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Judge Likens Apple, Ericsson to Untrue Fiances in Patent Case

July 27, 2022, 7:14 PM

A Texas federal judge chided both Apple Inc. and Ericsson Inc. for their actions ahead of a December trial in a 5G patent licensing dispute, comparing them to future spouses who are seemingly unfaithful to each other ahead of their nuptials.

“This strikes me that it’s much like two people who tell the world, ‘We can’t wait for our wedding in December and we’re so anxious to get married,’ and neither one seems to be particularly [chaste] or true to the other while the wedding is yet to take place,” Judge Rodney Gilstrap of the Eastern District of Texas said, according to a July 21 emergency hearing transcript obtained by Bloomberg Law.

Gilstrap, for example, pressed Apple’s counsel for suggesting the revival of an expired 2015 licensing agreement as a way to settle the dispute without first discussing it with Ericsson’s counsel.

Last week’s hearing was held after Apple asked the court to order that Ericsson “indemnify” it for any costs incurred after a Colombian judge earlier this month blocked 4G and 5G iPhone sales in the country.

Apple claimed that Ericsson broke an agreement to work out the global licensing rate for the standard-essential patents used in 4G and 5G mobile phones in the Eastern District of Texas, but Ericsson maintains it has a right to enforce its patents in courts across the world.

Attorneys representing Apple argued in court that the Colombia sales injunction chips away at the Texas court’s jurisdiction over the licensing dispute and improperly attempts to pressure Apple into settling before trial. In the meantime, Ericsson should cover the costs of Apple’s lost business in Colombia, said Joseph Mueller of Wilmer Cutler Pickering Hale and Dorr LLP.

“If this is like a wedding, we’re at the altar. We are ready and waiting to conclude a rate for the global portfolio right here as soon as possible,” he said. “What we’re asking is that Ericsson bear the responsibility for the financial consequences of what they’re doing, and if the injunction is overturned as erroneous later, that they would provide the indemnification.”

Counsel and spokespeople for the parties didn’t immediately respond to requests for comment on the hearing.

Gilstrap Skeptical

While Gilstrap said he didn’t “necessarily endorse” the kind of ex parte actions that Ericsson launched, he appeared skeptical of Apple’s claims that the Colombia injunction would derail the Texas proceedings.

“Whatever pressure is being created, it’s not on me. It’s not on this Court,” Gilstrap said. “It may be on your client, it may be on you, but it’s not on me and it’s not interfering with this proceeding.”

Apple’s counsel then offered Gilstrap “another option that we didn’t put in the briefing.” Fish & Richardson PC attorney Ruffin Cordell, who also represents the iPhone maker, suggested that Gilstrap revive the companies’ 2015 licensing agreement, which covered 2G, 3G, and 4G technology. It expired in January, giving rise to the current dispute.

“It would be a fairly straight forward matter for the Court to blue pencil that agreement and extend its term such that it would expire whenever the judgment is final in this case,” Cordell said.

The suggestion prompted Gilstrap to probe whether Cordell mentioned this idea to opposing counsel—he hadn’t— and to quip “nothing like a surprise in the middle of the courtroom.”

Proposal Rejected

Nick Mathews of McKool Smith PC, representing Ericsson, quickly shot down the suggestion and said the old agreement didn’t take into account Ericsson’s new 5G technology.

“It would have been great to hear about this when we ran into each other at dinner last night, but I’ll let that one slide,” he said. “We don’t agree with the terms of that prior license. Ericsson’s patent portfolio has completely changed.”

Mathews also emphasized that Ericsson is eager to resolve the licensing dispute in Texas and that the Colombian injunction needn’t stand in the way of that.

“We absolutely want to try this case. Nothing that’s happening in Colombia is going to impact this trial in December,” he said. “We’re looking forward to this rate adjudication. We want it to happen.”

Gilstrap ended the hearing without a ruling from the bench and said he’d inform the parties of his decision on the indemnification request soon.

Wilmer Cutler Pickering Hale and Dorr LLP, Fish & Richardson PC, and Gillam & Smith LLP represent Apple. Alston & Bird LLP, Hueston Hennigan LLP, and McKool Smith PC represent Ericsson.

The case is Ericsson Inc. et al v. Apple Inc., E.D. Tex., No. 21-cv-00376.

To contact the reporter on this story: Kelcee Griffis in Washington at kgriffis@bloombergindustry.com

To contact the editors responsible for this story: Adam M. Taylor at ataylor@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com