Jacob Schindler

Back in August, Hawaii-based NPE GPNE saw a long US campaign against Apple come to an unsuccessful end, as the Court of Appeals for the Federal Circuit affirmed a lower court’s verdict in favour of the Cupertino company. But the licensing company appears to be doubling down on similar claims against Apple in China, making what its attorneys claim is the largest damage claim ever in a Chinese court. GPNE isn’t likely to be awarded that sort of money, but it seems like another sign that NPEs are becoming more and more assertive in this market.

IAM readers may recall GPNE’s conflict with Apple for a memorable rule instituted in the courtroom by Judge Lucy Koh during the district court jury trial. Judge Koh barred the defendants from referring to GPNE, which was founded by former Hawaiian Telecom engineer Gabriel Wong, as a ‘patent troll’, ‘privateer’, ‘pirate’, ‘bounty hunter’ or ‘bandit’ during the proceedings. Also forbidden were references to any ‘shakedown’, ‘stick-up’, ‘paper patent’, ‘corporate shell game’ or ‘playing the lawsuit lottery’. Less than an hour after winning the case, Apple gleefully took the opportunity to publicly label GPNE as a patent troll attempting to “extort money”.

GPNE’s Chinese assertion appears to have begun back in 2013 in the Shenzhen Intermediate People’s Court. The court’s database shows four lawsuits against Apple and associated companies at the trial stage. According to a report in China’s National Business Daily, the most recent hearing was in late November 2016; the same article also states that Apple has made three separate attempts to invalidate the asserted patent at SIPO’s Patent Reexamination Board, with all of these complaints being dismissed on appeal.

The new development here appears to be that GPNE has upwardly revised its damages claim to $130 million, which is apparently the largest request on record. It is hard to verify whether this is true, but it is certainly much more than the largest sum ever actually awarded, which was $48 million (subsequently reduced to $23 million). No one realistically expects a Chinese court to hand out that amount of money, but GPNE is clearly trying to enhance the threat already posed by a potential injunction in the heart of Apple’s manufacturing base (and potentially generate some media exposure, too).

GPNE's Chinese attorney, Wang Zhiming, dismissed the unfavourable verdicts in the US, saying there is substantial difference between the patent systems in the two countries. In fact, Wang said he believes that in the technology area at issue, China’s patent law offers stronger protection than the current US system - and given recent developments State-side that could well be true.

It seems clear that some of the bigger and better-known PIPCOs are paying more attention to China as a potential litigation venue, as evidenced by WiLAN’s lawsuit against Sony last November in Nanjing. But as litigation continues to decline in the US, it is worth wondering whether some of the smaller operations that account for much of the day-to-day assertion activity in the US could follow suit. The consensus among Chinese practitioners seems to be that court conditions here will not favour entities like GPNE, and that belief will soon be put to the test. Some years ago in Hong Kong, British expatriates were sometimes dismissively branded with the acronym “FILTH”: Failed in London? Try Hong Kong. It was pejorative, but what did the targets of the term care? They were doing very well indeed. One wonders whether the new trend for NPEs will be: Failed in Texas? Try China.