Judgment rendered on February 28, 2013; Original copy of judgment received on thesame date; Court clerk
2011 (Wa) 38969, Case seeking declaratory judgment of absence of obligations
Date of conclusion of oral argument: December 18, 2012
Judgment
Plaintiff:

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:
NAGAI Hideto
Same as above:
KANEKO Shinsuke
Sub-counsel attorneys: INASE Yuichi
Same as above:
ISHIHARA Naoko
Same as above:
KURAHARA ShinichiroSame as above:
KATAYAMA Eiji
Same as above:
KITAHARA Junichi
Same as above:
OKAMOTO Naomi
Counsel patent attorney: OTSUKA Yasunori
Patent attorneys as assistants in court:
OTSUKA YasuhiroSame as above:
SAKATA Yasuhiro
Defendant:

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:
Same as above:
Same as above:
Same as above:
Same as above:
Same as above:

TANAKA Masato
ICHIHASHI Tomomine
INOUE Yoshitaka
KOBAYASHI Hideaki
INOUE Soh
TSUJIMOTO Kensuke
1Same as above:
OKADA Hiroaki
Same as above:
IIZUKA Akio
Counsel patent attorney: SUZUKI Mamoru
Patent attorney as assistant in court: OTANI Kan
Main text
1. The court confirms that the defendant does not have a right to seek
damages from the plaintiff based on the patent right for Patent No.
4642898, with regard to the plaintiff's production, assignment, lease,
import or offering for assignment or lease (including displaying forthe purpose of assignment or lease) of each product specified in the
List of Products attached hereto.
2. The defendant shall bear the court costs.
3. The additional period for the appeal against this judgment to thecourt of second instance shall be thirty (30) days.
Facts and reasonsNo. 1 Claim
Same as paragraph 1 of the main text of this judgment
No. 2 Background
1. Summary of caseThis is a court case wherein the plaintiff alleges that its production, assignment,
import or other acts in relation to the products specified in the List of Products attachedhereto (hereinafter collectively referred to as the "Products"; the product stated in No. 1
of said list shall be referred to as "Product 1" and the product stated in No. 2 of said list
as "Product 2," etc.) does not constitute an act of infringement of the defendant's patentright under Patent No. 4642898 for the invention titled "method and apparatus fortransmitting/receiving packet data using a pre-defined length indicator in a mobile
communication system" (this patent is hereinafter referred to as the "Patent"; the patentright as the "Patent Right"), and seeks a declaratory judgment to confirm that thedefendant is not entitled to seek damages due to the plaintiff's tort of infringing thePatent Right in relation to the plaintiff's acts as mentioned above.
2. Undisputed facts, etc. (the facts without any indication of the evidence are theundisputed facts or the facts found from the entire import of oral arguments)(1) Parties
2

A.

B.

The plaintiff 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 plaintiff 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 action (hereinafter the term "plaintiff" includes AppleJapan K.K. before the abovementioned absorption-type merger).
The defendant is a South Korean corporation whose business objectives are
manufacturing, sale, etc. of electric machine devices, communication andrelated machine devices, and their component parts.
(2) Defendant's patent right
A. The defendant (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. 1-1
and No. 1-2).
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 at3

least one LI field; if the data field of the PDU includes an intermediate segmentof 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 neitherC.

the first nor last segment of the SDU; and a transmitter for sending at least one
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 the4

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 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(B)

indicating the presence in the PDU of an intermediate segment
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
5

indicating the presence in the PDU of an intermediate segment
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) Plaintiff's acts, etc.
A. The plaintiff 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
C

Constituent Features I and O of Invention 2.
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 Otsu No. 1
to No. 5; the telecommunications standard developed by 3GPP is hereinafterreferred 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 Ko No. 12, theoriginal 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 a6result of an ESSENTIAL IPR for a STANDARD or TECHNICALSPECIFICATION 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 of7

specified IPRs at the time the undertaking is made. The extent of any suchexclusion 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 of
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.
B.

(A) On December 14, 1998, the defendant, 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 Ko No. 5).
8

(B) On August 7, 2007, the defendant, in accordance with ETSI IPR Policy
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 Ko No.13).
(5) Background history of this action
A. On April 21, 2011, the defendant, alleging that the plaintiff's acts of production,
assignment, import, etc. of the Products constitutes direct or indirect
infringement of the Patent Right in relation to the Inventions (Article 101, item(iv) and (v) of the Patent Act), filed a petition for a provisional disposition
order to seek an injunction against the plaintiff's production, assignment,
import, etc. of the Products. The right sought to be preserved by thisprovisional disposition was the right to seek an injunction under Article 102 of
the Patent Act (Tokyo District Court, 2011 (Yo) 22027; hereinafter referred toas the "Petition for Provisional Disposition").
B. The plaintiff filed this action on September 16, 2011.
Thereafter, on September 24, 2012, the defendant partially withdrew the
Petition for Provisional Disposition in relation to Products 1 and 3.
3. Issues
The issues disputed in this action are as follows: [i] whether the Products fall within
the technical scope of Invention 1 (Issue 1); [ii] whether the Patent Right for Invention 2
has been indirectly infringed upon (Article 101, items (iv) and (v) of the Patent Act)
(Issue 2); [iii] whether restrictions pursuant to Article 104-3, paragraph (1) of the Patent
Act may be imposed on the exercise of the Patent Right for the Inventions (Issue 3); [iv]whether the Patent Right for the Products has been exhausted (Issue 4); [v] whether alicense agreement in relation to the Patent Right has been formed between Apple Inc.
and the defendant based on the defendant's FRAND Declaration (Issue 5); and [vi]whether the defendant's exercise of the right to seek damages based on the Patent Right
constitutes an abuse of right (Issue 6).
Since the defendant's allegation concerning the amount of damages that should be9compensated by the plaintiff was reserved at the time of the conclusion of the oral
argument, no specific allegations have been presented on this point.
No. 3 Parties' allegations on disputed issues
1. Issue 1 (whether the Products fall within the technical scope of Invention 1)(1) Defendant's allegations
A. Structure of the Products(A) The Products conform to the UMTS standard (W-CDMA method), which isone of the standards developed by 3GPP. It has the structures set forth in"3GPP TS 25.322 V6.9.0," the technical specification of 3GPP standards
developed by 3GPP in September 2006 (Exhibit Ko No. 1-3 and Exhibit
Otsu No. 6; hereinafter referred to as the "Technical Specification V6.9.0").
In addition, according to the subclauses "4.2.1.2 Unacknowledged mode(UM) RLC entities," "4.2.1.2.1 Transmitting UM RLC entity," "9.2.1.3
UMD PDU," "9.2.2.5 Extension bit (E)" and "9.2.2.8 Length Indicator(LI)" of Technical Specification V6.9.0 (these subclauses shall behereinafter referred to as "Subclause 4.2.1.2," "Subclause 4.2.1.2.1," etc.),
all of the Products have the following structures (each of the structures
shall be hereinafter referred to as "Structure (a)," "Structure (b)," etc.)
a. The Products are devices for transmitting data in a mobile
communication system.
b. The Products have transmission buffers for receiving a service data unit
(SDU) from a higher layer, and segmenting the SDU to a size
appropriate to the protocol data unit (PDU) if the SDU is larger than theavailable space of one PDU (See Subclauses 4.2.1.2 and 4.2.1.2.1
referred to in Sections 1 and 2 of Attachment 1).
c. The Products have header inserters, which add to the data a UMD
header containing a sequence number (SN) and an E-bit field and an
RLC header containing a length indicator (LI) (See Subclause 9.2.1.3
referred to in Section 3 of Attachment 1).
d. If the SDU contained in the PDU is a complete one without
segmentation/concatenation/padding, the header inserter is set to '0,'which shows that the PDU contains a complete SDU. If the SDU
contained in the PDU is not a complete one, the header inserter is set to'1,' which shows the presence of a length indicator in the E-bit (See
Subclause 9.2.2.5 referred to in Section 4 of Attachment 1).
e. If the SDU is not included in one PDU, the header inserter inserts an LI
10field after the E-bit field in at least one PDU (See Subclause 9.2.2.8
referred to in Section 5(1) of Attachment 1).
f. If the PDU data field contains a segment which is neither the first nor
the last segment of the SDU, the header inserter sets the pre-definedvalue of an LI field ('111 1110' or '111 1111 1111 1110'), indicating that
the PDU contains a segment which is neither the first nor the last
segment of the SDU (See Subclause 9.2.2.8 referred to in Section 5(2)of Attachment 1).
g. The Products have transmitters for sending at least one PDU received
from the header inserter to the receiving entity.
h. The Products are devices for the transmission of data.
(B) a. According to the report on the demonstration test by Chipworks Inc., a
Canadian corporation (hereinafter referred to as the "Demonstration
Test"; Exhibit Otsu No. 13), Products 2 and 4 implement the functions
based on the "alternative E-bit interpretation" as specified in Technical
Specification V6.9.0 (Subclauses 9.2.2.5 and 9.2.2.8). This finding is
also evidenced by an expert opinion prepared by Professor A of the
University of Electro-Communications (Exhibit Otsu No. 14).
(a) In the Demonstration Test, a radio tester named "CM W500
universal radio communication tester" (hereinafter referred to as"CMW500") manufactured by Rohde & Schwarz, a German
corporation, was used as the "base station emulator." CMW500 is a
device supporting the W-CDMA method and is capable of creating acommunication environment which is exactly the same as the real
network environment (Exhibit Otsu No. 14, Page 10 and Exhibit
Otsu No. 41).
CMW500 has been certified by several international bodies, such as
GCF (Global Certification Forum) and PTCRB (PCS Type
Certification Review Board).
Test 1 (PDU Size: 488-bit, SDU size: 480-bit) was the test for the
combination of the data size for the "case in which the PDU
containsacomplete
SDU
without
segmentation/concatenation/padding." The reason for the value ofthe SDU size being larger than the PDU by eight bits was due totaking into account the addition of an 8-bit PDU header (7 serial
number (SN) bit + 1 E-bit) when the SDU is converted to a PDU
11

(Exhibit Otsu No. 14, Page 10).
Test 2 (PDU Size: 80-bit, SDU size: 480-bit) was the test for the
combination of data size in which a PDU which is neither the firstnor last one (e.g. the second PDU) is an "intermediate segment."
This test aims to monitor the PDU as the intermediate segment(Exhibit Otsu No. 14, Page 11).
(b) The findings of the Demonstration Tests were as follows:(i) If the PDU completely contains an SDU (Test 1), the E-bit
following the sequence number (SN) is '0,' and a PDU without alength indicator (LI) is output (Exhibit Otsu No. 13, Figures 12
and 14).
(ii) If the PDU contains an intermediate segment of an SDU (Test 2),
the E-bit following the sequence number (SN) is '1,' and a PDU
containing a pre-defined value '1111110' as an LI is output(Exhibit Otsu No. 13, Figures 13 and 15).
(c) Subclause 9.2.2.5 provides that, when interpreting the alternative
E-bit, the E-bit is configured as '0' if the "next field is a complete
SDU, which is not segmented, concatenated or padded," or '1' if the"next field is a Length Indicator and E-bit." Subclause 9.2.2.8
provides that in the case where the "alternative E-bit interpretation"is configured and a PDU contains an intermediate segment of an
SDU, and if a 7-bit length indicator is used, the length indicatorwith value '111 1110' shall be used.
The values of the E-bit and length indicator (see (b) above) obtained
as a result of the Demonstration Test agree with the function basedon the alternative E-bit interpretation as referred to in Technical
Specification V6.9.0. This indicates that Products 2 and 4
implement the aforementioned functions.
b. In this regard, the plaintiff alleges that the Demonstration Test uses the"normal E-bit interpretation" as specified in Subclause 9.2.2.5 ofTechnical Specification V6.9.0 (See Section 4 of Attachment 1), instead of
the alternative E-bit interpretation, because the "Interpretation" section of
the Demonstration Test findings reads "next octet: data" and does not
mention "a complete SDU without segmentation/concatenation/padding."
However, for the configuration of the alternative E-bit interpretation as
well, if the E-bit is set to '0,' the following bit sequence is "data" (which is12the "data" of a "complete SDU"). Accordingly, there is no discrepancy
between the statement of "next octet: data" in the "Interpretation" section
and the use of the alternative E-bit interpretation in the Demonstration
Test.
In addition, when the defendant confirmed the results of the comparative
test based on the normal E-bit interpretation (i.e. the case where thecheckbox of "altE_bitinterpretation" of the options window of CMW500(Exhibit Otsu No. 13, Figure 11) is not ticked), the configurations of PDU
headers were different depending on whether the checkbox was ticked,
and, the PDU header according to the normal E-bit interpretation was

B.

output if the checkbox was not ticked (Exhibit Otsu No. 55, Pages 35 to38). These comparative test results obviously show that the alternative
E-bit interpretation was used in the Demonstration Test, not the normal
E-bit interpretation.
On the basis of the foregoing, the plaintiff's allegations as mentioned
above are groundless.
Satisfaction of Constituent Features B and D(A) As explained below, the alternative E-bit interpretation referred to in
Subclause 9.2.2.5 of Technical Specification V6.9.0 discloses Constituent
Features B and D of Invention 1.
Invention 1 has the following structures: "determining whether the SDU is
included in one protocol data unit (PDU)" (Constituent Feature B); and"setting the one-bit field to indicate that the PDU fully contains the SDU
without segmentation/concatenation/padding in the data field, if the SDU
is included in one PDU" (Constituent Feature D).
According to the wording of Constituent Feature D, as well as Paragraph[0022] and Figure 5A of the description of the Patent (Exhibit Ko No. 1-2;
the description and the drawings shall be hereinafter collectively referred
to as the "Patent Description"), the case in which the "SDU is included in
one PDU" means the case in which the "PDU completely contains the
SDU without segmentation/concatenation/padding in the data field,"namely, the case in which the "SDU size completely matches the size of
the PDU payload." The case where the SDU is contained in the PDU after
concatenation or padding is excluded.
Furthermore, Subclause 9.2.2.5 indicates that, in relation to the"alternative E-bit interpretation," if the "next field is a complete SDU,
13

which is not segmented, concatenated or padded," namely, if the SDU iscompletely contained in (completely matches) the PDU, the E-bit is set to'0,' or otherwise as '1' (See Section 4 of Attachment 1). This statement of
Subclause 9.2.2.5 can be understood as requiring the determination as towhether the SDU is completely contained in (completely matches) the
PDU and the configuration of E-bit as above in accordance with the resultof such determination. Therefore, such statement discloses the structure ofConstituent Feature B for "determining whether the SDU is included in
one protocol data unit (PDU)," and the structure of Constituent Feature D
for "setting the one-bit field to indicate that the PDU fully contains theC.

D.

SDU." Meanwhile, with regard to the relationship between Subclauses
4.2.1.2.1 (See Section 2 of Attachment 1) and 9.2.2.5, it can be reasonably
understood that Subclause 4.2.1.2.1 merely provides a general statement
for the determination of whether the SDU is larger than the PDU without
regard to the type of E-bit, and that the specific method for comparison in
the case of use of the alternative E-bit interpretation is specified in
Subclause 9.2.2.5.
(B) On the premises of the foregoing, Structures (b) and (d) of the Products
satisfy Constituent Features B and D, respectively.
Satisfaction of Constituent Features C, E, F and G
Structure (c) of the Products satisfies Constituent Feature C, Structure (e)satisfies Constituent Feature E, Structure (f) satisfies Constituent Feature F, andStructure (g) satisfies Constituent Feature G, respectively.
Summary(A) As mentioned above, the Products satisfy Constituent Features B to G ofInvention 1, and also Constituent Features A and H as already mentionedin (3)B.(A) of the section of "Undisputed facts, etc."
Therefore, the Products fall within the technical scope of Invention 1 asthey satisfy all of the Constituent Features of Invention 1.
(B) Contrary to this, the plaintiff alleges that the Products do not fall within
the technical scope of Invention 1. The plaintiff's reasoning for thisallegation is that, for the Products to be considered to fall within thetechnical scope of Invention 1, it is necessary to prove 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 that14

the telecommunication service providers' networks are configured to use
the alternative E-bit interpretation.
However, as long as the Products satisfy all of the Constituent Features ofInvention 1 and have a structure to implement the alternative E-bit
interpretation, they can be considered as falling within the technical scopeof Invention 1, and the question of whether the telecommunication service
providers' actual networks are configured to use the alternative E-bit
interpretation is irrelevant to the question of whether the Products fallwithin the technical scope of Invention 1.
Therefore, the abovementioned allegation of the plaintiff is groundless.
(2) Plaintiff's allegations
A. Structure of the Products(A) The processing tasks relating to the UMTS standard are implemented bybaseband chips (chipsets) installed in the Products. Such chipsets are theproducts of Intel Corporation, and Apple Inc. purchases them through[(company name omitted)] and installs them into the Products.
Products 1 and 3 install Intel's baseband chip [(name omitted)]. This
baseband chip [(name omitted)] conforms to 3GPP standards called"Release 5" publicized before the priority date of the Patent Application,and this version does not reflect the alternative E-bit interpretation.
Therefore, the plaintiff refutes the defendant's allegation that Products 1
and 3 satisfy Structures (b) to (g).
In addition, the plaintiff has no knowledge as to whether Products 2 and 4
satisfy Structures (b) to (g) as alleged by the defendant.
(B) a. The Demonstration Test report relied upon by the defendant (Exhibit
Otsu No. 13) does not support that Products 2 and 4 implement thefunctions based on the alternative E-bit interpretation.
In this Demonstration Test, the test mobile device was connected to theemulator, which plays the role of base station, and the data transmitted
from such mobile device to the emulator was only tested by the data
analysis software. Thus, as such test was performed merely under thetesting environment, instead of on the real networks, the result of thetest cannot be the evidence of the Products' capability to implement thefunctions based on the alternative E-bit interpretation on the real
network.
b. In addition, as the Demonstration Test report (Exhibit Otsu No. 13)
15

contains the following deficiencies or problems, such report cannot be
the evidence that Products 2 and 4 implement the functions based on
the alternative E-bit interpretation.
(a) In the test log (Test 1) referred to in Exhibit Otsu No. 13, Figures 12
and 14, the E-bit is set to '0' in the second line of "68" of the "Byte"
section, and the statement "next octet: data" appears in the"Interpretation" section. Considering the statement which reads that"next field" is "data," it is logically understood that theDemonstration Test uses the normal E-bit interpretation (i.e. thecase of bit '0' for the "normal E-bit interpretation" referred to in
Subclause 9.2.2.5 of Technical Specification V6.9.0), instead of thealternative E-bit interpretation.
In addition, as the bit sequence indicated in the test log of Exhibit
Otsu No. 13, Figures 12 and 14, is merely a portion of data output
from the tested product, it is not clear whether the PDU contained acomplete SDU without segmentation/concatenation/padding orother object. Accordingly, it is impossible to conclude that the tested
product used the alternative E-bit interpretation, on the basis of thetest log referred to in Figures 12 and 14.
Meanwhile, ticking of the checkbox of "altE_bitinterpretation" in
Exhibit Otsu No. 13, Figures 11 is irrelevant to the question ofwhether the tested product actually used the alternative E-bit
interpretation.
(b) There is no evidence supporting that the length indicator set to'1111110,' as in the test log (Test 2) referred to in Exhibit Otsu No.
13, Figures 13 and 15, is set only for the indicator containing anintermediate segment. Therefore, it is impossible to conclude thatthe abovementioned value indicate the presence of a PDU
containing the intermediate segment.
Further, as is the case with Exhibit Otsu No. 13, Figures 12 and 14,
Figures 13 and 15 only show the SDU indication output by thetested product, and the condition of other segments of the SDU is
not clear.
Therefore, Figures 13 and 15 cannot be regarded as the evidence
supporting that the tested product implements the alternative E-bit
interpretation.
16

B.

Non-satisfaction of Constituent Features B and D
As explained below, the structures of Constituent Features B and D ofInvention 1 differ from those referred to in Technical Specification V6.9.0. So,even supposing that, as alleged by the defendant, the Products have structurescomplying with Technical Specification V6.9.0, it cannot be said that theysatisfy Constituent Features B and D.
(A) Constituent Feature B
Considering the statement of Constituent Feature B which reads"determining whether the SDU is included in one protocol data unit
(PDU)" and the statement of Constituent Feature D which reads "toindicate that the PDU fully contains the SDU without
segmentation/concatenation/padding in the data field, if the SDU is
included in one PDU" in their totality, the statement of Constituent
Feature B which reads "the SDU is included in one protocol data unit
(PDU)" should be interpreted to mean the case where "the SDU iscompletely contained in (completely matches) one PDU."
Thus, Invention 1 adopts in its Constituent Feature B the method todetermine whether the SDU is completely contained in (completely
matches) one PDU.
Meanwhile, considering Subclause 4.2.1.2.1 of Technical Specification
V6.9.0 which reads "segments the RLC SDU into UMD PDUs ofappropriate size, if the RLC SDU is larger than the length of available
space in the UMD PDU," the determination method referred to in
Subclause 4.2.1.2.1 is the method aimed at determining the necessity ofsegmentation of the SDU, in other words, whether the size of the SDU islarger than the available space of the PDU (the relationship between the
SDU and the PDU in terms of size) is determined. It is different from themethod to determine whether the SDU is completely contained in(completely matches) one PDU.
In addition, the statement of Subclause 9.2.2.5 of Technical Specification
V6.9.0 relied upon by the defendant merely provides instructions on theinterpretation of the value '0' or '1' for the E-bit, and does not mention
anything about the method of determination.
Therefore, even though the Products have Structure (b) complying withTechnical Specification V6.9.0, it does not mean that the Products satisfy
Constituent Feature B.
17

(B) Constituent Feature D
The case where "the SDU is included in one PDU" mentioned inConstituent Feature D refers to all of the following situations: [i] a casewhere the SDU is padded (i.e. the SDU is incorporated into the PDU withpadding); [ii] a case where the SDU is concatenated (i.e. the SDU is
incorporated into the PDU after concatenation with one or more otherSDUs); and [iii] a case where the SDU is not segmented, concatenated orpadded (i.e. the size of the SDU completely matches the size of PDU
payload). So, in order to satisfy Constituent Feature D, it is necessary that"the one-bit field is set to indicate that the PDU fully contains the SDU
without segmentation/concatenation/padding" even for the case referred toin [i] and [ii] above.
Meanwhile, in the alternative E-bit interpretation referred to in Technical
Specification V6.9.0, the one-bit field is set to indicate that the PDU fully
contains the SDU only for the abovementioned case [iii]. Accordingly,
Constituent Feature D and Structure (d) complying with Technical
Specification V6.9.0 differ in terms of the conditions for setting theone-bit field to indicate that the PDU fully contains the SDU without
segmentation/concatenation/padding, and also in terms of the method of
configuration of the one-bit field in the case where the PDU contains aC.

concatenated or padded SDU.
Therefore, even though the Products have Structure (d) complying withTechnical Specification V6.9.0, it does not mean that the Products satisfy
Constituent Feature D.
Lack of proof of the Products' capability to perform all functions contained in
the Constituent Features of Invention 1
In order for the Products to be regarded to fall within the technical scope ofInvention 1, it is necessary to prove that the Products are capable of performing
all functions contained in the Constituent Features of Invention 1. To this end,
it is necessary to show that the communication service providers' networks are
configured to allow the use of the alternative E-bit interpretation.
The alternative E-bit interpretation cannot be implemented by the Products
alone, and all mobile devices implement the "normal E-bit interpretation"
which is the default setting for the data transmission to a base station, unlessthe network requires the use of the alternative E-bit interpretation. If the"normal E-bit interpretation" is implemented, an E-bit or length indicator is not18

configured according to Constituent Features D and F of Invention 1. So, inorder for the Products to be considered as being capable of implementing allfunctions contained in the Constituent Features of Invention 1, it is necessarythat the communication service providers' networks are configured to allow theuse of the alternative E-bit interpretation.
Nevertheless, in this action, no evidence is found which indicates that thecommunication service providers' networks are configured to allow the use of
the alternative E-bit interpretation, and thus it cannot be said that the Products
are capable of implementing all functions contained in the Constituent Featureof Invention 1. Therefore, the Products do not fall within the technical scope ofInvention 1.
D. Summary
As mentioned above, the Products do not satisfy the Constituent Features ofInvention 1, and cannot be considered as being capable of implementing allfunctions contained in the Constituent Features of Invention 1. Therefore, theProducts do not fall within the technical scope of Invention 1.
2. Issue 2 (whether the Patent Right for Invention 2 has been indirectly infringed upon)(1) Defendant's allegations
A. Structure of data transmission method of the Products
According to the structure of the Products as explained in 1(1)A. above, thedata transmission method of the Products (hereinafter referred to as the"Method") have the following structures (each of the structures shall behereinafter referred to as "Structure (i)," "Structure (j)," etc.)
i. The Method is the method for transmitting data in a mobile communication
system.
j. The Method receives a service data unit (SDU) from a higher layer anddetermines whether the SDU is included in one protocol data unit (PDU).
k. If the SDU is included in one PDU, a PDU containing a header and data is
configured. Here, the header includes a sequence number (SN) field, and an
E-bit field set to '0' indicating that the PDU includes a complete SDU
without segmentation/concatenation/padding.
l. If the SDU is larger than the space available in one PDU, the SDU issegmented into SDUs of appropriate size. Here, the header contains asequence number field, an E-bit field set to '1' indicating the presence of alength indicator if the PDU does not contain a complete SDU, and a length
indicator.
19

B.

m. If the PDU data field contains a segment which is neither the first nor thelast segment of the SDU, the pre-defined value is set for the LI field,
indicating that the PDU contains a segment which is neither the first nor thelast segment of the SDU ('111 1110' or '111 1111 1111 1110').
n. The Method transmits a PDU to the receiving entity.
o. The Method is for data transmission.
The Method falls within the technical scope of Invention 2.
(A) Structures (j) to (n) of the Method satisfy Constituent Features J to N of
Invention 2, respectively.
In this regard, the plaintiff alleges that the Method does not satisfy
Constituent Features J and L of Invention 2, for the reason that thestructures of Constituent Features J and L differ from those specified inTechnical Specification V6.9.0. However, for the same reason as
mentioned in 1(1)B. above in relation to Constituent Features B and D,
Constituent Features J and L disclose the contents of the alternative E-bit
interpretation as specified in Technical Specification V6.9.0. Therefore,
the plaintiff's allegation as mentioned above is groundless.
(B) Based on the above, the Method satisfies Constituent Features J to N of
Invention 2, and also Constituent Features I and O as already mentioned in(3)B.(B) of "Undisputed facts, etc." of this judgment.

C.

Therefore, the Method falls within the technical scope of Invention 2 as it
satisfies all of the Constituent Features of Invention 2.
Establishment of indirect infringement(A) Indirect infringement under Article 101, item (iv) of the Patent Act
Even where a product for the use of the process pertaining to the patented
invention can also be used by a mode not involving the working of thepatented invention, the acts of manufacturing, sale, etc of such productcan still be considered to involve high probability of resulting in
infringement, except for the case where the product has an economical,
commercial or practical mode of use in a way using only the functions not
involving the working of the patented invention, and not using any
functions involving the working of the patented invention at all. Therefore,
it is reasonable to consider that such product still falls under the "productto be used exclusively for the use of the said process" (Article 101, item(iv) of the Patent Act) (See judgment dated June 23, 2011, of theIntellectual Property High Court).
20

In relation to the Products, an economical, commercial or practical modeof use without using functions involving the working of Invention 2
cannot be anticipated at all. Therefore, the Products are considered to fallunder the "product to be used exclusively for the use of the said process"in relation to Invention 2.
Based on the foregoing, the plaintiff's acts of import and sale of the
Products are considered to constitute indirect infringement of the Patent
Right for Invention 2 (Article 101, item (iv) of the Patent Act).
(B) Indirect infringement under Article 101, item (v) of the Patent Act
The problem to be solved by Invention 2 is as follows: "the RLC framing
based on VoIP in traditional technology leads to inefficient use of limited
radio resources in VoIP due to the use of unnecessary LI fields"(Paragraph [0012] of the Patent Description). The purpose of Invention 2
is as follows: "The invention relates generally to a mobile communication
system supporting packet service. More particularly, the invention relates
to a method and apparatus which efficiently use radio resources byreducing the header size of a protocol data unit (RLC PDU) to betransmitted on a radio link." (Paragraph [0013] of the Patent Description).
In addition, the effect of Invention 2 is "efficient use of limited radio
resources" (Paragraph [0018] of the Patent Description). Thus, theD.

Products are for the use of Invention 2, and are essential for the solution of
the problem of Invention 2 as mentioned above.
In addition, by the defendant's Petition for Provisional Disposition, theplaintiff must have come to know of the fact that Invention 2 is a patented
invention and the Products are used for the working of Invention 2.
Accordingly, the plaintiff's acts of import and sale of the Products
constitute indirect infringement of the Patent Right for Invention 2(Article 101, item (v) of the Patent Act).
Summary
As explained above, the plaintiff's acts of import and sale of the Products

constitute indirect infringement of the Patent Right for Invention 2 (Article 101,
items (iv) and (v) of the Patent Act).
(2) Plaintiff's allegations
A. The Method does not fall within the technical scope of Invention 2.
(A) For the same reason as mentioned in 1(2)A. above, none of the Products
can be considered as the implementations of the functions based on the21

alternative E-bit interpretation, and therefore the Method does not satisfy
Structures (j) to (n) as alleged by the defendant.
In addition, for the same reason as mentioned in 1(2)B. above, the structureof Constituent Features J and L of Invention 2 differ from those referred toin Technical Specification V6.9.0. Therefore, the Method is not considered
to satisfy Constituent Features J and L.
As the Method is not considered to satisfy Constituent Features J to N, theMethod does not fall within the technical scope of Invention 2.
(B) In addition, as mentioned in 1(2)C. above, no evidence can be found which
supports that the communication service providers' networks are configuredB.

to allow the use of the alternative E-bit interpretation, and the actual use of
the alternative E-bit interpretation in the Products is not evidenced.
Therefore, the Method does not fall within the technical scope of Invention2.
Non-existence of indirect infringement(A) In order to establish indirect infringement under Article 101, item (iv) or (v)of the Patent Act, it is necessary to establish, at least, the fact of direct
working of the invention by a third party. On the contrary, the defendant
has not made any allegation or produced evidence of direct working of
Invention 2 by a third party.
(B) No evidence has been produced which supports the actual use of thealternative E-bit interpretation for the Products. Moreover, the Products canalso be used by an economical, commercial or practical mode which only
involves the use of functions without working Invention 2. Therefore, theProducts do not fall under the "product to be used exclusively for the use of
said process" in relation to Invention 2 (Article 101, item (iv) of the Patent
Act).
(C) For actual telecommunication complying with 3GPP standards, thepercentage by which the SDU size coincides with the PDU size isextremely low, and the situation where Invention 2 achieves its effects isC.

significantly limited. Therefore, the Products are not "indispensable for the
resolution of the problem" (Article 101, item (v) of the Patent Act).
Summary
As mentioned above, the defendant's allegation that the plaintiff's acts ofimport and sale of the Products constitute indirect infringement of the Patent
Right for Invention 2 is groundless.
22

3. Issue 3 (whether restrictions pursuant to Article 104-3, paragraph (1) of the Patent
Act may be imposed on the exercise of the patent right)(1) Plaintiff's allegations
As the Patent for the Inventions contains the following grounds for invalidation andtherefore should be invalidated by a trial for patent invalidation, the defendant isrestricted from exercising the Patent Right against the plaintiff in accordance with
Article 104-3, paragraph (1) of the Patent Act.
A. Ground for invalidation 1 (lack of novelty due to Exhibit Ko No. 3)
As explained below, the Inventions are substantially identical to the invention
specified in Exhibit Ko No. 3 (Publication of Unexamined Patent Application
No. 2004-179917), which is a publication distributed before the priority date of
the Patent Application. Therefore, the Patent for the Inventions has a ground forinvalidation as it violates Article 29, paragraph (1), item (iii) of the Patent Act(Article 123, paragraph (1), item (ii) of the Patent Act).
(A) Contents of Exhibit Ko No. 3
Considering Paragraphs [0001], [0003], [0004], [0008], [0009], [0013],[0025], [0026], [0028], [0029] and [0031], and Figures 2, 3, 8, and 9 of
Exhibit Ko No. 3, this Exhibit discloses all of the Constituent Features of
the Inventions.
(B) Response to defendant's allegations
The defendant alleges that Exhibit Ko No. 3 does not disclose Constituent
Features D(K) and F(M). However, such allegation is groundless due tothe following reasons:a. Constituent Feature D(K)(a) Paragraph [0008] of Exhibit Ko No. 3 states that, in relation to
PDU50 of Figure 3: "if only one SDU fulfills data domain 58 of
PDU50, the bit 55a is set to '0,' indicating that no LI is present."
This "bit 55a" means the "extension bit" (Paragraph [0008]), which
is binary data of one bit ('0' or '1') (Figure 3).
Thus, in order to make it possible to set the extension bit (E-bit) to'0,' Exhibit Ko No. 3 can be considered to disclose the presence ofthe setter referred to in Constituent Features D(K) for setting "theone-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."(b) As SDUs vary in size, it is unavoidable that one SDU can be23

segmented into three or more segments. In such case, PDUs
containing intermediate segments (i.e. a segment which is neither
the first nor the last segment) are inevitably generated. Therefore,
it is clearly understandable for a person ordinarily skilled in the art
who reads Exhibit Ko No. 3 that said Exhibit discloses a PDU
containing an intermediate segment. Moreover, as the PDU
containing an intermediate segment does not fall under the casewhere "only one SDU fulfills data domain 58 of PDU50" andwhere the E-bit is set to '0' (Paragraph [0008]), the value of theE-bit containing an intermediate segment is necessarily set to '1.'"
In addition, the "padding PDU," which is one of the examples of"alternative PDUs" referred to in Exhibit Ko No. 3 (Paragraphs[0026] and [0031], Figures 8 and 9) corresponds to "PDUs
containing intermediate segments," as it plays the role to combine
PDUs before and after the padding PDU.
It follows from the above that Exhibit Ko No. 3 discloses thepresence of a "setter 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" asspecified in Constituent Feature D(K).
b. Constituent Feature F(M)Exhibit Ko No. 3 discloses that, in relation to a "padding PDU"
which correspond to a PDU including an intermediate segment, theLI field "creates special codes, all of which are '1'… the remaining
PDU…only fulfills the undefined parts, while keeping ignorable
information" (Paragraph [0026]). In addition, this Exhibit discloses,
as the value for the padding PDU containing a special LI, LI 156a
set to the defined value '111111111111111" (15 digits) in Figure 8,
and LI 156b set to the defined value '1111111" (7 digits) in Figure
9.
Therefore, Exhibit Ko No. 3 can be considered to disclose thestructure wherein "if the data field of the PDU includes anintermediate segment of the SDU, the LI field is set to thepre-defined value indicating the presence in the PDU of anintermediate segment which is neither the first nor the last segmentof the SDU" as referred to in Constituent Feature F(M).
24B.

(C) Summary
Based on the above, the Inventions are identical to the invention describedin Exhibit Ko No. 3 and therefore lack novelty.
Ground for invalidation 2 (lack of inventive step (1) based on Exhibit Ko No. 3
as primarily cited reference)
As explained below, the Inventions could have been easily conceived of by aperson ordinarily skilled in the art based on the combination of the invention
disclosed in Exhibit Ko No. 3, which is a publication distributed before thepriority date of the Patent Application, and common general technicalknowledge. Therefore, the Patent for the Inventions has a ground forinvalidation as it violates Article 29, paragraph (2) of the Patent Act (Article
123, paragraph (1), item (ii) of the Patent Act).
(A) Common features and difference between the Inventions and the invention
disclosed in Exhibit Ko No. 3
The Inventions differ from the invention disclosed in Exhibit Ko No. 3 inthat it is not clear whether the latter invention has a structure wherein "if
the data field of the PDU includes an intermediate 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 the last
segment of the SDU" as referred to in Constituent Feature F(M), but they
are identical in respect of all other structures.
(B) Whether the difference could have been easily conceived of by a person
ordinarily skilled in the art
The structure of the Inventions which constitutes the difference referred toin (A) above could have been easily conceived of by a person ordinarily
skilled in the art based on the combination of Exhibit Ko No. 3 andcommon general technical knowledge, on the basis of reasons including
the following: [i] Exhibit Ko No. 3 discloses a technical idea to "set the
pre-defined value for the length indicator so as to distinguish two types of
PDUs completely incorporating data of the same length comprising one
type of data" (Paragraphs [0008] and [0026], Figures 8 and 9, etc.); and[ii] judging from the technical point of view as well, setting the length
indicator to a pre-defined value so as to distinguish two types of PDUs is
the most realistic and simple way which would be adopted by a person
ordinarily skilled in the art as a matter of course (Exhibit Ko No. 39,
Paragraph [0007], etc.).
25

C.

(C) Summary
Based on the above, the Inventions could have been easily conceived ofby a person ordinarily skilled in the art based on the combination of theinvention disclosed in Exhibit Ko No. 3 and common general technicalknowledge and therefore lack inventive step.
Ground for invalidation 3 (lack of inventive step (2) based on Exhibit Ko No. 3
as primarily cited reference)
As explained below, the Inventions could have been easily conceived of by aperson ordinarily skilled in the art based on the inventions disclosed in Exhibits
Ko No. 3 and No. 4 (the minutes of the 3GPP Working Group "L2
Optimization for VoIP (R2-050969)"), which are the publications distributed
before the priority date of the Patent Application. Therefore, the Patent for theInventions has a ground for invalidation as it violates Article 29, paragraph (2)of the Patent Act (Article 123, paragraph (1), item (ii) of the Patent Act).
(A) Whether the difference could have been easily conceived of by a person
ordinarily skilled in the art
The common features and difference between the Inventions and theinvention disclosed in Exhibit Ko No. 3 are as explained in B(A) above.
The structure of the Inventions which constitutes the difference referred toabove could have been easily conceived of by a person ordinarily skilledin the art based on the combination of Exhibits Ko No. 3 and No. 4, on thebasis of reasons including the following: [i] Exhibit Ko No. 4 indicates the
problem of inability to distinguish two types of PDUs (PDUs of the samelength and containing data which constitute one type in total), in otherwords, the problem of inability to distinguish a PDU completely
containing one SDU and a PDU containing an intermediate segment; and[ii] Exhibit Ko No. 4 discloses a technical idea to solve theabovementioned problem by setting a pre-defined specific value for thelength indicator (Figures 2 and 3, etc.).
(B) SummaryD.

Based on the above, the Inventions could have been easily conceived ofby a person ordinarily skilled in the art based on the inventions disclosed
in Exhibits Ko No. 3 and No. 4, and therefore lack inventive step.
Ground for invalidation 4 (lack of inventive step (3) based on Exhibit Ko No. 3
as primarily cited reference)
As explained below, the Inventions could have been easily conceived of by a26

person ordinarily skilled in the art based on the combinations of Exhibits Ko
No. 3 and No. 39 (Japanese National Publication of PCT Application No.
2002-527945), which are the publications distributed before the priority date of
the Patent Application. Therefore, the Patent for the Inventions has a ground forinvalidation as it violates Article 29, paragraph (2) of the Patent Act (Article
123, paragraph (1), item (ii) of the Patent Act).
(A) Common features and difference between the Inventions and the invention
disclosed in Exhibit Ko No. 3
The Inventions differ from the invention disclosed in Exhibit Ko No. 3 in
the following points: [i] it is not clear whether the latter invention has astructure wherein "a one-bit field setter for setting the one-bit field toindicate that the PDU completely contains the 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 thepresence of at least one length indicator (LI) field, if the data field of the
PDU includes an intermediate segment of the SDU" as referred to inConstituent Feature D(K) (hereinafter referred to as "Difference 1"); and[ii] it is not clear whether the latter invention has a structure wherein "if
the data field of the PDU includes an intermediate 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 the last
segment of the SDU" as referred to in Constituent FeatureF(M)(hereinafter referred to as "Difference 2"). But these inventions are
identical in respect of all other structures.
(B) Description of Exhibit Ko No. 39
Exhibit Ko No. 39 discloses the following features: [i] the use of a length
indicator is needed in the receiver to correctly assemble the segmented
data ([Summary]); and [ii] a length indicator is inserted into a PDU
containing an intermediate segment of the SDU so as to distinguishwhether the SDU contained in the PDU ends in the current PDU orcontinues to the next PDU, and the pre-defined value is set for said length
indicator ([Summary], Paragraphs [0006], [0010] and [0019]).
In addition, the notice of reasons for refusal dated March 30, 2010, issued
during the examination process of the Patent Application (Exhibit Ko No.
44) indicates that it is mentioned in Exhibit Ko No. 39 that "specificinformation" on the SDU is shown by setting a pre-defined value for the27

length indicator and that "the specific information instructs which one ormore payload unit contains the segment length information in the headerof the lower PDU" (this statement corresponds to the statement in the
Patent Application which reads: "set to the value indicating the presenceof an intermediate segment"). As the defendant did not, in its written
opinion dated October 6, 2010, raise any objection to the matters specified
in the abovementioned notice of reasons for refusal, the defendant is
considered to have admitted that Exhibit Ko No. 39 discloses the feature
whereby the intermediate segment is indicated by the use of the length
indicator.
(C) Whether the difference could have been easily conceived of by a person
ordinarily skilled in the art
a. Difference 1
Considering the following two facts, it can be said that it was easy fora person ordinarily skilled in the art to conceive of an idea to set the
one-bit field to indicate whether an SDU is completely included in one
PDU or PDU includes an intermediate segment of the SDU and alength indicator is present (the structure of the Inventions whichconstitutes Difference 1), based on the combination of Exhibit Ko No.
3 and Exhibit Ko No. 39. [i] Before the priority date of the Patent
Application, a person ordinarily skilled in the art sufficiently
recognized the necessity to distinguish a PDU completely containing
one SDU and a PDU containing an intermediate segment. [ii] Exhibit
Ko No. 39 discloses the structure wherein the length indicator isinserted into the PDU containing an intermediate segment of the SDU
and the E-bit of said PDU is set to indicate the presence of the length
indicator ((B) above).
b. Difference 2
As explained in (B) above, Exhibit Ko No. 39 discloses the structureof the Inventions which constitutes Difference 2.
Accordingly, it can be said that it was easy for a person ordinarily
skilled in the art to conceive of the structure of the Inventions whichconstitutes Difference 2, based on the combination of Exhibit Ko No.
3 and Exhibit Ko No. 39.
(D) Summary
Based on the above, the Inventions could have been easily conceived of28

E.

by a person ordinarily skilled in the art based on the combination of
Exhibit Ko No. 3 and Exhibit Ko No. 39 and therefore lack inventive step.
Ground for invalidation 5 (lack of inventive step based on Exhibit Ko No. 1-4
as primarily cited reference)
As explained below, the Inventions could have been easily conceived of by aperson ordinarily skilled in the art based on the invention disclosed in Exhibit
Ko No. 1-4 (3GPP technical specification "3GPP TS 25.322 V.6.3.0";
hereinafter referred to as "Technical Specification V.6.3.0"), which is a
publication distributed before the priority date of the Patent Application, andcommon general technical knowledge. Therefore, the Patent for the Inventions
has a ground for invalidation as it violates Article 29, paragraph (2) of the
Patent Act (Article 123, paragraph (1), item (ii) of the Patent Act).
(A) Common features and difference of the Inventions and the invention
disclosed in Exhibit Ko No. 1-4
Exhibit Ko No. 1-4 discloses the "normal E-bit interpretation," asspecified in Technical Specification V.6.3.0.
The Inventions differ from the invention disclosed in Exhibit Ko No. 1-4
in the following points: [i] based on the "normal E-bit interpretation" as
referred to in Exhibit Ko No. 1-4, the length indicator is not present if the
PDU contains an SDU without segmentation/concatenation/padding(hereinafter referred to as "Difference 1"); and [ii] based on the "normal
E-bit interpretation" as referred to in Exhibit Ko No. 1-4, if the PDU
contains an intermediate segment of the SDU, a length indicator isinserted, and a special value indicating the presence of the intermediatesegment is configured for said length indicator (hereinafter referred to as"Difference 2"). These inventions are identical in respect of all otherstructures.
(B) Common general technical knowledge before the priority date of the
Patent Application
The following matters had already become a part of common generaltechnical knowledge before the priority date of the Patent Application.
a. SDUs of the same size are frequently generated by a VoIP application
which uses a sound codec with a fixed bit rate (Exhibits Ko No. 1-2,
No. 42 and No. 91).
b. If the received data completely fills the data field of a data packet (i.e.
if one SDU completely fills the PDU's data field), the header size can29be reduced (Exhibit Ko No. 3, Paragraph [0008] which reads "if only
one SDU fulfills data domain 58 of PDU50, the bit 55a is set to '0,'
indicating that no LI is present;" Exhibit Ko No. 40).
c. In a PDU's data field, the presence of an intermediate segment isindicated by the use of a length indicator (Exhibit Ko No. 39,
Paragraph [0019]; Exhibit Ko No. 43)(C) Whether the difference could have been easily conceived of by a person
ordinarily skilled in the art
a. It has been common knowledge of a person ordinarily skilled in the artthat the data volume of the PDU header can be reduced by setting its
first E-bit to '0' and omitting the length indicator, and also that only
four types of PDUs are thus capable of reducing the data volume of
the PDU header (i.e. [i] a PDU containing the first segment of the
SDU; [ii] a PDU containing an intermediate segment of the SDU; [iii]a PDU containing the last segment of the SDU, whose size coincides
with the size of the PDU data field; and [iv] a PDU containing one
SDU, whose size coincides with the size of the PDU data field).
According to the "normal E-bit interpretation" referred to in Exhibit
Ko No. 1-4, in relation to the two types of PDU [ii] and [iii] above, theE-bit is set to '0' and the length indicator is omitted.
With regard to the "normal E-bit interpretation" referred to in Exhibit
Ko No. 1-4, the reason for omitting the length indicator for PDUs
containing an intermediate segment of the SDU (as mentioned in [ii]above) is as follows. In many applications, SDUs whose size is larger
than the size of the PDU data field are frequently generated, andconsequently PDUs containing intermediate segments of the SDU areoften generated, and reduction of the header size of such PDU can
reduce the overhead in total and thereby enhance the efficiency of datatransmission. This strongly suggests that 3GPP had recognized thepossibility of reducing more data volume by omitting the length
indicator of the PDU containing an intermediate segment, rather thanby omitting the length indicator of the PDU containing an SDU which
completely matches the PDU data field. In addition, considering thatthe types of PDUs capable of omitting the length indicator are limited
as above, this also suggests that 3GPP had recognized the possibilityof reducing the data transmission overhead by omitting the length30

indicator for the PDU including the SDU which completely matches
the PDU data field, if the frequency of generation of such SDU ishigh.
Meanwhile, the statement of Constituent Feature D(K) 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" (hereinafter referred to as"Constituent Feature D(a)) represents the selection of the type [iv] asreferred to above for the PDU for omitting the length indicator. The
reason behind this is that, before the priority date of the Patent
Application, it was widely recognized by a person ordinarily skilled in
the art that a VoIP application which uses a sound codec with a fixed
bit rate frequently generates SDUs of the same size ((B)a. above).
Thus, the "normal E-bit interpretation" as referred to in Exhibit Ko No.
1-4 and Constituent Feature D(a) share the common technical idea toreduce the data transmission overhead by omitting the length indicatorof the PDU containing an SDU which occurs frequently, thereby toenhance the efficiency of data transmission.
b. (a) The adoption of the structure of Constituent Feature D(a) is
automatically and inevitably connected to the structure ofConstituent Feature D(K) which reads "setting the one-bit field toindicate the presence of at least one length indicator (LI) field, if
the data field of the PDU includes an intermediate segment of the
SDU" (hereinafter referred to as "Constituent Feature D(b)").
In other words, as the value of the E-bit is either '0' or '1,' giventhat the structure of Constituent Feature D(a) is adopted and the
PDU
containsan
SDU
without
segmentation/concatenation/padding, setting the value of the first
E-bit of the PDU to '0' inevitably means that the first E-bit of the
PDU containing any other type of data is always set to '1.'
Accordingly, if the PDU contains an intermediate segment of the
SDU, the first E-bit of the PDU is always set to '1,' indicating "thepresence of at least one length indicator (LI) field."(b) In addition, the adoption of the structure of Constituent Feature
D(a) automatically and inevitably leads to Constituent Feature
D(b), as well as the structure of Constituent Feature F(M) which31

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, if the data field of the
PDU includes an intermediate segment of the SDU."
In other words, for the PDU completely containing one SDU, if thefirst E-bit is set to '0' and the length indicator is omitted, it isnecessary to always set the first E-bit of the PDU containing
intermediate segments to '1' and insert the length indicator. The
length indicator is set to the value showing where in the PDU the
SDU ends or the pre-defined value showing the type of data stored
into the PDU data field. As it is impossible for the SDU to end in
an intermediate segment, there is no choice but to adopt thestructure of Constituent Feature F(M) wherein the length indicatorof a PDU containing an intermediate segment is set to thepre-defined value showing the type of data stored in the PDU data
field (i.e. intermediate segment).
c. Before the priority date of the Patent Application, it had been common
general technical knowledge that SDUs of the same size are frequently
generated by a VoIP application using a sound codec with a fixed bit
rate, that the header size can be reduced if one SDU completely fills
the PDU's data field, and that the presence of an intermediate segment
is indicated by the use of a length indicator in a PDU's data field ((B)
above). Based on this common general technical knowledge, in
relation to a specific VoIP application whereby one SDU frequently
fills the PDU data field, it was quite easy for a person ordinarily
skilled in the art to apply the aforementioned common generaltechnical knowledge to the "normal E-bit interpretation" as referred toin Exhibit Ko No. 1-4 and to modify the design to omit the length
indicator from the header of the PDU completely containing one SDU,
instead of a PDU containing intermediate segments. In addition, suchdesign modification automatically and inevitably involves theinsertion into the PDU containing an intermediate segment a length
indicator with a pre-defined value. It follows that a person ordinarily
skilled in the art could have easily conceived of the structures of theInventions which constitute Difference 1 (Constituent Feature D(a))
and Difference 2 (Constituent Feature D(b) and Constituent Feature
32F(M)), based on the combination of the "normal E-bit interpretation"referred to in Exhibit Ko No. 1-4 and common general technicalknowledge.
d. On the contrary, the defendant alleges the existence of a factor which
would obstruct a person ordinarily skilled in the art from applying thestructure of Constituent Feature F(M) to the "normal E-bit
interpretation" referred to in Exhibit Ko No. 1-4, for the reason thatthe addition of a length indicator to a PDU containing intermediatesegments would result in an increase in overhead.
However, even supposing that the overhead increases in the case of
PDUs containing intermediate segments, the header size still can be
reduced for the PDUs completely containing one SDU, and theoverhead decreases in the case where a certain VoIP application isused. Therefore, there is no obstructing factor for the application of thestructure of Constituent Feature F(M) to the "normal E-bit
interpretation" referred to in Exhibit Ko No. 1-4.
Based on the foregoing, the defendant's allegations as mentioned
above are groundless.
(D) Summary
Based on the foregoing, the Inventions could have been easily conceivedof by a person ordinarily skilled in the art based on the combination of theinvention disclosed in Exhibit Ko No. 1-4 and common general technicalknowledge, and therefore lack inventive step.
(2) Defendant's allegations
A. Ground for invalidation 1(A) The invention disclosed in Exhibit Ko No. 3 and the Inventions aredifferent in that the former does not disclose Constituent Feature D(K) andConstituent Feature F(M) of the Inventions.
a. The plaintiff refers to the explanation of Figure 3 in Exhibit Ko No. 3
which reads: "if only one SDU fulfills data domain 58 of PDU50, thebit 55a is set to '0,' indicating that no LI is present" (Paragraph [0008]).
As stated in Paragraph [0006] which reads "Figure 3 is the simplified
drawing of AM data PDU 50 and is published in 3GPP TS25.322
V3.8.0," such explanation of Figure 3 is an explanation about "3GPP
TS25.322 V3.8.0", which is the old technical specification of 3GPP
standards before the adoption of the alternative E-bit interpretation
33

(Exhibit Otsu No. 7, hereinafter referred to as the "Technical
Specification V3.8.0"). This explanation refers to what is called "thenormal E-bit interpretation" in the current 3GPP standards. On thecontrary, the normal E-bit interpretation makes no reference to thecase where "the PDU completely contains the SDU without
segmentation/concatenation/padding in the data field."
In addition, even the aforementioned statement of Paragraph [0008] isliterally interpreted; the wording which goes "only one SDU fulfills
data domain 58 of PDU50" also encompasses the case where the sizeof SDU is larger than that of PDU and the PDU is filled with the first
segment or intermediate segment, in addition to the case where thesizes of SDU and PDU are the same. Thus, this statement does notnecessarily only mean the case where "the PDU completely contains
the SDU without segmentation/concatenation/padding in the data
field" as stated in Constituent Feature D(K).
Therefore, Exhibit Ko No. 3 does not disclose Constituent Feature
D(K).
b. As explained in a. above, in Exhibit Ko No. 3, the case where theintermediate segment completely fills PDU also satisfies the casewhere "the bit 55a is set to '0,' indicating that no LI is present."
Therefore, this Exhibit is irrelevant to the structure of Constituent
Feature F(M) which reads "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 the last segment of the SDU, if the data field of
the PDU includes the intermediate segment of the SDU."
In addition, according to Exhibit Ko No. 3, the "padding PDU does nothave actual SDU data and is to be used only in the case where theSDU data is destroyed due to an unexpected interruption of datatransmission" and is not filled with the SDU (Paragraph [0026] of
Exhibit Ko No. 3). Therefore, this padding PDU is irrelevant to the
SDU, and it is impossible to anticipate the relationship between such
PDU and SDU or intermediate segment from this "padding PDU."
Therefore, this statement of Exhibit Ko No. 3 is irrelevant to PDUs
containing intermediate segments. In addition, in the case of "padding
PDU," the "extension bit 155a" is always set to '1,' without regard towhether such PDU is an intermediate segment or not. Therefore, the34

B.

"padding PDU" is not the technology to distinguish a PDU containing
a complete SDU and a PDU an containing intermediate segment.
Therefore, Exhibit Ko No. 3 does not disclose Constituent Feature
F(M).
(B) Based on the foregoing, the ground for invalidation 1 as alleged by theplaintiff is groundless.
Ground for invalidation 2(A) As mentioned in A.(A)a. above, as Exhibit Ko No. 3 does not disclose
Constituent Feature D(K), the Inventions and the invention disclosed in
Exhibit Ko No. 3 are also different in that the latter does not have thestructure of Constituent Feature D(K) of the Invention.
(B) The prior art referred to in Exhibit Ko No. 3 is the contents of Technical
Specification V3.8.0 and had been established as the standard by itself.
Therefore, there is no problem of inability of distinguishing the PDU
containing a complete SDU and the PDU containing an intermediatesegment.
In addition, from the technical standpoint, it was not an inevitable choice
to set the length indicator to the pre-defined value so as to distinguish thetwo types of PDUs.
Therefore, it cannot be said that the structure of Constituent Feature F(M)C.

could have been easily conceived of by a person ordinarily skilled in theart based on the combination of Exhibit Ko No. 3 and common generaltechnical knowledge.
(C) Based on the foregoing, the ground for invalidation 2 as alleged by theplaintiff is groundless.
Ground for invalidation 3(A) As mentioned in B.(A) and (B) above, the Inventions and the invention
disclosed in Exhibit Ko No. 3 are also different in that the latter does nothave the structure of Constituent Feature D(K). In addition, in the prior art
referred to in Exhibit Ko No. 3, no problem can be found pointing to theinability to distinguish the PDU containing a complete SDU and the PDU
containing an intermediate segment.
(B) The invention referred to in Exhibit Ko No. 4 is the method for solving the
problem that "if the previous RLC PDU is lost, it will not be possible toknow if the entire SDU was received or not" (the last line of thetranslation, Page 3), rather than the problem of the inability to distinguish
35

PDUs. Thus, said problem is different from the one to be solved by theinvention disclosed in Exhibit Ko No. 3.
In addition, Exhibit Ko No. 4 states: "Use one of the LI’s reserved values:
In this case, an additional LI would have to be incorporated in the RLCPDU in which the first RLC SDU is entirely included. This would result inan overhead of 3% of 12.2kbps payload" (Lines 1 to 3 of the translation,
Page 5). This indicates a technology completely opposite to Invention 1,
wherein the LI’s reserved value is used if the SDU is completely includedin the PDU. Further, Exhibit Ko No. 4 does not refer to the use of the LI’s
reserved values for the intermediate segment.

D.

Therefore, it cannot be said that the structure of Constituent Feature F(M)could have been easily conceived of by a person ordinarily skilled in theart based on the combination of Exhibits Ko No. 3 and No. 4.
(C) Based on the foregoing, the ground for invalidation 3 as alleged by theplaintiff is groundless.
Ground for invalidation 4(A) Exhibit Ko No. 39 discloses neither Constituent Feature D(K) nor
Constituent Feature F(M) of the Inventions.
a. Exhibit Ko No. 39 contains a statement which reads: "Alternatively,
the first PDU in the PDU may be provided with a length indicator
having a pre-defined value which indicates that the SDU in this PDU
continues to the next RLC PDU" (Paragraph [0019]). However, thisstatement indicates that the SDU continues to the next PDU (i.e. theSDU is not the last segment), but not that such SDU is not the first
segment. Therefore, this statement does not lead to a conclusion that
Exhibit Ko No. 39 discloses Constituent Feature F, as it makes noreference to an intermediate segment which is neither the first nor thelast segment.
In this regard, the plaintiff alleges that the defendant had admitted that
Exhibit Ko No. 39 refers to the indication of intermediate segments by
the use of the length indicator, on the ground that, in the course of
examination process, the defendant did not raise any objection in its
written opinion dated October 6, 2010, about the matters relating to
Exhibit Ko No. 39 as specified in the notice of reasons for refusal
dated March 30, 2010 (Exhibit Ko No. 44).
However, as mentioned above, Exhibit Ko No. 39 does not disclose36

the intermediate segments. In addition, it is not unreasonable at all forthe examiner to strive to grant the patent as early as possible based onthe "Elements of Claim 2" (Exhibit Ko No. 44), for which theexaminer did not find any reason for refusal. Therefore, the fact thatthe defendant did not expressly raise an objection by submitting awritten opinion in the examination process does not necessarily meanthat the defendant had admitted that the structure wherein intermediatesegments are indicated by the use of the length indicator is disclosed
in Exhibit Ko No. 39.
Based on the above, the plaintiff's allegations as mentioned above are
groundless.
b. In addition, Paragraph [0019] of Exhibit Ko No. 39 contains astatement which reads: "If the SDU ends at the end of the current PDU,
this is indicated by a length indicator value which points exactly to theend of the PDU." So, Exhibit Ko No. 39 clearly discloses the use of
the length indicator if the PDU contains a complete SDU, and thus
contains a disclosure which is opposite to Constituent Feature D(K).
(B) As mentioned above, Exhibit Ko No. 39 discloses neither Constituent
Feature D(K) nor Constituent Feature F(M) of the Inventions, and nofactor exists which would motivate a person ordinarily skilled in the art toE.

combine Exhibits Ko No. 3 and No. 39. Therefore, it cannot be said that
the Inventions could have been easily conceived of by a person ordinarily
skilled in the art based on the combination of Exhibits Ko No. 3 and No.
39.
Based on the above, the ground for invalidation 4 as alleged by theplaintiff is groundless.
Ground for invalidation 5(A) a. Before the priority date of the Patent Application, a high percentage of
the SDU size completely matching the PDU size in the realcommunication environment was not recognized among persons
ordinarily skilled in the art (Exhibit Ko No. 42, etc. do not support theplaintiff's allegations). Therefore, no factor is found which could havemotivated any person ordinarily skilled in the art of that time toattempt to reduce the header information of the PDU containing acomplete SDU.
In addition, for the purpose of the normal E-bit interpretation as37

mentioned in Exhibit Ko No. 1-4, the length indicator contained in theheader is set to a pre-defined value, if the last octet of the SDU
coincides with the last octet of the PDU (the table shown in Page 9 of
the translation indicates that the bit sequence '0000000' should be used
for the length indicator if "the previous RLC PDU was exactly filledwith the last segment of the RLC SDU and there is no 'Length
Indicator' that indicates the end of the RLC SDU in the preceding RLC
PDU"), and such length indicator was thus necessary. Accordingly, theidea to omit a length indicator did not exist even in the case of the
SDU size completely matching the PDU size. A person ordinarily
skilled in the art would not able to conceive of the idea to omit alength indicator by changing the technical specification alreadyreleased, if it were not for the circumstance where the SDU size
frequently matches the PDU size in the real communication
environment, and unless this circumstance was recognized by a person
ordinarily skilled in the art.
b. The length indicator for the normal E-bit interpretation as referred toin Exhibit Ko No. 1-4 is defined as the one that "indicates the last octetof each RLC SDU ending within the PDU" (9.2.2.8 of the translation,
Page 4) because it is necessary to demarcate the scope of one SDU
when the SDU is concatenated or padded. This Exhibit only suggeststhat no LI is present in the intermediate segment wherein the last octetof the SDU does not exist, and cannot serve as evidence of theexistence of a technical idea to omit an LI for the PDU containing anintermediate segment which frequently occurred in relation to thenormal E-bit interpretation.
c. The plaintiff alleges that the adoption of the structure of Constituent
Feature D(a) is automatically and inevitably connected to the structureof Constituent Feature D(b) and Constituent Feature F(M). This
allegation is groundless for the following reasons:(a) In Exhibit Ko No. 1-4, the one-bit field after the sequence number
has a meaning as an indicator of whether "the next field is a
Length Indicator and E-bit" (9.2.2.5 of the translation, Page 4), andsuch one-bit field is called "E-bit." Contrary to this, according to
the plaintiff's allegation, the term "E-bit" means an indicator ofwhether the SDU size completely matches the PDU size38

(Constituent Feature D(a)). Here, the meaning of the term "E-bit"
is completely different from that in Exhibit Ko No. 1-4.
The plaintiff alleges that, if the structure of Constituent Feature
D(a) is adopted and when the PDU contains an SDU without
segmentation/concatenation/padding (i.e. the SDU size completely
matches the PDU size), setting the value of the first E-bit of the
PDU to '0' inevitably means that the first E-bit of a PDU
containing any other type of data, including the case where the
PDU is an intermediate segment of the SDU, is set to '1.' In otherwords, the plaintiff alleges that the adoption of the structure ofConstituent Feature D(a) inevitably boils down to Constituent
Feature D(b), and further to the structure of Constituent Feature
F(M) wherein the length indicator of the PDU containing anintermediate segment is set to a pre-defined value showing thepresence of an intermediate segment.
However, the value '1' for the E-bit of the PDU containing anintermediate segment always means the value '0' for the E-bit of
the PDU containing a complete SDU. Thus, the purpose of
distinguishing these PDUs has already been attained. In addition,
the plaintiff, in alleging that the adoption of the structure ofConstituent Feature D(a) inevitably boils down to Constituent
Feature D(b), presupposes that the one-bit field after the sequencenumber is an "E-bit" with a new meaning as an indicator ofwhether the SDU size completely matches the PDU size. However,in alleging that the adoption of the structure of Constituent Feature
D(b) inevitably boils down to Constituent Feature D(M), theplaintiff presupposes that the one-bit field after the sequencenumber is an "E-bit" that has the traditional meaning as referred toin Exhibit Ko No. 1-4. Therefore, the plaintiff's allegation isinappropriate in this respect.
Furthermore, even supposing that the length indicator is omitted
from a PDU containing a complete SDU, the one-bit field after thesequence number can be used to indicate the presence of acomplete SDU ("E-bit"), and that the presence of the complete
SDU can be indicated by use of the value '0,' it only follows thatthe one-bit field after the sequence number is set to '1,' because the39intermediate segment does not contain a complete SDU. Therefore,
even such presumptions would not lead to the structure wherein alength indicator is inserted into an intermediate segment.
Thus, the adoption of the structure of Constituent Feature D(a) is
not inevitably and automatically connected to the adoption ofConstituent Feature D(b) or Constituent Feature F(M).
(b) In addition, supposing that, as alleged by the plaintiff, the adoptionof the structure of Constituent Feature D(a) is inevitably andautomatically connected to the adoption of Constituent Feature
D(b) and Constituent Feature F(M), it would be necessary toconsider the structures adopting Constituent Feature D(b) andConstituent Feature F(M) (i.e. alternative E-bit interpretation) as
well when adopting Constituent Feature D(a). Considering the factthat the "alternative E-bit interpretation results in an increase in the
total overhead" (Exhibit Ko No. 124), as well as the plaintiff's
allegation that the alternative E-bit interpretation is inefficient andis highly unlikely to be implemented, a factor can be found which
would obstruct a person ordinarily skilled in the art from adopting
Constituent Feature D(a).
(B) Based on the above, a person ordinarily skilled in the art could nothave easily conceived of the structure of the Inventions whichconstitute Difference 1 and Difference 2 based on the combination of
the normal E-bit interpretation referred to in Exhibit Ko No. 1-4 andcommon general technical knowledge.
Therefore, the ground for invalidation 5 as alleged by the plaintiff isgroundless.
4. Issue 4 (whether the Patent Right for the Products has been exhausted)(1) Plaintiff's allegations
A. Defendant's licensing to Intel Corporation(A) As mentioned in 1(2)A.(A) above, for the Products, the processing tasks
relating to the UMTS standard are implemented by baseband chips(chipsets) installed therein (the baseband chip installed in the Products are
hereinafter referred to as the "Baseband Chip").
Supposing that the Products involve the working of the Inventions, it
necessarily means that the essential processes of the Inventions are
implemented by the Baseband Chip, which is one of the component parts40

of the Products, and the Baseband Chip would constitute indirect
infringement of the Patent Right for Invention 1.
The Baseband Chip is a product manufactured by Intel Corporation. Apple
Inc. purchased this product in the U.S. through [(company name omitted)]
and installed it in the Products.
In this regard, the defendant alleges that the sale of Intel's Baseband Chip
to Apple, Inc. is handled by IMC (Intel Mobile Communications GMBH;
former Infineon); however, such allegation is not true.
(B) Intel Corporation and the defendant entered into a patent cross-license
agreement dated [(Omitted)] (Exhibit Ko No. 20-1; hereinafter referred toB.

as the "Defendant-Intel License Agreement").
Under the Defendant-Intel License Agreement, the defendant granted toIntel Corporation a [(Omitted)] license, in relation to the defendant's
patents [(Omitted)] (including the Patent Right).
[(Omitted)] was included in the scope of the right to be licensed under the
Defendant-Intel License Agreement.
Therefore, Intel Corporation's sale of the Baseband Chip to Apple Inc.
through [(Company name omitted)] falls within the scope of the licensing
under the Defendant-Intel License Agreement.
Exhaustion of the Patent Right for the Inventions
In the judgment of the Third Petty Bench of the Supreme Court of July 1, 1997
(See Minshu Vol. 51, No. 6, at 2299; hereinafter referred to as the "BBS Case
Supreme Court Judgment"), the Supreme Court held as follows: "it isreasonable to understand that, in the case where the Japanese patentee or aperson deemed equivalent to the patentee assigns a patented product outside ofJapan, the patentee is restricted from exercising in Japan its patent right for the
product against a third party who acquires the patented product from theassignee of the product and the subsequent assignees."
There is no reason to exclude licensees from the scope of "a person deemed
equivalent to the patentee" as referred to in the BBS Case Supreme Court
Judgment, and therefore licensees, such as Intel Corporation, should also bedeemed "a person deemed equivalent to the patentee." In addition, even in thecase of a component part, if such component part indirectly infringes the patentright for the product invention of the final products, the assignee andsubsequent assignees of such component part are still allowed to use it andwork the patent right for the invention for the final products. Based on these41

premises, a component part should be understood to fall under the "patented
product" as mentioned in the BBS Case Supreme Court Judgment.
In addition, in relation to the patent right for the process invention having
substantially identical technical elements as a product invention, it should also
be understood that the patentee is restricted from exercising his/her patent rightfor such process invention, as long as the patentee was guaranteed the"opportunity to obtain reward for public disclosure of the patented invention"
for such process invention.
As for the patent right for Invention 1, which is a product invention, theBaseband Chip manufactured by Intel Corporation falls under the "patented
product" in the context of indirect infringement. Moreover, the defendant was
guaranteed the "opportunity to obtain reward for public disclosure of thepatented invention" at the time when it granted Intel Corporation the
distribution license for the Baseband Chip. Based on these premises, thedefendant is restricted from exercising the Patent Right for Invention 1 against
Intel Corporation's customers in the lower stream of the distribution channel.
Further, Invention 2 is the process invention having substantially identicaltechnical elements to Invention 1. So, as the defendant is restricted fromexercising the Patent Right for Invention 1, exercising of the Patent Right forInvention 2 should also be prohibited.
Therefore, when Intel Corporation, the defendant's Patent licensee, sold theBaseband Chip to Apple Inc. in the U.S. through [(Company name omitted)],the Patent Right for the Inventions should be considered to have been
exhausted in relation to the Baseband Chip.
C. Summary
Based on the above, the defendant is prohibited from exercising, against theplaintiff, the Patent Right for the Products mounting the Baseband Chip.
(2) Defendant's allegations
The plaintiff alleges the exhaustion of the Patent Right for the Inventions in relation
to the Baseband Chip; however, such allegation is groundless due to the following
reasons.
A. Defendant-Intel License Agreement [(Omitted)][(Omitted)] Although Apple Inc. received the assignment of the Baseband Chip
through Intel Corporation, Intel Corporation has no authority for the Patent
Right. Therefore, the Patent Right for the Inventions cannot be exhausted byvirtue of such assignment.
42

B.

C.

The Products are not the licensed products under the License Agreement.
The Defendant-Intel License Agreement (Exhibit Ko No. 20-1) provides asfollows: [(Omitted)]
The Baseband Chip is a product developed and manufactured by IMC(formerly Infineon)([(Omitted)]), not by Intel Corporation. Therefore, theBaseband Chip is not [(Omitted)] as licensed under the License Agreement.
Non-satisfaction of requirements of international exhaustion
The BBS Case Supreme Court Judgment is understood to require, as aprerequisite for international exhaustion, the assignor's rights in the assigned
patented product to include the right of importation into Japan (as well as theright to use and assign the product in Japan). Therefore, it is obvious that "aperson deemed equivalent to the patentee" as mentioned in the BBS Case
Supreme Court Judgment means a person who has the right to import thepatented product into Japan (as well as the right to use and assign the productin Japan).
Nevertheless, Intel Corporation has no right to import the patented products (i.e.
mobile phones and tablet computers) into Japan (as well as the right to use andassign the products in Japan). Therefore, Intel Corporation does not fall under"a person deemed equivalent to the patentee."
In addition, the Baseband Chip assigned from Intel Corporation to Apple Inc. isneither the "data transmission device" nor "data transmission method"pertaining to the Inventions. As such, the Baseband Chip is not the "patented
product" as mentioned in the BBS Case Supreme Court Judgment.
Further, as [(Omitted)], the defendant still would not be able to obtain reward
for the public disclosure of the Inventions pertaining to the "data transmission
device" or "data transmission method" from Intel Corporation, even supposingthat the defendant expected the Baseband Chip to be incorporated into thedevices such as mobile phones. So, it is obvious that the defendant cannot be
considered to have been guaranteed the opportunity to obtain such reward. In
addition, as the unit price of the Baseband Chip represents only a very small

percentage of the total price of the Products, such limited opportunity forreward cannot be considered as the entire opportunity for gain.
D. Summary
As mentioned above, the Patent Right for the Inventions is not exhausted only
by virtue of Apple Inc. purchasing from Intel Corporation the Baseband Chip,
which is a component part of the Products. Therefore, the plaintiff's allegation
43

that the defendant is prohibited from exercising the Patent Right for the
Products is groundless, as it lacks the conditions precedent.
5. Issue 5 (whether a license agreement in relation to the Patent Right has been formed
based on the FRAND Declaration)(1) Plaintiff's allegations
A. Laws governing the FRAND Declaration(A) On December 14, 1998, the defendant made an undertaking (declaration) to
ETSI that it was prepared to license its essential patent for the UMTS
standard on the FRAND Terms (fair, reasonable and non-discriminatory
terms and conditions in accordance with ETSI IPR Policy Clause 6.1).
Further, on August 7, 2007, the defendant made a declaration to ETSI that it
was prepared to grant an irrevocable license for its essential patent for the
UMTS standard on the FRAND Terms, notifying the number of the South
Korean patent application, which served as the basis for the priority claim
for the Patent Application, as well as the international application numberof the Patent Application (hereinafter collectively referred to as the"FRAND Declaration").
The licensing declaration of the standards essential patent on the FRAND
Terms is applied to ETSI members, as well as all other parties including
non-members (Exhibit Ko No. 16, "ETSI Guide on Intellectual Property

B.

Rights (IPRs)"). Accordingly, both Apple Inc. and the plaintiff are eligible
to obtain license under the FRAND Declaration.
(B) The governing laws for the FRAND Declaration and IPR Policy are thelaws of France (Exhibit Ko No. 13, IPR Policy Clause 12). As such, theissues such as the effect of the FRAND Declaration and the requirement for
the formation of a license agreement thereunder are governed by the lawsof France.
Formation of License Agreement between the defendant and Apple Inc.
(A) The FRAND Declaration, which the defendant made to ETSI, satisfies allelements of the legally binding offer under the laws of France (i.e. thelicensed patent, the details of the rights to be licensed, etc.), and therefore
constitute the "actual licensing offer, acceptance of which is implied by the
implementation of the specification by a certain party." Under the laws ofFrance, the acceptance is made by way of performance of certain acts oragreement. As for this case, Apple Inc. implicitly accepted the defendant's
licensing offer by implementing the UMTS standard relating to the Patent44

for the Products. By doing so, the license agreement in relation to the
Patent Right can be regarded to have been formed between Apple Inc. andthe defendant.
(B) a. Although the fixed royalty rate is not provided in the defendant's
FRAND Declaration, this does not affect the formation of a license
agreement.
Under the French laws, in order for the sale and purchase contract to bevalidly formed, a specific purchase price must be provided. However, alicense agreement is characterized as a special contract different from asale and purchase contract, and agreement on the royalty rate is not a
condition essential for the formation of a contract between the parties.
In addition, under the French laws, the courts have authority todetermine the royalty rate on the FRAND Terms.
b. Under the French laws, the act of licensing is invalid unless it is in theform of writing (Intellectual Property Code, Article L613-8, paragraph(5)). On the other hand, the document is deemed legally binding if it issigned by a party to be bound by such document.
In this regard, the defendant's FRAND Declaration has been made inwriting signed by the defendant, and therefore satisfies the requirementof written form. The lack of signature of Apple Inc. has nothing to doC.

with this written form requirement. In addition, under the French laws,
the purpose of this formality requirement in the licensing agreement isthe "protection of specific interests of licensees." As such, only the
party to be protected against the lack of written form (i.e. licensee)should be eligible to challenge the validity of the contract on the groundof lack of written form. In this court case, the defendant is not eligible
to assert the invalidity of the contract.
Summary
As explained above, the FRAND Declaration made by the defendant to ETSI
constitutes the offer for a FRAND license agreement in relation to the Patent
Right, and the implementation by Apple Inc. of the UMTS standard relating to
the Patent for the Products constitutes the implicit acceptance for such offer.
Accordingly, the FRAND license agreement in relation to the Patent Right has
been formed between the defendant and Apple Inc., and therefore the defendant
is not entitled to exercise the Patent Right against the plaintiff, which is thesubsidiary company of Apple Inc.
45

(2) Defendant's allegations
A. Non-existence of offer for contract
Upon the formation of a contract, the parties are bound by the legal obligation
to perform the contract. Therefore, an offer for the contract should be concreteenough such that the contract can be immediately formed upon the acceptancethereof.
However, the defendant's FRAND Declaration contains no importantparticulars which are the elements of a contract, such as the consideration(royalty rate), terms and territories, and provides no specific obligations for theparties. Therefore, such declaration in no way constitutes an offer for a license

B.

agreement.
Under the French laws as well, it has been generally understood that, in order
for a license agreement to be formed, an offer expressly providing importantparticulars of a contract (such as consideration, the licensed patent, territories,
terms, etc.), as well as the corresponding acceptance are required. As such offer
does not exist in this case, no license agreement was formed. Meanwhile, there
has been no precedent of the Supreme Court of France (Court de cassation)
dealing with the issue of whether the royalty rate is the essential element for
the formation of a license agreement.
Non-existence of acceptance(A) As mentioned in A. above, as there has been no offer from the defendant
for the conclusion of a license agreement in relation to the Patent Right,
acceptance of such offer by Apple Inc. cannot exist.
(B) In this regard, the plaintiff alleges that Apple Inc. has made an implicit
acceptance of the offer by implementing the UMTS standard in theprocess of the manufacturing of the Products.
However, the plaintiff does not provide the reason why the implementation of
the standards constitutes consensus between the parties. In addition, given thatthe plaintiff's allegation is affirmed, the patented technology users would be
able to use such technology by merely implementing the standards, withoutC.

manifestation of their intention of acceptance to the right holder or even
without paying any consideration. Such consequence is obviously
unreasonable.
Therefore, the plaintiff's allegations above are groundless.
Dissatisfaction of requirement of written form(A) For the issue of whether a license agreement was formed, even granting
46

the plaintiff's allegations under the laws of France, the French laws stillrequire that the patent license agreement be made in the form of writing.
As there is no written document relating to the license agreement between
the defendant and Apple Inc., the license agreement as alleged by theplaintiff has not been formed.
(B) In this regard, the plaintiff alleges satisfaction of the requirement of
written form necessary for the formation of a patent license agreement, as
the defendant's FRAND Declaration contains the signature of the
defendant, which is to be bound by the contract.
However, the license agreement as alleged by the plaintiff to have been
formed between the defendant and Apple Inc. does not satisfy therequirement of written form, based on the following reasons. [i] The
FRAND Declaration has no provisions necessary for explaining theparticulars of a contract, such as the purpose, consideration, terms andterritories of the license agreement. [ii] As the FRAND Declaration does
not contain the plaintiff's signature, it is not clear whether the parties
reached a consensus. [iii] As the FRAND Declaration contemplates across-licensing arrangement between the parties, the licensee, which is theother party, is also bound by the licensing obligation, and therefore thesignature of Apple Inc. should not be omitted.
Therefore, the plaintiff's allegations as above are groundless.
D. Summary
As explained above, the plaintiff's allegation that a license agreement inrelation to the Patent Right was formed between the defendant and Apple Inc.
by the FRAND Declaration is groundless.
6. Issue 6 (abuse of right)(1) Plaintiff's allegations
Considering the various circumstances as explained below, it is an abuse of right(Article 1, paragraph (3) of the Civil Code) for the defendant to exercise the right toseek damages based on the Patent Right against the plaintiff, and such exercise is
not allowed.
A. Breach of obligation to disclose the Patent in a timely manner
ETSI IPR Policy Clause 4.1 requires the ETSI members to disclose to ETSI ina timely manner the intellectual property rights which might be essential for the
standards already developed or under development. If any participant in thedevelopment of standards conceals any patent which makes up the standards,
47

the standardization working group would miss the opportunity to consider
alternative technologies for the standards or to decide to exclude such patent
from the standards, and in addition, the users of the standards andstandardization bodies might also miss the opportunity to adopt alternativetechnologies. Based on these reasons, the ETSI members are required to timely
disclose their IPRs which might be essential for the standards.
In May 2005 (the month in which the date of priority of the Patent Application
falls), the defendant prepared and submitted to the 3GPP Working Group theapplication for change of technologies, including the ones for which thedefendant sought to obtain patent. It was not until August 2007, two years afterB.

C.

the adoption of the standards incorporating the Patent, that the defendant
informed ETSI of the existence of the Patent.
Thus, the defendant intentionally breached its obligation to timely disclose thepatent under IPR Policy Clause 4.1.
The defendant's Petition for Provisional Disposition was a retaliatory
countermeasure.
In April 2011, Apple Inc. filed a U.S. action against the defendant seeking an
injunction against the infringing acts, alleging that the defendant infringed thepatent rights owned by Apple Inc. which was not related to the standards.
In the same month, the defendant took retaliatory countermeasures against theplaintiff for the court action by Apple Inc., including the Petition for
Provisional Disposition seeking an injunction against sale, etc. of the Products
based on the Patent Right, which the defendant declared as essential for the
UMTS standard (the patent which is the subject of this declaration ishereinafter referred to as the "Standards Essential Patent").
Breach of obligation to enter into a license agreement and good-faithnegotiation obligation under the FRAND Declaration(A) "ETSI Guide on Intellectual Property Rights (IPRs)" Clause 1.4 (Exhibit
Ko No. 16) provides that a third party, in the capacity of the user of the
ETSI standards, is entitled to receive a FRAND license for the standardsin accordance with ETSI IPR Policy Clause 6.1 (Page 2, and the rightcolumn of the table of Page 3 of the translation).
As both Apple Inc. and the plaintiff are entitled to receive license for theStandards Essential Patent based on the defendant's FRAND Declaration,
the defendant is considered to be bound by an obligation to enter into alicense agreement for the Patent Right, which is the Standards Essential
48

Patent (obligation to enter into a license agreement). And, at least, thedefendant is considered to have an obligation to negotiate the license for
the Standards Essential Patent in good faith (good-faith negotiation
obligation).
Nevertheless, as explained below, the defendant breached both the
obligation to enter into a license agreement and good-faith negotiation
obligation.
a. As explained in B. above, by filing the Petition for Provisional
Disposition as a retaliatory countermeasure for the court action byApple Inc., the defendant has breached the obligation to enter into alicense agreement and good-faith negotiation obligation for the license
for the Standards Essential Patent.
The defendant did not have an intention to grant the license under the
FRAND Declaration to the plaintiff and Apple Inc.. The intent behindthe defendant's Petition for Provisional Disposition was merely tothreaten the plaintiff and Apple Inc. by exercising the right to seek an
injunction based on the Patent Right declared as essential, todiscourage Apple Inc. from proceeding with its court action, and toachieve results favorable to the defendant.
b. Apple Inc. asked the defendant to provide a concrete royalty rate on
the FRAND Terms applicable to the license for the Patent. The
defendant presented to Apple Inc. the "royalty rate of [(Omitted)] _%"on July 25, 2011, four and a half months after the request from Apple
Inc. [(Omitted)]. In addition, the defendant refused to provide any
information on the actual royalty rates applicable to other licensees.
In substance, the defendant's acts as mentioned above are deemed as
refusal to grant a FRAND license for the Patent Right to Apple Inc.
and the plaintiff.
It can be inferred from the following facts that the conditions offeredby the defendant to Apple Inc. are far from the FRAND Terms, and thedefendant substantially refused to grant Apple Inc. and the plaintiff a
FRAND license for the Patent Right. [i] It took as long as four and ahalf months for the defendant to contemplate the conditions, but toApple Inc. [(Omitted)]. [ii] It is impossible for Apple Inc. to determine
whether the conditions offered by the defendant fell under the FRAND(fair, reasonable and non-discriminatory) Terms, unless information on49

the royalty rates for the Patent applied to other licensees is disclosed toApple Inc.; however, the defendant did not provide Apple Inc. withany information on royalty rates for the reason of confidentiality
agreements with other licensees, although it was possible to disclosesuch information to a limited extent without breaching theconfidentiality obligations. [iii] The defendant had repeatedly shown
its policy to require the parties implementing the UMTS standard to
pay a royalty rate up to "about 5%" in total for any patents declared as
essential for such standards. Although this maximum rate was agreed
by other companies, the defendant offered an unreasonably highroyalty rate of "[(Omitted)] _%" for a single Patent (Among 1889
patents declared as essential for the UMTS standard, the number ofpatents owned by the defendant is only 103, representing 5.45% ofthem. Considering this fact, the reasonable royalty rate for the entiretyof the defendant's Standards Essential Patents is only 0.273% (5%×5.45%)).
c. On March 4, 2012, Apple Inc. made an offer to receive a license for
the Patent Right by sending the defendant a draft license agreementwith its signature (Exhibits Ko No. 65-1 and No. 65-2). This offer byApple Inc. was made on the premises that [(Omitted)] only to theextent of the purpose of execution of the FRAND license agreement,
and was not conditional, without imposing any such conditions as thatthe court has declared the Patent Right to be valid or to conflict withthe technology of Apple Inc.
However, the defendant refused the abovementioned offer by Apple
Inc. without making any counterproposal.
d. In spite of the refusal by the defendant, Apple Inc. has attempted tocontinue the licensing negotiations with the defendant in relation to
the FRAND Terms in all parts of the world.
On September 1 and 7 of 2012, Apple Inc. made a cross-licensing
offer for the entire portfolio of the Standards Essential Patents held byApple Inc. and the defendant relating to the mobile communication
devices (Exhibits Ko No. 109 and No. 110). In this offer, Apple Inc.
suggested that it would pay royalty at a rate of [(Omitted)] _% for the
portion of the Baseband Chip price contributing to the functions
relating to 3GPP standards, and that the defendant would pay royalty
50

at a rate of [(Omitted)] _% based on the Baseband Chip price for thepatent portfolio for Apple Inc.
However, the defendant has not responded to the abovementioned
offer by Apple Inc.
e. As mentioned above, Apple Inc. has repeatedly made a firm offer toreceive a license to the defendant, with detailed explanation of thecalculation basis of the royalty. Yet, the defendant has persisted on theprior offer without explaining the calculation basis of the proposed
royalty or making any counterproposal to Apple Inc. Further, thedefendant maintains the Petition for Provisional Disposition seeking
an injunction based on the Patent Right, which is the Standards
Essential Patent, putting pressure on Apple Inc. by the threatened
provisional injunction order based on the Standards Essential Patent.
The patented invention technology incorporated into the standards canbecome a powerful tool which far exceeds its inherent value, that is,such technology has a risk of enabling the patentee to obtain an
unreasonably high royalty or non-essential IPR cross-licenses from theusers of the standards. The series of the abovementioned acts of the
defendant would create the so-called "patent hold-up" (meaning thesituation where the prospective users of the standards are prohibitedfrom using the technologies incorporated in the standards, because of
the enforcement of the right for such technologies).
Therefore, it is obvious that the defendant breached its obligation toenter into a license agreement and good-faith negotiation obligation
for the Patent Right, which is the Standards Essential Patent.
(B) In this regard, the defendant alleges that it has no good-faith negotiation
obligation as Apple Inc. has not made a "firm offer to receive a license" on
the FRAND Terms.
However, in ETSI IPR Policy, the defendant's FRAND Declaration or thelaws of France which govern such declaration, there is no provision which
requires the prospective users of the UMTS standard to make a "firm offer
to receive a license," as a precondition for the patentee of the Standards
Essential Patent to have a good-faith negotiation obligation. A "firm offer
to receive a license" is not required for the formation of a license
agreement or the patentee's good-faith negotiation obligation.
Under the Japanese laws as well, there is no ground for requiring a "firm51offer to receive a license." Even supposing that a Japanese law requires ofApple Inc. or the plaintiff a "firm offer to receive a license" as theprerequisite for the defendant's good-faith negotiation obligation, Apple
Inc., as mentioned in (A) above, has made a "firm offer to receive alicense" to the defendant by manifesting its intention not to challenge thevalidity of the Patent Right or to raise the question of whether the productsof Apple Inc. conflict with the Patent, to the extent of the purpose of
executing the FRAND license agreement.
In addition, supposing that the prospective licensees are required to waive
their right to challenge the validity of the patent or to raise the question ofwhether their products conflict with the licensed patent, as a requirement
for the offer to receive a FRAND license, the holder of the Standards
Essential Patent may be able to protect itself from any licensee's claims
even if the patent turns out to be non-essential, invalid or not in conflictwith the licensee's product. This would induce patent holders to makedeclarations for non-essential patents as essential ones so as to gain thebenefit of being protected against the claim relating to the validity of thepatent or conflict with the licensee's own technologies. Such consequence
is not deemed appropriate.
Therefore, the defendant's allegations as mentioned above are groundless.
D.

E.

Violation of the Antimonopoly Act
The series of the defendant's acts constitute the creation of "patent hold-up"(C.(A)e. above). These acts completely run counter to the purpose of 3GPP,
which aims to widely disseminate the standards. Further, such acts are highly
likely to fall under one of the provisions related to the unfair trade practices as
set out in the Act on Prohibition of Private Monopolization and Maintenance ofFair Trade (hereinafter referred to as the "Antimonopoly Act") (Article 2,paragraph (9), item (ii) of the Antimonopoly Act, Paragraphs 2 to 4 andParagraph 14 of the Public Notice No. 15 of the Fair Trade Commission titled"Unfair Trade Practices") and therefore involve possible violation of the
Antimonopoly Act.
Summary
As explained above, taking into consideration the various circumstances,including that the defendant intentionally breached the obligation to timely
disclose the Patent to ETSI, that the defendant's Petition for Provisional
Disposition was a retaliatory countermeasure, that the defendant breached its
52obligation to enter into a license agreement and good-faith negotiation
obligation for the Patent Right, which is the Standards Essential Patent, under
the FRAND Declaration and thereby created the situation of "patent hold-up,"
and that the series of the defendant's acts may constitute violation of the
Antimonopoly Act, the defendant is prohibited from exercising the right to seek
damages against the plaintiff based on the Patent Right, as such exercise ofright constitutes an abuse of right.
(2) Defendant's allegations
The plaintiff pointed out the various circumstances to support its allegation that thedefendant's exercise of the right to seek damages against the plaintiff based on the
Patent Right constitutes an abuse of right. However, as explained below, thesecircumstances lack the facts to be premised upon, or can in no way be relied upon as
the grounds for the abuse of right.
A. Allegation of the breach of the obligation to timely disclose the Patent under
IPR Policy(A) ETSI IPR Policy Clause 4.1 (Exhibit Ko No. 12), which the plaintiff relies
upon for the allegation of the defendant's breach of the obligation totimely disclose the Patent, requires the members to exercise reasonableendeavors to disclose patents and other IPRs. However, this provision
governs the relationship between ETSI and its members, not therelationship between ETSI members and third parties. As such, the penalty
for the breach of obligation against third parties is not contemplated in the
IPR Policy.
In addition, in the first place, the breach of procedural obligation to ETSI
cannot be relied upon to substantiate the abuse of right by the exercise of
the Patent Right.
(B) The plaintiff relies upon the fact that the defendant disclosed the Patent to
ETSI only after about two years from the priority date of the Patent
Application to allege that the defendant breached the obligation todisclose IPRs in a timely manner.
However, for making the declaration of an essential patent, a company
needs to follow an appropriate internal process such as the selection ofpatents and examination of whether they are essential for the standards.
This process requires a significant amount of work and time, and, ofcourse, the corporate decision and action. Therefore, it generally takes one
or two years for an ETSI member to disclose the patent.
53

B.

Thus, although the defendant disclosed the Patent to ETSI only after about
two years from the priority date of the Patent Application, such disclosure
is within the range of normal practice. The defendant can be considered tohave exercised its reasonable endeavors to disclose the patent in a timely
manner and therefore is not accusable for the breach of the obligation todisclose IPRs in a timely manner.
Therefore, the plaintiff's allegation as mentioned above is groundless.
Allegation that the defendant's Petition for Provisional Disposition was a
retaliatory countermeasure
The plaintiff alleges that the defendant's Petition for Provisional Disposition
was a retaliatory countermeasure with the purpose of putting pressure on Apple
Inc. for the court action and thereby to achieve favorable results, relying on thefact that the defendant filed the Petition for Provisional Disposition after Apple
Inc. had filed for an injunction against the defendant in the U.S.
However, the U.S. injunction relief case filed by Apple Inc. against thedefendant is completely independent of this court case. In addition, the law
contemplates that the plaintiff may be subject to the injunction claim for the
infringement of the Patent Rights, as a matter of consequence that thedefendant is entitled to seek injunctive relief against the infringement of the
Patent Rights. Accordingly, although the defendant began exercising its rightC.

only after the enforcement by Apple Inc., there is no reason that the defendant
should be accused of having taken a "retaliatory countermeasure" or "puttingpressure on Apple Inc. for the court action."
Therefore, the plaintiff's allegation as mentioned above is groundless.
Allegation that the defendant breached its obligation to enter into a license
agreement and good-faith negotiation obligation under the FRAND Declaration(A) Non-existence of obligation to enter into a license agreement
By making a FRAND Declaration to ETSI, the declarant only has an
obligation to discuss and negotiate in good faith with prospective
licensees, upon the request from such prospective licensees and inaccordance with the basic principle of licensing on the FRAND Terms as
set out in IPR Policy Clause 6.1 (good-faith negotiation obligation).
Therefore, the FRAND Declaration does not serve as the basis of the
defendant's obligation to enter into a license agreement (obligation toenter into a license agreement) as alleged by the plaintiff.
In addition, the plaintiff's allegation that the FRAND Declaration serves as54the basis of the obligation to enter into a license agreement contradicts
ETSI's policy not to intervene in individual licensing negotiations, as
provided in the ETSI Guide on IPRs (Exhibit Ko No. 16) which provides
as follows: "Specific licensing terms and negotiations are commercial
issues between the companies and shall not be addressed within ETSI"(Clause 4.1).
Therefore, the plaintiff's allegation that the defendant breached its
obligation to enter into a license agreement under the FRAND Declaration
is groundless as it lacks the conditions precedent.
(B) Non-existence of good-faith negotiation obligationa. The specific content of the obligations of the party which made a
FRAND Declaration is an issue directly connected to the public
policies of each country, which can be determined from the standpointof the laws of Japan. From the standpoint of the Japanese laws, it
should be understood that, as the precondition for the good-faithnegotiation obligation, a prospective licensee needs to make a "firmoffer to receive a license," which indicates such prospective licensee's
faithful intent to obtain a license without challenging the validity of
the licensed patent.
The plaintiff alleges that Apple Inc. made a "firm offer to receive alicense" on the FRAND Terms to the defendant on March 4,
September 1 and 7 of 2012. However, this allegation is groundless.
(a) The offer dated March 4, 2012, alleged by the plaintiff cannot be
regarded as a "firm offer to receive a license," as the plaintiff
challenged the validity of the defendant's patent and raised thequestion of whether its products conflict with the Patent.
In addition, in the abovementioned offer, an unreasonably low
royalty rate of "[(Omitted)] _%" was proposed. This shows that theplaintiff did not have a faithful intention to obtain a license andonly made a perfunctory offer, anticipating that the negotiation
would fail. Therefore, such offer in no way constitutes a "firmoffer to receive a license."(b) In addition, the offers dated September 1 and 7 of 2012 as allegedby the plaintiff (Exhibits Ko No. 109 and No. 110) suggested[(Omitted)] (Translation, Page 3), and the plaintiff thereby
reserved its right to challenge the validity of the defendant's patent55

or to question whether the products in question conflict with thedefendant's patent. Therefore, these offers do not constitute a "firmoffer to receive a license" either. In addition, Apple Inc. hasalleged that "[(Omitted)]." Considering that the allegation of
exhaustion of patent right is a defense against the allegation ofpatent infringement, Apple Inc. can be virtually considered asquestioning whether the products in question conflict with thedefendant's patent by raising such allegation. In conclusion, theseoffers do not constitute a "firm offer to receive a license."(c) As mentioned above, the offers by Apple Inc. as alleged by theplaintiff are not considered as firm offers which indicate thefaithful intention to obtain a license. Therefore, the defendant is
not bound by any good-faith negotiation obligation from theoutset.
b. In this regard, the plaintiff raises an allegation to accuse the defendantof non-disclosure of licensing conditions for other licensees, although
it is possible to disclose such information to Apple Inc. within a scope
not breaching the confidentiality obligation.
However, the only obligation which the defendant owes as a result of
making the FRAND Declaration is the obligation to discuss andnegotiate in good faith with a prospective licensee who makes a firm
offer, and does not include the obligation to disclose the licensing
terms and conditions applicable to other licensees. Furthermore, Apple
Inc. has not made a firm offer to receive a license and therefore thedefendant has no obligation to the plaintiff at all. Therefore, theplaintiff's allegation as mentioned above is groundless.
(C) Non-existence of breach of good-faith negotiation obligationa. The defendant has not breached its good-faith negotiation obligation
as it has continuously requested Apple Inc. to enter into negotiations ina faithful manner.
The defendant, in its Response Letter dated April 18, 2012 (Exhibit
Otsu No. 42), notified Apple Inc. of its intention to grant a FRAND
license, and invited Apple Inc. to make a good-faith proposal. In
addition, the defendant has continuously requested Apple Inc. to enter
into faithful negotiations, for example, by sending proposals of[(Omitted)] in its letter dated September 7, 2012 (Exhibit Ko No. 111).
56

Rather, it is Apple Inc. which has not responded to the defendant's
invitations for faithful negotiations.
b. The plaintiff alleges that, for the patents for which a FRAND
Declaration is made, the calculation method to divide the 5% royalty
rate cap by the percentage to the entire patent portfolio should be used.
However, the 5% royalty rate cap has no ground and therefore theplaintiff's allegation as mentioned above is groundless.
c. In addition, the plaintiff alleges that the defendant refused to grant a
FRAND license to Apple Inc. and the plaintiff by not making a
FRAND licensing offer to Apple Inc. and seeking an injunction

D.

E.

against the plaintiff without making counterproposals.
However, as mentioned above, Apple Inc. did not make a "firm offer
to receive a license" at all. Therefore, the plaintiff's allegation that thedefendant's act constitutes refusal of licensing on the FRAND Terms
lacks the precondition and is therefore groundless.
d. As explained above, the plaintiff's allegation that the defendantbreached the good-faith negotiation obligation is groundless.
Allegation of violation of the Antimonopoly Act
The plaintiff alleges that the series of the defendant's acts fall under theunfair trade practices as prescribed in the Antimonopoly Act and therefore
violates the same Act.
The plaintiff's abovementioned allegation is grounded on the defendant's
breach of the obligation of timely disclosure of patents and filing of thePetition for Provisional Disposition as a retaliatory countermeasure. Suchallegation is groundless as it contains an error in its premises.
Summary
As mentioned above, the plaintiff's allegation that the defendant's exerciseof the right to seek damages against the plaintiff based on the Patent Right
constitutes an abuse of right is groundless, as there exists no fact which
serves as the basis of these alleged circumstances, or, these circumstancesin no way support the alleged abuse of right.
No. 4 Court Decision
1. Issue 1 (whether the Products fall within the technical scope of Invention 1)(1) Structure of the Products
The defendant alleges that Invention 1 is the implementation of the "alternative
E-bit interpretation" as referred to in Technical Specification V6.9.0 of the57

3GPP standards, and also that the Products complying with this technicalspecification 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. Products 1 and 3
There is no controversy as to the fact that Products 1 and 3 are products
complying with the UMTS standard, which is the standard communication
specification developed by 3GPP (3GPP standards).
There are multiple versions for the standards released as the UMTS
standard, and the alternative E-bit interpretation as alleged by the
defendant was adopted in the technical specification in the versions after"3GPP TS 25.322 V6.4.0" (hereinafter referred to as the "Technical
Specification V6.4.0"), the publication released after the priority date of
the Patent Application (Exhibits Ko No. 2 and No. 87, and the entire
import of oral arguments).
The submitted evidence is not sufficient for determining that Products 1
and 3 implement the functions based on the alternative E-bit interpretation.
Rather, the evidence indicates that the Baseband Chip incorporated into
Products 1 and 3 for the processing of tasks relating to the UMTS standard
is Intel's [(name omitted)] baseband chip, and that this baseband chipB.

complies with 3GPP standard version "Release 5" publicized before thepriority date of the Patent Application and does not have a function based
upon the alternative E-bit interpretation (Exhibits Ko No. 82 to No. 85).
Therefore, the defendant's allegation that Products 1 and 3 comply withTechnical Specification V6.9.0 is groundless.
Consequently, without the need to determine the other issues, the court
finds the defendant's allegation that Products 1 and 3 fall within thetechnical scope of Invention 1is groundless.
Products 2 and 4(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 the58

"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)
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 evidence (Exhibits Otsu No. 13, No. 14 and No.
41), as well as the entire import of oral arguments, the court finds
the following facts:(a) Chipworks Inc., a Canadian corporation, tested Products 2
and 4 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 Otsu No. 13, 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 Otsu
No. 13, Figures 13 and 15).
59

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, thecourt finds Products 2 and 4 to be the implementation of thefunctions based on the alternative E-bit interpretation.
c. In this regard, the plaintiff 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
whichcomprisea"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 plaintiff's allegations as mentioned above are
groundless.
C. Summary
Based on the above, the court finds Products 2 and 4 to comply withTechnical Specification V6.9.0 and have the structure implementing thefunctions based on the alternative E-bit interpretation.
(2) Technical significance of Invention 1
A. Matters disclosed by the Patent Description(A) The detailed explanation of the invention of the Patent Description(Exhibit Ko No. 1-2) contains the following statements (for thedrawings referred to in the following statement, see the Patent
Description Figures attached hereto).
a. "[Field of Invention] The invention relates to a mobile
communication system supporting packet service. Morespecifically, the invention relates to a method and apparatus whichefficiently use radio resources by reducing the header size of a60

Protocol Data Unit (PDU) to be transmitted on a radio link."(Paragraph [0001])b. "[Background of Invention] The UMTS (Universal Mobile
Telecommunication Service) system is a third-generation mobile
communication system which uses Code Division Multiple Access(hereinafter referred to as "CDMA") based on the European
telecommunication systems called GSM (Global System for
Mobile Communications) and GPRS (General Packet Radio
Services). This UMTS system provides services enabling mobile
phone subscribers and computer users to transmit packed-based
text, digitalized sound, video and multimedia data at a high speedof more than 2Mbps in all parts of the world. This UMTS system
has introduced the concept of a packet switched access systemusing a packet protocol like the Internet Protocol (hereinafterreferred to as "IP"). 3GPP (3rd Generation Partnership Project),which is the standardization body for the abovementioned UMTS
communication system, has been discussing a voicecommunication service called VoIP (Voice over IP) which assists
the voice packets using IP. VoIP is communication technology totransmit a voice frame generating from a voice codec in the formof an IP/UDP (User Datagram Protocol)/RTP (Real-time Transport
Protocol) packet. This VoIP facilitates the provision of voicecommunication service through the packet network." (Paragraph[0002]) "Figure 1 shows the composition of the usual mobile
communication system which supports VoIP." (Paragraph [0003])"In general, an RLC layer is divided into UM (UnacknowledgedMode), AM (Acknowledged Mode) and TM (Transparent Mode)depending on the operation mode. VoIP operates in the RLC UM.
In the transmitter, an RLC UM layer segments, concatenates orpads the RLC Service Data Unit (hereinafter referred to as "RLC
SDU") received from the higher layer into a size appropriate fortransmission through a radio channel. In the RLC UM layer,
segmentation/concatenation/padding information and a sequencenumber (SN) are inserted in the abovementioned result value, andan RLC PDU fit for transmission through a radio channel isconfigured Then, this LCP PDU (Note: a typographical error of61

"RLC PDU") is transmitted to the lower layer. … The operation
for the processing of the RLC SDU received from the higher layer
into a size appropriate for the transmission through a radio channel
is called 'RLC framing. '" (Paragraph [0004])"Figure 2C shows the operation for the configuration of an RLC
PDU by framing the RLC SDU in the RLC layer of the transmitter
based on the conventional technology. …The RLC layer of thetransmitter receives from the higher layer any given size of RLC
SDU, for example, RLC SDU225 which is 100-byte IP packet. If
the size of the data transmittable through a radio channel is 40
bytes, the RLC layer divides the RLC SDU225 into three, namely,
RLC PDU230, 235 and 240. In this case, the size of each of these
RLC PDUs is 40 bytes. In addition, each of these RLC PDUs
includes RLC header 245. This RLC header 245 is composed of atleast two pairs of the sequence number (hereinafter referred to as"SN") 250, E-field 255, Length Indicator (hereinafter referred to as"LI") field 260 and E-field 265. LI field 260 is contained as aresult of the segmentation. The SN field 250 shows a 7-bit SN
which increases in monotone for each RLC PDU. This SN showsan order of RLC PDU230, 235 and 240. E-field 255 showswhether the following field is a data field, or the pair set of an LI
field and E-field, and its size is 1 bit. LI field 260 has a size of 7
bits or 15 bits based on the framing of the RLC. The segment of
RLC SDU225 contained in the RLC PDU shows that it is placed atdata field 270 of the RLC PDU. That is, LI field 260 is data field
270 of the RLC PDU, and shows the start and the end of RLC
SDU225. LI field 260 is capable of indicating whether the padding
was made. The value shown by LI field 260 is configured by byte,
and means the number of bytes from the RLC header to the point
at which the RLC SDU ends." (Paragraph [0007])c. "As mentioned above, the conventional method to indicate theposition of the last byte of the RLC SDU using an LI field isefficient, when dividing one RLC SDU into two or more RLC
PDUs or connecting two or more RLC SDUs to make up one RLC
PDU. However, the VoIP packet has a general feature wherein one
complete RLC SDU corresponds to only one RLC PDU, and RLC
62

SDUs without segmentation/concatenation/padding are frequently
generated. …Thus, if the size of the RLC PDU is definedaccording to the size of the RLC SDU most frequently generated,the majority of RLC SDUs are framed in the RLC PDU without
segmentation/concatenation/padding.
In
such
case,
the
conventional framing method is inefficient." (Paragraph [0011])"…In other words, for the VoIP communication system, themajority of RLC SDUs are not segmented or concatenated, and
one RLC PDU is comprised of one RLC SDU. In spite of this, as
for the existing RLC framing operation mode, at least two LI fields,
i.e., the LI field which shows the start of the RLC SDU, and the LI
field which shows the end of the RLC SDU, are always required
for the RLC PDU. The LI field which shows whether the data field
can be padded is also inserted if necessary. Therefore, when using
an RLC framing method based on the conventional VoIP
communication system, there was a problem of inefficient use oflimited radio resources due to the use of the unnecessary LI field."(Paragraph [0012])
d. "[Problem to be solved by the invention] Therefore, in order tosolve the problem with the conventional technology as mentioned
above, this invention aims to provide the method and apparatus forthe mobile communication system which supports packet service,decreasing the header size of a radio link control layer's Protocol
Data Unit (RLC PDU) and using radio resources efficiently."(Paragraph [0013])
e. "[Means for solving problem] In order to achieve the purpose of
the invention as mentioned above, the invention features a methodof transmitting data in a mobile communication system by the useof a pre-defined length indicator (LI), comprising: a stage ofreceiving a service data unit (SDU) from a higher layer anddetermining whether the SDU is included in one protocol data unit
(PDU); a stage of segmenting the SDU into a plurality of segments
according to the transmittable PDU size, if the SDU is notincluded in one PDU; a stage of configuring multiple PDUs
wherein headers of the PDUs include a sequence number (SN)field, at least a one-bit field indicating the presence of a length63

indicator (LI) field and said one LI field and wherein the data fieldof each PDU includes the aforementioned segments; and a stage inwhich the LI field of the PDU containing an intermediate segmentof the SDU in the data field is set to the pre-defined value
indicating the presence of the aforementioned intermediatesegment and the PDUs are sent to a receiver." (Paragraph [0014])
In addition, "the invention features an apparatus for transmitting
data in a mobile communication system by the use of a pre-defined
length indicator (LI), comprising: a transmission buffer forreceiving 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 forconstructing at least one PDU containing a serial number (SN)field and a one-bit field in a header, and said at least one segment
in a data field; a one-bit field setter for setting said at least one
one-bit field of the PDU to indicate the presence of at least one
subsequent LI field; an LI inserter for inserting the LI field after
the one-bit field of said at least PDU and setting the LI field of the
PDU containing an intermediate segment of the SDU to the value
indicating the presence of the intermediate segment, if the SDU is
not included in one PDU; and a transmitter for sending at least one
PDU received from the LI inserter to a receiver." (Paragraph[0016])
f. "[Effect of Invention] The invention has an effect of enabling theefficient use of limited radio resources by the use of the 1-bit
information showing the presence of a complete RLC SDU in thedata field of the RLC PDU, thereby eliminating the need to insert
the additional information for a start/end/padding of such RLC
SDU. In addition, the invention has the effect of enabling thesegmentation of the RLC SDU by including the LI field set to thepre-defined new LI value in the RLC PDU containing only anintermediate segment of the RLC SDU as mentioned above."(Paragraph [0018])
g. "…The RLC layer uses two framing systems based on thepreferable embodiment of the invention. In the first system, the64RLC SDU which has the size most frequently used carries out theframing of the RLC PDU without the use of an LI field. The
second system frames the different sizes of RLC SDUs by the useof an LI field. ...The first E-field is called "F-field" in order todistinguish it from other E-fields." (Paragraph [0020])
h. "Figure 4 shows the structure of the RLC PDU according to thepreferable embodiment of the invention." (Paragraph [0021])"Figure 5A shows the configuration of the RLC PDU, when the
RLC SDU corresponds to the RLC PDU without
segmentation/concatenation/padding according to the preferable
embodiment of the invention. In Figure 5A, a transmitter (namely,
the RLC layer of a transmitter) sets the value of the F-field to '0'
and inserts a complete RLC SDU into the RLC PDU data field,
when it is possible to frame one complete RLC SDU into one RLC
PDU without segmentation/concatenation/padding." (Paragraph[0022])"Figure 5B shows the configuration of the RLC PDU, when theRLCisframed
in
the
RLC
PDU
after
segmentation/concatenation/padding according to the preferable
embodiment of the invention. In Figure 5B, when thesegmentation/concatenation/padding is necessary for the framingof the RLC, a transmitter sets the F-field to '1' and configures the
RLC PDU comprised of the LI field necessary for thesegmentation/concatenation/padding and the padding. …The
following problems should be solved in order to use the existing
first E-field as the F-field. Usually, if the RLC PDU was thesegment of the RLC SDU, and when neither the start nor the endof the RLC SDU was included in the RLC PDU, an LI field did
not exist in the RLC PDU. In Figure 5A, when the RLC SDU isframed
into
one
RLC
PDU
without
segmentation/concatenation/padding, an LI field is not used. It isnecessary to show that the RLC PDU does not contain one
complete RLC SDU, nor does it contain either the start or the endof the RLC SDU." (Paragraph [0023])
i. "Figure 6A shows the situation where one RLC SDU is segmented
into two or more RLC PDUs based on the conventional RLC
65

framing technology. …If an LI field is not inserted into RLCPDU615, which does not include the start or the end of the RLC
SDU, a receiver cannot determine whether the segment containedin the data field of RLC PDU615 constitutes one complete RLC
SDU, or one RLC SDU after the combination with the prior or
following segment of the RLC PDU. Therefore, in the preferable
embodiment of the invention mentioned later, a pre-defined new
LI value is determined so as to show the presence of an RLC PDU
which includes neither the start nor the end of the RLC SDU(hereinafter referred to as an "intermediate PDU"). For example,'1111 110' is defined as a pre-defined new LI value. The RLC PDU
in which the pre-defined new LI value is inserted is recognized as
an intermediate RLC PDU." (Paragraph [0024])"Figure 6B shows the situation where one RLC SDU is segmented
into two or more RLC PDUs using the pre-defined LI, according
to the preferable embodiment of the invention. In Figure 6B, one
RLC SDU625 is segmented into three, namely, PDU 630, 635, 640
that are SN 'x', 'x+1', and 'x+2'. Then, the F-field of the first RLC
PDU630 is set to '1,' the pre-defined LI value of '1111 100' isinserted into the first RLC PDU630, showing that the first byte ofthis first RLC PDU630 data field corresponds to the first byte of
RLC SDU625. Since the second RLC PDU635 includes only theintermediate portion without including the start or the end of RLC
SDU625, the F-field is set as '0', and the pre-defined LI value '1111
110' is inserted into the second RLC PDU635, showing that the
aforementioned RLC PDU635 is an intermediate RLC PDU. In thethird RLC SDU640, LI value '0100 011' is contained, which showsthat it is the end of RLC SDU625, for example, the 35th byte of adata field, is shown." (Paragraph [0025])(B) 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 Patent Description as referred to in (A) above (including
each drawing), the court finds that the Patent Description discloses thefollowing. [i] In relation to the mobile communication system supporting
packet service (wireless data packet communication system), in order toprovide VoIP service, which is a communication technology for66

transmitting voice frames generated from a voice codec in the form ofvoice 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(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, and67

B.

thereby achieves the effect to enhance efficiency for the use of radio
resources.
Relationship between Invention 1 and alternative E-bit interpretation(A) The structure and effect of Constituent Feature D of Invention 1 whichreads "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" (A.(B)[iii] above) defines that,
under the alternative E-bit interpretation, if the E-bit contained in the firstoctet 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)B.(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 toindicate 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 thestructure of Constituent Feature F which reads "the LI field is set to thepre-defined value indicating the presence in the PDU of an intermediatesegment 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 thelast octet of the SDU, the 7-bit "length indicator" with value '111 1110' or
the 15-bit "length indicator" with value '111 1111 1111 1110' shall be used((1)B.(A)[iv] above).
On the basis of these findings, the court finds Invention 1 to be theimplementation of the alternative E-bit interpretation.
(B) a. In contrast, the plaintiff relies upon the following arguments to allege
that Technical Specification V6.9.0 contains no disclosure ofConstituent Feature B: Constituent Feature B of Invention 1 whichreads "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 statementof 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 than the length of available space in the UMD
PDU" means that the method as referred to therein aims at
determination of the necessity of segmentation of the SDU andwhether the size of the SDU is larger than the available space of the68

PDU (i.e. the size relation between the SDU and the PDU) and it istherefore different from the method to determine whether the SDU iscompletely contained in (completely matches) one PDU.
In spite of such allegation by the plaintiff, Subclause 9.2.2.5 ofTechnical Specification V6.9.0 indicates that, under the "alternative
E-bit interpretation," the E-bit '0' contained in the first 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)B.(A)[ii] above)). Thesestatements can be considered as defining the configuration of the E-bit
as mentioned above, depending on the results of determination as towhether the SDU is completely contained in (completely matches) thePDU (i.e. whether the SDU is a complete SDU, which is notsegmented, concatenated or padded) as a precondition for suchconfiguration. Therefore, these statements can be considered as
disclosing the structure 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 plaintiff to be groundless.
b. In addition, the plaintiff alleges that the structure of Constituent
Feature D differs from the alternative E-bit interpretation as set out inTechnical Specification V6.9.0, based on the following reasons: "thecase where the SDU is included in one PDU" as referred to inConstituent Feature D includes all of the situations [i] where the SDU
is padded, [ii] where the SDU is concatenated, and [iii] where theSDU is not segmented, concatenated or padded, and, accordingly, inorder to satisfy Constituent Feature D, 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 inTechnical Specification V6.9.0, the one-bit field is configured toindicate that the PDU contains a complete SDU only in the case [iii]above.
However, considering the wording of Constituent Feature D whichreads "setting the one-bit field to indicate that the PDU completely
69contains the SDU without segmentation/concatenation/padding in thedata field, if the SDU is included in one PDU," as well as thestatement of Paragraph [0022] and Figure 5A of the Patent Description,
it is understood that the case where "the SDU is included in one PDU"
as referred to in Constituent Feature D only means the case where "thePDU
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 withpadding. Therefore, the plaintiff's allegation is unacceptable as it fails
to satisfy the conditions precedent.
(3) Whether Products 2 and 4 fall within the technical scope of Invention 1
A. As already mentioned in (3)B.(A) of "Undisputed facts, etc.," Products 2 and 4
satisfy Constituent Features A and H of Invention 1.
Further, based on the findings that Products 2 and 4 comply with Technical
Specification V6.9.0 and have a structure to implement the functions based on
the alternative E-bit interpretation ((1)C. above), and that Invention 1 is theimplementation of the alternative E-bit interpretation ((2)B.(A) above), thecourt finds Products 2 and 4 to satisfy Constituent Features B to G of Invention
1.

B.

Based on the above, the court finds Products 2 and 4 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 plaintiff alleges that Products 2 and 4 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 plaintiff's allegation
is groundless as it fails to satisfy the conditions precedent.
(B) In addition, the plaintiff alleges that, for Products 2 and 4 to be considered
to fall within the technical scope of Invention 1, it is necessary to evidence
that these 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 of70

Invention 1.
However, as Products 2 and 4 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 plaintiff's allegation as mentioned above is unacceptable.
(4) SummaryA.

B.

As mentioned above, Products 1 and 3 do not fall within the technical scope ofInvention 1; whereas Products 2 and 4 fall within such technical scope. Further,
considering the facts that Invention 2 is the invention for the method of datatransmission 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 Products 1 and 3 does not fall within the technicalscope of Invention 2, but the structure of data transmission method of Products
2 and 4 falls within the technical scope of Invention 2.
As a consequence of A. above, the plaintiff's acts of import, sale, etc. of
Products 1 and 3 are not regarded to constitute infringement of the Patent

Right.
2. Issue 6 (abuse of right)
Next, the court would like to decide on the issue of acceptability of the plaintiff's
defense that the defendant's exercise of the right to seek damages based on the Patent
Right for Products 2 and 4 constitutes an abuse of right, considering the specific detailsof the instant case.
(1) Facts on which the decision is premised
Considering the totality of the non-disputed facts, evidence (Exhibits Ko No. 5, No.
6, No. 12, No. 13, No. 27 to No. 29, No. 32 to No. 37, No. 65, No. 85 to No. 87, No.
109 to No. 111, and Exhibits Otsu No. 36, No. 42 and No. 53 (including branchnumbers, if any)), and the entire import of oral arguments, the court finds thefollowing 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 such71

specifications 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
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:72

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
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 the73matter 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
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) (Exhibit Ko No. 16),
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
74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)""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:
・ To be granted licenses on fair, reasonable and non-discriminatory
terms and conditions in respect of a standard at least to manufacture,B.

sell, lease, repair, use and operate, (Clause 6.1)"
Background of the FRAND Declaration(A) On December 14, 1998, the defendant, 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") (Exhibit Ko No. 5).
(B) On May 4, 2005, the defendant 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 defendant 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, thedefendant requested "introduction of the alternative E-bit interpretation to
be optionally used in the RLM UM operation mode" and "introduction of75

a new 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." (Exhibit Ko
No. 85).
Thereafter, the abovementioned modification request was accepted. In
Technical Specification V6.4.0 of 3GPP standards released in June of2005 (Exhibit Ko No. 87), 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 sequencenumber (SN), in the case of the data transmission in unacknowledged
mode (UM)) was incorporated in the clause relating to "Extension bit (Ebit)" (Subclause 9.2.2.5) as the optional standard for the conventional
normal E-bit interpretation. Thus, the alternative E-bit interpretation has
become one of the standard technologies.
(D) The defendant filed the Patent Application on May 4, 2006, and obtained
the registration of establishment of the Patent Right on December 10,
2010.
(E) On August 7, 2007, the defendant, in accordance with ETSI IPR Policy
Clause 4.1, submitted to ETSI the document titled "Statement on IPR
Information and Licensing Declaration" (Exhibit Ko No. 13), notifyingthat the IPRs relating to the South Korean patent application number,which served as the basis of the priority claim for the Patent Application,and the international application number of the Patent Application(PCT/KR2006/001699) are or highly likely will be essential IPRs for the
UMTS standard (such as TS 25.322). In this document, the defendantmade an undertaking that it was prepared to grant an irrevocable licenseon the conditions complying with IPR 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 thedefendant in the U.S., alleging that the defendant had infringed its
IPRs relating to "iPhone" and "iPad" products.
76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 defendant, alleging that the plaintiff's act of
production, assignment, import, etc. of the Products constitutes direct
or indirect infringement of the Patent Right in relation to theInventions (Article 101, items (iv) and (v) of the Patent Act), filed apetition for an order for provisional disposition to seek an injunction
against the plaintiff's production, assignment, import, etc. of the
Products (hereinafter referred to as the "Petition for Provisional
Disposition"). The right sought to be preserved by this provisional
disposition was the right to seek an injunction under Article 102 of the
Patent Act.
Thereafter, on September 24, 2012, the defendant partially withdrew
the Petition for Provisional Disposition in relation to Products 1 and 3.
(C) a. Apple Inc. requested the defendant in the letter dated April 29,
2011 (Exhibit Ko No. 6-1), to provide clear explanation on[(Omitted)].
b. The defendant, in its letter dated May 13, 2011 (Exhibit Ko No.
6-3), invited Apple Inc. to propose concrete licensing conditions(e.g. the licensed patents, licensing period, availability ofcross-licensing of essential patents owned by Apple Inc.), andrequested the confidential treatment of future negotiations. Further,
the defendant, in its letter dated June 3, 2011 (Exhibit Ko No. 6-6),
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 defendant of [(Omitted)] in the letter
dated June 22, 2011 (Exhibit Ko No. 32).
Against these backgrounds, Apple Inc. and the defendant enteredinto a confidentiality agreement on July 20, 2011 (hereinafterreferredtoasthe"Apple-DefendantConfidentiality
Agreement")(Exhibit Ko No. 33).
(D) The defendant notified Apple Inc. in its letter dated July 25, 2011
(Exhibit Ko No. 29), that it was prepared to grant a worldwide
non-exclusive FRAND license for the UMTS essential patents(including pending patent applications) owned by the defendant at the77royalty rate of "[(Omitted)] _%" (hereinafter referred to as the"Defendant's Licensing Offer") and also that [(Omitted)].
In response to this, in the letter dated August 18, 2011 (Exhibit Ko No.
34-4), Apple Inc. expressed its opinions to the defendant that"[(Omitted)]," and asked the defendant to disclose information, in
accordance with the provisions of the Apple-Defendant Confidentiality
Agreement, to enable Apple Inc. to determine whether the Defendant's
Licensing Offer complied with the FRAND Terms, including theinformation on whether the royalty rate which the defendant requiredof Apple Inc. also applies to other licensees and the information on theessential patent license agreements between the defendant and otherlicensees.
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 defendant has
alleged in 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 defendant 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 defendant
may charge Apple Inc. would be 0.275% (5%×5.5%) at maximum.
[ii] Since the patent declared by the defendant as essential for the
UMTS 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 defendant is based on[(Omitted)], and such royalty rate far exceeds the figure explained in[i]. Therefore, the royalty rate is unreasonably high.
(E) The plaintiff filed this action on September 16, 2011.
(F) a. The defendant, in its letter dated January 31, 2012 (Exhibit Otsu
No. 36), expressed its opinions to Apple Inc. such as [(Omitted)]
and requested Apple Inc. to make a good-faith counterproposal if
dissatisfied with the Defendant's Licensing Offer.
b. Apple Inc., in its letter dated March 4, 2012 (Exhibit Ko No. 65-1),
78

made an offer for the execution of a license agreement to thedefendant, attaching a draft license agreement, to propose thelicensing conditions reflecting the results of analysis of the three
Japanese patents which the defendant alleges as essential for the
UMTS standard (i.e. Patent Nos. 4642898 (the Patent), 4299270
and 4291328). As stated in the draft agreement (Exhibit Ko No.
65-2), this proposal contained an offer to pay the royalty of[(Omitted)] _%.
In response to this offer, the defendant expressed its opinion toApple Inc. in its letter dated April 18, 2012 (Exhibit Otsu No. 42),that the abovementioned license agreement offer by Apple Inc. was
not a FRAND license agreement offer, because the compensationof [(Omitted)] _% royalty rate was too low and unreasonable, and[(Omitted)].
(G) a. In the letter dated September 1, 2012 (Exhibit Ko No. 109), Apple
Inc. informed the defendant that it was prepared to propose ascheme 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 defendant, in its letter dated September 7, 2012 (Exhibit Ko
No. 111), expressed its opinion to Apple Inc. that the letter fromApple Inc. dated September 1, 2012 (Exhibit Ko No. 109) was[(Omitted)], and proposed [(Omitted)].
c. Apple Inc., in its letter dated September 7, 2012 (Exhibit Ko No.
110), made a proposal to the defendant, presenting its basic policy
and calculation basis of the royalty 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 defendant may charge Apple
Inc. to be [(Omitted)] _% (USD[(Omitted)] per product unit), andthe royalty rate which Apple Inc. may charge the defendant to be[(Omitted)] _% (USD[(Omitted)] per product unit).
The letter of Apple Inc. (Exhibit Ko No. 110) includes the79

following statements: [i] [(Omitted)], as the basic policy of Apple
Inc. for calculation of the royalty 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 court case, the plaintiff, a Japanese juridical person, seeks confirmation thatthe defendant, a South Korean juridical person, is not entitled to claim against theplaintiff for damages on the ground of infringement of the Patent Right, in relation
to the plaintiff's acts of import, sale, etc. of the Products. As this court case has an
aspect of international litigation, a decision on the governing laws is necessary.
It is understood that the nature of the legal relationship for the right to seek damages
on the ground of infringement of the Patent Right is a tort. Therefore, the governing
law is decided in accordance with Article 17 of the Act on General Rules forApplication of Laws (hereinafter referred to as the "General Rules Act").
As for this case, considering the fact that the Products were imported and sold inJapan, and that the dispute relates to damage caused by infringement of the Patent
Right protected under the Patent Act of Japan, it should be understood that theJapanese laws are "the laws of the place where the result of the wrongful act
occurred" (Article 17 of the General Rules Act). Accordingly, the laws of Japan
apply to this case.
Based on the presumptions as mentioned above, the court hereby decides on theissue of whether the defendant's exercise of the right to seek damages against theplaintiff based on the Patent Right constitutes an abuse of right.
(3) Abuse of right
The plaintiff alleges that, taking into consideration the various circumstances,including that the defendant intentionally breached the obligation to timely disclose
the Patent, that the defendant's Petition for Provisional Disposition was a retaliatory
countermeasure, that the defendant 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
80

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 defendant constitute violation of the Antimonopoly Act,the defendant is restricted from exercising the right to seek damages against theplaintiff 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 the goodfaith principle to mutually provide material information and to conduct thenegotiation 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, the defendant, as amember of ETSI (European Telecommunications Standards Institute), which isthe standardization body that established 3GPP, notified ETSI in the documentof Exhibit Ko No. 13 that the IPR (intellectual property rights) pertaining to theinternational application number of the Patent Application is essential for the
UMTS standard (3GPP standards), and made a declaration that it was preparedto grant an irrevocable license for such essential patent in accordance with the
FRAND (i.e. fair, reasonable and non-discriminatory terms and conditions)licensing terms and conditions complying with ETSI IPR Policy Clause 6.1(FRAND Declaration). [ii] ETSI Guide on IPRs Clause 1.4 provides for themembers' obligation to "undertake to grant licenses on fair, reasonable andnon-discriminatory terms and conditions" (IPR Policy Clause 6.1), themembers' right "to be granted licenses on fair, reasonable andnon-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 of a standard at least to
manufacture, sell, lease, repair, use and operate" (IPR Policy Clause 6.1).
Considering [i] and [ii] above, as well as the entire import of oral arguments,
the court 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 defendant as essential for the UMTS
standard under the FRAND Declaration, the defendant has an obligation to
hold a faithful negotiation with such party for the execution of a FRAND
81

license agreement for the use of the UMTS standard.
Then, given that the defendant received a specific offer to obtain a FRAND
license for the Patent Right, the defendant and the offeror can be considered ashaving entered into the preparatory process for a FRAND license agreement.
Therefore, it is appropriate to consider that the parties are bound by anobligation under the good faith to mutually 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 defendant
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 (Exhibit Ko No. 65-1), madean offer to the defendant for a FRAND license agreement for the three
Japanese patents, including the Patent, declared by the defendant as essential
for the UMTS standard (See (1)C.(F)b. above). Therefore, it is appropriate toconsider that Apple Inc. and the defendant have entered into the preparatory
process for the execution of a contract and have become bound by anobligation under the good faith principle as mentioned above.
(B) In this regard, the defendant 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 be construed that, as aprecondition for the good-faith negotiation obligation, a prospective licensee
needs to make a "firm offer to receive a license" showing that such prospective
licensee seriously wishes to obtain a license, without challenging the validity ofthe patent to be licensed. [ii] The offer dated March 4, 2012, from Apple Inc. tothe defendant cannot be regarded as a "firm offer to receive a license," as Apple
Inc. challenged the validity of the defendant's patent and questioned whether
the products in question conflicts with the defendant's patent. [iii] In addition,in the abovementioned offer, an unreasonably low royalty rate of "[(Omitted)]_%" was proposed. This shows that Apple Inc. did not have a faithful intention
to obtain a license 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 defendant's such allegations to be groundless dueto 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 which82

made the FRAND Declaration and the prospective licensee have theobligation under the good-faith principle as mentioned in (A) above even if
the prospective licensee reserved its right to challenge the validity of thelicensed patent, as long as the contents of such offer are concrete enoughand presuppose the validity 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
(Exhibit Ko No. 65-1), 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 (Exhibit Ko No. 65-2). The contents of this offer clearly
indicate the intention of 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 notparticularly unreasonable, and in addition, the plaintiff challenged thevalidity of the Patent as a defense to the defendant's Petition for
Provisional Disposition, in which the defendant sought an injunction
against import, assignment, etc. of the Products by the plaintiff (thesubsidiary company of Apple Inc.) based on the Patent Right, and, further,
the case for this provisional disposition was still pending before the courtat the time when Apple Inc. made the aforementioned offer (from theentire import of oral arguments). Considering all of these circumstances, it
is not appropriate to 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 defendant's allegations [i] and [ii] to be
groundless.
b. 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 fromthe figure of the royalty rate that such rate is unreasonably low and does notsatisfy 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 that the aforementioned royalty rate took into consideration83

B.

the percentage of patents owned by the defendant to the entire patent family
declared as essential for the UMTS standard in all parts of the world((1)C.(E) above), as indicated by Apple Inc. in its letter dated August 18,
2011 (Exhibit Ko No. 34-4)). The court cannot find that Apple Inc. had nointention to enter into a license agreement under any condition different
from the royalty rate as mentioned above.
Therefore, the court finds the defendant's allegation [iii] to be groundless.
Next, the court hereby discusses the issue of whether the defendant breached
the obligation 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 oral arguments, the court finds the following facts. [i] The defendant,
after executing the confidentiality agreement dated July 20, 2011
(Apple-Defendant Confidentiality Agreement), notified Apple Inc. in its letter
dated July 25, 2011 (Exhibit Ko No. 29), that it was prepared to grant aworld-wide, non-exclusive FRAND license for the defendant's patent essential
for the UMTS standard (including pending patent applications) at the royalty
rate of "[(Omitted)] _%" (hereinafter referred to as the "Defendant's Licensing
Offer"). [(Omitted)]. However, the defendant did not explain the calculationbasis of the "[(Omitted)] _%" of the licensing terms and conditions. [ii] In theletter dated August 18, 2011 (Exhibit Ko No. 34-4), Apple Inc. expressed its
opinions to the defendant about the Defendant's Licensing Offer that the
royalty rate offered by the defendant was unreasonably high and not complying
with the FRAND Terms, because, among the entirety of the patent family(1889) declared as essential for the UMTS standard in all parts of the world,
the defendant only owns 103 of them, which represents only 5.5% (according
to the survey result of "Fairfield Resources International"), and considering this,the royalty rate which the defendant may charge Apple Inc. would be 0.275%(5%×5.5%) at maximum. In the same letter, Apple Inc. asked the defendant todisclose information, in accordance with the provisions of the Apple-DefendantConfidentiality Agreement, to enable Apple Inc. to determine whether the
Defendant's Licensing Offer was consistent with the FRAND Terms, including
information on whether the royalty rate which the defendant required of Apple
Inc. also applies to other licensees and information on the essential patent
license agreements between the defendant and other licensees. [iii] The
defendant, in its letter dated January 31, 2012 (Exhibit Otsu No. 36), expressed
its opinions to Apple Inc. such as [(Omitted)] and requested Apple Inc. to make84

a good-faith counterproposal if dissatisfied with the Defendant's Licensing
Offer. However, the defendant did not provide the calculation basis of theroyalty rate for the Defendant's Licensing Offer. [iv] Apple Inc., in its letter
dated March 4, 2012 (Exhibit Ko No. 65-1), made an offer to the defendant fora FRAND license agreement for the three Japanese patents which the defendant
alleges as essential for the UMTS standard, including the Patent, proposing to
pay a royalty rate of [(Omitted)] _%. [v] The defendant expressed its opinion toApple Inc. in its letter dated April 18, 2012 (Exhibit Otsu No. 42), that the offer
for a license agreement by Apple Inc. mentioned in [iv] above was not a licenseoffer 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 (Exhibit Ko No.
109), Apple Inc. informed the defendant that it was prepared to propose ascheme 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 (Exhibit Ko No. 110), made a proposal to the defendant,
presenting its basic policy and calculation basis of the royalty 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 theassumption that the maximum amount of royalty for the entire pool foressential patents for mobile device standard technologies shall be USD[(Omitted)] per product unit, Apple Inc. proposed the royalty rate which thedefendant may charge Apple Inc. to be [(Omitted)] _% (USD[(Omitted)] per
product unit), and the royalty rate which Apple Inc. may charge the defendant
to be [(Omitted)] _% (USD[(Omitted)] per product unit). [vii] The defendant,
in its letter dated September 7, 2012 (Exhibit Ko No. 111), expressed its
opinion that the letter from Apple Inc. referred to in [vi] above was [(Omitted)],and proposed [(Omitted)].
In addition to the aforementioned facts found by the court, considering that theevidence does not clearly indicate the defendant's response to the draft license
agreement that Apple Inc. proposed in its letter dated September 7, 2012, thefollowing facts are found. [i] In the process of licensing negotiation between
Apple Inc. and the defendant in relation to the Patent Right, the defendantmade an offer to Apple Inc. in its letter dated July 25, 2011, to grant aworld-wide, non-exclusive license for the defendant's patent essential for the85

UMTS standard (including pending patent applications) at the royalty rate of"[(Omitted)] _%" as a FRAND Term ("Defendant's Licensing Offer").
However, the defendant did not explain the calculation basis of such licensing
conditions. Thereafter, Apple Inc. asked the defendant to disclose information
to enable Apple Inc. to determine whether the Defendant's Licensing Offer wasconsistent with the FRAND Terms, such as information to confirm whether the
royalty rate which the defendant required of Apple Inc. also applies to otherlicensees, and information on the essential patent license agreements between
the defendant and other licensees. In spite of such request, the defendant did
not explain the calculation basis of such licensing conditions even at the timeof September 7, 2012. [ii] Apple Inc. made an offer for a FRAND license
agreement for the three Japanese patents which the defendant declared as
essential for the UMTS standard, including the Patent, proposing to pay aroyalty rate of [(Omitted)] _% in its letter dated March 4, 2012, and further
made a concrete licensing proposal, including cross-licensing, to the defendant,
presenting the basic policy and criteria for calculation of the royalty rate ofApple Inc. in its letter dated September 7, 2012. In spite of this, the defendant
only requested Apple Inc. to make a concrete counterproposal if dissatisfied
with the Defendant'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 thedefendant did not provide any information necessary for Apple Inc. todetermine whether the Defendant's Licensing Offer or offer of Apple, Inc. wascomplying with the FRAND Terms (e.g. information on the essential patent
license agreement between the defendant and other licensees) in spite of
repeated requests from Apple Inc., and did not suggest any counterproposal forthe licensing conditions presented by Apple Inc. Therefore, it is appropriate toconsider that the defendant breached its obligation under the good faithprinciple to provide material information to Apple Inc. and to conduct thenegotiation in a faithful manner in relation to the execution of a FRAND

C.

license agreement for the Patent declared as essential for the UMTS standard.
The defendant's allegations which contravene the aforementioned findings areunacceptable.
As discussed above, considering the totality [i] that the defendant breached its
obligation under the good faith principle to provide material information toApple Inc., the plaintiff's parent company, and to conduct the negotiation in a86

faithful 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; [ii] that, under suchcircumstances, as of the date of conclusion of the oral argument for this court
action, the defendant still maintains the Petition for Provisional Disposition
seeking an injunction against import, sale, etc. of Products 2 and 4 based on the
Patent Right; [iii] that the defendant 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 defendant's
modification request in relation to 3GPP specifications; and [iv] othercircumstances relating to the process of licensing negotiations for the Patent
Right between Apple Inc. and the defendant, the court finds that the defendant's
exercise of the right to seek damages against the plaintiff based on the Patent
Right for Products 2 and 4, without fulfilling its obligation under the good faithprinciple as mentioned above, is not allowed, as such exercise of the rightconstitutes an abuse of right.
3. Conclusion
Based on the foregoing, the court upholds the plaintiff's claim as it is reasonable,
and renders the judgment in the form of the main text.
Tokyo District Court, 46th Civil Division
Presiding Judge:
Ichiro Otaka
Judge:Aya Takahashi
Judge:
Masafumi Ueda

87

(Attachment)
List of Products
1.
2.
3.
4.

"iPhone 3GS"
"iPhone 4""iPad Wi-Fi+3G model""iPad 2 Wi-Fi+3G model"

88

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3GPP TS25.322 V6.9.0(Summary)

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Figures Attached to the Patent Description[Figure 1]

IP Network

Core Network93

[Figure 2C]
IP packet

Sequence number (SN)

Data field[Figure 3]

Data field[Figure 4]

Data part
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[Figure 5A][Figure 5B]

Data part
Data part
Padding[Figure 6A]

First segment

Intermediatesegment

Last segment[Figure 6B]

New pre-defined valueFirst segment

Intermediatesegment

Last segment95