Certified copy (telex according to Sec. 169 para. 3 of the German Code of Civil Proceedings (ZPO))

4a O 144/14 delivered on 3 November 2015

Beihof, Court Clerk as Registrar of the Branch

Office

REGIONAL COURT DÜSSELDORF

IN THE NAME OF THE PEOPLE

JUDGMENT

In the legal dispute

of SISVEL International S.A., represented by Mr. Karel van Lelyveld, 44, Rue de la Vallée, 2661 Luxemburg, Grand Duchy of Luxemburg,

Plaintiff,

Attorneys of record: Attorneys Arnold Ruess, Königsallee 59a, 40215 Düsseldorf,

versus

1. Haier Deutschland GmbH, legally represented by its Managing Director Sun Shubao, Hewlett-Packard-Strasse 4, 61352 Bad Homburg,

2. Haier Europe Trading SRL, Avenue Charles de Gaulle 115-123, 92200 Neuilly Sur Seine, France,

Defendants,

Attorneys of record: Attorneys Gulde Hengelhaupt Ziebig & Schneider, Wallstrasse 58/59, 10179 Berlin,

the Chamber of Civil Matters 4a of the Regional Court, represented by Presiding Regional Court Judge Dr. Crummenerl, the Regional Court Judge Dr. Büttner, and the Regional Court Judge Haase has ruled on the basis of the oral hearing of 29 September2015

that:

2

I. Defendants are,

1. on penalty of an administrative fine up to an amount of EUR 250,000.00

for each violation - or in the alternative, imprisonment - or imprisonment

up to a period of six months and in case of repeated violations up to a

total period of two years, with such imprisonment to be executed

against Defendants' managing directors, ordered to refrain from:

offering, marketing, or using, or importing or possessing for said

reasons

communications devices of a cellular radio system, comprising means

for detecting a failure in a radio connection, said radio connection

having a plurality of active radio bearers belonging to a radio resource

control connection, comprising means for determining a first expiry time

for a period during which the re-establishment of the lost radio

connection is allowable in respect of said radio bearers, which are used

to provide a service or services of a first category; and means for

determining a second expiry time for a period during which the re-

establishment of the lost radio connection is allowable in respect of said

radio bearers, which are used to provide a service or services of a

second category, said second category of services being different from

said first category of services and said second expiry time being

different from said first expiry time,

in the Federal Republic of Germany;

2. to provide Plaintiff with information about the scope in which the actions

specified in Sec. I.1 have been committed (by Defendants) since 12

September 2007, including

a) the names and addresses of manufacturers, suppliers, and other

previous owners,

3

b) the names and addresses of commercial buyers and retail outlets

for which the products were intended,

c) the quantities of the manufactured, delivered, received, or ordered

products and the prices paid for the relevant products;

in support of which evidence of such information, copies of the

relevant purchase, and sales records (i.e., invoices or alternatively

bills of delivery) must be submitted where confidential details

beyond the accountable data may be blackened out;

3. to provide Plaintiff with accounting about the scope in which the actions

specified in Sec. I.1 have been committed (by Defendants) since 12

October 2007, including

a) individual deliveries, broken down by delivery quantities, times,

prices, and type designations as well as the names and

addresses of the commercial buyers,

b) individual offers, broken down by offer quantities, times, prices,

and type designations as well as the names and addresses of the

commercial offer recipients,

c) advertising done, broken down by advertising media, circulation, as

well as period and range of distribution,

d) acquisition costs broken down by individual cost factors and

generated profits,

where Defendants shall retain the right to disclose the names and

addresses of the non-commercial customers and the offerees to a

certified accountant based in the Federal Republic of Germany to be

designated by Plaintiff and sworn to confidentiality in lieu of Plaintiff,

provided that Defendants bear the associated costs and authorize and

obligate same to inform Plaintiff upon specific request whether a

particular customer or offeree is included in the list;

4. only Defendant 1): to surrender any of the products specified in I.1 that

are in its direct or indirect possession or ownership to a marshal for the

purpose of destruction at the expense of Defendant 1), with Defendant

1) remaining entitled to perform the destruction itself;

4

5. to recall the products noted above under I.1. placed on the market

subsequent to 12 September 2007 from commercial customers with

reference to the judicially established patent infringing status of the

matter and with the binding commitment to refund any fees as well as to

assume all necessary packaging and transport costs as well as customs

and storage costs associated with the recall and to reclaim these

products.

II. It is found that Defendants as joint and several debtors are obligated to

reimburse all damages to Plaintiff that were caused by Nokia Corporation

in 02150 Espoo, Finland, due to actions according to section I.1. in the

time between 12 October 2007 to 30 May 2011, by the Intellectual

Property Asset Trust in Wilmington DE 19801 USA, due to actions

according to section I.1. in the time from 31 May 2011 to 10 May 2012, and

by Plaintiff according to section I.1. since 11 May 2012 and will continue to

be caused.

III. Defendants bear the costs of litigation as joint and several debtors.

IV. The judgment is provisionally enforceable with regard to the operative part

of the judgment for I.1., I.4., and I.5. (order to cease-and-desist, destroy,

and recall), in return for a security bond in the amount of EUR 450,000.00,

with regard to the operative part of the judgment for I.2 and I.3. (order to

provide information and render account) provisionally enforceable in return

for a security bond in the amount of EUR 50,000.00, and with regard to the

operative part of the judgment for III. (cost decision), provisionally

enforceable in return for a security bond in the amount of 110% of the

respective amount to be enforced.

V. The amount in dispute is set at EUR 500,000.00.

5

Facts of the matter

Plaintiff is suing Defendants for the alleged infringement of the European patent EP

1 264 504 B2 (Exhibit B-15, in the German translation under register no. DE 601 30

436 T3 Exhibit B-16; hereinafter: patent in suit), claiming that Plaintiff is the holder

of this patent.

The patent in suit was internationally registered on 23 February 2001, claiming two

Finnish priority dates, i.e., 24 February 2000 (FI 20000438) and 24 March 2000 (FI

20000701) and published on 30 August 2001 as an international application as well

as on 11 December 2002 as a European application. The granting of the patent in

suit was published on 12 September 2007. Plaintiff was entered in the register of

the German Patent and Trademark Office (DPMA) as the holder for the time since 1

October 2012, since it is the legal successor of the Intellectual Property Asset Trust.

Previously, as per 15 February 2012, a transfer of the patent in suit from applicant

Nokia Corp. to the 2011 Intellectual Property Asset Trust (previously: Nokia 2011

Patent Trust) had been entered, as per 11 May 2012 a transfer to Core Wireless

Licensing S.a.r.l. and as per 6 September 2012 a transfer back to the 2011

Intellectual Property Asset Trust.

The patent in suit relates to a method and an arrangement for optimizing the re-

establishment of connections in a cellular radio system supporting real time and

non-real time communications. In response to an objection by Qualcomm Inc. of

12 June 2008, the European Patent Office upheld, after the objection had already

been withdrawn, the patent in suit in its decision on 2 February 2012 (Exhibit B-

18a, in the German version as Exhibit B-18b) in a limited version. An amended

patent specification was published on 29 February 2012. In its pleading of 19

February 2015 (Exhibit G6), Defendants challenged the patent in suit by filing a

nullity action (file no. of the German Federal Patent Court (BPatG) 6 Ni 6/15 (EP),

which has not been ruled on yet.

Claim 17 of the patent in suit reads as follows:

"communications device of a cellular radio system, comprising means (514, 605) for detecting a failure in a radio connection, said radio connection having a plurality of active radio bearers belonging to a radio resource control connection, characterized in that it comprises: - means (511, 515, 605) for determining a first expiry time for a period during which the re-establishment of the lost radio connection in respect of said radio bearers which are used to provide a service or services of a first category is allowable, and

6

- means (511, 515, 605) for determining a second expiry time for a period during which the re-establishment of the lost radio connection in respect of said radio bearers which are used to provide a service or services of a second category is allowable, said second category of services being different to said first category of services and said second expiry time being different to said expiry time."

The drawings below were taken from the patent in suit and illustrate its technical

teaching on the basis of the schematic representation of embodiments:

Fig. 2a Fig. 2b

7

Fig. 4

Fig. 2a and Fig. 2b are both schematic representations of the communication

situations according to the patent in suit in various embodiments. Fig. 3 shows a

method according to the patent in suit in the form of a flowchart, and Fig. 4 shows a

method according to the patent in suit as a phase diagram.

Defendants offer in Germany mobile telephones with the identifications W858,

W861, W867, L901, and W970 as well as tablets with the identifications Haier Mini

Pad D85, Haier Mini Pad 822, Haier Mini Pad 782, G782, and G781 (hereinafter

referred to in their totality as challenged embodiments). Defendant 2) offered the

challenged embodiments at least on the International Radio Show in Berlin in

September 2014.

The challenged embodiments support UMTS ("Universal Mobile

Telecommunications System") and meet the technical standard 3GPP TS 25.331

(submitted in excerpts as Exhibits AR B-21 and AR B-22) in terms of, for example,

the Radio Resource Control Protocol for the connection between the user

equipment and the UMTS Terrestrial Radio Access Network UTRAN, i.e., the radio

access network for UMTS (hereinafter: Standard). The chip sets in the challenged

embodiments were partially manufactured by Qualcomm.

On 10 April 2013, Plaintiff had submitted to the European Telecommunication

Standard Institute (hereinafter: ETSI) a commitment, according to which it is

prepared to license the patent in suit at fair, reasonable, and non-discriminatory

terms (hereinafter: FRAND or respectively FRAND terms). Reference is made to

Plaintiff's explanation in Exhibit AR3. The ETSI is a standardization organization

which, among other things, is responsible for the standardization of UMTS.

8

Plaintiff operates a "Sisvel Wireless Patent Program," which provides for the

licensing of a patent portfolio in the wireless area in which a license for 47 patent

families with over 480 patents is offered of which, according to the information

provided by Plaintiff, 33 patent families with more than 350 patents are to be

essential for various communication standards (GSM, GPRS, UMTS, and LTE).

Plaintiff informed the Defendants' parent companies (Qingdao Haier Electronic Co.,

Ltd, and Qingdao Haier Telecom Co., Ltd) about its "Sisvel Wireless Patent

Program" in letters dated 20 December 2012, 22 August 2013, and 11 November

2013. On 17 February 2014, representatives from Plaintiff and Defendants' parent

companies met, but ultimately, the meeting was unsuccessful. On 29 August 2014,

Plaintiff made another license offer (Exhibit AR B-39), which Qingdao Haier

Telecom Co., Ltd, rejected on 1 September 2014 without making a counteroffer. On

5 December 2014, Plaintiff furthermore offered an interim agreement (Exhibit AR B-

40). The group that Defendants are part of licenses various of Plaintiff's license pool

relating to other technologies.

In a letter dated 13 October 2014, Defendant 1) submitted to Plaintiff a license offer

(Exhibit G4) for the patent in suit for Germany and all European countries in which

the national parallel property rights of the patent in suit are in force (cf. Exhibits

G3/G19). Plaintiff rejected this offer and referenced, in particular, the licensing

negotiations with the parent company of Defendant 1) (cf. Exhibit G5). In a letter

dated 12 August 2015, both Defendants made Plaintiff another license offer, which

has been submitted to the file as Exhibit G19. Plaintiff rejected this offer in its letter

dated 24 August 2015 (Exhibit G21). In the pleading dated 22 September 2015,

Defendants made another license offer. Plaintiff rejected this offer as well.

Defendants submitted in the oral hearing on 29 September 2015 a (original)

guarantee in the amount of EUR 5,000.00 (for the present proceedings and the

parallel proceedings 4a O 93/14) and documents with figures relating to sales

generated with the challenged embodiments.

Plaintiff believes that the local competence of the court follows from infringing

actions that related to all of Germany and therefore also the district of the Regional

Court Düsseldorf.

Plaintiff claims that it is the sole holder of disposition rights with regard to the patent

in suit and is entitled to assert the claims asserted on the basis of the patent in suit.

Plaintiff states that the original applicant, Nokia Corporation, transferred the patent

in suit including all claims already arisen from the patent in suit on 31 May 2011 to

the 2011 Intellectual Property Trust (formerly Nokia 2011 Patent Trust) by written

agreement (Exhibit AR 2a); the Trust, in turn, transferred the patent in suit including

9

all claims that had arisen from the patent in suit to Plaintiff on 11 May 2012 by

written agreement as well (Exhibit AR 2d). The entry of Core Wireless Licensing

S.a.r.l. as the holder on 11 May 2012 had been accidental, which is why the 2011

Intellectual Property Trust had been entered as the holder once again on 6

September 2012.

Plaintiff holds that the technical teaching of the patent in suit is realized and the

standard complied with. Compliance with this standard requires first of all the

establishment of a radio connection with several active radio bearers. On the one

hand, this follows from the fact that the standard mentions the term "radio bearers"

several times in the plural, namely as part of the definition of the task of the radio

resource control (RRC; section 5 of the standard, page 39 et seq. of Exhibit AR B-

24 and page 54 et seq. of Exhibit AR B-26), within the context of the description of

the radio access bearers (section 6.3 of the standard, page 40 of Exhibit AR B-24

and page 55 of Exhibit AR B-26), as well as in the description of the radio resources

control connection release (sections 8.1.4 and 8.1.12 of the standard, page 101 of

Exhibit AR B-24, as well as pages 132 and 151 of Exhibit AR B-26). On the other

hand, the use of several radio bearers in the operation of the challenged

embodiments follows from the circumstance that the challenged embodiments are

able to maintain a phone call and retrieve data at the same time. The concurrent

telephone and data transmission services require for each of the two services a

specific and therefore respectively different radio bearer.

Secondly, compliance with the standard requires two means to identify an expiry

time within the meaning of the patent in suit. Even a timer set for zero seconds is a

timer within the meaning of the patent in suit. Furthermore, Plaintiff believes, the

values of the individual timers are provided by the network with which the terminal

is connected so that, in compliance with the standard, the terminal should be

capable to accept all values provided by the network and correspond with the

standard for at least two timers.

Thirdly, and following from it, the standard requires that the expiry times of the two

timers must differ according to the patent in suit. What is relevant here is how the

terminal is configured to use two different expiry values for the two timers. The

standard requires standard values for these time values, namely 12 seconds for the

first timer T314 and 180 seconds for the second timer T315. Terminals always use

these standard values if the network initially does not provide any values for the

timers.

Plaintiff disputes that Defendants can claim an alleged license from the chip

manufacturer Qualcomm. To avoid patent infringements, Plaintiff therefore believes

that a license even for China is necessary.

10

It believes that Defendants' antitrust objection of compulsory licensing does not

apply. Plaintiff disputes the existence of a market-dominating position created by

the patent in suit. Regardless, however, Plaintiff feels that it is not acting improperly,

because it had offered a license to Defendants' group several times at fair,

reasonable, and non-discriminatory terms. The licensing agreement Plaintiff had

sent (Exhibit AR B39) had been a standard licensing agreement accepted in the

market. Plaintiff believes that it is entitled to demand a global group license across

the entire patent portfolio that is offered. It is not acceptable to grant a license only

for the patent in suit if it is clear at the same time that Defendants continue to

violate Plaintiff's patent rights in China. The granting of a single license is not

practicable. Non-standard essential patents are offered for free within the license.

Plaintiff feels that the licensing fee it demands is appropriate.

Plaintiff is of the opinion that its approach does not constitute an illegal exercising of

rights either. Plaintiff disputes that the previous applicant of the patent in suit

(Nokia) had concealed this from the standardization organization in an improper

and intentional manner. It also disputes that the teaching of the patent in suit would

not have been included in the standard, if the application of the patent in suit had

been known at the time the standard was established.

Plaintiff is asking

the Court to find as it did.

Defendants are asking

that the complaint be dismissed.

Alternatively: that Defendants be allowed to avert compulsory enforcement by provision of security (bank or savings bank guarantee);

Also in the alternative: that the legal dispute be stayed according to Sec. 148 ZPO until the Federal Patent Court has ruled in the first instance on the pending nullity action about the legal validity of the German part of the European patent EP 1 264 504 B2;

Also in the alternative: that Defendants are granted a grace period to be set by the Court prior to a decision about the complaint under 1.1. to allow Plaintiff to submit a new license offer.

Defendants hold that the court does not have jurisdiction for the complaint against

Defendant 2) because it is — undisputedly — based in the Republic of France and

11

because it only exhibited mobile radio devices in Germany on the IFA in Berlin

during the time from 5 to 10 September 2014.

Regarding the facts of the case, Defendants dispute that Plaintiff is entitled to

assert claims regarding the patent in suit, at least with regard to the submitted

period of time.

Defendants believe that the technical teaching of the patent in suit is not a

mandatory requirement for a fulfillment of the technical standard and that the

standard allows for such communication devices, whose operations include just a

single active radio bearer for the radio connection. This is the case for the operation

of the challenged embodiments as well. Defendants furthermore believe that

communication devices according to the standard can also be operated in such a

way that the re-establishment period is set to zero seconds, as is the case in the

German mobile radio networks, where the network requires this re-establishment

period. In that case, there are no means to determine an expiry period within the

meaning of the patent in suit, because an expiry period of zero seconds is not an

expiry period at all. Finally, what is then also missing as well is a realization of the

teaching according to the patent, because there are not two different expiry periods,

but only one expiry period of zero seconds.

Defendants hold that Plaintiff cannot assert a cease-and-desist claim against

Defendants on the basis of the patent in suit. In Plaintiff's opinion, this is essential

to the standard, which means that it can only demand a reasonable licensing fee.

The license offer that Plaintiff made to Defendants' parent companies is

unreasonable. Defendant believes that Plaintiff has not demonstrated the legal

validity and the importance of all patents to be licensed; rather this was only done

with regard to the present patent in suit and the patent asserted in the parallel

proceedings (file no. 4a O 93/14). The quota license demanded by Plaintiff in the

amount of EUR 0.15 to EUR 0.50 is excessive, because it clearly exceeds the

FRAND licensing rate of 0.012%. The flat licensing fee demanded by Plaintiff for

the past is excessive as well.

Furthermore, Defendants hold that Plaintiff's actions are improper, because it is

attempting to collect licensing fees even for terminals manufactured by Defendants

for which exhaustion has already occurred or for which the licensing fees have

already been paid with regard to the patent in suit. Nokia, the original applicant of

the patent in suit is said to have granted Qualcomm a comprehensive license,

which also includes patent in suit (cf. Exhibit G8). This license obligates Plaintiff as

the purchaser of the patent in suit as well (cf. Exhibit G9/9a). Plaintiff conceded that

the function according to the patent is performed by the chip set. A licensing of the

12

chip therefore leads to an exhaustion of the patent rights to the device as a whole.

Due to the Qualcomm license, exhaustion has occurred in particular in China.

Consequently, licensing by Plaintiff is no longer required in China. It is furthermore,

and regardless of the question of exhaustion, improper for Plaintiff to demand

licensing fees for the use of the patent in suit even for those challenged

embodiments for which Qualcomm has already provided a reasonable service in

return. The burden of proof for the chip sets is reversed, which means that it is

Plaintiff's obligation to show that they are not already licensed.

The enforcement of the patent in suit is, according to Defendants, also a case of an

unlawful exercise of a right (Sec. 242 BGB), because Plaintiff is asserting a

dishonestly acquired legal position. The dishonesty lies in the intentional deception

with regard to the presence of essential rights in violation of European antitrust laws

as well as the contractual agreement with ETSI concluded by the former applicant

of the patent in suit Nokia. Plaintiff must claim responsibility for this. Nokia

intentionally hid the patent in suit (and/or its application) during the standardization

process. If it had been disclosed, a different, patent-free technology would have

been considered and/or more favorable licensing fees would have been negotiated

from the start.

Furthermore, Defendants raise the plea of having acted in good faith (dolo agit)

(Sec. 242 BGB) with regard to the assertion of the cease-and-desist claims, because

Plaintiff lacks an interest worthy of protection in this regard. Finally, exploitative

abuse according to Sec. 242 BGB exists, because Plaintiff refuses to grant an

individual license. Rather, it offers a patent portfolio in which obviously not all

patents are essential. From a geographic perspective as well, Defendants believe

that Plaintiff is attempting to force potential licensees to purchase licenses for

patents in a manner that violates antitrust law. With regard to other parts, their

existence and essentiality for the standard or Plaintiff's ownership have not been

clarified.

Defendants plead the statute of limitations. Since it is undisputed that Plaintiff has

been attempting to license, inter alia, the patent in suit, it should have been aware

of the challenged embodiments at the latest from the end of 2012. Furthermore,

Plaintiff assisted with the creation of the standard and therefore should have

known from the time the patent was granted that all mobile radio devices using the

standard are using the technical teaching of the patent in suit as well.

Alternatively, Defendants claim that they should be granted a stay of execution,

because an execution, especially of an operative part of the judgment pertaining to

cease-and-desist, would cause irrecoverable damage. Defendants' customer would

switch to competitors and Defendants would be unable to fulfill already signed

13

supply agreements, which would harm its reputation in an irreversible manner.

Defendants would be unable to recover lost market shares, not even if an operative

part of the judgment pertaining to cease-and-desist were to be repealed.

For other details relating to the status of the facts and the dispute, please refer to

the exchanged pleadings and their exhibits as well as the transcript of the oral

proceedings on 29 September 2015 as well.

14

Grounds

The complaint is admissible and fully justified.

A. The complaint is fully admissible; in particular, the seized court has local jurisdiction

for the complaint against Defendant 2) as its local jurisdiction according to Sec. 39

ZPO has been accepted, because Defendants discussed the matter in the oral

hearings on 27 November 2014 (BI. 68 GA) and 29 September 2015 (folio 223 GA)

without objecting to the lacking local jurisdiction.

B. The complaint is justified. Plaintiff is entitled to the asserted cease-and-desist claim,

the claim to the rendering of information, the destruction, recall, and ascertainment

of the obligation to pay damages according to Art. 64 EPC, Sec. 9, 139 para. 1 and

2, 140a para. 1 and 3, 140b PatG, Sec. 242, 259 BGB within the asserted scope.

Plaintiff has a standing to sue (refer to I. in this regard). The challenged

embodiments literally infringe the patent in suit (refer in this regard to II. and III.).

Plaintiff is furthermore entitled to assert its claims against Defendants, because

neither Defendants' compulsory license objection under the antitrust law nor its

objections based on Sec. 242 BGB apply here (more in this regard under IV). A

stay of the proceedings is not necessary (refer in this regard to VI).

I.

Plaintiff is both entitled to conduct proceedings and has standing to sue.

It is registered in the patent register as the holder, which is why it is already

procedurally entitled on the basis of Sec. 30 para. 3 clause 2 PatG to demand

Defendants to cease-and-desist, because the ceasing and desisting is not owed to

the patent holder, per se, and the cited provisions entitled the registered holder to

procedurally assert the rights under the patent. Furthermore, Plaintiff is entitled

under substantive law on the basis of the written agreements between Nokia

Corporation and 2011 Intellectual Property Trust (Exhibit AR 2a) and between the

2011 Intellectual Property Trust and Plaintiff (Exhibit AR 2d) to assert claims for

damages on the basis of the patent in suit, even for those periods in which its legal

successors held the patent in suit.

What is relevant for the substantive legitimation, however, is the substantive legal

situation.

The entry of a holder in the patent register according to Sec. 30 para. 3 clause 2

PatG does, in fact, entitle the holder to procedurally assert claims on the basis of

15

the patent, but it has no influence on the substantive law situation, which means

that it neither has a law-constituting nor a law-extinguishing effect (FCJ, GRUR

2013, 713 para. 53 — Fräsverfahren). It is true, however, that the registration

develops a double indicative effect both for the substantive accuracy of the entered

ownership as well as for the correctness of the transfer date if and to the extent the

entry of a new holder is related to the claimed transfer of the patent in question in a

clear, chronological context so that then the opposing party would be advised to

demonstrate the specific circumstances that lead to the invalidity of a claimed

transfer of rights and, if necessary, to prove the same, so it can effectively deny the

standing to sue of the registered holder (FCJ, GRUR l.c., para. 60 —

Fräsverfahren).

In this case, a chronological context between the claimed transfers of rights and the

entries in the patent register can be determined. There are approximately eight and

a half months between the substantiated date of the transfer agreement asserted

by Plaintiff and substantiated by the submission of the "Patent Assignment

Agreement" (Exhibit AR 2a; the patent in suit is listed on page 14 of the attached list

on the fourth row from the bottom with the Nokia code 29997), concluded on 31

May 2011 between Nokia Corp. and the Nokia 2011 Patent Trust (later: 2011

Intellectual Property Asset Trust, cf. Exhibit AR 2b), and the entry of the transfer on

15 February 2012. It is true that this period is longer than what is generally

necessary for the entry of a change in owners. It must be taken into account,

however, that the parties involved in the transfer are not based in Germany and that

one of them even has the legal form of a trust under the law of the State of

Delaware so that a longer period of time is needed to effect the entry of the agreed-

upon transfer of a right. By simply disputing the valid transfer, Defendants did not

adequately refute the resulting indicative effect of the entry. Defendants neither

dispute the validity of the "Patent Assignment Agreement" nor the acting persons'

representation authority. Defendants do not submit any evidence indicating that the

patent in suit might have been transferred to a third party instead of the 2011

Intellectual Property Trust. Defendants' objection that Plaintiff did not submit the

part of the agreement that indicates reciprocally agreed-upon services is irrelevant.

Plaintiff was not required to disclose this part because, at least without any specific

indications, it is not apparent how the type and scope of the reciprocal services

could be evidence for the invalidity of the transfer.

Furthermore, Plaintiff submitted the transfer of the patent in suit from the 2011

Intellectual Property Asset Trust to Plaintiff and substantiated it by submitting the

"Assignment" dated 10 April / 11 May 2012 (Exhibit AR 2d) (patent in suit on page

13 of the list of transferred rights, second to last line, listed under the Nokia Code

29997). This transfer was entered on 1 October 2012, so more than five and a half

months later. Based on the circumstances that have been described, such a period

16

of time constitutes a sufficiently close chronological connection between the

submitted substantive transfer and the entry of the change in ownership. In this

regard as well, Defendants limit themselves to globally assert the invalidity of the

transfer, but are unable to successfully refute the indicative effect of this entry. That

the "Assignment" in question is labeled Annex B and therefore is obviously part of a

more extensive agreement does not change this fact, because not even Defendants

claim that the "Assignment" is complete by itself and therefore legally valid.

Finally, the indicative effect of the register status on the ownership of Plaintiff is not

contradicted by the fact either that Core Wireless Licensing S.a.r.l. was registered

as the holder of the patent in suit for the period from 11 May 2012 to 6 September

2012. Defendants did not dispute Plaintiff's submission that this entry was an error

and was corrected soon thereafter, i.e., not even four months later. Consequently, it

must be deemed as conceded that no substantive transfer of the patent in suit to

Core Wireless Licensing S.a.r.l. took place. Contrary to Defendants' opinion, the

entry by itself does not substantiate the acquisition of a right.

Finally, Plaintiff is also entitled to liquidate the damages that were incurred due to

such infringing actions that were committed during the time the patent was held by

its previous owners on its own account. Both the "Patent Assignment Agreement"

dated 31 May 2011 (Exhibit AR 2a) and the "Assignment" dated 10 April / 11 May

2012 contain provisions indicating that not only the patent itself by all the claims

resulting from infringements of the patent in the past are transferred (both using the

wording "all rights to pursue damages [...] for past, present, and future infringement

of the Patent Rights"). Defendants do not submit that these agreements could be

invalid.

II. The patent in suit relates to a method and arrangement for optimizing the re-

establishment of connections in a cellular radio system supporting real time and

non-real time communications.

As the patent in suit explains in its introductory remarks, mobile communication

networks primarily consist of a radio access network and a core network. It is a

previously known technical goal, especially relating to the wording of technical

standards such as the 3GPP, to connect a radio access network with various types

of core networks and vice versa. For the specification 3GPP, it is known, for

example, that it connects a radio access network according to WCDMA UTRAN

with a core network according to GSM and IS-41/ANSI-41. The specifications of

cellular radio systems of the second and third generation generally support real

17

time (RT) services as well as non-real time (NRT) services. The real time services

are generally used for time-critical applications such as speech or real time video,

while the non-real time services are used for the transmission of data such as e-

mails or downloaded files. One characteristic of the real time services is that the

user can immediately perceive delays and interruptions in the radio bearer

performance.

In fact, the radio connection between the user terminal and the servicing base

station is often lost in cellular radio systems. There are certain configurations for the

quick re-establishment of the connections so that the incident remains unnoticed by

the user or only creates as little inconvenience as possible. These types of

configurations are known for connections of the type RRC (radio resource control)

in the specifications of the 3GPP standard TS25.331, TS25.302, TS25.321, and

TS25.322 of the ETSI. It is known from this prior art that a mobile terminal, upon

having lost the radio connection in the so called CELL_DCH (Dedicated Channel)

status switches to the so-called CELL_FACH (Forward Access Channel) in order to

make a new cell selection and to request a re-establishment of the connection.

Upon having lost the connection, a timer referred to as T314 or "re-establishment

timer" starts up as soon as the mobile terminal has recognized that the connection

was lost. If the mobile terminal has determined that it is located in a service area in

which a re-establishment is possible, it stops the timer and sends the message

"RRC CONNECTION RE_ESTABLISHMENT REQUEST" to an uplink channel or a

joint control channel. If, however, the timer runs out before the mobile terminal

detects its position in a service area in which a re-establishment of the radio

connection is possible, the end device will enter an RRC idle state, in which it can

no longer communicate with the base stations. The value of the time can range

from 0 to 4095 and is determined by the RNC (Radio Network Controller) by

sending the respective value to the mobile terminal in a control message such as

the RRC connection establishment, the radio bearer establishment, the radio bearer

release, the radio bearer reconfiguration, the transport channel reconfiguration, or

the reconfiguration of the physical channel or the RRC connection re-establishment

messages. The timer value can therefore be specific to the terminal and can even

be modified while the connection is working, depending on the respectively current

service configuration. The patent in suit also mentions the WO 95/08903 A1 as a

disclosure of a similar connection re-establishment method.

The patent in suit believes that a disadvantage of this method is that it is not flexible

with regard to the various types of services, especially with regard to real time

services and non-real time services. A real time connection does not tolerate any

long delays or interruptions so that a relatively small value of just a few seconds

must be chosen for the timer T314 or the re-establishment option for such a

18

connection must even be deactivated, which means that the radio bearer is

immediately released when the radio connection is lost. In contrast, since non-real

time connections are much more tolerant, delays of up to 10 minutes can be

tolerated. If, however, the mobile terminal has radio bearers for real time and non-

real time connections, at least one of these types of connections suffers from an

inappropriately chosen expiry value for the re-establishment. The same difficulty

presents itself with regard to services that have different requirements for the time

control of the connection re-establishment.

In consideration of this prior art, the patent in suit claims its technical challenge to

be the creation of a method and arrangement with which a re-establishment of the

connection is facilitated that takes into account the requirements of different types

of services.

To solve this challenge, the patent in suit proposes in claim 17 an arrangement with

the following features:

1. A communications device of a cellular radio system.

2. The communications device comprises means (514, 605) for detecting a

failure in a radio connection.

2.1 Said radio connection has a plurality of active radio bearers.

2.2 The active radio bearers belong to a radio resource control connection.

3. The communications device comprises means (511, 515, 605) for

determining a first expiry time

3.1 for a period during which the re-establishment of the lost radio

connection is allowable.

3.2 This re-establishment is performed in respect of said radio bearers which

are used to provide a service or services of a first category.

4. The communications device comprises means (511, 515, 605) for

determining a second expiry time

4.1 for a period during which the re-establishment of the lost radio

connection is allowable.

4.2 This re-establishment is performed in respect of said radio bearers

which are used to provide a service or services of a second category.

5. Said second category of services is different from said first category of

services.

6. Said second expiry time is different from said first expiry time.

III. The parties - correctly - only disagree about the realization of features 2.1, 3., 4.,

and 6. The realization of these features can, however, be determined.

19

1.

The challenged embodiments implement feature 2.1, according to which the radio

connection maintained by the communication device according to the patent in suit

and monitored for failure must comprise a plurality of active radio bearers.

a)

A radio bearer within the meaning of the teaching of the patent in suit is a

specification for the configuration of the radio connection between a communication

device and a base station of the mobile radio system, wherein the individual figures

of the radio connection configuration depend on which category of service is to be

provided through the radio connection. Consequently, the execution requires

several categories of services according to the patent in suit as well as several

radio bearers, because each individual radio bearer is designed specifically in

consideration of the respective category of services.

This interpretation of feature 2.1 in dispute is the result of the overall context of the

wording of the claim, which determines the patent scope of protection pursuant to

Art. 69 clause 1 EPC. It already becomes clear to a person skilled in the art from

feature 2.1 that the radio bearer within the meaning of the patent in suit does not

establish the radio connection itself, but rather technically contributes to this radio

connection. The teaching of feature 2.2 is closely related to this, according to which

the active radio bearers are, upon closer scrutiny, a part of the radio resource

control connection, i.e., that they, as a person skilled in the art can easily see,

facilitate the use of the resources available on the radio connection. That the

manner in which the radio resources are used depends on the service to be

handled through the radio connection finally follows from the connection between

feature 2.1 with the two parallel features 3.2 and 4.2. According to these two

features, the radio bearers are used for providing one or more services of certain

categories. The specification provided by the radio bearer regarding the use of the

radio resources therefore depends on the category to which one or more of the

services performed through the respective radio connection belong.

This understanding of feature 2.1 is substantiated by the description of the patent in

suit, which must be consulted according to Art. 69 clause 2 EPC for the

interpretation. The connection between the identity of a radio bearer on the one

hand and the category of the service on the other is explained as follows in the

description (para. [0017] of the patent in suit) within the context of the general

description of the invention and the general illustration of mobile radio systems:

"According to the invention there are defined separate timers or some higher layer monitoring arrangements for different categories of radio bearers.

20

Examples of such categories are RT and NRT radio bearers, CS (Circuit Switched) domain and PS (Packet Switched) domain radio bearers and radio bearers utilizing acknowledged mode/unacknlowledged mode or transparent mode Layer 2 retransmission protocol, or radio bearers serving certain specific service types like e.g. audio, video or e-mail. Also other radio bearer specific or radio access bearer specific or service specific parameters may be used to define the re-establishment category."

A person skilled in the art gathers on the basis of the technical challenge that each

category of services is assigned to a radio bearer and the radio bearer, in return, is

assigned to a separate timer, which is the core of the teaching according to the

patent. Examples for the creation of such categories of services and therefore radio

bearers are the differentiation between real time and non-real time radio bearers

(RT for real time, NRT for non-real time, cf. para. [0004]) or also between radio

bearers for circuit-switched (CS) services on the one hand and packet-switched

(PS) services on the other.

Furthermore, a person skilled in the art can gather from the mention of the

"transparent model of layer 2" that the teaching builds on the recognized reference

model "OSI" (Open System Interconnection Model) for network architectures and

protocols. This model identifies the second of a total of seven layers as the data

link, whose task it is to control the access to the transmission medium (in the layer

model layer 1: physical link) and, where possible, guarantee measures for a fairly

error-free transmission, for example by dividing the signal to be transmitted into

frames and providing each individual frame with a check sum, which allows for a

verification of the correct data frame transmission. This matches with the further

general description of the invention (para. [0019]), according to which the

verification measure of the 'timer' does not necessarily have to be limited to a

physical measurement of time. In order to explain the monitoring configuration of a

higher layer addressed in para. [0017], it reads as follows:

"With higher layer monitoring arrangements, we mean that for example speech or video codecs may monitor the error rates occurring in information received over active radio bearers. A sudden surge in error rates means that the radio bearer has most likely been temporarily lost. A counter calculating the number of completely corrupted frames or other discrete information units may take over the duties of a timer so that when the counter reaches a predefined threshold value, the "timer" is regarded to have expired."

A person skilled in the art can infer from this that the loss of a radio bearer does not

mean that the radio connection is lost as well, because if the radio connection is

lost, no signals are transmitted at all, not even corrupt signals. Therefore, when a

radio bearer is lost, the requirements for the use of the communication resources

are no longer fulfilled, which may render a transmitted signal corrupt.

21

b)

Consequently, a realization of feature 2.1 by the challenged embodiments has been

confirmed.

On the one hand, it is undisputed that the challenged embodiments are capable of

performing a speech service (telephony) and a data service (for example access to

the Internet) at the same time. These two services differ in that they belong to

different categories according to the patent in suit and therefore require several, but

at least two, radio bearers. While a speech service requires a real time service and

also because it is performed with the help of circuits, since the Internet telephony by

Voice-over-IP (VolP) is undisputedly not possible in German mobile radio networks,

data service as non-real time service is possible and performed in a packet-

switched manner.

On the other hand, the standard TS 25.331, which the challenged embodiments

meet, requires at least two radio bearers. In the provisions of the standard

procedure "RAB information for setup" according to section 8.6.4.2 of the standard

(page 294 of Exhibit AR B-24, page 462 of Exhibit AR B-26), the setup and

processing of more than one radio bearer is required, since it states there:

"If the IE "RAB information for setup" is included, the procedure is used to establish radio bearers belonging to a radio access bearer and the UE shall: [...]

1> for each radio bearer in the IE "RB information to setup": [...]

2> if the radio bearer identified with the IE "RB Identity" already exists in the variable ESTABLISHED_RABS:

3> set the variable INVALID_CONFIGURATION to TRUE."

In German:

„Wenn das Informationseinheit „RAB information for setup" enthalten ist, wird das Verfahren verwendet, um Funkträger zu erzeugen, die zu einem Funkzugangsträger gehören, und die Benutzerendeinrichtung (UE) soll: […]

1> für jeden Funkträger im Informationselement „RB information to setup": […] 2> wenn der mit der Informationseinheit „RB identity" identifizierte Funkträ-

ger in der Variable ESTABLISHED_RABS existiert: 3> die Variable INVALID_CONFIGURATION auf den Wert WAHR

setzen."

Consequently, the standard requires within the context of a certain procedure the

setup of more than one radio bearer. There are no clear indications that the setup

of a single radio bearer would be possible as well, for example with regard to the

22

performed service, in order to satisfy the requirements of the standard. This follows

from the fact that the device according to the standard must be able to perform

different categories of services so that more than one radio bearer must be

available for its operation.

2.

The realization of the groups of features 3 and 4, according to which the

communication device according to the patent in suit comprises means to identify a

first and a second expiry time can be confirmed as well.

a)

The means according to the patent for identifying the expiry time are all suitable

technical measures that can be used to determine whether one or several services

of a particular category can be re-established after the expiry of a preset time. It is

irrelevant in this regard whether these technical measures are manifested in a

spatial-physical manner, whether they are geared toward the measuring of elapsed

time or the mere determination of events, or whether the expiry period identified by

them is an actual period of time, i.e., whether it is longer than zero seconds.

This interpretation once again follows the overall context of the wording of the

claim. The parallel sub-features 3.1 and 4.1 explain that the means according to the

patent in suit are to be used to determine the expiry period that corresponds to the

period of time during which the re-establishment of one or more services of a first

category is permitted. The means functioning as a timer therefore serve to limit the

attempt of a re-establishment of services of certain categories in terms of time. A

person skilled in the art recognizes that the wording of the claim neither provides

any information as to how the expiry times permitted for the re-establishment of the

services is to be determined, nor does it contain any information about the length of

the expiry time. Both are therefore placed at the creative discretion of the person

skilled in the art, for whom both spatial-physical time-measuring means as well as

other means, for example purely technical signal means or data-processing means,

that do not measure any time but are suitable in another way to limit the periods of

time during which the re-establishment of services is permitted. Furthermore, it is

also at the discretion of the person skilled in the art for how long the expiry periods

are to be measured, because the claim neither prescribes a maximum nor a

minimum duration and does not even exclude the value of zero seconds, i.e., the

expiry of any period of time.

The interpretation of these feature groups as well is supported by the respective

description. The patent in suit makes the connection between the re-establishment

of an interrupted service on the one hand and the monitoring of a period of time

23

during which it is technically feasible and meaningful for the user of the service to

re-establish the service on the other to be the focus of the discussion of prior art

(para. [0009] and [0017]). The solution proposed by the patent in suit to overcome

the disadvantages criticized about the prior art is geared toward providing such a

period of time as the permitted re-establishment time for each category of services

and to have it monitored by separate timers, which are to be configured in such a

way that they match the respective category of services, i.e., that they have the

flexibility necessary for the monitoring of the respectively appropriate period of time

(para. [0010], [0011], and [0017]). The description does not address how the

respective time-recording means are to be configured. It is specifically explained,

however (in para. [0017] and in detail in para. [0019]), that in addition to a time

measurement as such means can be taken into consideration with which the

progression of time is not monitored, but changes in the error ratios, i.e., means

that warrant a limitation of the permitted re-establishment period through the

monitoring of events.

Especially in consideration of the fact that the description of the patent in suit

specifically leaves open whether the means to determine expiry times are based on

a measurement of time or another suitable method, the person skilled in the art

takes seriously that the description does not require the expiry of a minimum period

of time either, which is monitored by such a means according to the patent in suit. A

person skilled in the art concludes from this that such a means according to the

patent in suit is given even when it monitors a value of zero seconds as the expiry

time. A person skilled in the art recognizes here that such a monitoring is not

meaningless at all from a technical perspective, because it signifies the full and

immediate abandonment of a re-establishment attempt for the interrupted service,

which has the technical advantage that the respective radio bearers and the radio

resources they control are released immediately. A person skilled in the art can

gather this from the general description of the invention, where it says the following

with regard to the need for a flexible configuration of the timers for radio carriers of

certain service categories (para. [0009]):

"It should even be possible to "turn off" the re-establishment possibility for RT bearers, meaning that if UE loses the radio connection, the RT bearers are released (locally in UE and in UTRAN) immediately."

This passage in the description pertains to the technical situation in prior art, but the

purpose of the patent in suit is not to overcome this situation. The criticism of the

patent in suit is not that the expiry times for radio bearers of certain categories of

services are monitored, and be it with a value of zero seconds, but that the prior art

only provides one timer and therefore only one value, which may even be set to zero

24

seconds for certain categories, but that it does not make any sense that it has the

same value for all categories of services.

In addition, the value of zero seconds as a potential time measurement value is

even specifically mentioned in the general description of the invention, once again

in the description of prior art (para. [0007]):

"The value of the timer T314 may be anything between 0 and 4095 seconds."

It follows within the context of the description passage in the just mentioned para.

[0008] that a person skilled in the art is informed that a value of zero seconds is a

valid time measurement value. This value is neither excluded, because the

disclosure in para. [0007] does not indicate that the limits should not be included in

the valid value range, nor is this value known from prior art rejected: The patent in

suit does not list a time measurement value of zero seconds as a disadvantage, but

wants to distinguish itself from the prior art by providing a timer for each category of

services so that a separate value can be flexibly selected and monitored for each

category.

b)

Consequently, the challenged embodiments realize feature groups 3 and 4.

Defendants themselves do not disipute that permitted re-establishment times of

zero seconds are monitored in the operation of the challenged embodiments for at

least two categories of services. According to the explanations above, a timer must

be assumed even for the monitoring of such a zero value, i.e., the immediate

exclusion of a re-establishment, i.e., one with the value of zero seconds.

In addition, the standard requires that devices working with the standard, which

undisputedly include the challenged embodiments as well, are to use standard

values for two different timers T314 and T315 in the event of a missing preset time

value from the network which do not equal zero and which furthermore differ from

each other. The standard requires the following with regard to the method for the

transition of control from one radio cell to another (so-called handover) section

8.3.6.3 (page 204 in Exhibit AR B-24, page 285 in Exhibit AR B-26):

"8.3.6.3 Reception of HANDOVER TO UTRAN COMMAND message by the UE The UE shall be able to receive a HANDOVER TO UTRAN COMMAND message and perform an inter-RAT handover, even if no prior UW measurements have been performed an the target UTRAN cell and/or frequency. The UE shall act upon all received information elements as specified in subclause 8.6, unless specified otherwise in the followoing.

25

[...] The UE shall: [...] 1> initialise the variable TIMERS AND_CONSTANTS to the default values

and start to use those timer and constant values."

In German:

"8.3.6.3 Empfang einer HANDOVER TO UTRAN COMMAND-Nachricht durch die UE Die UE soll in der Lage sein, eine HANDOVER TO UTRAN COMMAND-nachricht zu empfangen und einen inter-RAT-Handover auszuführen, auch wenn zuvor keine Maßnahmen der UE auf der Zielzelle des UTRAN und/oder der Frequenz ausgeführt worden sind. Die UE soll auf alle empfangenen Informationen hin so handeln, wie dies in Unterpunkt 8.6 beschrieben ist, sofern nicht nachstehend anderes vorgeschrieben ist. [...] Die UE muss: [...] 1> die Variable TIMERS AND CONSTANTS auf die die Standardwerte einstellen und die Benutzung dieser Zeitnehmer und Werte beginnen."

The standard values of the two timers T314 and T315, in turn, are provided under

section 10.3.3.43 of the standard (page 548 of Exhibit AR B-24, page 881 of Exhibit

AR B-26) with 12 seconds for T314 and with 180 for T315. It can therefore be held

that devices working in accordance with the standard, i.e., the challenged

embodiments as well, have, under certain operating conditions, two timers with

different time values which are not equal to zero seconds.

3.

Finally, it can be confirmed that the featured embodiments realize feature 6 as well,

according to which the means according to the patent in suit used to determine

expiry periods must differentiate between the first and the second expiry time.

a)

According to the patent in suit, the second expiry time differs from the first expiry

time, when the two expiry times relating to different categories of services are

monitored by different means for the determination of the expiry times so that

different values can be set for the two expiry times. It does not run counter to the

realization of this feature, however, if the two means for the monitoring of the expiry

times are set at identical values in an operating state of the communication device,

but the two identical values are used by a respectively different means to determine

the expiry time.

26

This interpretation of feature 6 follows according to the above explanations under

1.a) and 2.a) from the context of the wording and the disclosure content of the

description. As features 3.1 and 4.1 show, the expiry times have the function of

limiting the re-establishment attempts for a connection required for the respective

service to a period of time during which this re-establishment is permitted, while

after the expiry of the period of time, the radio resources controlled by the radio

bearer can be released again. Here, the teaching according to the patent in suit

does not differentiate itself from the teaching known from prior art, according to

which the expiry time is set to zero seconds which, on the contrary, even creates

the advantage of immediately released radio resources (cf. para. [0009]). Rather,

the solution according to the patent in suit consists of determining the expiry time

for each radio bearer separately and to monitor it separately as well by means of a

separate timer that is assigned to the radio bearer (cf. para. [0017]). Consequently,

the constellation in which both timers (namely: means for determining the expiry

time) are set to the value of zero seconds falls into the scope of protection as well,

because it is still guaranteed that the two timers can be set to other values that

differ from each other so that the determination of the values and the monitoring of

the timers is independent from each other, even if the values that were set and are

monitored independently from each other are the same.

Finally, this interpretation is supported by the fact that the flexibility in the setting

and monitoring of at least two expiry times required and taught by the patent in suit

is not a purpose in and of itself, but that it is to guarantee that attempts are made to

re-establish the connection in a competent manner as part of the operation of the

communication devices according to the patent in suit for categorically different

services with different tolerances regarding the length of a failed connection expiry.

If the services performed by the communication device are so intolerant of

connection disruptions in a particular constellation that it is more advantageous to

release the radio resources immediately instead of attempting a re-establishment of

the connection for even a very short period of time, then the patent in suit is not

opposed to an operating mode in which the timer of both or all of the performed

services is set to zero seconds in order to guarantee the immediate release of the

radio resources that is advantageous in this constellation.

b)

Therefore, the challenged embodiments implement feature 6, because even

according to Defendants' submission, it monitors the re-establishment of at least

two services with timers that are set to the value of zero seconds. Furthermore, the

realization of feature 6 results in the fact that the standard, which is implemented by

the challenged embodiments, requires, as shown above under 2.b), a setting of the

timers T314 and T315 to standard values which, in turn, according to the table in

27

section 10.3.3.43, are 12 seconds for T314 and 180 seconds for T315.

Consequently, the operation of the challenged embodiments according to the

standard also includes operating modes in which these two timers are not both set

to zero, but rather to different values that do not equal zero seconds.

IV.

The compulsory license objection raised by Defendants against the cease-and-

desist claim as well as the recall and destruction claims asserted on the basis of the

antitrust law do not apply (refer in this regard to 1.). Neither the Qualcomm license

claimed by Defendants (refer in this regard to 2.) nor Defendants' objections based

on Sec. 242 BGB (refer in this regard to 3. and 4.) can stand up against Plaintiff's

claims asserted here.

1.

Defendants cannot successfully raise the compulsory license objection on the basis

of antitrust law. Plaintiff therefore cannot assert its cease-and-desist claim and the

claims to a recall and, against Defendant 1), to destruction without violating Art. 102

TFEU. It is therefore irrelevant whether the patent in suit leads to a market-

dominating position, because even when assuming that this is the case, there is no

indication for an abuse of this position.

a)

The European Court of Justice provided in its judgment of 16 July 2015, file no. C-

170/13 (GRUR 2015, 764, hereinafter in short: (the) CJEU judgment) guidelines as

to when the enforcement of the cease-and-desist claim from one of the standard-

essential patents (hereinafter also referred to as: "SEP") standardized by a

standardization organization, whose holder has committed to this organization that

it would grant FRAND licenses ("Fair Reasonable And Non-Disciminatory") to any

third party, does not constitute an abuse of a market-dominating position within the

meaning of Art. 102 TFEU. Accordingly, the holder of an SEP must inform the

alleged infringer of the patent infringement before it asserts a cease-and-desist

claim (para. 61 of the CJEU judgment). To the extent it is prepared to purchase a

license, the SEP holder must offer the infringer a specific, written license offer for

the SEPs at fair, reasonable, and non-discriminatory terms (FRAND terms) (para.

63 CJEU judgment). The infringer must respond to this offer in good faith and in

particular without any delaying tactics (para. 65 CJEU judgment). If it does not

accept the offer by the SEP holder, the infringer must make a counteroffer within a

short period of time which complies with FRAND requirements as well (para. 66

CJEU judgment). If the SEP holder rejects this counteroffer, the patent infringer

must, from this time on, render account about the use of the SEP and provide

28

security for the payment of the licensing fees, which applies as well to uses in the

past (para. 67 CJEU judgment). These antitrust restrictions apply not only to the

cease-and-desist claim but also for the recall claim, because complaints directed at

the recall are able to prevent that products manufactured by competititors that meet

the standard in question are launched on the market or remain on the market (para.

73 CJEU judgment). The same applies as well for the claim for the destruction of

the patent-infringing objects, because its effect on the market access of respective

product is similar to that of a cease-and-desist or recall claim. In contrast to that, the

assertion of claims for the rendering of account or damages is, in general and

without any other conditions, not abusive within the meaning of Art. 102 TFEU

(para. 74 et seq. CJEU judgment).

b)

Plaintiff is entitled to assert the cease-and-desist claims, as well as the claims to

recall and destruction in this regard, and their assertion does not constitute abuse

within the meaning of Art. 102 TFEU, because Defendants did not adhere to the

rules drafted by the CJEU with regard to the counteroffer.

aa)

Plaintiff has fulfilled its obligation to inform. It is irrelevant whether the talks between

Plaintiff and Defendants' group companies were sufficient in this regard to fulfill the

obligation to inform about the patent in suit. In any event, the complaint adequately

informed Defendants about the patent in suit and the asserted patent infringement,

which was sufficient in the present case.

(1)

It is true that, according to the CJEU judgment, the reference to the SEP to be

enforced must be made prior to an assertion before a court. It is furthermore

questionable whether the information about the patent can be provided later within

the context of the infringement proceedings, because now, due to the fact that a

complaint was filed, licensing negotiations are now only possible under the

pressure of court proceedings. However, this need not be decided here.

In this case, the complaint was filed on 8 September 2014 and therefore prior to the

CJEU judgment (of 16 July 2015) and the opinions by the Advocate General

Wathelet in this matter of 20 November 2014. At the time the complaint was filed,

the case law of the highest German court of justice (FCJ, GRUR 2009, 694 —

Orange Book Standard) did not require the holder of a patent granting a market-

dominating position to inform the infringer of the patent and to make a license offer.

Rather, it was up to the infringer to make a license offer. The patent holder is only

acting abusively by enforcing a cease-and-desist claim on the basis of such a

29

patent under patent law if the infringer has made the holder an unconditional offer

for the conclusion of a licensing agreement that it adhered to and that the patent

holder was not permitted to reject without violating against the discrimination or the

impairment prohibition. Furthermore, the infringer had to comply with the terms that

the licensing agreement to be concluded ties to the use of the licensed object as

long at it is already using the object of the patent (FCJ, GRUR 2009, 694 — Orange

Book Standard). It is correct that the Orange Book Standard decision was issued

with regard to a patent that was essential for a de facto standard. In the case law of

the court of first instance, however, these conditions were applied as well to those

essential patents for which the standard was agreed upon within the context of a

standardization process between the companies involved and the patent holder had

made FRAND commitments (cf. Regional Court Düsseldorf, judgment of 24 April

2012 — 4b O 274/12 — para. 227 et seq. in Juris).

The Orange Book Standard ruling of the FCJ was, however, contested, and in

particular the EU Commission placed different requirements on the actions of the

holder of an SEP under antitrust law. This divergence ultimately led to the decision by

the Regional Court Düsseldorf to refer the matter (GRUR-RR 2013, 196 — LTE

Standard) to the CJEU. This does not change the fact, however, that Plaintiff had to

assume at the time it filed the complaint that it had to inform Defendant about the

patent in suit. In view of these facts, it is sufficient for transition cases such as this

one if the patent infringer is informed of the patent infringement by the complaint.

(2)

Whether a patent holder has to provide information, not just about the patent for

which it desires to assert a cease-and-desist claim before a court of law, but also

about all other property rights for which it is offering a license does not have to be

decided here. The provision of information about other patents is not directly

required for the enforcement of the patent in suit, but could, even though that does

not have to be decided here, only be relevant for the question of whether the

licensing agreement proposed by Plaintiff is appropriate. Plaintiff's offer is not

relevant in this case here (more on this below).

bb)

Plaintiff has made Defendants a license offer prior to filing the complaint.

It is not an abuse of a market-dominating position if the holder of an essential

standard offers it (first) to the parent company of the alleged patent infringer in

order to initiate the respective negotiations. Often, a group is interested in

purchasing a license, not just for a single company (subsidiary), but for the entire

group of companies. The conclusion of licensing agreements is often coordinated

30

by a central office in the group so that the parent company is generally a suitable

contact partner. It can furthermore be assumed that sufficient communication exists

between the parent company and its individual group companies and that the

patent holder would, if necessary, be referred to the responsible company. In

contrast, it would be an unnecessary formality to require the patent holder to

potentially make an offer to each individual group company.

Therefore, it is sufficient for the conclusion that a license was offered that Plaintiff

offered a license to Defendants' parent companies and that Defendants would have

been covered by the intended license.

cc)

Whether Plaintiff's offer, and in particular the insistence on a globally valid portfolio

license, corresponds to FRAND principles is irrelevant in this case. Even if one

were to assume that Plaintiff's offer does not comply with FRAND terms, the

assertion of the cease-and-desist claim and the claims to a recall and destruction

under patent law does not constitute an abuse of a market-dominating position in

this case. Even if Plaintiff's offer does not comply with FRAND terms, Defendants,

as the users of the teaching according to the patent, or at least their parent

companies had to respond to it and comply in this regard with the requirements of

the CJEU judgment. This did not, however, happen to a sufficient degree.

(1)

According to para. 65 of the CJEU judgment, it is the responsibility of the alleged

patent infringer to respond to the patent holder's offer

"diligently, in accordance with recognized commercial practices in the field and in good faith, a point which must be established on the basis of objective factors and which implies, in particular, that there are no delaying tactics."

The alleged patent infringer, who wants to raise the compulsory license objection, is

therefore not entitled to not respond at all to the patent holder's proposed licensing

agreement and to simply continue the (unauthorized) use of the patented teaching.

Rather, the CJEU expects the alleged patent infringer to strive to obtain a license

as well. It is therefore irrelevant in this regard whether it must respond to a

proposed licensing agreement without FRAND terms with a counteroffer or whether

it can respond in another way, for example by demonstrating to the patent holder

that its offer does not comply with FRAND requirements and requesting specific

changes to the offer. It does not have to be decided either whether the alleged

patent infringer must accept an offer that complies with the FRAND requirements,

because the patent holder has already fulfilled its obligations under antitrust law by

having made such an offer, leaving no room for a counteroffer.

31

At the latest when the alleged patent infringer decides to respond to the patent

holder's offer with a counteroffer, it becomes subject to the obligations described in

para. 66 et seq. of the CJEU judgment. Even if the patent holder's offer does not

meet the FRAND requirements, the alleged patent infringer has to render account

about the use from the date the counteroffer is rejected (even with regard to the

past) and provide security for the payable licensing fees (para. 67 CJEU judgment).

Together with the requirement to render an account and to provide security in

advance, the CJEU has listed formal prerequisites that the party seeking a license

must fulfill in order to use an essential patent prior to the conclusion of a licensing

agreement. Already prior to its conclusion, it must act in accordance with its

proposed licensing agreement, render account in accordance with this offer, and

provide security. It cannot be assumed that an alleged patent infringer is sufficiently

willing to purchase a license and does not engage in any delaying tactics if it is not

even willing to provide advanced performance by rendering the respective account

and providing security on the basis of a proposed licensing agreement it has drafted

itself in spite of the fact that it has used the patent prior to an agreement. This is a

formal minimum requirement which must be fulfilled regardless of the question of

whether and with regard to which details the offer or the counteroffer can be

considered as FRAND compliant.

(2)

Defendants did not meet these requirements. They did, in fact, make counteroffers,

but did not render an account on a timely basis or provide security.

(aa)

With the exception of a response in accordance with recognized commercial

practices in the field and in good faith, the CJEU requires the following for a

counteroffer from Defendants (para. 67 CJEU judgment):

"[[67]] Furthermore, where the alleged infringer is using the teachings of the SEP before a licensing agreement has been concluded, it is for that alleged infringer, from the point at which its counteroffer is rejected, to provide appropriate security in accordance with recognized commercial practices in the field, for example by providing a bank guarantee or by placing the amounts necessary on deposit. The calculation of that security must include, inter alia, the number of the past acts of use of the SEP, and the alleged infringer must be able to render an account in respect of those acts of use."

In addition to the obligation to provide security and to render an account about

(past) acts of use on the basis of the counteroffer that was made, the CJEU

therefore also determines that this must be done from the time the counteroffer was

rejected. A relevant delay in the rendering of an account and provision of security

32

therefore conflicts with the assertion of the compulsory licensing obligation under

antitrust law. The CJEU clearly stated the time for the rendering of an account and

provision of security. Accordingly, the CJEU specifically requires in the judgment of

16 July 2015 that the infringer, when responding to the patent holder's offer, does

not "pursue any delaying tactics" and that a counteroffer must be submitted "within

a short period of time" (para. 65/66 CJEU judgment). The patent user is therefore

required to already prepare the rendering of an account and provision of security at

the time it is preparing its counteroffer. This does not constitute an undue burden

for the alleged patent infringer, because it must always anticipate that the

counteroffer is rejected. In addition, an account must be rendered even if the patent

holder accepts the counteroffer.

The fact that other counteroffers are made also does not release the alleged patent

infringer from the obligation to render an account for the patent holder and to

provide security from the time the first counteroffer is rejected. It is true that the

alleged patent infringer is free to modify its counteroffer after it has been rejected by

the patent holder in order to come to an agreement. The obligation to provide

security and render an account already arises, however, when the first counteroffer

is rejected. Otherwise, the patent user could continue to delay the fulfillment of its

obligation by repeatedly making new offers. This, however, would contradict the

expectation of a patent user willing to license, which the CJEU assumes in its

decision.

The time requirement applies as well to transition cases in which the rejection of the

(first) counteroffer took place prior to the CJEU judgment at the latest from the time

the CJEU judgment was handed down on 16 July 2015, because according to the

case law of the German Federal Court of Justice that applied before the judgment

was handed down (GRUR 2009, 694 — Orange Book Standard), an obligation to

render an account and provide security existed before that date as well. According

to this case law, a patent infringer was, in the event of a patent providing a market-

dominating position, obligated to make an unconditional offer for the concluding of a

licensing agreement to the patent holder (at its own initiative), which it would be

bound by and which the patent holder could not reject without violating the

discrimination or impairment prohibition. Furthermore, the patent user had to

comply with the terms that the licensing agreement to be concluded ties to the use

of the licensed object as long at it is already using the object of the patent (FCJ,

GRUR 2009, 694 — Orange Book Standard; cf. the explanations under IV. 1. b) aa)

(1) above).

Whether the rendering of an account in transition cases could be effectively

performed directly after the CJEU judgment was handed down does not have to be

33

decided here, because it was not done in a timely manner either (more on this

below).

(bb)

Plaintiff rejected the counteroffer of Defendant 1) in its letter dated 20 October 2014

(Exhibit G4). This means that Defendant 1) had to provide security from this date on

and render an account about the use of the patent in suit. This did not happen, not

even directly after the CJEU judgment was handed down on 16 July 2015.

Even for the second counteroffer, no security was provided and an account

rendered on a timely basis. After the rejection of the second offer of the (two)

Defendants dated 12 August 2015 (Exhibit G19) on 24 August 2015, the rendering

of an account and provision of security did not take place within an appropriate

period of time either. Rather, Defendants did not provide security and render an

account until the oral hearing on 29 September 2015 after another counteroffer.

This is late. The requirement in the CJEU judgment "from the time its counteroffer

was rejected" must generally be interpreted in a narrow manner. The rendering of

an account over one month after the rejection of the second counteroffer by Plaintiff

must, at least in the present case, be considered as no longer "from the time." This

already applies, because the rendering of an account and provision of the

guarantee did not happen until the oral hearing, during which Plaintiff's claims

based on the infringement of the patent in suit were discussed. Until the end of the

hearing, Plaintiff had been unable to adequately verify the correctness of the

account or the existence of security. It is furthermore not clear why the rendering of

an account and provision of security could not have taken place earlier, in particular

because a first counteroffer had already been rejected in October 2014. The

provision of an account and security therefore seems to be an expression of a

delaying tactic, which is inconsistent with the raising of the compulsory license

objection under antitrust law.

(cc)

Defendant 2) had initially not made a counteroffer at all. It is irrelevant whether it is

precluded from successfully raising the compulsory license objection because it

did not adequately respond to Plaintiff's offer and therefore did not attempt to

obtain a license for the patent in suit, because at the latest when the second

counteroffer was rejected on 24 August 2015, which was submitted by Defendant

2) as well, Defendant 2) was required to render a respective account and provide

security. This did not occur within a permitted period of time, but late, namely

during the oral hearing on 29 September 2015. Therefore, reference can be made

in this regard to the explanations above.

34

2.

Defendants' reference to an alleged license with Qualcomm is irrelevant as well and

does not conflict with Plaintiff's claims. It must be taken into consideration here that

not all challenged embodiments have chip sets from Qualcomm. There is no

respective objection with regard to challenged embodiments with chip sets from

other manufacturers (such as MediaTek), not even according to Defendants'

submission.

Defendants have already not submitted adequate evidence about a licensing

through Qualcomm, which Plaintiff disputes anyway. Defendants cite in this regard

only a press release dated 24 July 2008 (Exhibit G8). Defendants' submission does

not contain sufficient information about the license terms. The press release about

the acquisition of the property rights from Nokia dated 12 January 2012 (Exhibit G9)

only mentions in general the continued application of licensing agreements that

Noika had concluded, but not a Qualcomm license. The reference to an alleged

Qualcomm license, however, is irrelevant for other reasons as well. In detail:

a)

Defendants do not claim exhaustion in Germany, or at least they do not adequately

substantiate such a claim. To the extent Defendants discuss the question of

exhaustion on p. 13 of the reply dated 24 August 2015 (page 191 et seq. of the

court record), this likely pertains to the situation in China. In any event, however,

Defendants have failed to adequately substantiate exhaustion with regard to the

challenged embodiments in Germany. Whether, however, exhaustion has occurred

in China does not have to be decided here, because to the extent Defendants

argue that Plaintiff's license offer does not meet FRAND requirements, because

licensing fees are demanded for China in spite of exhaustion, this does not conflict

with the assertion of the cease-and-desist claim in this case. Ultimately, Plaintiff's

offer does not matter here (cf. explanations above under IV. 1.).

b)

We do not agree with Defendants' submission that the use of the patent in suit in

Europe is paid for due to the Qualcomm license even without exhaustion. First of

all, Defendants have not substantiated the existence of the Qualcomm license.

Secondly, it is unclear why an unspecific license payment from Qualcomm to Nokia

is supposed to conflict with the assertion of claims in this case. Defendants'

submission is speculative in this regard, and the service in return is not specified at

all.

35

c)

Finally, it seems doubtful why a reversal of the burden of proof should apply to the

chip sets from other manufacturers. Ultimately this is irrelevant. It already cannot be

found for the alleged Qualcomm license why these should conflict with Plaintiff's

claims.

3.

The assertion of the claims in dispute do not constitute a case of an unlawful

exercise of a right according to Sec. 242 BGB. Defendants claim in this regard an

(alleged) conduct by the original patent holder Nokia (or respectively here by Nokia

Mobile Phones Ltd.). They claim that it had intentionally not reported the application

for the patent in suit during the standardization to the standardization organization

and thus committed a so-called patent ambush.

It is irrelevant whether Nokia did, in fact, conceal the existence of the patent in suit

and whether Plaintiff can be held responsible for this conduct. Even if conceding

these two points, the objection based on Sec. 242 BGB would ultimately not apply.

According to Sec. 4.1 of the ETSI IPR Policy (submitted as Exhibit G12a),

companies involved in the standardization are held to disclose the property rights

that are relevant for the standard during its standardization. If this happens, the

patent holder is asked in accordance with Sec. 6.1 of the ETSI-IPR Policy to state

in writing its willingness to grant licenses for the respective patent at FRAND terms.

As long as such a commitment is not on file, the work on the standard can be

interrupted (Sec. 6.3 ETSI-IPR Policy). In the event no FRAND commitment is

issued and an alternative, patent-free technical solution exists, this alternative is to

be made the object of the standard (Sec. 8.1.1 ETSI-IPR Policy). This is done to

ensure that the teaching that is included in the standard can be used by anyone at

FRAND licensing terms.

A so-called patent ambush, i.e., an intentional concealment of a property right

during the standardization with the objective to be able to demand excessive

licensing fees after the standard has been established, does not, in principle, cause

the patent holder to be unable to assert a cease-and-desist claim under patent law

that relates to the concealed patent. The legal consequence is rather only an

obligation to license this patent at FRAND terms (Regional Court Düsseldorf —

judgment of 24 April 2012 — file no. 4b 0 274/10 — para. 252 in Juris — FRAND

commitment; holding another opinion: Korp, Der Patenthinterhalt [The Patent

Ambush], Diss., 2014, p. 77, according to which the potential legal consequence of

a patent ambush may be a free license; the requirements listed in this regard are

not, however, sufficiently present in this case). The obligation to license at FRAND

36

terms correctly places third parties in the position they would have had if the SEP

holder had acted correctly during the standardization. Restrictions of the patent

holder going beyond a rectification of the misconduct would constitute unjust

punishment.

Plaintiff is required to license at FRAND terms anyway. It is irrelevant whether this

follows simply from Art. 102 TFEU without a respective FRAND commitment (so

that ultimately a patent ambush is always without any consequences), because the

obligation to grant licenses at FRAND terms follows here at least from Plaintiff's

FRAND commitment, which it filed with the ETSI and which includes the patent in

suit as well (Exhibit AR3).

By issuing the FRAND commitment, Plaintiff has already remedied a potential

violation (patent ambush) by the former holder of the patent in suit. If Nokia had

issued a respective FRAND commitment for the patent in suit, nothing would have

conflicted with the inclusion of the patented teaching in the standard. It is not

apparent that a different technical solution would have been standardized in this

case. Consequently, the legal situation after the submission of the FRAND

commitment does not differ from the situation that would exist if Nokia had acted in

compliance with the ETSI-IPR Policy and if it had provided information about the

patent in suit and issued a FRAND commitment prior to the establishment of the

standard.

4.

The dolo agit objection raised by Defendants does not apply. As discussed with

regard to the compulsory license objection under antitrust law, Plaintiff ultimately

did not act in an abusive manner.

To the extent Defendants cite Sec. 242 BGB under the aspect that Plaintiff is only

offering a license for the essential patent in suit together with other non-essential

patents and exclusively within the context of an illegal geographic coupling, this

does not apply either. As discussed above, a non-FRAND-compliant license offer

generally only forces Defendants to respond to it if they want to raise the objection

of abusive conduct based on Art. 102 TFEU. They did not, however, respond

appropriately to this.

V. The patent infringement therefore leads to the following asserted claims:

1.

37

Since Defendants used the patent in suit in Germany, they are required to cease-

and-desist from the acts of use committed in Germany pursuant to Art. 64 EPC,

Sec. 139 para. 1 PatG.

2.

From the time the patent in suit was granted plus one month, Defendants therefore,

as joint and several debtors, owe compensation for the damages Plaintiff as well as

its individual right predecessors have incurred due to the infringing acts and will still

incur in the future, Art. 64 EPC, Sec. 139 para. 2 PatG.

Defendants are at least culpable of negligence. As a professional company, they

should have recognized and avoided the use of the patent in suit if they had applied

the due care required from them in the course of business, Sec. 276 BGB.

Since the exact amount of damages has currently not been identified, because

Plaintiff does not have any information about the scope of the acts of use and

infringement by Defendants, it has a legal interest pursuant to Sec. 256 ZPO that

Defendants' liability for damages is determined on its merits.

3.

To enable Plaintiff to identify the damages and compensation it is entitled to,

Defendants must render an account about its acts of use in the determined scope.

4.

Plaintiff's right to demand from Defendant 1) the destruction of the infringing objects

that it has, possesses, or owns in Germany follow from Art. 64 EPC, Sec. 140a

para. 1 PatG.

5.

Defendants' obligation to recall the patent-infringing products it has taken to the

German market and to take possession of the successfully recalled products again

follows from Art. 64 EPC, Sec. 140a para. 3 PatG.

6.

Plaintiff's claims are not time-barred. According to Art. 64 EPC, Sec. 141 PatG,

Sec. 199 para. 1, 195 BGB, claims based on the patent in suit become time-barred

three years from the end of the year in which the creditor became aware of the facts

substantiating the claim or should have become aware of them.

38

Defendants submit in this regard that Plaintiff should have known about the UMTS-

enabled products of Defendants and therefore of the alleged infringement since the

end of 2012 due to its efforts to license its so-called wireless patent portfolio. We

fail to understand why Plaintiff should have known specifically about Defendants'

products. In addition, this does not substantiate the defense of the statute of

limitation, because the complaint was filed in 2014 when, calculated from the end of

2012, the three-year limitation period had not expired yet.

Defendants also submit that Plaintiff, due to its participation in the standard, should

have known already from the time the patent in suit was granted that all mobile

radio devices that fulfill the standard also make use of the technical teaching of the

patent in suit. This submission does not prove, however, that, just because Plaintiff

knew about the relevance of the standard for the patent in suit, it also means that

Plaintiff knew or had to have known about Defendants as potential debtors and the

challenged embodiments as products that fulfill the standard. The mere

circumstance that a particular property right is relevant for the fulfillment of a

technical standard does not mean that it was also known which products from

which manufacturers or providers fulfill the technical standard.

Vl. A stay of the proceedings according to Sec. 148 ZPO is not necessary. The

consideration of the interests of both of the parties does not conflict with a stay until

the decision about the parallel nullity action with a reversal of the parties has been

decided by the court of first instance.

1.

In the opinion of the Divsion (mid-1988, 91 — Nickel-Chrom-Legierung, BIPMZ

1995, 121 — Hepatitis-C-Virus), which was upheld by the Higher Regional Court

Düsseldorf (GRUR 1979, 188 — Flachdachabläufe) and the Federal Court of

Justice (GRUR 1987, 284 Transportfahrzeug), the filing of the nullity action as such

is not enough reason to stay the infringement proceedings and therefore to give to

the challenge of the patent in suit an effect that hinders the patent protection in

violation of Sec. 58 para. 1 PatG. Rather, the parties' interests must be weighed

against each other. In this regard, the Division of the Infringement Court must make

a decision about how the nullity action will turn out without being able to anticipate

the conclusion of the court of first instance. Because of this and in consideration of

the fact that none of the members of the Infringement Court is a technical expert, a

stay can only be considered if the destruction of the patent in suit is sufficiently

likely. When reviewing the prior art citations that are claimed to be harmful to

novelty, a stay therefore can only be considered if the Infringement Court can

39

clearly agree with the anticipation of all features so that there are no longer any

reasonable doubts. The proceedings cannot be stayed for lack of an inventive step

or an alleged inadmissible expansion if at least reasonable arguments can be found

for the merit of the invention and its overall patentability.

In this case, the fact that the patent in suit has already undergone a legal validity

review, i.e., the opposition proceedings that led to a limited maintenance in

accordance with the opposition decision of 2 February 2012 (Exhibit B-18a, in the

German translation as Exhibit B-18b), additionally speaks against a stay with regard

to the parallel nullity action. Even though the former complainant withdrew the

opposition relatively quickly, the patent in suit was still reviewed for its legal validity

by a technically competent board and maintained in the scope that is not at issue in

these infringement proceedings.

2.

Measured against these parameters, a success of a legal validity challenge of the

patent in suit is not sufficiently likely.

a)

The challenge based on WO 1993/08660 (in the parallel nullity action citation NK4;

hereinafter: WO '660) on the grounds of an alleged lack of novelty of the patent in

suit does not have sufficient chances of success.

With regard to the feature groups 3 and 4, a sufficiently clear and direct disclosure

of at least two independent timers, and therefore means according to the patent in

suit for the determination of an expiry time, is lacking. WO '660 does, indeed,

disclose two different timing intervals, i.e., on the one hand a timing interval 504 to

receive a codeword (page 9, lines 22 to 27 of the WO '660) and on the other hand a

timing interval 516 to re-establish a radio connection according to a protocol MUX 3

(page 10, lines 16 to 29 of WO '660). What is missing in the disclosure of WO '660,

however, is any indication that these two timing intervals can be monitored at the

same time and independently from each other by means of two different timers.

What is therefore lacking is precisely a disclosure of the proposed solution with

which the patent in suit, as an alternative to the prior art, wants to guarantee a

flexible monitoring of those timing intervals that are technically provided for services

from different categories.

The Opposition Division of the European Patent Office (EPO) came to the

conclusion in its decision of 2 February 2012 that the US 5 280 541 (there identified

as citation D5) which corresponds to WO '660 discloses only one timer which,

40

however, can be set to different possible time values, but not an embodiment with

more than one timer that takes into account the different categories of services

(Exhibit B-18a, page 6, Exhibit B-18b, page 5, each time in the third paragraph of

section 3.4).

This means at the same time that a sufficient prior disclosure of feature 6 is at least

questionable. For lack of a disclosure of two timers that are independent from each

other, what is therefore also lacking is a disclosure of two expiry times which can be

set to the same value, but which can also have two different values, the times of

which can be independently monitored.

Finally, the prior disclosure of radio bearers according to the patent in suit and its

features 2.1, 3.2, and 4.2 does not seem sufficiently clear. Defendants submit that

the transceivers taught in WO '660 (from page 1, line 33, to page 2, line 2 of WO

'660) are the radio bearers within the meaning of the patent in suit, but in view of

the deliberations in III.1.a) above, we cannot concur. According to the specific

teaching of WO '660, a transceiver is a technical means that provides multiple RF

channels. It is not clear that in this regard a means to assign and manage radio

resources in a network architecture on the physical layer (layer 1) and/or the data

link (layer 2) is disclosed. What is missing in particular is any indication that the

transceivers disclosed in WO '660 are part of a radio resource control connection:

Defendants reference in this regard only the disclosure of WO '660 (from page 2,

line 35 to page 3, line 2), according to which the protocol MUX-1 is used for certain

types of signals and messages. That does not show, however, to what extent the

transceiver allegedly disclosed as a radio bearer is to be part of a radio resource

control connection, because it is also not disclosed whether and, if so, to what

extent the protocol MUX-1 is to control radio resources.

b)

It also does not seem sufficiently likely that the patent in suit can be disallowed due

to the effective claiming of the Finnish priority FI 20 000 438 of 24 March 2000

(priority document in the nullity action, submitted without translation as Exhibit NK0-

P; hereinafter: FI '438) and that therefore a counter is made with the standard

document ETSI TS 125 331V3.2.0 (submitted as Exhibit NK1).

An effective claiming of the priority of a document with an older priority date

requires that the same invention is fully disclosed in the subsequent application in a

way that allows a person skilled in the art to learn about the same invention directly

and clearly from the other document, and that the necessary disclosure can be

taken from the older document as a whole, i.e., that the disclosure can be contained

in the claims, the description, or the drawing of the older document

(Fitzner/Lutz/Bodewig/Beckmann, Patentrechtskommentar [Patent Law

41

Commentary], 4th edition, Art. 87 EPC, para. 31 et seq.). In view of this, it does not

seem sufficiently likely that the Federal Patent Court will find for an invalid claiming

of the priority of FI '438 in the nullity action.

Defendants' objection that Fl '438 only discloses one service of one category, but

not at least two services from different categories, does not have sufficient chances

of success. FI '438 should disclose sufficiently clearly and directly the

implementation of two categorically different services whose failure due to a

disruption of the connection is separately monitored and are to be addressed with

the help of separately determined and monitored re-establishment times. The

description of FI '438 reads as follows in this regard (NKO-P, page 8, lines 16 to

37):

"Throughout a period 201 the UE has been communicating with the UTRAN through a set of radio bearers belonging to an RRC connection. For the sake of example we assume that there has been at least one active radio bearer for providing real time services and one active radio bearer for providing non-real term services. At least once during the period 201 the UTRAN hast sent to the UE a dedicated control channel message; messages 202 und 203 are shown in Fig. 2a. At a certain time instant 204 there is a radio link failure which cuts the radio connection between the UE and the UTRAN. When the UE detects that the radio connection has been lost, it starts at least one timer. Also when the UTRAN detects that the radio connection has been lost, it starts at least one timer. [...] In the embodiment illustrated in Fig. 2a the UE and the UTRAN both start at least two timers: at least one concerning the re-establishment of the radio connection for the part of the RT-related radio bearers and at least one more concerning the re-establishment of the radio connection for the part of the NRT-related radio bearers."

In German:

"Während einer Zeitspanne 201 hat das UE mit dem UTRAN über eine Reihe von Funkträgern kommuniziert, die zu einer RRC-Verbindung gehören. Zu Beispielszwecken nehmen wir an, dass wenigstens ein aktiver Funkträger Echtzeitdienste zur Verfügung gestellt hat und dass ein aktiver Funkträger Nicht-Echtzeitdienste zur Verfügung gestellt hat. Wenigstens einmal innerhalb der Zeitspanne 201 hat das UTRAN an die UE eine dedicated control channel-Mitteilung gesendet; die Mitteilung 202 und 203 sind in Figur 2a gezeigt. Zu einem bestimmten Zeitpunkt 204 tritt ein Funkverbindungsfehler auf, der die Funkverbindung zwischen der UE und dem UTRAN unterbricht. Sobald die UE den Verlust der Funkverbindung feststellt, startet sie wenigstens einen Zeitnehmer. Auch das UTRAN startet, sobald es den Verlust der Funkverbindung feststellt, wenigstens einen Zeitnehmer. [...] In the embodiment shown in Fig. 2a, both the UE and the UTRAN start at least two timers: at least one timer for the re-establishment of the radio connection for the parts of the radio bearer relating to real time services, and

42

at least one additional timer for the re-establishment of the radio bearers relating to non-real time services."

According to this, the FI '438 discloses real-time services in one instance, and non

real-time services in another. The fact that the services are of different categories is

disclosed in FI '438 in the same way as in the patent in suit (Page 2, lines 4 to 11 of

FI '438).

Therefore, Defendants' objection that Fl '438 does not disclose at least two active

radio bearers in the sense of the patent in suit likewise has almost no chance of

success. At the same time, the disclosure of at least two active radio bearers, of

which one enables real-time service and the other enables non real-time service,

follows from the descriptive passages reproduced from FI '438. This corresponds to

the technical teaching of the patent in suit, to provide at least two active radio

bearers for at least two services from different categories.

c)

Defendants' challenge based on the plea for annulment of the inadmissible

extension has a similarly low chance of success.

An inadmissible extension of granted property rights in comparison to their original

application is to be assumed, according to Art. 123 EPC, if the scope of protection

leaves the original application after granting the content of the disclosure. Similar to

an examination of an effective claim of a priority, this classification depends on

whether the technical teaching included in the scope of protection follows from the

whole of the disclosure of the original application, so that the claims of the original

application are to be taken into account for the review alongside the description and

drawings (Fitzner/Lutz/Bodewig/Müller, op. cit., Art. 123 margin no. 121f. and 128).

Therefore, we cannot assume with reasonable certainty that there is an inadmissible

extension of the patent in suit with regards to its original application in accordance

with the document WO 01/63955 A1 (Exhibit NK0-W in the nullity proceedings;

hereinafter referred to as WO '955).

Defendants also argued that the embodiments of two services of different

categories as well as the monitoring of two expiry times with regards to the

restoration of the radio bearers for these services had not been disclosed in

advance. WO '955 discloses real-time services (RT) and non real-time services

(NRT) which are categorically different from one another in its description (page 1,

line 31 to page 2, line 4 of WO '955), just as the patent in suit does. WO '955, then

discloses the following in its description with regards to the expiration of timers

(page 10, lines 5 to 10 and 24 to 27):

43

"The RT timer(s) in the UE expire at a certain later time instant 205, which is not very much after the time instant 204 which meant the failure of the radio link-as we noted in the description of prior art, typical expiry times for RT re-establishment timers is in the order of seconds. Correspondingly, the RT timer(s) in the RNC expire at a time instant 207 which is slightly later than the time instant 206. The reason for lightly delaying the timer expiration in the RNC is that also such cases must be allowed for where the UE finds itself to on an "in service area" only a very short moment before the timer(s) in the UE would expire. lt takes time for the UE to react, and since the re-establishment of the RRC connection relies an a UE-originating radio transmission which may even undergo a retransmission before successful reception at the UTRAN, it would be operationally unwise if the timer(s) at the RNC would expire simultaneously with the UE timers. [...] According to an aspect of the Invention, the NRT timer(s) of the UW expire at a certain still later time instant 208, which may be as long several minutes after the radio link failed. Again after a certain delay, the NRT timer(s) of the RNC expire at time instant 209."

In German:

"Der oder die RT-Zeitnehmer der UE laufen zu einem bestimmten späteren Zeitpunkt 206 ab, der nicht sehr weit nach dem Zeitpunkt 204 liegt, welche den Ausfall der Funkverbindung bezeichnet — wie wir bereits in der Beschreibung des Standes der Technik ausgeführt haben liegen die typischen Zeiten für die RT-Wiederherstellungszeitnehmer in der Größenordnung von Sekunden. Dementsprechend laufen der oder die RT-Zeitnehmer des RNC zu einem Zeitpunkt 207 ab, der ein wenig später als der Zeitpunkt 206 liegt. Der Grund für die leichte Verzögerung des Zeitnehmer-Ablaufs im RNC liegt darin, dass viele Fälle zugelassen werden müssen, in denen die UE ihre Position in einem "Gebiet mit Dienst" erst einen kurzen Moment vor dem Ablauf des oder der Zeitnehmer der UE feststellt. Die UE braucht Zeit um zu reagieren und da die Wiederherstellung der RRC-Verbindung auf einer von der UE ausgehenden Funkübertragung beruht, die womöglich gar eine Rückübertragung durchläuft, bevor sie erfolgreich vom UTRAN empfangen wird, wäre es im Betrieb unklug, wenn der oder die Zeitnehmer des RNC zeitglich mit den Zeitnehmer der UE abliefen.[...] Nach einem Aspekt der Erfindung laufen der oder die NRT-Zeitnehmer zu einem bestimmten noch später gelegenen Zeitpunkt 208 ab, der sogar mehrere Minuten nach dem Abbruch der Funkverbindung liegen kann. Nach wiederum einer gewissen Verzögerung laufen der oder die NRT-Zeitnehmer des RNC zum Zeitpunkt 209 ab."

This passage not only discloses the embodiment of two categorically different

services (namely: real-time and non real-time services) from the communications

device, but in particular also the provision of different timers that can monitor timing

for the restoration of the control connection for each of the two services

independently of one another because there are at least two different timers which

are, accordingly, able to monitor two independent times, namely a significantly

shorter expiry time for real-time services than for non real-time services.

44

d)

Finally, the fact that Defendants claim that the technical teaching of the patent in

suit results in an obvious manner from a combination of the older version of the

standard (1999 version, submitted as NK3) with a scientific report from 1998 (Shin /

Han, Fast Low-Cost Recovery for reliable Real-Time Multimedia Communication;

submitted as NK6, in German translation as NK6a) does not provide a foundation

for a sufficient prospect for success for the nullity action.

Firstly, this challenge has not been incorporated into the nullity proceedings, as

Defendants conceded in the hearing on 29 September 2015. In the nullity

proceedings, Defendants only denied the inventive step with regards to a

combination of the disclosure from NK3 with general knowledge in the field, as well

as with two other technical contributions (NK7 and NK8). Defendants did not state

that NK6 manifested general knowledge in the field or that it disclosed the same

things as NK7 and/or NK8.

Additionally, it is not evident what occasion a person skilled in the art would have

had on the priority date to consult the disclosures of NK6 to solve the objective

technical problem. The standard in its older version does not disclose the provision

of technical means which would enable the simultaneous determination of two

different expiry times, which is crucial for the different category for the services.

NK6 also does not disclose such a teaching. It is true that NK6 does deal with the

problem of differing degrees of failure and error tolerances in different categories of

services at the beginning. The technical solution suggested by NK6, however,

points in a different direction. For the re-establishment of interrupted connections,

NK6 suggests a "backup multiplexing," which is a mechanism for distributing

resources to backup channels in such a way that the backup channels must share

the resources; the scope of resources used does not grow proportionally with the

number of backup channels. Instead, these resources are shared and distributed

through multiplexing (distribution of signals over multiple transmission routes). This

is treated in NK6 (page 12, end of the first paragraph and second paragraph and

third paragraph) as follows:

"Thus, raw backup channels are too expensive to be useful for multimedia net-working.

To alleviate this problem, we have developed a resource-sharing technique, called backup multiplexing. Its basic idea is that an each link, we reserve only a very small fraction of link resources needed for all backup channels going through the link. In this article, we consider only link-bandwidth for simplicity, but other resources like buffer and CPU can be treated similarly. With backup multiplexing, backup channels are overbooked via a meta-admission test, in which some existing backup channels are not accounted for

45

in the admission test of a new backup channel. lt is, in essence, equivalent to resource sharing between the new backup and those backups unaccounted for."

In German:

"Demnach sind bloße Auffangkanäle zu aufwendig, um in einer Multimedia-Vernetzung von Nutzen zu sein. Um diesem Problem zu begegnen, haben wir einen Mechanismus zur Aufteilung von Ressourcen entwickeln, genannt backup multiplexing. Die wesentliche Idee besteht darin, dass wir für jede Verbindung nur einen kleinen Bruchteil der Verbindungsressourcen reservieren, die für alle durch die Verbindung verlaufenden Auffangkanäle nötig wären. In diesem Beitrag betrachten wir zur Vereinfachung nur die Verbindungs-Bandbreite, aber andere Ressourcen wie Arbeitsspeicher und die zentrale Prozessoreinheit können ähnlich behandelt werden. Beim backup multiplexing werden die Auffangkanäle mithilfe einer Meta-Zugangsprüfung überbucht, so dass einige der bestehenden Auffangkanäle bei der Zugangsprüfung eines neuen Auffangkanals unberücksichtigt bleiben. Dies entspricht im Wesentlichen der Aufteilung von Ressourcen zwischen dem neuen Auffangkanal und den unberücksichtigten Auffangkanälen."

NK6, therefore, does not attempt to monitor a time during which the connection

must be restored, but rather takes an entirely different route: it is focused on the

possibility of maintaining a sufficient number of backup channels. The NK6 answers

the apparent disadvantage that too many connection resources are linked and used

for the backup channels with the suggestion of backup multiplexing, or a distribution

of resources among a plurality of backup channels, so that the resources are not

available to every backup channel in the amounts actually required.

VII. There are neither procedural or material and legal grounds for Defendants'

additional alternate request to grant Plaintiff a new license offer within a time period

to be determined before the decision regarding the cease-and-desist claim. The

conclusion of the last hearing, Section 296a ZPO, determines this decision. At that

time, Plaintiff was not precluded by antitrust law from bringing claims against

Defendants resulting from the patent in suit. Any changes in temporal

circumstances due to a new license offer from Defendant must be disregarded.

The schedule formulated by the CJEU for the conclusion of a FRAND licensing

agreement also does not provide for setting such deadlines. The CJEU assumes

that a settlement regarding a licensing agreement must be completed quickly; in

this respect, the patent user may not use any delay tactics and must provide a

counter-offer within a short time period. This would be undermined if patent users

46

who did not adhere to CJEU guidelines were given the chance to make an

additional counter-offer.

This is the case here. There were already licensing discussions before the claim

was submitted. Three counter-offers were submitted during the proceedings, for

which Defendants neither provided an invoice nor provided a security in a prompt

manner. To now allow them to make further counter-offers before the issuance of a

court injunction would delay the litigation and would inappropriately impair Plaintiff's

limited-term right to bring a patent law cease-and-desist claim resulting from the

patent in suit. As indicated above, such a counter-offer could not, in any case, be

brought against Plaintiff claims without a lack of prompt financial accounting and

security bonds.

VIII. The decision on costs is based on Sec. 91 para. 1 ZPO.

The claim for provisional enforceability is based on Sec. 709 ZPO.

No suspension of enforcement in accordance with Sec. 712 ZPO is to be granted

to the Defendants. It is not possible to determine that Defendants face an

irreparable disadvantage as a result of the enforcement of the judgment, namely

the operative part of the judgment pertaining to cease and desist, that could justify

the granting of suspension of enforcement according to Sec. 712 para. 1 clause 1

ZPO. This type of irreparable disadvantage, which would, of course, require an

initial consideration of the interests of both the judgment creditor and debtor (Zöller

/ Herget, comment to ZPO, 30th ed., § 712 margin no. 3), does not include those

circumstances that are resolved through the enforcement itself, and that are not

dissolved as a regular consequence of enforcement (Zöller / Herget, op. cit., § 707

margin no. 13).

In the present case, Defendants only claim enforcement of those impending

consequences intrinsic to the enforcement of a patent as an exclusive right, namely

the inability to fulfill contractual obligations to the buyer of the challenged embodiment

that have already been accepted as well as ensuing disruptions in supply that could

damage the reputation of Defendants. If such consequences of enforcement are to

be taken into account, injunctions resulting from patents could hardly be enforced, for

typically the individual using the teaching of a patent in a commercial manner is

contractually obligated to continue its exploitation by third parties, for instance by

delivering devices made in accordance with the patent. The patent holder's opposing

47

interest in being able to promptly enforce its property rights has particular weight in

this instance because the patent has only a limited term of protection (cf. on the

meaning of the interest of the creditor, for whom the time without enforcement of a

cease-and-desist order is irretrievably lost in antitrust law contexts also Ahrens /

Bähr, Wettbewerbsprozess, 7th ed., chap. 29 margin no.. 82). With this background,

at least, Defendants' view that suspensions of enforcement must generally be

granted in patent law matters seems incorrect. In contrast to Defendants' opinion, this

conclusion also cannot be drawn from higher court rulings.

IX. Die pleadings of the parties dated 01 October 2015 and 06 October 2015 (not

included) handed in after the end of the hearing were not taken into account in the

decision. Reopening the hearing is not appropriate, Sections 296a, 156 ZPO.

Dr. Crummenerl Presiding judge

of the Regional Court

Dr. Büttner Judge of the Regional

Court

Haase Judge of the Regional

Court

Certified

[Signature] [*REGIONAL COURT 252 DÜSSELDORF *]

Beihof

Court Clerk