Germany is Latest Battleground in Apple Patent Wars: IPCom v Apple

On 28 February 2014, a German court dismissed a patent-infringement claim for US$2.2 billion in damages against Apple (LG Mannheim, 2 O 53/12 and 2 O 95/13). IPCom, a German patent-holding firm, claimed that Apple owed it damages for iPhones sold in Germany because Apple had allegedly violated its patent for granting mobile devices access to cellular networks.

Patent Portfolio as Sword

IPCom is a firm that holds patents without any intention to use them to produce products. The strategy underlying IPCom’s ownership of a portfolio of technology patents is to profit off of royalties, licence fees, and successful enforcement of the patents.

This business strategy has led to criticism of IPCom as a “patent troll,” a pejorative term for companies that engage in economic rent-seeking by merely holding patents without using them in industrial processes.

Patenting Emergency Network Access

IPCom acquired the patent at issue, the “100A patent” by Apple, from a German car-parts maker that designed car phones but left the industry before the proliferation of mobile devices. This patent is for the process of sending information to a network for the purpose of identifying the priority class of the device.

The description of the patent says that identifying a particular device’s priority is achieved by sending a bit (as in a digital bit: 0 or 1) to the network. Assessing the priority class of a mobile device is especially useful when networks are overloaded because it enables emergency access to a network if a device has a high priority.

One Bit or Three?

The Mannheim Regional Court, located in southwestern Germany, did not publish reasons for its decision. However, a hearing for this case held last month focused on the patent’s description of accessing a network with only a single bit. Apple argued at this hearing that it requires at least three bits to express a priority level and that the patent’s definition of a single bit access procedure does not apply to Apple’s technology. IPCom alternatively argued that the court should read the patent more expansively and consider it to be in use when the standard three-bit priority access signal is sent to networks. IPCom has announced that it will appeal the ruling.

Germany as Patent Battleground

Patent battles often occur in Germany as a result of its standing as Europe’s largest economy. German courts are regarded in the industry as more efficient than other European courts at dealing with patent disputes. As a result, over two-thirds of patent claims in Europe are now filed in Germany.