Crystal Clear Codec wins against strawman VerifyIP over decoding technology

In a dispute over a patent used to improve audio quality in mobile communications, Crystal Clear Codec has successfully defended itself in the Netherlands. The District Court of The Hague rejected the nullity action filed by VerifyIP, which acted as a strawman for an unknown client.

Granted by the EPO in 2020 and invented by Huawei,EP 2 940 685covers a method for predicting a bandwidth extension frequency band signal, and a decoding device. This is used to improve audio quality in mobile communications. US-based Crystal Clear Codec (CCC) own the patent. The company manages several patent families relevant to the EVS standard, related to the encoding of audio signals for 4G mobile communication.

VerifyIP claims invalidity

VerifyIP, acting as a strawman on behalf of an unknown client, claimed the patent invalid for lack of novelty. It argued that the Spectral Band Replication (SBR) technology of the MPEG-4 standard already disclosed the invention that is the subject of EP 685. As a further argument, the company claims that the patent also lacks inventive step. This is because, they argued, a person skilled in the art could arrive at the technology based on the published standards for audio coding.

However, the court took a different view and dismissed the nullity case (case ID: C/09/634073 HA ZA 22-721). The court did not admit the argument that EP 685 is not inventive in relation to prior art, because VerifyIP provided it too late.

Strawman up front

During the dispute, CCC argued that VerifyIP as strawman had no right to bring the nullity claim. But, since the court dismissed the suit, it did not decide on this matter.

Dutch company VerifylP was established in May 2022. Acting on behalf of an unknown prinicpal, its sole objective, according to its website, is “to provide anonymity to an organisation or company wishing to nullify a European patent before a patent court in Europe or oppose a granted patent before the EPO.”

While quite common in EPO oppositions, strawman claims in nullity suits are relatively rare. In the present case, one reason for a company using a strawman could be that EP 685 is an SEP. In disputes where a FRAND defence can be raised, the District Court of The Hague prohibits the “accelerated patent regime”.

This is where the court should reach a finding of infringement and invalidity within twelve months. Use of a strawman avoids a counterclaim for infringement in the same proceedings and thereby a FRAND defence. CCC was not able to file a parallel infringement suit, as the potentially infringing party is unknown.

The dispute about the validity of EP 685 could therefore take place under the accelerated regime. It is not yet known whether VerifyIP will appeal the ruling.