Unwired Planet Comments on ITC Litigation

Welcome to the Unwired Planet blog.  We created this blog to provide interested parties with more information regarding our initiatives, as we try to be as transparent as possible without limiting or impairing our strategy.  With this in mind, we will strive to keep you informed, but we remain circumspect to protect stockholders’ interests.  We plan to update this blog only when we determine that there is publicly available information in court or PTO records that requires explanation or comment by Unwired Planet.

As you are probably aware, Unwired Planet’s first filed patent lawsuit is an ITC complaint against Apple and Research-in-Motion, with a parallel lawsuit in the Federal District Court of Delaware.  We filed the complaint in August 2011.   Below is an update based on the Markman order than was made public on Friday, October 5th.

Monday, October 8, 2012

Our hearing (similar to a trial in Federal Court) is set to start a week from today (Monday, October 15, 2012). 

Quick Summary of Events:

  • On Friday, September 28, 2012, Administrative Law Judge (ALJ) E. James Gildea issued a Markman (or “claim construction”) order (Order No. 46), which provides the meaning of disputed terms in the claims of the patents at issue. In response to a Motion for Clarification filed by Unwired Planet on Monday October 1, the ALJ then issued an additional Order (Order No. 51) on Friday, October 5.
  • As a result of these Orders, all 4 patents in the ITC case have been construed in at least one way that significantly weakens our infringement case.
  • We believe it is very important to note that this result, while disappointing:
    • will not impact any of the 20 patents in our pending cases in Nevada,
    • will not impact any of the other patents in the portfolio except possible indirect implications on the patent family members of the patents-in-suit, and
    • is not binding on the judge in the pending Delaware equivalent case.
    • As of now, the trial is still scheduled to begin on October 15th.  We have requested the court to enter summary determination of non-infringement (given the Markman definitions) and to stay the remainder of trial pending appeal.  This would save unnecessary costs and allow us to commence the appeal process immediately first through an ITC commission review (expected 30 day process), and if that is not successful, through a subsequent Federal Circuit appeal (estimated 1 year process).
    • We have dropped the ‘608 patent from the ITC investigation and will not be appealing the rulings regarding that patent for a variety of reasons.  The ‘409, ‘447 and ‘037 patents, which share a common specification, remain in the investigation.

Our Perspective:

Our patent portfolio is broad and robust (containing 200 patents and 75 applications) and encompasses foundational contributions to the mobile industry.  The pending ITC case is a small part of our strategy, but it happens to have been filed first -- and be publicly observable -- and therefore, in our view, it currently receives the most scrutiny.

Certainly, a positive quick result from the ITC would have accelerated our strategy.  We have been, nonetheless, fully prepared for the possibility of a negative result, and have been taking actions over the last few months designed to better situate Unwired Planet for our long-term licensing effort. These events do not materially impact our long-term plans – as noted, this Markman decision impacted only a small fraction of our 200 patents.

Our pending Federal court cases in Nevada continue unaffected (containing a collective total of 20 patents) and the ITC has no binding effect upon our Delaware case (containing the 5 patents initially filed in the ITC matter).  We also have many valuable patents that are not in pending litigation.  Finally, we have a strategy to address any adverse impact that the ITC proceeding may have had on the foundational patents at issue and their family members.

Simply stated, we remain enthusiastic about this patent portfolio and our licensing prospects.

Detailed Discussion:

The Markman Ruling:

On Friday, September 28, 2012, Administrative Law Judge E. James Gildea (ALJ) issued a Markman (or “claim construction”) order (Order No. 46), which provides the meaning of disputed terms in the claims of the patents at issue.  On Friday, October 5, 2012, Judge Gildea issued the public version of this order, which anyone can read.

We now understand the ALJ adopted Apple & RIM’s position that the terms “wireless mobile telephone”, “two-way communication device” and “mobile device” (as used in the ‘409, ‘447 & ‘037 patents, respectively) exclude any device that uses a “computer module.” 

In the initial Markman Order, however, it wasn’t quite clear what the ALJ’s determination had been. The ALJ concluded in Order 46 that there had been a “disavowal” of subject matter in the ‘037, ‘449 and ‘409 patents, finding that the mobile devices could not contain a “computer module” and still infringe.  However, although the term “computer module” does not appear in the patent claims, the ALJ referred repeatedly to the computer module as something that must be separate from, and in addition to, the processing power already in the cellular phone (see page 77, definition of “computer module”).  This statement, if incorporated into the definition of the mobile device terms, would have potentially preserved our infringement case.  We filed a Motion for Clarification to this effect on Monday, October 1, 2012.  On Friday, October 5, 2012, the ALJ ruled in Order 51 that Unwired Planet’s interpretation was incorrect, and that he did not define a computer module to be separate (see bottom of page 3), therefore severely weakening our infringement case under that construction.

Separately, with respect to the ‘037 patent, which we believe covers the basics of an app store, we interpret the Markman order to be unfavorable to Unwired Planet in one additional way beyond the limitations on “mobile device”, namely, that the ALJ has construed this patent to exclude any download of applications to the mobile device. 

Finally, the Markman order is unfavorable regarding the ‘608 patent in a number of different ways such that our chances of ultimately prevailing on this patent at the ITC are remote. Thus, we have determined to drop the ‘608 patent from the investigation.

The Procedural Status:

As of right now, we remain scheduled to go to trial on October 15th.  We have determined that there is no triable issue of fact with regard to our infringement case under the present claim construction.  We have petitioned Judge Gildea to enter summary determination of non-infringement so that we can pursue an immediate appeal of the claim construction.  We have further requested a stay of the pending trial during the appeal to the commission. Both petitions are currently under consideration by the ALJ. 

Cautionary Language Regarding Forward-Looking Statements

This blog contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding Unwired Planet’s expectations regarding its pending litigation matters, the impact of the Markman order and Unwired Planet’s strategy and plan. All statements other than statements of historical fact contained in this blog are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only current predictions and are subject to known and unknown risks, uncertainties and other factors that may cause Unwired Planet’s actual results, levels of activity, performance or achievements to be materially different from those anticipated by the forward-looking statements. These forward-looking statements are subject to a number of risks, including the uncertainty of the impact of the Markman order, the ability of Unwired Planet to realize anticipated results of its plan and strategy, the ability of Unwired Planet to implement and execute its plan and strategy as well as those risk factors discussed in filings with the U.S. Securities and Exchange Commission (“SEC”), including but not limited to Unwired Planet’s Annual Report on Form 10-K filed on September 7, 2012, and any subsequently filed reports on Forms 10-Q and 8-K. Unwired Planet undertakes no duty to update or revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, after the date of each applicable posting in this blog.

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