACK" stands for "acknowledged", "NACK" for "not acknowledged"  and "CQI" for "channel quality indicator"  The judgment does not indicate the drawing to which the numbering of the integers refers but the only relevant ones that I could find were Figure 9 of 549 and Figure 8 of 810.  Though they look very similar they were taken from the different specifications. The first claims of both patents were amended as follows pursuant to subparagraph (iii) of para [456] of Mr Justice Meade's judgment.   

Claim 1 of 549 as amended is for:

"A radio communication apparatus comprising: 

a first spreading unit (214) adapted to spread an ACK/NACK signal with a sequence defined by one of a plurality of cyclic shift values;
(a) A radio communication apparatus of a mobile station adapted to spread and transmit an ACK/NACK signal or a CQI signal in accordance with a code-multiplexing structure for code- multiplexing ACK/NACK signals and CQI signals from a plurality of mobile stations, the radio communication apparatus comprising:
(b) a first spreading unit (214) adapted to spread the ACK/NACK signal with a sequence defined by one of twelve cyclic shift values, the sequence being one of twelve sequences that are mutually separable because of mutually different cyclic shift values of the twelve cyclic shift values;
(c) a second spreading unit (219) adapted to spread the CQI signal with a sequence defined by another one of the twelve cyclic shift values, the sequence being another of the twelve sequences;
(d) a third spreading unit (216) adapted to spread the ACK/NACK signal, after the ACK/NACK signal has been spread with the sequence defined by one of twelve cyclic shift values, with a sequence that is one of three orthogonal sequences that each have a different respective orthogonal sequence number of first, second and third orthogonal sequence numbers;
(e) a control section adapted to:
control the spreading of the ACK/NACK signal by the first spreading unit (214) by setting a code-multiplexing cyclic shift value, of first cyclic shift values for spreading ACK/NACK signals, in accordance with the code-multiplexing structure;
(f) control the spreading of the CQI signal by the second spreading unit (219) by setting a code-multiplexing cyclic shift value, of second cyclic shift values for spreading CQI signals, in accordance with the code-multiplexing structure; and
(g) control the spreading of the ACK/NACK signal by the third spreading unit (216) by setting a code-multiplexing orthogonal sequence number, of the first, second and third of orthogonal sequence numbers, in accordance with the code-multiplexing structure; and
(h) a transmitting unit (223) adapted to transmit the ACK/NACK signal, and adapted to transmit the CQI signal,
(i) characterized in that said first spreading unit (214), in each symbol that forms the ACK/NACK signal, uses said code-multiplexing cyclic shift value of said first cyclic shift values, and said first cyclic shift values form a portion of the twelve cyclic shift values, for the ACK/NACK signal;
(j) said second spreading unit (219), in each symbol that forms the CQI signal, uses said code-multiplexing cyclic shift value of said second cyclic shift values, and said second cyclic shift values are not within the portion of the twelve cyclic shift values, for the CQI signal; and
(k) a cyclic shift value between the first cyclic shift values and the second cyclic shift values is not used for either the ACK/NACK signal or the CQI signal,
(l) wherein the first cyclic shift values for spreading ACK/NACK signals and the first, second and third orthogonal sequence numbers are arranged in a 2-cyclic shift interval mesh structure in the code-multiplexing structure, according to which ACK/NACK signals for which the second orthogonal sequence number is set have 2-cyclic-shift-interval cyclic shift values set that are offset by one cyclic shift value with respect to 2-cyclic-shift-interval cyclic shift values that set for the ACK/NACK signals for which the first and third orthogonal sequence numbers are set,
(m) the CQI signals in the code-multiplexing structure are not spread with any of the orthogonal sequences, and
(n) the unused cyclic shift value is positioned after an immediately preceding cyclic shift value for spreading CQI signals, and before an immediately subsequent cyclic shift value for spreading ACK/NACK signals, in the code-multiplexing structure,
(o) so that a minimum value of a difference in cyclic shift values between the CQI signals and the ACK/NACK signals, after said immediately preceding cyclic shift value in the code- multiplexing structure, is equal to the 2-cyclic-shift interval in cyclic shift values between the ACK/NACK signals in the mesh structure."

Claim 1 of 810 as amended is for:

"(a) A mobile station (200) adapted to spread and transmit an ACK/NACK signal or a CQI signal in accordance with a code-multiplexing structure for code-multiplexing ACK/NACK signals and CQI signals from a plurality of mobile stations, comprising:
(b) a receiver (202) configured to receive control information on a control channel element, CCE;
(c) a first spreading unit (214) adapted to spread the ACK/NACK signal with a sequence defined by one of twelve cyclic shift values, the sequence being one of twelve sequences that are mutually separable because of mutually different cyclic shift values of the twelve cyclic shift values;
(d) a second spreading unit (219) adapted to spread the CQI signal with a sequence defined by another one of the twelve cyclic shift values, the sequence being another of the twelve sequences;
(e) a third spreading unit (216) adapted to spread the ACK/NACK signal, after the ACK/NACK signal has been spread with the sequence defined by one of twelve cyclic shift values, with a sequence that is one of three orthogonal sequences that each have a different respective orthogonal sequence number of first, second and third orthogonal sequence numbers;
(f) a control section adapted to:
control the spreading of the ACK/NACK signal by the first spreading unit (214) by setting a code-multiplexing cyclic shift value, of a set of cyclic shift values for spreading ACK/NACK signals in the twelve cyclic shift values, in accordance with the code-multiplexing structure;
(g) control the spreading of the CQI signal by the second spreading unit (219) by setting a code-multiplexing cyclic shift value, of a set of cyclic shift values for spreading CQI signals in the twelve cyclic shift values, in accordance with the code- multiplexing structure; and
(h) control the spreading of the ACK/NACK signal by the third spreading unit (216) by setting a code-multiplexing orthogonal sequence number, of the first, second and third orthogonal sequence numbers, in accordance with the code-multiplexing structure; and

(i) a transmitter (223) configured to transmit the CQI signal using the code- multiplexing cyclic shift value of the set of cyclic shift values for spreading CQI signals; and
(j) the transmitter being further configured to transmit the ACK/NACK signal using the code-multiplexing cyclic shift value of the set of cyclic shift values for spreading ACK/NACK signals, and the code-multiplexing orthogonal sequence number of the first, second and third orthogonal sequence numbers,
(k) characterized in that
 (l) the CCE is associated with a physical uplink control channel, PUCCH, and the PUCCH is determinative of a cyclic shift value among the twelve cyclic shift values comprising the set of cyclic shift values for spreading CQI signals and the set of cyclic shift values for spreading ACK/NACK signals, with one or more unused cyclic shift values separating the set of cyclic shift values for spreading CQI signals and the set of cyclic shift values for spreading ACK/NACK signals,
(m) the set of cyclic shift values for spreading ACK/NACK signals and the first, second and third orthogonal sequence numbers are arranged in a 2-cyclic shift interval mesh structure in the code-multiplexing structure, according to which ACK/NACK signals for which the second orthogonal sequence number is set have 2-cyclic-shift-interval cyclic shift values set that are offset by one cyclic shift value with respect to 2-cyclic-shift-interval cyclic shift values that are set for the ACK/NACK signals for which the first and third orthogonal sequence numbers are set,
(n) the CQI signals in the code-multiplexing structure are not spread with any of the orthogonal sequences, and
(o) an unused cyclic shift value, of the one or more unused cyclic shift values, is positioned after an immediately preceding cyclic shift value for spreading CQI signals, and before an immediately subsequent cyclic shift value for spreading ACK/NACK signals, in the code- multiplexing structure,
(p) so that a minimum value of a difference in cyclic shift values between the CQI signals and the ACK/NACK signals, after said immediately preceding cyclic shift value in the code-multiplexing structure, is equal to the 2-cyclic-shift interval in cyclic shift values between the ACK/NACK signals in the mesh structure. 

The Issues

The issues in the appeal were:

• The construction of the above claims and whether Apple had infringed those claims;
• If claim 1 of 549 is to be construed in the way alleged by the respondents, whether it was anticipated by a document known as "Nokia" which had been produced for the relevant standard-setting group; and
• Whether claim q of 810 was obvious over a document referred to as "the Kobe agreement,"

Claim Construction

Apple argued that claim 1 of 549 did not simply require the device to be capable of performing the specified functions, it actually required the device to be doing those things.  The reason for that argument was that as mixed resource blocks are not in use in the UK,  no mobile in this country would ever infringe the patents on such a construction. A similar argument had succeeded at first instance in Coflexip SA and another v Stolt Comex Seaway MS Ltd and others [2000] IP&T 1332, [2000] EWCA Civ 242 though it had been reversed on appeal.  Lord Justice Birss said that  Coflexip was illustrative but could not be taken too far because that was a different case with a different patent specification.  The trial judge rejected Apple's contention for the reasons set out in para [20] of Lord Justice Birss's judgment. On appeal, Apple contended that Mr Justice Meade had erred on (i) the wording of the claims, (ii) the wording of the specification and (iii) the nature of the invention.  

As to its first point, the appellant argued that the word "adapted" at the beginning of claim 1 referred to a product able to perform as specified after the word "characterized" but that the word "characterized" required the actual doing of those things,   It was submitted that the product was known but the use was not and it was the use that constituted the invention,   Lord Justice Birss disposed of that argument at para [27]:

"Furthermore the appellant’s argument also breaks down when one appreciates that a mobile is not expected to do both (i) and (j) at the same time (and the skilled reader would appreciate that). Feature (i) is about transmitting an ACK/NACK signal and feature (j) is about a CQI. But when the CMS is operating these are sent by different mobiles. Therefore for these two features to characterise a single mobile (which is what the claim plainly requires) they must refer to what that mobile will do in certain circumstances and not to what it is doing at any given moment. This shows that even the appellant’s construction requiring that the CMS must be 'in existence' only works if these terms are read as referring to the capabilities of the mobile. To make sense the word 'uses' has to refer to what will happen if the mobile is sending an ACK/NACK or a CQI. In that case these features have the meaning found by the judge and there is no hook on which to hang the reading in of a further limitation that the CMS has to be in existence."

In his lordship's view the words "adapted" and "characterized" were to be given their natural meanings.

As to the wording of the specification, Apple relied on a reference to Figure 7 as prior art and contended that the only thing that differed from the prior art was the use described in claim 1 after the word "characterized".

Mr Justice Meade had held that Fig 7 was not prior art and not part of the common general knowledge Lord Justice Birss agreed with the trial judge at para [36] of his judgment and said that that was enough to dispose of the argument.  A skilled addressee would think that the adjective “conventional” was a mistake and ignore it.   The Lord Justice then addressed Apple's subsidiary point that para 63 of the specification taught as follows:

"A base station and mobile station according to Embodiment 2 of the present invention have the same kind of configurations as a base station (see base station 100 in FIG.8) and mobile station (see mobile station 200 in FIG.9) according to Embodiment 1, and differ only in regard to part of the processing performed by the control channel allocation section (control channel allocation section 102 shown in FIG.8)."

Apple also argued that para 63 was supported by para 69:

"A base station and mobile station according to Embodiment 3 have the same kind of configurations as a base station (see base station 100 in FIG.8) and mobile station (see mobile station 200 in FIG.9) according to Embodiment 1, and differ only in regard to part of the processing performed by the control channel allocation section (control channel allocation section 102 shown in FIG.8) "

Applet submitted that the patent was stating in terms that the only difference between the base station and mobile according to the different embodiments was in the processing performed within the base station. His lordship considered that to be Apple's best point   However, in his view. the patent stated in terms that the only difference between the base station and mobile according to the different embodiments lay in the processing performed within the base station. 

As for the nature of the invention which was Apple's last point, the appellants had argued that the invention was about the coordination by the base station of the use of uplink code resources by multiple mobiles so that all of their signals were able to be received without interference at the base station. They continued that what mattered for the invention, was not just the code resource being used by one mobile but the fact that it was using a code resource that was sufficiently distinct from that being used by all the other mobiles using the same resource block.  Lord Justice Birss was not persuaded.  He said at para [43]:

"The simple answer is that the high level summary of what the invention is concerned with and its advantages does not demand that the mobile device claim should be understood as limited to the device when the relevant CMS is in operation. That is because a mobile capable of doing the right thing in the right circumstances is itself a useful object, worth claiming, and something which takes advantage of the invention.  That is the point of the mobile telecommunication standards. Even if only some networks deploy a particular feature and others do not, to be a device in accordance with the standard the device must be capable of acting appropriately in the right circumstances. As the judge held at paragraph [248] the appellant’s point provides no reason for what is an unusually restrictive approach to 'adapted'"

His lordship concluded at [44] that Mr Justice Meade's construction of claim 1 of 549 was right.  The mobile device must be capable of operating with the relevant code multiplexing structure when required to do so but was not limited to a situation in which that code multiplexing structure was in fact in use.

Whether the Appellant's Phones infringed

Lord Justice Birss reframed the issue as a question of whether Apple's phones were "adapted" for use with the relevant technique.  He observed that this was also a matter of construction.   The trial judge had found at paras [288] and [289] of his judgment that the appellant's phones were so adapted because they could perform the relevant function without reprogramming.

Apple took issue with the word "reprogramming" relying on Lord Justice Birss's judgment in Koninklijke Philips Electronics NV v Nintendo of Europe GmbH [2014] EWHC 1959 (Pat),  In that case, the question was whether a general-purpose computer without the relevant programming could still be said to perform a particular function.  His lordship held that the answer was "no".  The fact that a general-purpose computer could be programmed in such a way as to make it suitable for carrying out the function did not mean that a general-purpose computer on its own was itself suitable for performing that function. Until the software was installed, it was not.  The appellants argued that the same reasoning applied to their phones.

A similar point arose in IPCOM GmbH & Co Kg v Vodafone Group Plc and others  [2021] Bus LR 813, [2021] RPC 10, [2021] EWCA Civ 205, [2021] WLR(D) 105.  In that case, the claim was directed to a scheme in a telecommunications system in which a certain class of users, such as the police, would get privileged access to the network's resources in preference to other users.  The relevant claim was for a telecommunications system with a base station “set up to send” the relevant signals whereby the privileged access system would operate.  Such a system was not in use in the UK and a series of steps would have to take place to alter the behaviour of base stations from their normal operation.  At first instance, Mr Recorder Campbell held that taking those steps amounted to reprogramming and the Court of Appeal agreed.

Apple tried to draw an analogy between Phillips and INCOM.  Mr Justice Meade had rejected the analogy and Lord Justice Birss agreed.  The trial judge had been right to reject the appellants' argument for non-infringement and conclude that its mobiles infringed and were essential to the standard. In this case, the skilled addressee reading the patent would have had no difficulty in seeing that the mobiles were capable of operating in accordance with the relevant CMS when required to do so,  He or she would understand that that would satisfy the claim. Such a skilled person would also understand that the claim was for a feature of a telecommunications standard.  A crucial difference between IPCOM and the present case was that the former was about a base station which would require a series of adjustments to be made before the police or other privileged users could enjoy priority access whereas the present case was about handsets which would work as specified in the claim as soon as the phone moved to a cell with a base station with the relevant CMS.

Whether Claim 1 of 549 had been anticipated by Nokia

The paper known as "Nokia" had been submitted for the 3GPP standardization discussions in Orlando in June 2007. "3GPP" stands for "Third Generation Partnership Project" and they are the umbrella group of standard-setting organizations that set the LTE standard.  The paper was entitled “Signaling of Implicit ACK/NACK resources” and made proposals about how to tell the mobiles what codes to use for sending the ACK/NACK signals to the base station.  In June 2007, the working group had decided to use the scheme of codes (ZC/CAZAC and Walsh codes) which broadly corresponds to the scheme of the patent claims.  Nokia presented a scheme to map control channel indexes on the downlink transmissions from the base station to the physical code resources to be used for ACK/NACKs on the PUCCH.

Apple argued that a handset constructed to operate in accordance with Nokia would be capable of operating in accordance with claim 1 of 549 and so anticipate the invention. Mr Justice Meade rejected that submission on the ground that the code multiplexing structure in the appellants' example would not accord with the claim.   Lord Justice Birss agreed with Mr Justice Meade.   The fact that a phone could be set up to generate a similar code multiplexing structure of the claim did not mean that it had arrived at that point by the same route as the invention.

Lord Justice Birss said at [73] that the real issue was whether Mr Justice Meade was right to say that it is necessary to examine a code multiplexing structure as a whole to compare it to that of the claim. His lordship believed that the trial judge had been right. To be a mobile within the claim while a given code multiplexing structure was in force, the mobile had to be capable of not doing certain things such as sending an ACK/NACK at the wrong time.  The point of the invention was to mitigate the risk of interference caused by sending ACK/NACKs without the 2-cyclic shift. Nokia's mobile could not mitigate that risk because when its code multiplexing structure was in force the phone would still be capable of sending ACK/NACK signals without the 2-cycle shift.

Obviousness of Claim 1 of 810 over the Kobe Agreement

The learned lord justice remarked that as he had disposed of the anticipation issue it was not strictly necessary to consider whether claim 1 of 810 lacked an inventive strep.   He, therefore, addressed it briefly, His judgment did not refer to the Windsurfing/Pozzoli test in terms but the fact that he construed the claim at para [78] which is the second step of the test suggests that he did.  The trial judge certainly used that methodology.

Lord Justice Birss described the Kobe Agreement at para [6(iii)] as "another, earlier, document arising from the same standard-setting process.  It is a draft report or in effect minutes of the May 2007 meeting of the same group (Paper R1-072646 3GPP TSG RAN WG1 Meeting #49b). Mr Justice Meade did not consider the steps between the nearest prior art and claim 1 of 810 to have been obvious and Lord Justice Birss agreed.

The argument on appeal had been different as Lord Justice Birss explained st [97[:

"At trial the appellant’s case that claim 1 of the 810 patent was obvious was considered in detail and rejected. This was focussed on that claim as being one which required using the CCE number as the means of signalling. The obviousness case advanced on appeal is different (and was not considered below). It works in the following way. First it depends on succeeding in the novelty attack based on Nokia against claim 1 of 549. If that had succeeded then the point would be that all those features which were also in claim 1 of 810 were anticipated by Nokia and so the only difference between Nokia and claim 1 of 810 would be the matter of implicit signalling. Second it depends on succeeding on appeal in overturning the judge’s construction of the claim as requiring that the CCE itself was used for implicit signalling. If that had succeeded then the point would be that the idea of using the channel index number as the means of signalling was obvious and so the claim was invalid. "

As the novelty attack failed and Lord Justice Birss agreed with the trial judge's construction of claim 1 of 810 this argument did not get airborne.

Conclusion

This has not been an easy case to explain or simplify because of the length of the first instance judgment and the complexity of the patent. the wording of which Mr Justice Meade described as verbose at para [205] of his judgment. I, therefore, anticipate a greater than usual volume of readers' enquiries.  Anyone wishing to discuss this case may call me on 020 7404 5252 during office hours or he or she may send me a message through my contact page.