22-04-20 Thales Acb

Case: 20-11032 Document: 00516288093 Page: 1 Date Filed: 04/20/2022
No. 20-11032
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT
CONTINENTAL AUTOMOTIVE SYSTEMS, INCORPORATED, A

DELAWARE CORPORATION,
Plaintiff-Appellant,
v.
AVANCI, L.L.C., A DELAWARE CORPORATION; AVANCI

PLATFORM INTERNATIONAL LIMITED, AN IRISH COMPANY;
NOKIA CORPORATION, A FINNISH CORPORATION; NOKIA OF
AMERICA CORPORATION, A DELAWARE CORPORATION; NOKIA
SOLUTIONS AND NETWORKS U.S., L.L.C., A DELAWARE
CORPORATION; NOKIA SOLUTIONS AND NETWORKS OY, A
FINNISH CORPORATION; CONVERSANT WIRELESS LICENSING
SARL, A LUXEMBOURG CORPRATION; OPTIS UP HOLDINGS,
L.L.C., A DELAWARE CORPORATION; OPTIS CELLULAR
TECHNOLOGY, L.L.C., A DELAWARE CORPORATION; OPTIS
WIRELESS TECHNOLOGY, L.L.C., A DELAWARE CORPORATION;
SHARP CORPORATION, A JAPANESE CORPORATION,
Defendants-Appellees.
On Appeal from the United States District Court for the

Northern District of Texas, No. 3:19-cv-02933
Hon. Barbara M.G. Lynn
MOTION FOR LEAVE TO FILE BRIEF OF AMICUS

CURIAE THALES IN SUPPORT OF PLAINTIFF-APPELLANT’S
PETITION FOR REHEARING EN BANC
(Counsel Listed on Inside Cover)

Craig M. Reiser Michael L. Keeley

Counsel of Record Paul Zeineddin
Denise Plunkett Michael O’Mara
Christopher Erickson AXINN, VELTROP &
AXINN, VELTROP & HARKRIDER LLP
HARKRIDER LLP 1901 L Street NW
114 West 47th Street Washington, DC 20036
New York, NY 10036
(212) 728-2218
creiser@axinn.com
Counsel for Thales DIS AIS Deutschland GmbH and

Thales DIS AIS USA LLC
SUPPLEMENTAL CERTIFICATE OF INTERESTED PERSONS
No. 20-11032, Continental Automotive Systems v. Avanci
The undersigned counsel of record certifies that the following
listed persons and entities as described in the fourth sentence of Rule
28.2.1 have an interest in the outcome of this case. These
representations are made in order that the judges of this court may
evaluate possible disqualification or recusal.
Plaintiff-Appellant Plaintiff-Appellant’s Counsel
Continental Automotive Systems, Matthew Holder

Inc. Jennifer Ayers
Martin Bader
Stephen Sandor Korniczky
Michael Scarborough
Mona Solouki
Karin Dougan Vogel
SHEPPARD MULLIN RICHTER
& HAMPTON, L.L.P.
Defendants-Appellants Defendants-Appellants’
Counsel
Avanci, L.L.C. and Avanci Jeffrey L. Kessler

Platform International Limited Aldo A. Badini
Patrick S. Opdyke
Susannah P. Torpey
WINSTON & STRAWN, L.L.P.
Nokia Corporation; Nokia of Jeffrey A. Lamken

America Corporation; Nokia Lauren F. Dayton
Solutions and Networks U.S., Eugene Alexis Sokoloff
L.L.C.; Nokia Solutions and Lauren Marguerite Weinstein
Networks OY MOLOLAMKEN, L.L.P.
Mark Anthony McCarty

Matthew Richardson
Theodore E. Stevenson, III
Andrew Jacob Tuck
ALSTON & BIRD, L.L.P.
Optis Up Holdings, L.L.C.; Optis Jason G. Sheasby

Cellular Technology, L.L.C.; Optis Hong Annita Zhong
Wireless Technology, L.L.C. IRELL & MANELLA, L.L.P.
Eric S. Tautfest
GRAY REED
Sharp Corporation Theodore J. Angelis

K & L GATES, L.L.P.
Amici Curiae in Support of Counsel for Amici Curiae

Plaintiff-Appellant
Fair Standards Alliance A.S.B.L. Ian Simmons

Brian Quinn
Scott Schaeffer
O'MELVENY & MYERS, L.L.P.
App Association Amanda Tessar

PERKINS COIE, L.L.P.
American Honda Motor Company, Nicole A. Saharsky

Incorporated MAYER BROWN, L.L.P.
ii
Tesla, Incorporated Nicole A. Saharsky

MAYER BROWN, L.L.P.
U-Blox America, Incorporated Nicole A. Saharsky

MAYER BROWN, L.L.P.
Apple, Incorporated Joseph J. Mueller

WILMER CUTLER PICKERING
HALE AND DORR, L.L.P.
MPEG LA, L.L.C. John D. Holden

WINDELS MARX LANE &
MITTENDORF, L.L.P.
Thales DIS AIS Deutschland Craig M. Reiser

GmbH and Thales DIS AIS USA Paul Zeineddin
L.L.C. Denise Plunkett
Michael L. Keeley
Thales DIS AIS USA, LLC is a Michael O’Mara
wholly-owned subsidiary of Thales Christopher Erickson
DIS AIS Deutschland GmbH. AXINN, VELTROP &
Thales DIS AIS Deutschland HARKRIDER LLP
GmbH is a wholly-owned
subsidiary of Gemalto B.V.
Gemalto B.V. is a wholly-owned
subsidiary of Thales SA, a publicly
traded company.
Amici Curiae in Support of Counsel for Amici Curiae

Defendants-Appellees
InterDigital, Incorporated Stephen Akerley

INTERDIGITAL,
INCORPORATED
iii
Dated: April 20, 2022 Respectfully submitted,
/s/ Craig M. Reiser

_________________________________________
Craig M. Reiser
Attorney of Record for Amicus

Curiae Thales DIS AIS
Deutschland GmbH and Thales
DIS AIS USA L.L.C.
iv
MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF
Thales DIS AIS Deutschland GmbH and Thales DIS AIS USA
LLC (together, “Thales”) respectfully request leave to file the attached
amicus curiae brief in support of the Petition for Rehearing En Banc of
Plaintff-Appellant Continental Automotive Systems, Inc.’s
(“Continental”). 1
Federal Rule of Appellate Procedure 29(b) allows the filing of an
amicus brief in support of an en banc rehearing with the Court’s leave.
To obtain the Court’s leave the motion must state “(A) the movant’s
interest; and (B) the reason why an amicus brief is desirable and why
the matters asserted are relevant to the disposition of the case.” Fed. R.
App. P. 29(a)(3).
Thales is an industry leader in the field of machine-to-machine
(“M2M”) communications. M2M communication is transforming a
1
Plaintiff-Appellant Continental Automotive Systems, Inc. and Defendant-Appellee
Avanci, L.L.C. consent to this motion. Defendants-Appellees Optis Up Holdings,
L.L.C., Optis Cellular Technology, L.L.C., Optis Wireless Technology, L.L.C., and
Sharp Corporation do not oppose this motion. The remaining Defendant-Appellees
were contacted by counsel for Thales, but did not indicate their consent or
opposition.
range of industries, including healthcare, retail services, smart energy,
transportation, logistics, and automotives.
Thales produces wireless network access modules that enable
M2M communications. These modules are compatible with various
mobile communication standards promulgated by the European
Telecommunications Standards Institute (“ETSI”), a Standard Setting
Organization (“SSO”). Patent owners self-declare patents as potentially
“essential” (“Standard Essential Patents” or “SEPs”) to these and other
standards meaning that the standards could not be implemented
without using technology covered by the patents. To offset the potential
abuse of market power resulting from the inclusion of a patent in a
standard, SSOs require SEP-holders to commit to license their SEPs to
would-be implementers on fair, reasonable, and non-discriminatory
terms (“FRAND”). See Op. 3.
The Fifth Circuit panel decision will reach far beyond the parties
at issue. The decision permits SEP-holders to abandon their FRAND
obligations to many implementers and abuse the market power derived
from the inclusion of their patents in a standard. This will hurt mid-
level component manufacturers like Thales that implement
2
standardized technologies and the end-consumers of products
incorporating these components.
Thales has years of experience negotiating licensing agreements
with SEP-holders. In these negotiations, SEP-holders have attempted
to abuse their market power by, inter alia, offering supra-FRAND
terms, refusing to offer licenses, or even seeking exclusion of Thales’
products from the United States. 2 Thales therefore understands how
this decision will cause confusion and uncertainty for mid-level
manufacturers and ultimately allow SEP-holders to seek supra-FRAND
royalties and other one-sided terms—contravening the commitments
SEP-holders make to all would-be implementers of a standard. See
FAC ¶¶ 77-85. Ultimately, the decision will result in decreased
innovation among manufacturers and increased costs for consumers in
the M2M communication space and other sectors on the forefront of
technological development.
The panel decision fails to analyze the terms of the agreements
between SSOs and SEP-holders, let alone how the SSOs sought to
2
See Certain UMTS and LTE Cellular Communications Modules & Products
Containing the Same, No. 337-TA-1240 (ITC Apr. 1, 2022) (Initial Determination).
3
balance SEP-holders’ and implementers’ interests through these
agreements. See Op. 10-11. The panel thus erroneously concluded that
SEP-holders’ commitments only run toward a sub-set of implementers.
See id. Thales’ amicus brief demonstrates why the Fifth Circuit panel’s
understanding of SEP-holders’ obligations is flawed, the harm and
confusion it will cause, and why a rehearing is necessary.
CONCLUSION
For the foregoing reasons, Thales respectfully requests that the
Court grant this motion for leave to file the attached amicus curiae brief
in support of Plaintiff-Appellant Continental’s Petition for Rehearing
En Banc.
/s/ Craig M. Reiser

_________________________________________
Craig M. Reiser
Counsel of Record
Denise Plunkett
Christopher Erickson
AXINN, VELTROP &
HARKRIDER LLP
114 West 47th Street
New York, NY 10036
(212) 728-2218
creiser@axinn.com
4
Michael L. Keeley
Paul Zeineddin
Michael O’Mara
AXINN, VELTROP &
HARKRIDER LLP
1901 L Street NW
Washington, DC 20036
Counsel for Thales DIS AIS

DIS AIS USA LLC
5
CERTIFICATE OF COMPLIANCE
Pursuant to Federal Rules of Appellate Procedure 32(g),
undersigned counsel certifies that this brief:
(i) Complies with the type-volume limitation of Rule 27(d)(2)
because it contains 602 words, including footnotes and
excluding the parts of the brief exempted by Rule 32(f); and
(ii) complies with the typeface requirements of Rule 32(a)(5) and
the type style requirements of Rule 32(a)(6) because it has
been prepared using Microsoft Office Word 2016 and is set in
Century Schoolbook font in a size equivalent to 14 points or
larger.
Dated: April 20, 2022 /s/ Craig M. Reiser

_________________________________________
Craig M. Reiser
CERTIFICATE OF SERVICE
I hereby certify that on April 20, 2022, I electronically filed the
foregoing with the Clerk of the Court for the United States Court of
Appeals for the Fifth Circuit by using the appellate CM/ECF system.
/s/ Craig M. Reiser

_________________________________________
Craig M. Reiser
No. 20-11032
IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT
CONTINENTAL AUTOMOTIVE SYSTEMS, INCORPORATED, A

DELAWARE CORPORATION,
Plaintiff-Appellant,
v.
AVANCI, L.L.C., A DELAWARE CORPORATION; AVANCI

PLATFORM INTERNATIONAL LIMITED, AN IRISH COMPANY;
NOKIA CORPORATION, A FINNISH CORPORATION; NOKIA OF
AMERICA CORPORATION, A DELAWARE CORPORATION; NOKIA
SOLUTIONS AND NETWORKS U.S., L.L.C., A DELAWARE
CORPORATION; NOKIA SOLUTIONS AND NETWORKS OY, A
FINNISH CORPORATION; CONVERSANT WIRELESS LICENSING
SARL, A LUXEMBOURG CORPRATION; OPTIS UP HOLDINGS,
L.L.C., A DELAWARE CORPORATION; OPTIS CELLULAR
TECHNOLOGY, L.L.C., A DELAWARE CORPORATION; OPTIS
WIRELESS TECHNOLOGY, L.L.C., A DELAWARE CORPORATION;
SHARP CORPORATION, A JAPANESE CORPORATION,
Defendants-Appellees.
On Appeal from the United States District Court for the

Northern District of Texas, No. 3:19-cv-02933
Hon. Barbara M.G. Lynn
BRIEF OF AMICUS CURIAE THALES IN

SUPPORT OF PLAINTIFF-APPELLANT’S PETITION
FOR REHEARING EN BANC
(Counsel Listed on Inside Cover)

Craig M. Reiser Michael L. Keeley

Counsel of Record Paul Zeineddin
Denise Plunkett Michael O’Mara
Christopher Erickson AXINN, VELTROP &
AXINN, VELTROP & HARKRIDER LLP
HARKRIDER LLP 1901 L Street NW
114 West 47th Street Washington, DC 20036
New York, NY 10036
(212) 728-2218
creiser@axinn.com
Counsel for Thales DIS AIS Deutschland GmbH and

Thales DIS AIS USA LLC
SUPPLEMENTAL CERTIFICATE OF INTERESTED PERSONS
No. 20-11032, Continental Automotive Systems v. Avanci
Pursuant to Fifth Circuit Rules 28.2.1 and 29.2, the undersigned
counsel of record for amicus curiae certifies that this supplemental
statement of interested parties discloses all those with an interest in
the amicus brief. These representations are made to permit the judges
of this Court to evaluate possible disqualification or recusal.
Amicus Curiae on this Brief
Thales DIS AIS Deutschland GmbH and Thales DIS AIS USA LLC,
amicus curiae. Thales DIS AIS USA, LLC is a wholly-owned subsidiary
of Thales DIS AIS Deutschland GmbH. Thales DIS AIS Deutschland
GmbH is a wholly-owned subsidiary of Gemalto B.V. Gemalto B.V. is a
wholly-owned subsidiary of Thales SA, a publicly traded company.
Counsel for Amicus Curiae
Craig M. Reiser, Denise Plunkett, Christopher Erickson, Michael L.

Keeley, Paul Zeineddin, Michael O’Mara of Axinn, Veltrop & Harkrider
on behalf of amicus curiae Thales DIS AIS Deutschland GmbH and
Thales DIS AIS USA LLC.

_________________________________________
Craig M. Reiser
TABLE OF CONTENTS
INTEREST OF THE AMICUS CURIAE ................................................... 1
SUMMARY OF ARGUMENT .................................................................... 3
ARGUMENT ............................................................................................... 4
I. REHEARING EN BANC IS APPROPRIATE ......................... 4
The panel decision contravenes established law, which

does not categorically limit which implementers can
enforce SEP-holders’ obligations to SSOs ...................... 4
The panel decision upsets the balance of the

standardized technologies ecosystem, which is critical
to ensuring the development of innovative products .... 6
CONCLUSION ......................................................................................... 12
ii
TABLE OF AUTHORITIES
Page(s)
Cases
Broadcom Corp. v. Qualcomm Inc.,

501 F.3d 297 (3d Cir. 2007) ................................................................... 8
Ericsson, Inc. v. D-Link Sys., Inc.,

773 F.3d 1201 (Fed. Cir. 2014) .......................................................... 8, 9
HTC Corp. v. Telefonaktiebolaget LM Ericsson,

12 F.4th 476 (5th Cir. 2021) .................................................................. 4
Huawei Techs. Co. v. T-Mobile US, Inc.,

No. 16-CV-00052, 2017 WL 3954108
(E.D. Tex. Aug. 29, 2017) ....................................................................... 8
Koninklijke Philips N.V. v. Thales DIS AIS USA, LLC,

No. 20-01713 (D. Del. filed Dec. 17, 2020) .......................................... 10
Microsoft Corp. v. Motorola, Inc.,

795 F.3d 1024 (9th Cir. 2015) ................................................................ 5
TCL Commc’n Tech. Holdings Ltd. v. Telefonaktiebolaget LM

Ericsson, 943 F.3d 1360 (Fed. Cir. 2019),
cert. denied, 141 S. Ct. 239 (2020) ......................................................... 5
Statutes
Fed. R. App. P. 29(a)(4)(E) ......................................................................... 1
Fed. R. App. P. 35(a) ................................................................................... 4
Other Authorities
Analysis of Proposed Consent to Aid Public Comment,

Motorola Mobility LLC and Google Inc., FTC File No. 121-
0120 (Jan 3, 2013) ................................................................................ 10
iii
Certain UMTS and LTE Cellular Communications Modules

& Products Containing the Same, No. 337-TA-1240 (ITC
Apr. 1, 2022) (Initial Determination) .................................................. 10
ETSI, Rules of Procedure: Annex 6: ETSI Intellectual

Property Rights Policy § 12 (Dec. 1, 2021) .................................... 5-6, 7
Jacob Morgan, A Simple Explanation of ‘The Internet of

Things,’ Forbes (May 13, 2014) ............................................................. 1
Jorge Contreras, Much Ado About Holdup, 2019 U. Ill. L.

Rev. 875 (2019) ....................................................................................... 8
Knud Lasse Lueth, State of the IoT 2020: 12 billion IoT

connections, surpassing non-IoT for the first time, IoT
Analytics (Nov. 19, 2020) ....................................................................... 7
Singh, R. P., Javaid, M., Haleem, A., & Suman, R., Internet
of things (IoT) applications to fight against COVID-19
pandemic, Diabetes & metabolic syndrome, 14(4), 521–
524 (2020) ............................................................................................... 7
Third Party United States Federal Trade Commission’s

Statement on the Public Interest, Certain Gaming and
Entertainment Consoles, Related Software, and
Components Thereof, Inv. No. 337-TA-752, 2012 WL
7681645 (June 6, 2012) .......................................................................... 8
Unwired Planet v. Huawei [2017] EWHC 711 (Pat) (UK) ....................... 5
iv
INTEREST OF THE AMICUS CURIAE 1
The field of machine-to-machine (“M2M”) communications has
enabled us to connect almost any device with an on-and-off switch to not
only the Internet, but to other devices, giving rise to the rapidly-
expanding “Internet of Things” (“IoT”). 2 IoT devices span a wide range
of industries, from cellphones and coffee makers, to home appliances
and wearable fitness devices, and even airplane engines and oil rig
drills.
Underlying this M2M connectivity are modern interoperability
standards, like 5G. Such standards not only allow products to be
designed that will be compatible with each other, but have enabled the
development of “smart cities”—helping us to reduce waste and use
energy efficiently. They facilitate the technologies that can link your
calendar, your car, traffic monitoring services, and your phone—so you
know what time to leave for a meeting and the best route to take. They
1 Pursuant to Fed. R. App. P. 29(a)(4)(E), amicus affirms that no counsel for a party
authored this brief in whole or in part and that no person other than amicus has
made any monetary contributions intended to fund the preparation or submission of
this brief. Amicus has requested leave of this Court to file this brief.
2 See Jacob Morgan, A Simple Explanation of ‘The Internet of Things,’ Forbes (May
13, 2014), https://tinyurl.com/yawb95ja.

have helped to promote economic growth and development, and the
creation of products that improve our daily lives.
Amicus curiae Thales DIS AIS Deutschland GmbH and Thales
DIS AIS USA LLC (together, “Thales”) is an industry leader in the
M2M field. Thales produces wireless network access modules that
enable M2M communications. Thales’ modules are compatible with the
3G UMTS, 4G/LTE and 5G mobile communication standards
promulgated by the European Telecommunications Standards Institute
(“ETSI”), a Standard Setting Organization (“SSO”). SSOs like ETSI
bring together industry participants to create technical standards for
particular technologies that facilitate interoperability. Companies like
Thales that seek to implement one or more of these standards may need
to license tens of thousands of patents that are self-declared as
“essential” to the standard.
Thales has attempted in good faith to negotiate licenses for these
patents with the relevant SEP-holders, but has been rebuffed at times
with licensing offers that are not fair, reasonable, and non-
discriminatory (“FRAND”). In other cases, the SEP-holder has simply
refused to make an offer to Thales, in direct contravention of its
2
FRAND obligations. One remedy for an implementer in this situation
is to bring a lawsuit against the relevant SEP-holder to enforce the
SEP-holder’s obligations under the relevant standard. The Fifth Circuit
panel’s decision, if left to stand, would remove this option for many
implementers and would also upend the balance between implementers
and SEP-holders established by the Intellectual Property Rights (“IPR”)
policies of various SSOs.
Thales therefore has a strong interest in this Court’s en banc
review, and reversal, of the Fifth Circuit panel’s decision.
SUMMARY OF ARGUMENT
In concluding that only certain implementers are third-party
beneficiaries to SEP-holders’ agreements with SSOs, the panel decision
created intra- and inter-circuit splits, which are appropriate to resolve
en banc. The panel decision thus departed from the prior decisions of
this Court and other courts, and did so based on a flawed analysis of the
SSO agreements at issue. En banc rehearing also is appropriate
because the balancing of interests between SEP-holders and licensees is
tremendously important for encouraging the development of 21st-
century technologies, such as those relying on M2M communications.
3
The panel decision, if left to stand, would disrupt the carefully crafted
balance between SEP-holders and implementers prescribed by SSOs
and, consequently, is likely to harm consumers and innovation.
ARGUMENT
I. REHEARING EN BANC IS APPROPRIATE
En banc rehearing is appropriate where the rehearing is
“necessary to secure or maintain uniformity of the court's decisions” or
where there is a “question of exceptional importance.” Fed. R. App. P.
35(a). Both of these elements are present here.
The panel decision contravenes established law,

which does not categorically limit which
implementers can enforce SEP-holders’
obligations to SSOs
As Continental notes, this Circuit has unambiguously defined
which entities are third-party beneficiaries to agreements between
SEP-holders and SSOs. “Companies seeking to license under [FRAND]
terms become third-party beneficiaries of the contract between the
standard-essential patent holder and the standard setting
organization.” HTC Corp. v. Telefonaktiebolaget LM Ericsson, 12 F.4th
476 , 481 (5th Cir. 2021) (emphasis added). The Fifth Circuit panel
4
therefore erred by concluding that only some would-be licensees are
third-party beneficiaries to those contracts. See Op. 10-11.
The panel decision cites no court decision that requires the panel’s
conclusion. This is not surprising, because other courts have
consistently described the agreements between SEP-holders and SSOs
as providing rights to implementers, without limitation. See, e.g., TCL
Commc’n Tech. Holdings Ltd. v. Telefonaktiebolaget LM Ericsson, 943
F.3d 1360, 1364 (Fed. Cir. 2019), cert. denied, 141 S. Ct. 239 (2020)
(concluding that “implementers of ETSI standards,” without limitation,
are third-party beneficiaries of the ETSI agreement, which is “intended
to benefit implementers of ETSI standards”); Microsoft Corp. v.
Motorola, Inc., 795 F.3d 1024, 1033 (9th Cir. 2015) (“Microsoft—as a
standard-user—can enforce these contracts as a third-party beneficiary”
(emphasis added)); see also Unwired Planet v. Huawei [2017] EWHC
711 (Pat) (UK), ¶¶ 98-146 (holding, under French law, that the ETSI
agreement is enforceable by “person[s] wishing to implement the
standard,” without limitation). 3
3The interpretation of the ETSI IPR Policy is governed by French law. See ETSI,
Rules of Procedure: Annex 6: ETSI Intellectual Property Rights Policy (hereinafter
5
The Fifth Circuit panel’s decision is devoid of any analysis as to
why, based on the actual terms of ETSI’s IPR policy (or other SSOs’
polices), Continental is not an intended beneficiary. See Op. 11-12; see
also FAC ¶¶ 77-85. The Fifth Circuit panel did not address, much less
justify, the resulting inconsistency between the rule it announced and
the ETSI IPR policy at issue—which does not provide different rights to
implementers depending on whether the implementer competes with
the licensing SEP-holder. See Op. 11-12; ETSI IPR Policy.
The Fifth Circuit should grant rehearing en banc to reconcile
these intra- and inter-circuit splits and to correct the panel’s
unsupported interpretation of the ETSI IPR policy.
The panel decision upsets the balance of the

standardized technologies ecosystem, which is
critical to ensuring the development of
innovative products
The impact of the panel’s decision is not limited to the parties or
even the industries in this case. To the contrary, the panel decision, if
left to stand, would be a sea change for standardized technologies like
M2M communications, upending the deliberate balance reflected in
“ETSI IPR Policy”) § 12 (Dec. 1, 2021), https://www.etsi.org/images/files/IPR/etsi-

ipr-policy.pdf.
6
many SSO policies, including ETSI’s. 4 This will harm consumers and
innovation.
The world economy has become dependent upon M2M
communication technology. The number of IoT connected devices (over
10 billion globally) recently exceeded the number of non-IoT-connected
devices. 5 Products using M2M communications are now ubiquitous in
myriad critical sectors of the economy. For example, Thales’ wireless
modules are components in respirators and other medical devices,
smart energy meters, autonomous vehicles, global positioning systems,
and more. 6 M2M communications also have been heralded in the fight
against COVID-19. 7 In short, M2M communications have become an
essential part of our society and economy globally.
4 See, e.g., ETSI IPR Policy § 3.1 (“[T]he 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.”).
5 Knud Lasse Lueth, State of the IoT 2020: 12 billion IoT connections, surpassing
non-IoT for the first time, IoT Analytics (Nov. 19, 2020), https://iot-
analytics.com/state-of-the-iot-2020-12-billion-iot-connections-surpassing-non-iot-for-
the-first-time.
6 See generally Thales Markets,
https://www.thalesgroup.com/en/worldwide/activities (last visited Apr. 20, 2022).

7 Singh, R. P., Javaid, M., Haleem, A., & Suman, R., Internet of things (IoT)
applications to fight against COVID-19 pandemic, Diabetes & Metabolic Syndrome,

14(4), 521–524 (2020), https://doi.org/10.1016/j.dsx.2020.04.041.
7
The Fifth Circuit panel’s decision would impede innovation in
M2M technologies by increasing the likelihood of, and unfair leverage
resulting from, patent hold-up. Patent hold-up occurs when SEP-
holders negotiate excessive royalties or other one-sided terms based on
the market power resulting from the inclusion of their self-declared
SEPs in a technological standard. See Op. 3 (citing Ericsson, Inc. v. D-
Link Sys., Inc., 773 F.3d 1201, 1209 (Fed. Cir. 2014)); Broadcom Corp.
v. Qualcomm Inc., 501 F.3d 297, 310-314 (3d Cir. 2007). Patent hold-up
can result in higher prices for end consumers and reduce innovation. 8
The panel decision encourages hold-up because it releases SEP-
holders from any FRAND obligation to certain implementers (i.e., non-
SSO members that do not compete with the licensing SEP-holder) as
those implementers will no longer be able to enforce the SEP-holders’
FRAND obligations. See Huawei Techs. Co. v. T-Mobile US, Inc., No.
16-CV-00052, 2017 WL 3954108, at *4 (E.D. Tex. Aug. 29, 2017), report
and recommendation adopted, No. 16-CV-00052, 2017 WL 3927177
8See Jorge Contreras, Much Ado About Holdup, 2019 U. Ill. L. Rev. 875, 883 (2019);
Third Party United States Federal Trade Commission’s Statement on the Public
Interest, Certain Gaming and Entertainment Consoles, Related Software, and
Components Thereof, Inv. No. 337-TA-752, 2012 WL 7681645, at *1-2 (June 6,
2012).
8
(E.D. Tex. Sept. 6, 2017) (crediting expert testimony that “there would
be little if any remedy for a[n] [SSO] member's noncompliance” if non-
members of an SSO could not enforce SSO obligations). In the M2M
communications space, this likely would lead to higher prices for
products on which consumers are increasingly reliant.
Moreover, the panel’s ruling stands to impede licensing
negotiations that allow implementers of standardized technologies, like
5G, to apply the technology in innovative settings, such as M2M
communications. The royalty rate is often a sticking point in these
licensing negotiations between SEP-holders and implementers, and
existing licenses can serve as an appropriate benchmark for
determining whether a royalty rate is FRAND. See D-Link, 773 F.3d at
1227-28. The panel decision, however, splits implementers into two
camps: those entitled to FRAND terms (i.e., SSO members and
implementers that compete with the licensing SEP-holder) and those
that are not. License negotiations would become more difficult as
implementers and SEP-holders would argue over, for example, whether
a prior licensing agreement involved an implementer who competed
with the licensing SEP-holder. There also would be an increased risk
9
that a license with a supra-FRAND royalty rate would be proffered as
the benchmark for a subsequent license.
The panel decision creates particular confusion and uncertainty
for component manufactures like Thales that are in the middle of the
supply chain. The panel, in holding Continental had not suffered an
injury-in-fact, stated that Continental had not been denied property to
which it is entitled because it “does not need to personally own SEP
licenses to operate its business.” Op. 12.
But the panel decision fails to recognize that without a license,
mid-chain manufacturers like Thales are often subject to lawsuits by
SEP-holders (including Avanci members). In fact, an SEP-holder and
Avanci member recently brought parallel actions against Thales, in
federal court and in the International Trade Commission, 9 seeking an
exclusion order and other relief in an attempt to obtain supra-FRAND
royalties through a hold-up strategy. 10
9 Koninklijke Philips N.V. v. Thales DIS AIS USA, LLC, No. 20-01713 (D. Del. filed
Dec. 17, 2020); Certain UMTS and LTE Cellular Communications Modules &
Products Containing the Same, No. 337-TA-1240 (ITC Apr. 1, 2022) (Initial
Determination).
10 See Analysis of Proposed Consent to Aid Public Comment, at 3, Motorola Mobility
LLC and Google Inc., FTC File No. 121-0120 (Jan 3, 2013) (“[F]iling for an exclusion
order before the ITC on a FRAND-encumbered SEP significantly raises the risk of
10
Furthermore, the panel decision fails to recognize that
downstream manufacturers’ customers require mid-level manufacturers
to warrant that the supplied components do not infringe any
intellectual property rights, as well as to indemnify them for any
licensing royalties (even if supra-FRAND). See FAC ¶ 105.
Mid-level manufacturers thus need a license to avoid
(1) potentially ruinous lawsuits from SEP-holders, (2) the likely loss of
business stemming from their inability to provide a contractual
warranty regarding infringement, and (3) having to pay supra-FRAND
royalties via the payments to downstream manufacturers. Without the
ability to enforce a SEP-holder’s FRAND obligations, a consequence of
the panel’s decision, many mid-level manufacturers will be unable to
obtain licenses and thus avoid these severe consequences. Moreover,
these significant costs will inevitably hamper innovation and lead to
higher costs for consumers.
patent hold-up in concurrent licensing negotiations because an exclusion order may

be entered by the ITC before a FRAND rate is reached.”).
11
CONCLUSION
For the foregoing reasons, rehearing en banc is necessary and
appropriate.
/s/ Craig M. Reiser

_________________________________________
Craig M. Reiser
Counsel of Record
Denise Plunkett
Christopher Erickson
AXINN, VELTROP &
HARKRIDER LLP
114 West 47th Street
New York, NY 10036
(212) 728-2218
creiser@axinn.com
Michael L. Keeley
Paul Zeineddin
Michael O’Mara
AXINN, VELTROP &
HARKRIDER LLP
1901 L Street NW
Washington, DC 20036
Counsel for Thales DIS AIS

DIS AIS USA LLC
12
CERTIFICATE OF COMPLIANCE
Pursuant to Federal Rules of Appellate Procedure 32(g),
undersigned counsel certifies that this brief:
(i) Complies with the type-volume limitation of Rule 29(b)(4)
because it contains 2,093 words, including footnotes and
excluding the parts of the brief exempted by Rule 32(f); and
(ii) complies with the typeface requirements of Rule 32(a)(5) and
the type style requirements of Rule 32(a)(6) because it has
been prepared using Microsoft Office Word 2016 and is set in
Century Schoolbook font in a size equivalent to 14 points or
larger.

_________________________________________
Craig M. Reiser
CERTIFICATE OF SERVICE
I hereby certify that on April 20, 2022, I electronically filed the
foregoing with the Clerk of the Court for the United States Court of
Appeals for the Fifth Circuit by using the appellate CM/ECF system on
April 20, 2022.
/s/ Craig M. Reiser

_________________________________________
Craig M. Reiser

22-04-20 Thales Acb

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Case: 20-11032 Document: 00516288093 Page: 1 Date Filed: 04/20/2022

IN THE UNITED STATES COURT OF APPEALS

CONTINENTAL AUTOMOTIVE SYSTEMS, INCORPORATED, A

AVANCI, L.L.C., A DELAWARE CORPORATION; AVANCI

On Appeal from the United States District Court for the

MOTION FOR LEAVE TO FILE BRIEF OF AMICUS

(Counsel Listed on Inside Cover)

Craig M. Reiser Michael L. Keeley

Counsel for Thales DIS AIS Deutschland GmbH and

SUPPLEMENTAL CERTIFICATE OF INTERESTED PERSONS

No. 20-11032, Continental Automotive Systems v. Avanci

The undersigned counsel of record certifies that the following

listed persons and entities as described in the fourth sentence of Rule

28.2.1 have an interest in the outcome of this case. These

evaluate possible disqualification or recusal.

Plaintiff-Appellant Plaintiff-Appellant’s Counsel

Continental Automotive Systems, Matthew Holder

Avanci, L.L.C. and Avanci Jeffrey L. Kessler

Nokia Corporation; Nokia of Jeffrey A. Lamken

Mark Anthony McCarty

Optis Up Holdings, L.L.C.; Optis Jason G. Sheasby

Sharp Corporation Theodore J. Angelis

Amici Curiae in Support of Counsel for Amici Curiae

Fair Standards Alliance A.S.B.L. Ian Simmons

App Association Amanda Tessar

American Honda Motor Company, Nicole A. Saharsky

Tesla, Incorporated Nicole A. Saharsky

U-Blox America, Incorporated Nicole A. Saharsky

Apple, Incorporated Joseph J. Mueller

MPEG LA, L.L.C. John D. Holden

Thales DIS AIS Deutschland Craig M. Reiser

Amici Curiae in Support of Counsel for Amici Curiae

InterDigital, Incorporated Stephen Akerley

Dated: April 20, 2022 Respectfully submitted,

/s/ Craig M. Reiser

Attorney of Record for Amicus

MOTION FOR LEAVE TO FILE AMICUS CURIAE BRIEF

LLC (together, “Thales”) respectfully request leave to file the attached

amicus curiae brief in support of the Petition for Rehearing En Banc of

Plaintff-Appellant Continental Automotive Systems, Inc.’s

Federal Rule of Appellate Procedure 29(b) allows the filing of an

amicus brief in support of an en banc rehearing with the Court’s leave.

Thales is an industry leader in the field of machine-to-machine

(“M2M”) communications. M2M communication is transforming a

range of industries, including healthcare, retail services, smart energy,

transportation, logistics, and automotives.

Thales produces wireless network access modules that enable

M2M communications. These modules are compatible with various

mobile communication standards promulgated by the European

Telecommunications Standards Institute (“ETSI”), a Standard Setting

Organization (“SSO”). Patent owners self-declare patents as potentially

“essential” (“Standard Essential Patents” or “SEPs”) to these and other

standards meaning that the standards could not be implemented

without using technology covered by the patents. To offset the potential

abuse of market power resulting from the inclusion of a patent in a

standard, SSOs require SEP-holders to commit to license their SEPs to

would-be implementers on fair, reasonable, and non-discriminatory

terms (“FRAND”). See Op. 3.

at issue. The decision permits SEP-holders to abandon their FRAND

obligations to many implementers and abuse the market power derived

level component manufacturers like Thales that implement

standardized technologies and the end-consumers of products

incorporating these components.