2011 (Yo) 22027, Petition for a provisional disposition order based on patent right
Decision
Obligee:Republic of Korea, Gyeonggi-do, Suwon-si(Address omitted)
Samsung Electronics Co., Ltd.
Counsel attorneys: OHNO Seiji
Same as above:
MIMURA Ryoichi
Same as above:
TANAKA Masato
Same as above:
ICHIHASHI TomomineSame as above:
INOUE Yoshitaka
Same as above:
KOBAYASHI HideakiSame as above:
INOUE Soh
Same as above:
TSUJIMOTO Kensuke
Same as above:
OKADA HiroakiCounsel patent attorney: SUZUKI Mamoru
Sub-Counsel attorney : IIZUKA Akio
Patent attorney as assistant in court: OTANI Kan
Obligor:Shinjuku-ku, Tokyo (address omitted)
Apple Japan Godo Kaisha(Successor in litigant's status from Apple Japan
Kabushiki Kaisha)Counsel attorneys: NAGASAWA Yukio
Same as above:
YAKURA Chie
Same as above:
KATAYAMA Eiji
Same as above:
KITAHARA Junichi
Same as above:
OKAMOTO Naomi
Same as above:
IWAMA Chataka
Same as above:
KAJINAMI ShoichiroCounsel patent attorney: KATO Shimako
Sub-counsel attorneys: NAGAI Hideto
Same as above:
KANEKO Shinsuke
Same as above:
INASE Yuichi
Same as above:
ISHIHARA Naoko
Same as above:
KURAHARA Shinichiro1

Sub-counsel patent attorney:
OTSUKA Yasunori
Patent attorneys as assistants in court:
OTSUKA YasuhiroSame as above:
SAKATA Yasuhiro

Main text
1. The petition shall be dismissed.
2. The obligee shall bear the court costs.
3. The additional period for the immediate appeal against this decision
to the court of second instance shall be thirty (30) days.
Reasons
No. 1 Petition
1. The Obligor is prohibited from the production, assignment, lease, import, or offering
for the assignment or lease (including displaying for the purpose of assignment or lease)of each product specified in 1 and 2 of the List of Products attached hereto.
2. The Obligor must release the possession of each of the products specified in 1 and 2of the List of Products attached hereto and deliver them to the court execution officer.
No. 2 Background
1. Summary of case
The obligee held a patent right under Patent No. 4642898 for the invention titled"method and apparatus for transmitting/receiving packet data using a pre-defined
length indicator in a mobile communication system" (this patent is hereinafterreferred to as the "Patent"; the patent right as the "Patent Right").In this case, theobligee alleges that the obligor's import and sale in relation to the products specified
in the attached Lists of Products 1 and 2 (hereinafter referred to as the "Products")
constitutes the infringement of the Patent Right, and filed the petition for aprovisional disposition order for an injunction against the obligor's production,
assignment, etc. of the Products and custody of infringing products by a court
execution officer. The right sought to be preserved by this provisional disposition is
the right to seek an injunction based on the Patent Right.
2. Undisputed facts, etc. (the facts without any indication of the prima-facie evidence
are the undisputed facts or the facts found from the entire import of hearings)(1) Parties
A. The obligee is a South Korean corporation whose business objectives are2

B.

manufacturing, sale, etc. of electric machine devices, communication andrelated machine devices, and their component parts.
The obligor is a limited liability company ("godo kaisha" under the laws ofJapan) whose business objectives are sale, etc. of personal computers, hardware
and software for computer-related devices, and ancillary devices for computers.
The obligor implemented an absorption-type merger of Apple Japan K.K., asubsidiary company of Apple Incorporated, a U.S. corporation, (hereinafterreferred to as "Apple Inc.") on October 30, 2011, and succeeded to the status ofApple Japan K.K. in this case (hereinafter the term "obligor" includes AppleJapan K.K. before the abovementioned absorption-type merger).

(2) Obligee's patent right
A. The obligee (the name as it appears on the patent registry is "Samsung
Electronics Company Limited") filed an international application for the Patent(the PCT international application number is PCT/KR2006/001699, its priority
date is May 4, 2005, its priority country is South Korea, and the Japaneseapplication number is Patent Application No. 2008-507565; hereinafter referred
to as the "Patent Application") on May 4, 2006, and obtained the registration of
establishment of the Patent Right on December 10, 2010 (Exhibits Ko No. 1
and No. 2).
B. The claims of the Patent comprise Claims 1 to 14. Claims 1 and 8 read as
follows (the invention of Claim 8 is hereinafter referred to as "Invention 1" andthe invention of Claim 1 as "Invention 2," and these Inventions 1 and 2 shall behereinafter collectively referred to as the "Inventions").
"[Claim 1] A method of transmitting data in a mobile communication system,comprising: a stage of receiving a service data unit (SDU) from a higher layerand determining whether the SDU is included in one protocol data unit (PDU);
if the SDU is included in one PDU, a stage of configuring the PDU including aheader and a data field, wherein the header includes a sequence number (SN)field, and a one-bit field indicating that the PDU includes the whole SDU in thedata field without segmentation/concatenation/padding; if the SDU is notincluded in one PDU, a stage of segmenting the SDU into a plurality ofsegments according to the transmittable PDU size, and the data field of each
PDU configuring a plurality of PDUs comprising one of said plurality ofsegments, wherein headers of the PDUs include an SN field, a one-bit fieldindicating the presence of at least one length indicator (LI) field and said atleast one LI field; if the data field of the PDU includes an intermediate segment3

of the SDU, a stage, wherein the LI field is set to the pre-defined value
indicating the presence in the PDU of an intermediate segment which is neither
the first nor last segment of the SDU, and the PDU is sent to a receiver.
"[Claim 8] An apparatus for transmitting data in a mobile communication
system, comprising: a transmission buffer for receiving a service data unit
(SDU) from a higher layer, determining whether the SDU is included in one
protocol data unit (PDU), and reconfiguring the SDU to at least one segment
according to the transmittable PDU size; a header inserter for configuring atleast one PDU including a serial number (SN) field and a one-bit field in aheader, and said at least one segment in a data field; a one-bit field setter for
setting the one-bit field to indicate that the PDU includes the whole SDU
without segmentation/concatenation/padding in the data field, if the SDU is
included in one PDU, and for setting the one-bit field to indicate the presenceof at least one length indicator (LI) field, if the data field of the PDU includes
an intermediate segment of the SDU; an LI inserter for inserting and setting an
LI field after the one-bit field in said at least one PDU if the SDU is notincluded in one PDU, wherein if the data field of the PDU includes anintermediate segment of the SDU, the LI field is set to the pre-defined value
indicating the presence in the PDU of an intermediate segment which is neither
the first nor last segment of the SDU; and a transmitter for sending at least oneC.

PDU received from the LI inserter to a receiver."The constituent features of each of the Inventions are as follows (each of theconstituent features shall be hereinafter referred to as "Constituent Feature A,""Constituent Feature B," etc.)(A) Invention 1 (Claim 8)[A] An apparatus for transmitting data in a mobile communication
system, comprising:[B] a transmission buffer for receiving a service data unit (SDU) from ahigher layer, determining whether the SDU is included in one
protocol data unit (PDU), and reconfiguring the SDU to at least one
segment according to the transmittable PDU size;[C] a header inserter for constructing at least one PDU including a serial
number (SN) field and a one-bit field in a header, and said at least
one segment in a data field;[D] a one-bit field setter for setting the one-bit field to indicate that the
PDU
includes
the
whole
SDU
without
4

segmentation/concatenation/padding in the data field, if the SDU is
included in one PDU, and for setting the one-bit field to indicate thepresence of at least one length indicator (LI) field, if the data fieldof the PDU includes an intermediate segment of the SDU;
[E] an LI inserter for inserting and setting an LI field after the one-bit
field in said at least one PDU if the SDU is not included in one
PDU,[F] wherein if the data field of the PDU includes an intermediatesegment of the SDU, the LI field is set to the pre-defined value
indicating the presence in the PDU of an intermediate segment(B)

which is neither the first nor the last segment of the SDU;
[G] and a transmitter for sending at least one PDU received from the LI
inserter to a receiver.
[H] an apparatus for transmitting data which comprises the features [B]
to [G] above.
Invention 2 (Claim 1)[I] A method of transmitting data in a mobile communication system,comprising:[J] a stage of receiving a service data unit (SDU) from a higher layerand determining whether the SDU is included in one protocol data
unit (PDU);[K] a stage of constructing the PDU including a header and data field, if
the SDU is included in one PDU, wherein the header includes asequence number (SN) field, and a one-bit field indicating that the
PDU includes the whole SDU in the data field without
segmentation/concatenation/padding;[L] if the SDU is not included in one PDU, a stage of segmenting the
SDU into a plurality of segments according to the transmittable
PDU size, and the data field of each PDU constructing a plurality of
PDUs comprising one of the plurality of segments, wherein headersof the PDUs include a SN field, at least a one-bit field indicating thepresence of a length indicator (LI) field and said at least one LI
field;[M] if the data field of the PDU includes an intermediate segment of the
SDU, a stage wherein the LI field is set to the pre-defined value
indicating the presence in the PDU of an intermediate segment
5which is neither the first nor the last segment of the SDU;
[N] and the PDU is sent to a receiver.
[O] a method of transmitting data which comprises the features [J] to[N] above.
(3) Obligor's acts, etc.
A. The obligor is engaged in import and sale of the Products manufactured byApple Inc.
B. (A) The Products satisfy Constituent Features A and H of Invention 1.
(B) The method of data transmission incorporated into the Products satisfies
Constituent Features I and O of Invention 2.
C

The Products conform to the UMTS (Universal Mobile Telecommunications
System) standard, which is the telecommunications standard developed by
3GPP (Third Generation Partnership Project). 3GPP is a private organization
established for the purposes of the dissemination of the third-generation mobile
telecommunication system or mobile telephone system (3G), as well as theinternational standardization of the related specifications (Exhibits Ko No. 3 toNo. 6 and No. 11; the telecommunications standard developed by 3GPP is
hereinafter referred to as "3GPP Standards").
The UMTS standard is called "W-CDMA" (wideband code division multiple
access) in Japan.

(4) FRAND Declaration for the Patent
A. ETSI (European Telecommunications Standards Institute), one of the standard
organizations which established 3GPP, provides the "Intellectual Property
Rights Policy" as the guidelines for the treatment of intellectual property rights(IPRs).
The IPR Policy of ETSI contains the following Clauses (Exhibit Otsu No. 12,
the original text is English):"3. Policy Objectives
3.1 It is ETSI's objective to create STANDARDS and TECHNICALSPECIFICATIONS that are based on solutions which best meet the technicalobjectives of the European telecommunications sector, as defined by theGeneral Assembly. In order to further this objective the ETSI IPR POLICY
seeks to reduce the risk to ETSI, MEMBERS, and others applying ETSISTANDARDS and TECHNICAL SPECIFICATIONS, that investment in the
preparation, adoption and application of STANDARDS could be wasted as aresult of an ESSENTIAL IPR for a STANDARD or TECHNICAL
6

SPECIFICATION being unavailable. In achieving this objective, the ETSI IPRPOLICY seeks a balance between the needs of standardization for public use in
the field of telecommunications and the rights of the owners of IPRs.
3.2 IPR holders whether members of ETSI and their AFFILIATES or third
parties, should be adequately and fairly rewarded for the use of their IPRs in
the implementation of STANDARDS and TECHNICAL SPECIFICATIONS.
4.
Disclosure of IPRs
4.1 ….. each MEMBER shall use its reasonable endeavours, in particularduring the development of a STANDARD or TECHNICAL SPECIFICATION
where it participates, to inform ETSI of ESSENTIAL IPRs in a timely manner.
In particular, a MEMBER submitting a technical proposal for a STANDARD
or TECHNICAL SPECIFICATION shall, on a bona fide basis, draw theattention of ETSI to any of that MEMBER's IPR which might be ESSENTIAL
if that proposal is adopted.
4.3 The obligations pursuant to Clause 4.1 above are deemed to be fulfilled
in respect of all existing and future members of a PATENT FAMILY if ETSI
has been informed of a member of this PATENT FAMILY in a timely manner.
6.
Availability of Licenses
6.1 When an ESSENTIAL IPR relating to a particular STANDARD or
TECHNICAL SPECIFICATION is brought to the attention of ETSI, theDirector-General of ETSI shall immediately request the owner to give within
three months an irrevocable undertaking in writing that it is prepared to grantirrevocable licences on fair, reasonable and non-discriminatory ("FRAND")conditions under such IPR to at least the following extent:
・MANUFACTURE, including the right to make or have made customized
components and sub-systems to the licensee's own design for use in
MANUFACTURE;
・sell, lease, or otherwise dispose of EQUIPMENT so MANUFACTURED;・repair, use, or operate EQUIPMENT; and・use METHODS.
The above undertaking may be made subject to the condition that those who
seek licences agree to reciprocate.
6.2 An undertaking pursuant to Clause 6.1 with regard to a specified memberof a PATENT FAMILY shall apply to all existing and future ESSENTIAL IPRsof that PATENT FAMILY unless there is an explicit written exclusion of
specified IPRs at the time the undertaking is made. The extent of any such7

exclusion shall be limited to those explicitly specified IPRs.
6.3 As long as the requested undertaking of the IPR owner is not granted, theCOMMITTEE Chairmen should, if appropriate, in consultation with the ETSISecretariat use their judgment as to whether or not the COMMITTEE should
suspend work on the relevant parts of the STANDARD or TECHNICALSPECIFICATION until the matter has been resolved and/or submit for
approval any relevant STANDARD or TECHNICAL SPECIFICATION.
12. The POLICY shall be governed by the laws of France.
15. Definitions
6. "ESSENTIAL" as applied to IPR means that it is not possible ontechnical (but not commercial) grounds, taking into account normal
technical practice and the state of the art generally available at the time ofstandardization, to make, sell, lease, otherwise dispose of, repair, use oroperate EQUIPMENT or METHODS which comply with a STANDARD
without infringing that IPR. For the avoidance of doubt in exceptional cases
where a STANDARD can only be implemented by technical solutions, allof which are infringements of IPRs, all such IPRs shall be considered
ESSENTIAL.
7. "IPR" shall mean any intellectual property right conferred by statute law
including applications therefor other than trademarks. For the avoidance ofB.

doubt rights relating to get-up, confidential information, trade secrets or the
like are excluded from the definition of IPR.
9. "MEMBER" shall mean a member or associate member of ETSI.
References to a MEMBER shall wherever the context permits beinterpreted as references to that MEMBER and its AFFILIATES.
13. "PATENT FAMILY" shall mean all the documents having at least onepriority in common, including the priority document(s) themselves. For the
avoidance of doubt, "documents" refers to patents, utility models, andapplications therefor.
(A) On December 14, 1998, the obligee, as a member of ETSI, made anundertaking (declaration) to ETSI that it was prepared to license its
essential IPR relating to W-CDMA technology supported by ETSI as the
UMTS standard on "fair, reasonable and non-discriminatory terms andconditions" (hereinafter referred to as the "FRAND Terms") in accordancewith ETSI IPR Policy Clause 6.1 (Exhibit Otsu No. 5).
(B) On August 7, 2007, the obligee, in accordance with ETSI IPR Policy8Clause 4.1, notified ETSI of the number of the South Korean patentapplication which served as the basis for the priority claim for the Patent
Application and the international application number of the Patent
Application (PCT/KR2006/001699), and declared that the IPRs relating tothese applications are or highly likely will be an essential IPR for the
UMTS standard (such as TS 25.322), with a declaration that it was
prepared to grant an irrevocable license in accordance with the licensing
terms and conditions complying with ETSI IPR Policy Clause 6.1 (i.e. the
FRAND Terms; and this declaration shall be hereinafter referred to as the"FRAND Declaration")(Exhibit Otsu No.13).
3. Parties' allegations
The parties' allegations are as specified in their respective written allegations.
Therefore, the court cites these allegations.
No. 3 Court Decision
1. Whether the Products fall within the technical scope of Invention 1(1) Structure of the Products
A. Whether the Products comply with Technical Specification V6.9.0
The obligee alleges that Invention 1 is the implementation of the"alternative E-bit interpretation" as referred to in Technical Specification
V6.9.0 of the 3GPP standards, and also that the Products complying withthis technical specification fall within the technical scope of Invention 1.
First of all, the court would like to determine whether the Products can beconsidered as the products complying with Technical Specification V6.9.0.
(A) Alternative E-bit interpretation
Subclauses 9.2.2.5, 9.2.2.8 and 9.2.2.8.1 of Technical Specification
V6.9.0 (see Attachment 1) contain the following descriptions. [i] For
the E-bit (extension bit) in the first octet of the PDU (UMD PDU)
whose transmission mode is unacknowledged mode, either the"normal E-bit interpretation" or the "alternative E-bit interpretation" isapplied depending on the higher layer configuration. [ii] Under the"alternative E-bit interpretation," the E-bit '0' contained in the firstoctet means that "the next field is a complete SDU, which is notsegmented, concatenated or padded," whereas the E-bit '1' means that"the next field is a length indicator and an E-bit." [iii] The "length
indicator" is used to indicate the last octet of each SDU (RLC SDU)
9

ending within the PDU, unless the E-bit contained in the first octet
indicates a "complete SDU not segmented, concatenated or padded."[iv] In the case where the "alternative E-bit interpretation" isconfigured, and a PDU (RLC PDU) contains a segment of an SDU butneither the first octet nor the last octet of this SDU, the 7-bit "length
indicator" with value '111 1110' or the 15-bit "length indicator" withvalue '111 1111 1111 1110' shall be used.
(B) Demonstration Testa. Considering the prima-facie evidence (Exhibits Ko No. 21, No. 22
and No. 49), as well as the entire import of hearings, the court
finds the following facts:(a) Chipworks Inc., a Canadian corporation, tested the Products
using CMW500 as the "base station emulator"(Demonstration Test).
CMW500 supports the W-CDMA method.
(b) Test 1 of the Demonstration Test was for the "case in which
thePDU
containsacomplete
SDU
without
segmentation/concatenation/padding," and performed under
the conditions of "PDU Size: 488-bit, SDU size: 480-bit."
Test 2 was the test to monitor the PDU as an "intermediatesegment" excluding the first and last PDUs (e.g. the second
PDU), and performed under the conditions of "PDU Size:
80-bit, SDU size: 480-bit."(c) The results of the Demonstration Tests were as follows:[i] In Test 1, the E-bit following the sequence number (SN)was '0,' and a PDU without a length indicator (LI) was
output (Exhibit Ko No. 21, Figures 12 and 14).
[ii] In Test 2, the E-bit following the sequence number (SN)was '1,' and a PDU containing a pre-defined value'1111110' as the length indicator was output (Exhibit Ko
No. 21, Figures 13 and 15).
b. The values of the E-bits and length indicator as indicated by the
results of the Demonstration Test in a. above agree with the values
obtained for the alternative E-bit interpretation as referred to in (A)above (Test 1 corresponds to (A)[ii] and [iii] above, and Test 2
corresponds to (A)[ii] and [iv] above, respectively). Therefore, the10

court finds the Products to be the implementation of the functions
based on the alternative E-bit interpretation.
c. In this regard, the obligor raises allegations that the"Interpretation" section of the Demonstration Test results reads"next octet: data" and does not mention "a complete SDU without
segmentation/concatenation/padding," and that therefore theDemonstration Test used the normal E-bit interpretation instead of
the alternative E-bit interpretation.
However, for the alternative E-bit interpretation, if the E-bit is set
to '0,' the bit sequence of the next field shows "data" of the SDU

C.

which
comprisea"complete
SDU
without
segmentation/concatenation/padding." Accordingly, the indicationof "next octet: data" in the "Interpretation" section does notcontradict the use of the alternative E-bit interpretation in the
Demonstration Test.
Therefore, the obligor's allegations as mentioned above are
groundless.
Summary
Based on the above, the court finds the Products to comply with Technical
Specification V6.9.0 and have the structure implementing the functions

based on the alternative E-bit interpretation.
(2) Technical significance of Invention 1
A. Matters disclosed by the description
Taking into consideration the wording of the scope of the claim ofInvention 1 (Claim 8) and the statement of the "detailed explanation of theinvention" of the description of the Patent (Exhibit Ko No. 2; thedescription and the drawings shall be hereinafter collectively referred to as
the “Patent Description”), the court finds that the Patent Description
discloses the following. [i] In relation to the mobile communication
system supporting packet service (wireless data packet communication
system), in order to provide VoIP service, which is a communication
technology for transmitting voice frames generated from a voice codec inthe form of voice packets using the Internet Protocol, there was a problem
of unnecessary LI fields being inserted, which caused inefficient use oflimited wireless resources, when using the RLC framing method in the
VoIP communication system based on the conventional technology
11(operation for processing the RLC SDU received from the higher layer
into a size appropriate for transmission through wireless channel). Namely,
although the majority of RLC SDUs are not segmented or concatenatedand one RLC SDU is comprised of one RLC PDU, if the conventional
RLC framing operation is applied, at least the length indicator (LI) fieldindicating the starting point and the LI field indicating the end point of the
SDU are always required. [ii] The purpose of Invention 1 is to provide a
device for using radio resources efficiently by reducing the header size of
the RLC PDU (protocol data unit of radio link control layer), so as tosolve the abovementioned problem of the conventional technology. [iii]Invention 1, as a means to achieve the abovementioned purpose, adopts
the structure wherein the RLC PDU data field shows one-bit informationthat "one complete RLC SDU can be framed into one RLC PDU without
segmentation/concatenation/padding" (i.e. the structure of Constituent
Feature D which reads "setting the one-bit field to indicate that the PDU
completely
contains
the
SDU
without
segmentation/concatenation/padding in the data field, if the SDU is
included in one PDU"), and by doing so, eliminates the need to insert
additional information showing segmentation/concatenation/padding of
the RLC SDU (i.e. use of the "LI field"). Further, to this end, Invention 1
adopts the structure wherein the LI field set to the pre-defined new LI
value indicates that the RLC PDU includes "only an intermediate segmentof the RLC SDU which does not include the start or the end of the RLC
SDU" (i.e. the structure of Constituent Feature D which reads "a one-bit
field setter for setting the one-bit field to indicate the presence of at least
one length indicator (LI) field, if the data field of the PDU includes anintermediate segment of the SDU" and the structure of Constituent Feature
F which reads "the LI field is set to the pre-defined value indicating thepresence in the PDU of an intermediate segment which is neither the first
nor the last segment of the SDU"). By adopting these structures, Invention
1 enables the segmentation of the RLC SDU to reduce the header size, andthereby achieves the effect to enhance efficiency for the use of radio
resources.
B. Relationship between Invention 1 and alternative E-bit interpretation(A) The structure and effect of Constituent Feature D of Invention 1
which reads "setting the one-bit field to indicate that the PDU
12completely
contains
the
SDU
without
segmentation/concatenation/padding in the data field, if the SDU is
included in one PDU" (A.[iii] above) defines that, under thealternative E-bit interpretation, if the E-bit contained in the first octet
is '0,' it shows that the "next field is a complete SDU, which is notsegmented, concatenated or padded" and that the LI is not used((1)A.(A)[ii] and [iii] above). In addition, the structure of Constituent
Feature D which reads "a one-bit field setter for setting the one-bit
field to indicate the presence of at least one length indicator (LI) field,
if the data field of the PDU includes an intermediate segment of the
SDU" and the structure of Constituent Feature F which reads "the LI
field is set to the pre-defined value indicating the presence in the PDUof an intermediate segment which is neither the first nor the last
segment of the SDU" define that, under the alternative E-bit
interpretation, if the PDU (RLC PDU) contains a segment of the SDU
but does not contain either the first or the last octet of the SDU, the7-bit "length indicator" with value '111 1110' or the 15-bit "length
indicator" with value '111 1111 1111 1110' shall be used ((1)A.(A)[iv]
above).
On the basis of these findings, the court finds Invention 1 to be the(B)implementation of the alternative E-bit interpretation.
a. In contrast, the obligor relies upon the following arguments toallege that Technical Specification V6.9.0 contains no disclosureof Constituent Feature B: Constituent Feature B of Invention 1
which reads "to determine whether the SDU is completely
contained in one PDU" has a meaning "to determine whether the
SDU is completely contained in (completely matches) one PDU;"
whereas, the statement of Subclause 4.2.1.2.1 of Technical
Specification V6.9.0 which reads "segments the RLC SDU into
UMD PDUs of appropriate size, if the RLC SDU is larger thanthe length of available space in the UMD PDU" means that themethod as referred to therein aims at determination of thenecessity of segmentation of the SDU and whether the size of the
SDU is larger than the available space of the PDU (i.e. the size
relation between the SDU and the PDU) and it is therefore
different from the method to determine whether the SDU is13

completely contained in (completely matches) one PDU.
In spite of such allegation by the obligor, Subclause 9.2.2.5 ofTechnical Specification V6.9.0 indicates that, under the"alternative E-bit interpretation," the E-bit '0' contained in thefirst octet means that "the next field is a complete SDU, which is
not segmented, concatenated or padded," whereas the E-bit '1'means that "the next field is a length indicator and an E-bit"(1.(1)A.(A)[ii] above)). These statements can be considered as
defining the configuration of the E-bit as mentioned above,
depending on the results of determination as to whether the SDU
is completely contained in (completely matches) the PDU (i.e.
whether the SDU is a complete SDU, which is not segmented,
concatenated or padded) as a precondition for such configuration.
Therefore, these statements can be considered as disclosing thestructure of Constituent Feature B to "determine whether the
SDU is completely contained in one protocol data unit (PDU)."
Based on the above, the court finds the abovementioned
allegations of the obligor to be groundless.
b. In addition, the obligor alleges that the structure of Constituent
Feature D differs from the alternative E-bit interpretation as set
out in Technical Specification V6.9.0, based on the following
reasons: "the case where the SDU is included in one PDU" asreferred to in Constituent Feature D includes all of the situations[i] where the SDU is padded, [ii] where the SDU is concatenated,and [iii] where the SDU is not segmented, concatenated orpadded, and, accordingly, in order to satisfy Constituent FeatureD, it is necessary that "the one-bit field is set to indicate that the
PDU
fully
contains
the
SDU
without
segmentation/concatenation/padding" even in the case [i] or [ii]above; whereas, according to the alternative E-bit interpretation
as set out in Technical Specification V6.9.0, the one-bit field isconfigured to indicate that the PDU contains a complete SDU
only in the case [iii] above.
However, considering the wording of Constituent Feature D
which reads "setting the one-bit field to indicate that the PDU
completely
contains
the
SDU
without
14

segmentation/concatenation/padding in the data field, if the SDU
is included in one PDU," as well as the statement of Paragraph[0022] and Figure 5A of the Patent Description, it is understoodthat the case where "the SDU is included in one PDU" as referred
to in Constituent Feature D only means the case where "the PDU
completely
contains
the
SDU
without
segmentation/concatenation/padding in the data field" (i.e. case[iii] above), and not the case where the concatenated SDU is
contained in the PDU or the case where the SDU is incorporated
into PDU with padding. Therefore, the obligor's allegation is
(3)
A.

B.

unacceptable as it fails to satisfy the conditions precedent.
Whether the Products fall within the technical scope of Invention 1
As already mentioned in (3)B.(A) of "Undisputed facts, etc.," the Products
satisfy Constituent Features A and H of Invention 1.
Further, based on the findings that the Products comply with Technical
Specification V6.9.0 and have a structure to implement the functions based on
the alternative E-bit interpretation ((1)B. above), and that Invention 1 is theimplementation of the alternative E-bit interpretation ((2)B.(A) above), thecourt finds the Products to satisfy Constituent Features B to G of Invention 1.
Based on the above, the court finds the Products to fall within the technicalscope of Invention 1, as they satisfy all of the Constituent Features of Invention
1.
(A) On the other hand, the obligor alleges that the Products do not satisfy
Constituent Features B and D, because Constituent Features B and D are
not disclosed in Technical Specification V6.9.0.
However, as already mentioned in (2)B.(B) above, the obligor's allegation
is groundless as it fails to satisfy the conditions precedent.
(B) In addition, the obligor alleges that, for the Products to be considered tofall within the technical scope of Invention 1, it is necessary to evidence
that the Products implement all functions stated in the Constituent
Features of Invention 1 on the real network; however, the alternative E-bit
interpretation is only optional to the normal E-bit interpretation, and there
is no evidence that the telecommunication service providers' networks are
configured to allow the use of the alternative E-bit interpretation, andtherefore that the Products do not fall within the technical scope ofInvention 1.
15

However, as the Products satisfy all of the Constituent Features ofInvention 1 and have the structure to implement the alternative E-bit
interpretation, they are found to fall within the technical scope ofInvention 1, and whether the telecommunication service providers'
networks are actually configured to allow the use of the alternative E-bit
interpretation is irrelevant to the issue of whether the Products fall within
the technical scope of Invention 1.
Therefore, the obligor's allegation as mentioned above is unacceptable.
(4) Summary
Based on the foregoing, the Products fall within such technical scope ofInvention1.
Further, considering the facts that Invention 2 is the invention for the method ofdata transmission for the device of Invention 1, and as these Inventions have acommon structure (the fact not disputed by the parties), the structure of datatransmission method of the Products falls within the technical scope ofInvention 2.
2. Abuse of right
Next, the court would like to decide on the issue of acceptability of the obligor's
defense that the obligee's exercise of the right to seek an injunction based on the
Patent Right for the Products constitutes an abuse of right, considering the specificdetails of the instant case.
(1) Facts on which the decision is premised
Considering the totality of the non-disputed facts, prima-facie evidence and theentire import of hearings, the court finds the following facts:
A. ETSI IPR Policy(A) Outside Europe, the second-generation mobile telecommunication system(2G) specifications were inconsistent depending on the country. Even in
the same country, different specifications were used and suchspecifications were not universally interoperable. The U.S., Japan andEurope respectively used different systems based on the non-interoperable
standards. Against this backdrop, in 1998, international standards bodies,such as ETSI (European Telecommunications Standards Institute),
gathered to organize a standard body called 3GPP. The objectives of this
3GPP were the dissemination of the third-generation mobile
telecommunication system (3G) for providing data communication service
and multimedia service, in addition to conventional voice communication
16

services, as well as the standardization of the related specifications.
(B) ETSI provides IPR Policy as the guidelines for the treatment of IPR(intellectual property rights).
In general, the standardization of technology is expected to have various
effects, such as ensuring product interoperability, reduction in production
and procurement costs, enhanced efficiency in research and development,
and more opportunities for partnership with other companies. In addition,for end-users as well, standardization would have significance, such as
more convenient products/services at cheaper product prices and service
fees. On the other hand, companies obtain IPRs to exclusively use thetechnology, so as to prevent competitors from using the same technology
and to increase its sales. If certain IPR is determined to be essential for the
standardized technology, there is a risk that the owner company of such
IPR would take advantage of such standards to threaten competitors
attempting to develop products using such technology to refrain fromusing such IPR, while demanding an unreasonably high royalty rate orother unreasonable licensing conditions, and forcing them to accept suchconditions. In such case, competitors are exposed to the risk of loss of theinvestment for applying standard technology (such as investment fordevelopment or capital investment) if the license for such IPR cannot be
obtained. Such situations may lead to a significant obstacle to thedissemination of technologies by way of standardization. Based on theforegoing possibilities, it is necessary to strike a balance between thenecessity of standardization of technologies and the protection of right of
IPR owners in the field of telecommunications.
ETSI IPR Policy aims to meet the foregoing needs (See "Policy
Objectives" in Clause 3.1).
(C) ETSI IPR Policy provides as follows:a. IPR Policy Clause 4.1 provides that each MEMBER shall use its
reasonable endeavors, in particular during the development of a
STANDARD or TECHNICAL SPECIFICATION where it participates,
to inform ETSI of ESSENTIAL IPRs in a timely manner, and that, inparticular, a MEMBER submitting a technical proposal for a
STANDARD or TECHNICAL SPECIFICATION shall, on a bona fidebasis, draw the attention of ETSI to any of that MEMBER's IPR whichmight be ESSENTIAL if that proposal is adopted. Clause 4.3 provides
17

that the obligations pursuant to Clause 4.1 above are deemed to be
fulfilled in respect of all existing and future members of a PATENTFAMILY if ETSI has been informed of a member of this PATENTFAMILY in a timely manner.
b. IPR Policy Clause 6.1 provides that, when an ESSENTIAL IPR
relating to a particular STANDARD or TECHNICALSPECIFICATION is brought to the attention of ETSI, theDirector-General of ETSI shall immediately request the owner to give
within three months an irrevocable undertaking in writing that it isprepared to grant irrevocable licenses on fair, reasonable andnon-discriminatory (“FRAND”) terms and conditions under such IPR
to at least the following extent: [i] MANUFACTURE, including theright to make or have made customized components and sub-systems
to the licensee's own design for use in MANUFACTURE, [ii] sell,
lease, or otherwise dispose of EQUIPMENT so MANUFACTURED,[iii] repair, use, or operate EQUIPMENT, and [ii] use METHODS.
Clause 6.1 also provides that the above undertaking may be madesubject to the condition that those who seek licenses agree toreciprocate. Clause 6.2 provides that an undertaking pursuant toClause 6.1 with regard to a specified member of a PATENT FAMILY
shall apply to all existing and future ESSENTIAL IPRs of thatPATENT FAMILY unless there is an explicit written exclusion of
specified IPRs at the time the undertaking is made. Clause 6.3
provides that, as long as the requested undertaking of the IPR owner is
not granted, the COMMITTEE Chairmen should, if appropriate, in
consultation with the ETSI Secretariat use their judgment as towhether or not the COMMITTEE should suspend work on the relevant
parts of the STANDARD or TECHNICAL SPECIFICATION until thematter has been resolved and/or submit for approval any relevant
STANDARD or TECHNICAL SPECIFICATION.
c. IPR Policy Clause 15, paragraph 6 provides as follows:"ESSENTIAL" as applied to IPR means that it is not possible ontechnical (but not commercial) grounds, taking into account normal
technical practice and the state of the art generally available at the timeof standardization, to make, sell, lease, otherwise dispose of, repair,use or operate EQUIPMENT or METHODS which comply with a
18

STANDARD without infringing that IPR. For the avoidance of doubt
in exceptional cases where a STANDARD can only be implemented
by technical solutions, all of which are infringements of IPRs, all such
IPRs shall be considered ESSENTIAL.
d. IPR Policy Clause 12 provides that the POLICY shall be governed by
the laws of France.
(D) ETSI Guide on Intellectual Property Rights (IPRs) , which supplements
IPR Policy, provides as follows:a. ETSI Guide on IPRs Clause 1.1 provides that the main characteristicsof the Policy can be simplified as follows:"• Members are fully entitled to hold and benefit from any IPRs which
they may own, including the right to refuse the granting of licenses.
• It is ETSI's objective to create Standards and Technical
Specifications that are based on solutions which best meet thetechnical objectives of ETSI.
• In achieving this objective, ETSI IPR Policy seeks a balance between
the needs of standardization for public use in the field of
telecommunications and the rights of the owners of IPRs.
• The IPR Policy seeks to reduce the risk that investment in the
preparation, adoption and application of standards could be wasted asa result of an Essential IPR for a standard or technical specification
being unavailable.
• Therefore, the knowledge of the existence of Essential IPRs is
required as early as possible within the standards making process,especially in the case where licenses are not available under fair,reasonable and non-discriminatory (FRAND) terms and conditions.
b. ETSI Guide on IPRs Clause 1.4 provides that the ETSI IPR POLICY
defines rights and obligations for ETSI as an Institute, for its Members
and for the Secretariat. Non-Members of ETSI also have certain rights
under the Policy but do not have legal obligations. The "table" asreferred to in this clause provides as follows:"Rights of members""• to refuse the inclusion of own IPRs in standards (Clauses 8.1 and
8.2).
• to be granted licenses on fair, reasonable and non-discriminatory
terms and conditions in respect of a standard (Clause 6.1)"
19

"Obligations of Members""• to inform ETSI about their own, and other people's Essential IPRs
(Clause 4.1).
• owners of Essential IPRs are requested to undertake to grant licenses
on fair, reasonable and non-discriminatory terms and conditions(Clause 6.1)""Rights of Third Parties""• Third parties have certain RIGHTS under ETSI IPR Policy either asowners of Essential IPRs or as users of ETSI standards or
documentation:

B.

・ To be granted licenses on fair, reasonable and non-discriminatory
terms and conditions in respect of a standard at least to manufacture,sell, lease, repair, use and operate, (Clause 6.1)"
Background of the FRAND Declaration(A) On December 14, 1998, the obligee, as a member of ETSI, made adeclaration to ETSI that it was prepared to license its essential IPR
relating to the W-CDMA technology, supported by ETSI as the UMTS
standard, on "fair, reasonable and non-discriminatory terms andconditions" in accordance with ETSI IPR Policy Clause 6.1 (hereinafterreferred to as the "FRAND Terms") .
(B) On May 4, 2005, the obligee filed a South Korean patent application,
which is the base of the priority claim of the Patent Application (Priority
Claim No.: 10-2005-0037774).
(C) From May 9 to 13 of 2005, the obligee submitted to the 3GPP Working
Group a modification request form in relation to Technical Specification
V6.3.0, which contained then-effective standards. In this form, the obligee
requested "introduction of the alternative E-bit interpretation to be
optionally used in the RLM UM operation mode" and "introduction of anew pre-defined value for the length indicator in the case where the RLCPDU is neither the first nor the last octet of the RLC SDU." .
Thereafter, the abovementioned modification request was accepted. In
Technical Specification V6.4.0 of 3GPP standards released in June of2005 , the alternative E-bit interpretation (specification to be applied only
when the higher layer configuration chose the alternative E-bit
interpretation for the E-bit after the sequence number (SN), in the case of
the data transmission in unacknowledged mode (UM)) was incorporated
20

in the clause relating to "Extension bit (E bit)" (Subclause 9.2.2.5) as theoptional standard for the conventional normal E-bit interpretation. Thus,
the alternative E-bit interpretation has become one of the standard
technologies.
(D) The obligee filed the Patent Application on May 4, 2006, and obtained theregistration of establishment of the Patent Right on December 10, 2010.
(E) On August 7, 2007, the obligee, in accordance with ETSI IPR Policy
Clause 4.1, submitted to ETSI the document titled "Statement on IPR
Information and Licensing Declaration" , notifying that the IPRs relating
to the South Korean patent application number, which served as the basisof the priority claim for the Patent Application, and the international
application number of the Patent Application (PCT/KR2006/001699) areor highly likely will be essential IPRs for the UMTS standard (such as TS
25.322). In this document, the obligee made an undertaking that it was
prepared to grant an irrevocable license on the conditions complying withIPR Policy Clause 6.1 (FRAND Terms), to the extent to which such IPRs
continue to be essential for standards.
This document contained a provision to make such undertaking subject tothe condition that prospective licensees agree to reciprocate in accordancewith IPR Policy Clause 6.1, and the provision that the formation, validityC.

and enforcement of the FRAND Declaration shall be governed by the lawsof France.
Developments after the FRAND Declaration(A) In April 2011, Apple Inc. filed the infringement action against the
obligee in the U.S., alleging that the obligee had infringed its IPRs
relating to "iPhone" and "iPad" products.
These IPRs alleged by Apple Inc. are not essential for the standards.
(B) After Apple Inc. filed the U.S. action as referred to in (A) above, on
April 21, 2011, the obligor filed the Petition.
(C) a. Apple Inc. requested the obligee in the letter dated April 29, 2011,
to provide clear explanation on [(Omitted)].
b. The obligee, in its letter dated May 13, 2011, invited Apple Inc. topropose concrete licensing conditions (e.g. the licensed patents,
licensing period, availability of cross-licensing of essential patents
owned by Apple Inc.), and requested the confidential treatment of
future negotiations. Further, the obligee, in its letter dated June 3,21

2011, notified Apple Inc. that it was prepared to grant a FRAND
license to Apple Inc., and that execution of the confidentiality
agreement was required before the determination of licensing
conditions.
Apple Inc. informed the obligee of [(Omitted)] in the letter dated
June 22, 2011.
Against these backgrounds, Apple Inc. and the obligee entered into
a confidentiality agreement on July 20, 2011 (hereinafter referred
to as the "Apple-Obligee Confidentiality Agreement").
(D) The obligee notified Apple Inc. in its letter dated July 25, 2011, that it
was prepared to grant a worldwide non-exclusive FRAND license for
the UMTS essential patents (including pending patent applications)owned by the obligee at the royalty rate of "[(Omitted)] _%"(hereinafter referred to as the "Obligee's Licensing Offer") and alsothat [(Omitted)].
In response to this, in the letter dated August 18, 2011, Apple Inc.
expressed its opinions to the obligee that "[(Omitted)]," and asked theobligee to disclose information, in accordance with the provisions of
the Apple-Obligee Confidentiality Agreement, to enable Apple Inc. todetermine whether the Obligee's Licensing Offer complied with the
FRAND Terms, including the information on whether the royalty rate
which the obligee required of Apple Inc. also applies to other licensees
and the information on the essential patent license agreements between
the obligee and other licensees.
The opinions raised by Apple Inc. in the abovementioned letter wereas follows. [i] It has been a common understanding that there is anupper limit to the aggregate royalty rate which any owner of the
UMTS standard essential patents may charge. The obligee has allegedin other litigation that such aggregate royalty rate should be "about
5%." However, among the entirety of the patent family (1889)
declared as essential for the UMTS standard in all parts of the world,
the obligee only owns 103 of them, which represents only 5.5%
(according to the survey result of "Fairfield Resources International"of 2009). Considering this figure, the royalty rate which the obligee
may charge Apple Inc. would be 0.275% (5%×5.5%) at maximum.
[ii] Since the patent declared by the obligee as essential for the UMTS
22

standard only relates to the functions of mobile communication chips,
the royalty rate should be based on the price of the component parts,
or at least the industry average price of communication devices.
However, the royalty rate offered by the obligee is based on[(Omitted)], and such royalty rate far exceeds the figure explained in[i]. Therefore, the royalty rate is unreasonably high.
(E) a. The obligee, in its letter dated January 31, 2012, expressed its
opinions to Apple Inc. such as [(Omitted)] and requested Apple Inc.
to make a good-faith counterproposal if dissatisfied with the
Obligee's Licensing Offer.
b. Apple Inc., in its letter dated March 4, 2012, made an offer for the
execution of a license agreement to the obligee, attaching a draft
license agreement, to propose the licensing conditions reflecting
the results of analysis of the three Japanese patents which the
obligee alleges as essential for the UMTS standard (i.e. Patent Nos.
4642898 (the Patent), 4299270 and 4291328). As stated in thedraft agreement, this proposal contained an offer to pay the royaltyof [(Omitted)] _%.
In response to this offer, the obligee expressed its opinion to Apple
Inc. in its letter dated April 18, 2012 , that the abovementioned
license agreement offer by Apple Inc. was not a FRAND license
agreement offer, because the compensation of [(Omitted)] _%royalty rate was too low and unreasonable, and [(Omitted)].
(F) a. In the letter dated September 1, 2012, Apple Inc. informed theobligee that it was prepared to propose a scheme for licensing on
FRAND Terms, including cross-licensing proposals, for the entire
pool for essential patents for mobile device standard technologies
which support 2G, 3G and 4G (LTE).
b. The obligee, in its letter dated September 7, 2012, expressed its
opinion to Apple Inc. that the letter from Apple Inc. dated
September 1, 2012 was [(Omitted)], and proposed [(Omitted)].
c. Apple Inc., in its letter dated September 7, 2012, made a proposal
to the obligee, presenting its basic policy and calculation basis of
the royalty rate. In this letter, Apple Inc. proposed the basis ofroyalty per unit for all feature phones, smart phones and mobile
tablet devices applicable between the parties. Based on the23assumption that the maximum amount of royalty for the entire
pool for essential patents for mobile device standard technologies
shall be USD [(Omitted)] per product unit, Apple Inc. proposed theroyalty rate which the obligee may charge Apple Inc. to be[(Omitted)] _% (USD[(Omitted)] per product unit), and the royalty
rate which Apple Inc. may charge the obligee to be [(Omitted)] _%(USD[(Omitted)] per product unit).
The letter of Apple Inc. includes the following statements: [i][(Omitted)], as the basic policy of Apple Inc. for calculation of theroyalty rate (Translation Page 1, Line 33 to Page 2, Line 4; Page 3,
Lines 1 to 8 and Lines 20 and 21), and [ii] [(Omitted)] (Translation
Page 4, Lines 28 to 39).
D. Role and nature of the Patent
The Patent is an essential patent for manufacturing and selling of, andusing methods in relation to, the products complying with the "alternative
E-bit interpretation" as set out in Technical Specification V6.9.0 of the
UMTS standard.
(2) Governing laws
In this case, the obligee, a South Korean juridical person, filed the petition against
the obligor, a Japanese juridical person, for a provisional disposition order for an
injunction against obligor's production, assignment, etc. of the Products. The rightsought to be preserved by this provisional disposition is the right to seek an
injunction based on the Patent Right. As this case has an aspect of international
litigation, a decision on the governing laws is necessary.
It is understood that the law governing the right to seek an injunction based on apatent right shall be the law of the country where the patent in question was
granted(judgment of the First Petty Bench of the Supreme Court on September 26,
2002, Minshu Vol. 56, No. 7, at 1551).Accordingly, the laws of Japan apply to thiscase.
Based on the presumptions as mentioned above, the court hereby decides on theissue of whether the obligee's exercise of the right to seek an injunction against the
obligor based on the Patent Right constitutes an abuse of right.
(3) Abuse of right
The obligor alleges that, taking into consideration the various circumstances,including that the obligee intentionally breached the obligation to timely disclose thePatent, that the obligee's Petition for Provisional Disposition was a retaliatory24

countermeasure, that the obligee breached its obligation to enter into a license
agreement and good-faith negotiation obligation for the Patent Right declared as
essential for the standards under the FRAND Declaration and thereby created thesituation of so-called "patent hold-up" (meaning the situation where the prospective
users of the standards are prohibited from using the technologies incorporated in thestandards, because of the enforcement of the right for such technologies), and thatthe series of these acts of the obligee constitute violation of the Antimonopoly Act,the obligee is restricted from exercising the right to seek damages against the
obligor based on the Patent Right, as such exercise of right constitutes an abuse ofright (Article 1, paragraph (3) of the Civil Code).
A.(A)The Civil Code of Japan has not expressly provided for the parties'
obligations during the preparatory process for the execution of contracts;
however, it is appropriate to consider that, in certain cases, parties which
entered into the negotiation process are bound by an obligation under thegood faith principle to mutually provide material information and to
conduct the negotiation in a faithful manner.
Based on the "Facts on which the decision is premised" as mentioned
above, the following facts can be found. [i] On August 7, 2007, theobligee, as a member of ETSI (European Telecommunications Standards
Institute), which is the standardization body that established 3GPP,
notified ETSI in the document of Exhibit Ko No. 13 that the IPR(intellectual property rights) pertaining to the international application
number of the Patent Application is essential for the UMTS standard(3GPP standards), and made a declaration that it was prepared to grant an
irrevocable license for such essential patent in accordance with the
FRAND (i.e. fair, reasonable and non-discriminatory terms andconditions) licensing terms and conditions complying with ETSI IPR
Policy Clause 6.1 (FRAND Declaration). [ii] ETSI Guide on IPRs Clause
1.4 provides for the members' obligation to "undertake to grant licenses on
fair, reasonable and non-discriminatory terms and conditions" (IPR Policy
Clause 6.1), the members' right "to be granted licenses on fair, reasonable
and non-discriminatory terms and conditions in respect of a standard"(IPR Policy Clause 6.1), and third parties' right "to be granted licenses on
fair, reasonable and non-discriminatory terms and conditions in respect ofa standard at least to manufacture, sell, lease, repair, use and operate" (IPR
Policy Clause 6.1).
25

Considering [i] and [ii] above, as well as the entire import ofhearings, thecourt finds that, pursuant to IPR Policy Clause 6.1 and ETSI Guide on
IPRs Clause 1.4, if any party, whether an ETSI member or not, seeks a
FRAND license for the Patent declared by the obligee as essential for the
UMTS standard under the FRAND Declaration, the obligee has an
obligation to hold a faithful negotiation with such party for the executionof a FRAND license agreement for the use of the UMTS standard.
Then, given that the obligee received a specific offer to obtain a
FRAND license for the Patent Right, the obligee and the offeror canbe considered as having entered into the preparatory process for a
FRAND license agreement. Therefore, it is appropriate to consider
that the parties are bound by an obligation under the good faith tomutually provide material information and to conduct the negotiation
in a faithful manner.
And, Apple Inc. is considered to have made a concrete offer to the
obligee expressing its desire to obtain a FRAND license, at the latest
as of the time when Apple Inc., in its letter dated March 4, 2012, madean offer to the obligee for a FRAND license agreement for the three
Japanese patents, including the Patent, declared by the obligee as
essential for the UMTS standard. Therefore, it is appropriate toconsider that Apple Inc. and the obligee have entered into the
preparatory process for the execution of a contract and have becomebound by an obligation under the good faith principle as mentioned
above.
(B) In this regard, the obligee alleges that it has no good-faith negotiation
obligation under the FRAND Declaration, based on the following
reasons. [i] From the standpoint of the Japanese laws, it should beconstrued that, as a precondition for the good-faith negotiation
obligation, a prospective licensee needs to make a "firm offer toreceive a license" showing that such prospective licensee seriously
wishes to obtain a license, without challenging the validity of thepatent to be licensed. [ii] The offer dated March 4, 2012, from Apple
Inc. to the obligee cannot be regarded as a "firm offer to receive alicense," as Apple Inc. challenged the validity of the obligee's patentand questioned whether the products in question conflicts with the
obligee's patent. [iii] In addition, in the abovementioned offer, an26

unreasonably low royalty rate of "[(Omitted)] _%" was proposed. Thisshows that Apple Inc. did not have a faithful intention to obtain alicense and only made a perfunctory offer, anticipating that thenegotiation would fail. Therefore, such offer in no way constitutes a"firm offer to receive a license."
However, the court finds the obligee's such allegations to be
groundless due to the following reasons:a. Points [i] and [ii] above
If an offer to obtain a FRAND license for the patent declared as
essential for the standards under the FRAND Declaration is made,the party which made the FRAND Declaration and the prospective
licensee have the obligation under the good-faith principle asmentioned in (A) above even if the prospective licensee reserved
its right to challenge the validity of the licensed patent, as long as
the contents of such offer are concrete enough and presuppose thevalidity of the licensed patent, and the prospective licensee's
intention to obtain a FRAND license is clear.
As for this case, the offer made by Apple Inc. dated March 4, 2012,is a concrete offer, specifying the three Japanese patents including
the Patent as the licensed patents, and attaching a draft license
agreement containing detailed licensing conditions, including theroyalty rate. The contents of this offer clearly indicate the intentionof Apple Inc. to obtain a FRAND license. Nevertheless, the draft
agreement as mentioned above includes [(Omitted)] in [(Omitted)](Translation, Page 2, Lines 2 to 4), which indicates that Apple Inc.
reserved its right to challenge the validity of the Patent to belicensed. However, the terms of this draft provision themselves are
not particularly unreasonable, and in addition, the obligor
challenged the validity of the Patent as a defense to the obligee's
Petition for Provisional Disposition, in which the obligee sought an
injunction against import, assignment, etc. of the Products by the
obligor (the subsidiary company of Apple Inc.) based on the Patent
Right, and, further, the case for this provisional disposition was
still pending before the court at the time when Apple Inc. made theaforementioned offer (from the entire import of hearings).
Considering all of these circumstances, it is not appropriate to27

b.

consider that Apple Inc. had no intention to obtain a FRAND
license merely because it reserved the right to challenge thevalidity of the Patent in the offer.
Therefore, the court finds the obligee's allegations [i] and [ii] to be
groundless.
Point [iii] above
The royalty rate applicable in Japan as proposed by Apple Inc. in
its offer dated March 4, 2012, was [(Omitted)] _%. It cannot be
judged only from the figure of the royalty rate that such rate isunreasonably low and does not satisfy the FRAND Terms, or that
Apple Inc. had no intention to obtain a FRAND license ("Facts on
which the decision is premised" as mentioned above indicates thatthe aforementioned royalty rate took into consideration thepercentage of patents owned by the obligee to the entire patentfamily declared as essential for the UMTS standard in all parts of
the world (, as indicated by Apple Inc. in its letter dated August 18,2011). The court cannot find that Apple Inc. had no intention toenter into a license agreement under any condition different fromthe royalty rate as mentioned above.
Therefore, the court finds the obligee's allegation [iii] to beB.

groundless.
Next, the court hereby discusses the issue of whether the obligee breached theobligation under the good-faith principle as mentioned in A.(A) above.
Considering the "Facts on which the decision is premised," as well as the entire
import of hearings, the court finds the following facts. [i] The obligee, after
executing the confidentiality agreement dated July 20, 2011 (Apple-Obligee
Confidentiality Agreement), notified Apple Inc. in its letter dated July 25, 2011,that it was prepared to grant a world-wide, non-exclusive FRAND license forthe obligee's patent essential for the UMTS standard (including pending patentapplications) at the royalty rate of "[(Omitted)] _%" (hereinafter referred to as
the "Obligee's Licensing Offer"). [(Omitted)]. However, the obligee did not
explain the calculation basis of the "[(Omitted)] _%" of the licensing terms andconditions. [ii] In the letter dated August 18, 2011, Apple Inc. expressed its
opinions to the obligee about the Obligee's Licensing Offer that the royalty rate
offered by the obligee was unreasonably high and not complying with the
FRAND Terms, because, among the entirety of the patent family (1889)28

declared as essential for the UMTS standard in all parts of the world, theobligee only owns 103 of them, which represents only 5.5% (according to thesurvey result of "Fairfield Resources International"), and considering this, theroyalty rate which the obligee may charge Apple Inc. would be 0.275% (5%×5.5%) at maximum. In the same letter, Apple Inc. asked the obligee to disclose
information, in accordance with the provisions of the Apple-Obligee
Confidentiality Agreement, to enable Apple Inc. to determine whether the
Obligee's Licensing Offer was consistent with the FRAND Terms, including
information on whether the royalty rate which the obligee required of Apple
Inc. also applies to other licensees and information on the essential patent
license agreements between the obligee and other licensees. [iii] The obligee,
in its letter dated January 31, 2012, expressed its opinions to Apple Inc. such as[(Omitted)] and requested Apple Inc. to make a good-faith counterproposal if
dissatisfied with the Obligee's Licensing Offer. However, the obligee did notprovide the calculation basis of the royalty rate for the Obligee's Licensing
Offer. [iv] Apple Inc., in its letter dated March 4, 2012, made an offer to the
obligee for a FRAND license agreement for the three Japanese patents which
the obligee alleges as essential for the UMTS standard, including the Patent,
proposing to pay a royalty rate of [(Omitted)] _%. [v] The obligee expressed its
opinion to Apple Inc. in its letter dated April 18, 2012, that the offer for alicense agreement by Apple Inc. mentioned in [iv] above was not a license offer
on the FRAND Terms, because the compensation for each of the three Japanese
patents is unreasonable because the [(Omitted)] _% royalty rate is too low, and[(Omitted)]. [vi] In the letter dated September 1, 2012, Apple Inc. informed theobligee that it was prepared to propose a scheme for licensing on FRAND
Terms, including cross-licensing proposals, for the entire pool for essential
patents for mobile device standard technologies which support 2G, 3G and 4G(LTE). Further, Apple Inc., in its letter dated September 7, 2012, made a
proposal to the obligee, presenting its basic policy and calculation basis of theroyalty rate. In this letter, Apple Inc. proposed the basis of royalty per unit for
all feature phones, smart phones and mobile tablet devices applicable between
the parties. Based on the assumption that the maximum amount of royalty forthe entire pool for essential patents for mobile device standard technologies
shall be USD [(Omitted)] per product unit, Apple Inc. proposed the royalty rate
which the obligee may charge Apple Inc. to be [(Omitted)] _%(USD[(Omitted)] per product unit), and the royalty rate which Apple Inc. may
29charge the obligee to be [(Omitted)] _% (USD[(Omitted)] per product unit).
[vii] The obligee, in its letter dated September 7, 2012, expressed its opinion
that the letter from Apple Inc. referred to in [vi] above was [(Omitted)], andproposed [(Omitted)].
In addition to the aforementioned facts found by the court, considering that the
prima-facie evidence does not clearly indicate the obligee's response to thedraft license agreement that Apple Inc. proposed in its letter dated September 7,
2012, the following facts are found. [i] In the process of licensing negotiation
between Apple Inc. and the obligee in relation to the Patent Right, the obligee
made an offer to Apple Inc. in its letter dated July 25, 2011, to grant aworld-wide, non-exclusive license for the obligee's patent essential for the
UMTS standard (including pending patent applications) at the royalty rate of"[(Omitted)] _%" as a FRAND Term ("Obligee's Licensing Offer"). However,
the obligee did not explain the calculation basis of such licensing conditions.
Thereafter, Apple Inc. asked the obligee to disclose information to enable
Apple Inc. to determine whether the Obligee's Licensing Offer was consistent
with the FRAND Terms, such as information to confirm whether the royalty
rate which the obligee required of Apple Inc. also applies to other licensees,
and information on the essential patent license agreements between the obligee
and other licensees. In spite of such request, the obligee did not explain thecalculation basis of such licensing conditions even at the time of September 7,
2012. [ii] Apple Inc. made an offer for a FRAND license agreement for thethree Japanese patents which the obligee declared as essential for the UMTS
standard, including the Patent, proposing to pay a royalty rate of [(Omitted)]_% in its letter dated March 4, 2012, and further made a concrete licensing
proposal, including cross-licensing, to the obligee, presenting the basic policy
and criteria for calculation of the royalty rate of Apple Inc. in its letter dated
September 7, 2012. In spite of this, the obligee only requested Apple Inc. tomake a concrete counterproposal if dissatisfied with the Obligee's Licensing
Offer, without making any concrete counterproposal for the licensing
conditions presented by Apple Inc.
Based on the analysis of the facts [i] and [ii] above, the court finds that the
obligee did not provide any information necessary for Apple Inc. to determine
whether the Obligee's Licensing Offer or offer of Apple, Inc. was complying
with the FRAND Terms (e.g. information on the essential patent license
agreement between the obligee and other licensees) in spite of repeated30

C.

requests from Apple Inc., and did not suggest any counterproposal for the
licensing conditions presented by Apple Inc. Therefore, it is appropriate toconsider that the obligee breached its obligation under the good faith principle
to provide material information to Apple Inc. and to conduct the negotiation ina faithful manner in relation to the execution of a FRAND license agreement
for the Patent declared as essential for the UMTS standard.
The obligee's allegations which contravene the aforementioned findings areunacceptable.
As discussed above, considering the totality [i] that the obligee breached its
obligation under the good faith principle to provide material information toApple Inc., the obligor's parent company, and to conduct the negotiation in afaithful manner in the preparatory process for the execution for a FRAND
license agreement on the FRAND Terms for the Patent declared as essential forthe standards under the FRAND Declaration;obligee [ii] that the obligee
disclosed the Patent (international application number of the Patent
Application) to ETSI only about two years after the technology pertaining to
the Patent (alternative E-bit interpretation) was adopted as the standard
technology in accordance with the obligee's modification request in relation to
3GPP specifications; and [iii] other circumstances relating to the process oflicensing negotiations for the Patent Right between Apple Inc. and the obligee,

the court finds that the obligee's exercise of the right to seek an injunction
against the obligor based on the Patent Right for the Products, without fulfilling
its obligation under the good faith principle as mentioned above, is not allowed,
as such exercise of the right constitutes an abuse of right.
3. Conclusion
Based on the foregoing, the court concludes that this petition should be dismissed
without the need to discuss other points at issue, as the obligee failed to make a
prima facie showing of the right sought to be preserved, and the court applied
Article 7 of the Civil Provisional Remedies Act and Article 61 of the Code of Civil
Procedure to the burden of court costs. Therefore, the court renders the decision as
mentioned in the main text.
February 28, 2013
Tokyo District Court, 46th Civil Division
Presiding Judge:
Ichiro Otaka
31

Judge:Judge:Aya Takahashi
Masafumi Ueda

32

(Attachment)
List of Products
1. "iPhone 4"
2. "iPad 2 Wi-Fi+3G model"

33

(Attachment 1)3GPP TS25.322 V6.9.0(Summary)

34

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