Legal

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GE patent dropped from Access Advance HEVC pool after successful Unified challenge

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Some patent holders and pools designate their patents as relevant or essential to a standard without proper scrutiny or analysis. As part of an ongoing series examining this dubious practice, we highlight U.S. Patent 10,057,603. The ’603 patent is owned by GE Video Compression. Access Advance LLC had identified this patent as purportedly essential to the H.265 (HEVC) standard as part of the Access Advance Patent Pool. But after an ex parte reexamination initiated by Unified Patents led to a significant narrowing of the claim, Access Advance no longer lists this patent as essential. 

Access Advance had identified claim 1 of the ’603 Patent as allegedly essential. That claim recites:

1. A decoder for decoding a data stream including encoded data of a video, the decoder comprising:

an entropy decoding engine configured to decode data from the data stream based on an arithmetic decoding scheme to obtain a sequence of symbols, 

wherein, with respect to at least one symbol of the sequence of symbols, the entropy decoding engine is configured to:

select a context corresponding to the at least one symbol, and 

entropy decode the at least one symbol using the selected context based on the arithmetic decoding scheme, which includes updating a probability model associated with the selected context at one of a first update rate under a high-efficiency mode of entropy decoding and a second update rate, that is lower than the first update rate, under a low-complexity mode of entropy decoding; and

a reconstructor configured to reconstruct at least a portion of the video based on the sequence of symbols.

Unified filed its reexamination request on December 21, 2020, based on prior art that clearly disclosed claim 1. Given the strength of the prior art, the USPTO quickly determined that a substantial new question of patentability had been raised. A formal rejection issued on June 25, 2021, detailing how the prior art rendered the claim invalid. Of importance here, the claims were found to only cover the specific, corresponding disclosures in the specification rather than the broad, functional language that was clearly taught by the prior art. In the following months, the patent owner attempted to dissuade the examiners of this interpretation, but those attempts failed, and the reexamination concluded on January 26, 2022. 

Under U.S. law, a patentee is only allowed to use the broad, functional language at issue here if it is willing to be limited to the specific disclosures in the patent that correspond to the functional language. Patent asserters like Access Advance have tried to shirk this requirement when asserting their patents, taking advantage of claim language that looks broad on its face. Worse, Access Advance kept this patent in its May 2022 list of allegedly-essential patents only to finally remove it from its October 2022 list, nearly 10 months after the reexamination concluded.

Hence, the importance of formal scrutiny is demonstrable. Overbroad assertions of hundreds of patents that allegedly cover critical technical standards can, and should, be meaningfully analyzed. In the end, the public benefits when it is clear which are the truly valid and essential patents. Challenges to such assertions have a proven track record of sifting the wheat from the chaff.

Unified Succeeds in RPI Decisions

For the past decade, across more than 300 proceedings, Unified Patents has won every real party-in-interest (RPI) challenge—whether at institution, on final written decision, or before the Federal Circuit.  

Unified’s status as the sole RPI was challenged in its first filed IPR, where the Board held that Unified was the sole RPI. Unified Patents Inc. v. Clouding IP, LLC, IPR2013-00586, Paper 9 (Mar. 21, 2014) (members were not found to be RPIs, where there was no evidence of funding or control of the particular IPR; challenged claims were later cancelled in a Final Written Decision issued April 26, 2015). Unified overcame every such challenge in the proceeding years. Today, RPI designations are rarely challenged and largely settled law.

Read more about Unified’s RPI decisions on our website HERE.

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Proven Networks proven to be PAE in public interest statements

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On January 27, 2022, Unified Patents filed a public interest statement in the ITC on the Proven Networks v. NetApp (inter alia) investigation. Unified focused on Proven Networks' status as a litigation funded, investment-driven NPE run and controlled by the Russ, August, and Kabat firm. Read the public statement below and also find comments from a member of Congress, NetApp, and others.

Unified’s statement was written by Christine Lehman of Reichman Jorgensen LLP and by in-house counsel, Jonathan Stroud and Jung Hahm.

Checking Essentiality within Access Advance - An HEVC Case Study

Some patent holders and pools designate their patents as relevant or essential to a standard without proper scrutiny or analysis. As part of an ongoing series examining this dubious practice, we highlight U.S. Patent 10,575,014. The ‘014 patent is owned by the Electronics and Telecommunications Research Institute (ETRI) and Korea’s Kyung Hee University. The ‘014 patent is purportedly essential to the H.265 (HEVC) standard as part of the Access Advance Patent Pool and it is part of a family of at least 30 applications globally. It should not be considered essential. 

The ‘014 patent is directed to the encoding/decoding and partitioning/reconstruction phases of video coding. Generally, instead of transmitting every frame (i.e., image) of every video, including its corresponding data, the encoder and decoder will each generate a prediction of the image and only transmit the difference between the prediction and the original image (i.e., the residual). The decoder will then use its prediction (and the residual, if one was sent) to reconstruct the image. 

The ‘014 patent requires that when residual information is sent from the encoder to the decoder, then the decoder will add it to the predicted pixel values it generated in order to reconstruct the image. See, e.g., claim 1 (“generating the target block based on an intra prediction value and the residual block information”). However, when the encoder decides not to send residual information for a given pixel, the decoder then must look to a neighboring pixel in order to generate the reconstructed image. See, e.g., claim 1 (“generating the target block based on intra prediction direction information decoded from the bitstream”). Stated differently, the ‘014 patent creates a dependency between the prediction mode and the residual flag designating whether or not residual information was transmitted. 

HEVC, in contrast, does not have the same dependency that the ‘014 patent requires. In HEVC, when the decoder decides not to send residual information, the reconstructed image is generated based on the predicted pixel value (not the value of a neighboring block). See HEVC, §§ 7.4.9.5, 7.3.8.8, 7.4.9.8, 9.3.3, 9.3.3.8.  Indeed, in the HEVC syntax tree, the predicted value and the flag that designates whether residual information is sent are separate and distinct elements. See HEVC, § 7.3.8.5. They are, simply, not dependent on one another. In modern coding, predictions are accurate and a necessary first step in the order of operations. Thus, there is little reason to complete a prediction, then ignore it in favor of using the neighboring block’s value when reconstructing an image.     

Thus, the ‘014 patent does not appear to be essential to the HEVC standard even though it has been declared essential and actively licensed as being so. The public would benefit from appropriate scrutiny of such large patent pools that allegedly cover critical technical standards. 

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FTC Highlights SEP Antitrust Abuses

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The recent remarks of FTC Commissioner Rebecca Kelly Slaughter on standards essential patents (“SEPs”) are commendable, as is her emphasis on the role antitrust law plays in curtailing anticompetitive abuses of them. The abuses Slaughter highlights mostly impact small- and medium-sized businesses, “the ‘little engines that could’ of our economy,” who lack the resources to navigate complex legal issues and are “more likely to cave to supra-FRAND rates out of fear of exclusion.” Patents do not grant companies a free pass to abuse their dominant market positions through anticompetitive means.

Commissioner Slaughter emphasized that patents are not—and cannot become—an absolute shield for anti-competitive conduct by SEP holders: “When patent holders obtain market power by virtue of being included in standards, the way they exercise that market power is not immunized from the antitrust laws merely because patents are involved.” Specifically, owners of SEPs are obligated to license their patents to willing licensees on fair, reasonable, and non-discriminatory (“FRAND”) terms, and U.S. antitrust policy plays an important role in policing those matters.

Clear antitrust policies are imperative to ensure sincere FRAND licensing practices. Without definite antitrust policies, SEPs can skirt FRAND requirements, leading to “holdup,” or the practice of prohibiting businesses from implementing technologies that implement standards unless they agree to higher royalties and more unfavorable licensing terms than the SEP owner could have obtained before the standard was set, when alternative technologies were available.

Commissioner Slaughter identified three examples of holdup evincing anticompetitive conduct: (1) refusing to license a SEP to any willing licensee in violation of a FRAND  commitment, (2) conditioning an SEP license on taking or giving a cross-license to non-essential patents or that are SEPs of unrelated standards (i.e., bundling), and (3) requiring a license to a portfolio where some or all of the patents are not even identified, let alone provided with the relevant information needed by a potential licensee to assess whether the patents under negotiation are valid, enforceable, and essential to the standard’s implementation, or offered on non-discriminatory terms.

This disproportionately affects small businesses, who lack the bargaining power to negotiate with SEP owners and the resources to defend against SEP assertions. Theoretically, federal judges occasionally enforce FRAND terms in patent cases, but as Commissioner Slaughter pointed out, that case needs to first get to court and continue on to a point to reach such a decision, and “if small and medium entities are agreeing to supra-FRAND terms because they are afraid of the threat of exclusion after litigation, there necessarily will not be a high volume of cases challenging licensing demands.”

Commissioner Slaughter also underscored the role that standards-developing organizations, or SDOs, have in setting policies that would facilitate licensing and prevent inefficient litigation. SDOs can institute policies that mitigate the harms of holdup by mandating commitments from participants to disclose and/or license standard-essential patents on FRAND terms. SDO policies can also clarify how a reasonable rate may be determined. For example, SDOs may specify a narrow set of circumstances in which injunctive or other exclusionary relief may be an appropriate remedy for “holdout,” i.e., when a potential licensee unilaterally refuses to take a license or unreasonably delays in  doing so.[1]

Commissioner Slaughter’s message that “antitrust laws have an important role to play in the standard-setting context, including conduct related to the use or abuse of SEPs” is laudable. The application of antitrust law in congruence with sound SDO policies to promote “widespread and efficient licensing” at “actual FRAND rates” can reward genuine innovation while also preventing abuses by SEP holders, including assertion of poor-quality, SEP-questionable patents.

[1] As Commissioner Slaughter pointed out, absent collusion, holdout does not pose the same concerns from an antitrust standpoint as holdup, which has the potential to exclude firms from implementing a standard and hurting customer choice among competitors. While competition and consumers are harmed indefinitely when market power is exploited to engage in holdup, there are remedies for holdout.