Apple $2.2 Billion Case Hinges on Two-Bit Issue

Photographer: Brendon Thorne/Bloomberg

Apple Inc. is involved in a lawsuit in Germany regarding its coding software used in wireless networks. Close

Apple Inc. is involved in a lawsuit in Germany regarding its coding software used in wireless networks.

Close
Open
Photographer: Brendon Thorne/Bloomberg

Apple Inc. is involved in a lawsuit in Germany regarding its coding software used in wireless networks.

Apple Inc. (AAPL)’s chances of defeating a 1.57 billion-euro ($2.2 billion) lawsuit in Germany depend on whether an IPCom GmbH patent protects a technology using one or three bits for coding software used in wireless networks.

IPCom will only win if it convinces the court the patent isn’t limited to technology using just one bit for coding information, Presiding Judge Holger Kircher said at a hearing in Mannheim, Germany, today. IPCom is relying on a patent for technology to decide what call gets priority on a mobile network when more than one is placed at the same time.

“One or three bits, that’s the key issue here,” said Kircher. “We will issue a separate ruling on this -- which means we won’t even touch the question today of what amount of damages would be warranted in case of an infringement finding.”

Patent holding company IPCom, based in Munich, has sued mobile-device makers globally over mobile technology it acquired from Robert Bosch GmbH in 2007 to collect license fees. In June, the company signed a global license agreement with Deutsche Telekom AG to end all litigation with the German phone company.

The patent in today’s case, called “100A” by IPCom, was struck down by the European Patent Office in 2012 after Apple, Nokia Oyj (NOK1V), HTC Corp. (2498), Ericsson AB and Vodafone Group Plc (VOD) contested it. IPCom appealed and was granted a rehearing. Last month, the European Patent Office upheld the intellectual property while narrowing its scope, Judge Kircher said.

Fresh Look

The patent’s new wording requires a fresh examination, he said. The judges may deviate form a 2011 ruling by the Mannheim court finding Nokia liable at a time when the patent still had a different scope, he said.

IPCom argues device makers and phone companies are using the technology in the 3G wireless standard. The company is seeking 1.57 billion euros in damages from Apple for its use in the iPhone in Germany alone. The sum sought for using the technology in iPad tablets hasn’t yet been specified.

“It doesn’t really matter how many bits are used, the patent is talking about one set of information, not about the number of bits used to code that information,” Bernhard Frohwitter, IPCom’s managing director, told the court.

A bit is the basic unit of information in computing and digital communications. The term bit is a contraction of “binary digit,” referring to the two values 1 and 0 usually used to code information.

Apple’s lawyer Wolrad Prinz zu Waldeck und Pyrmont argued the language of the patent is restricted to one bit while the 3G standard uses three bits. The court shouldn’t allow an interpretation that goes beyond the actual language the patent was granted for, he said.

The court set a Feb. 28 date for a ruling in today’s case.

Today’s case is: LG Mannheim, 2 O 52/12.

To contact the reporter on this story: Karin Matussek in Berlin at kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.