Yesterday (January 5, 2012), Chief Judge Gregory M. Sleet of the United States District Court for the District of Delaware entered a venue transfer order (in a declaratory judgment case brought by Motorola Mobility) that takes Apple to task for making a "disingenuous" argument. The chief judge wants this to serve as a warning to any "other parties" going forward, telling everyone "to refrain from extending their advocacy to arguments that, as was the case here, appear less than forthright".
I'll show you the related passage further below. Let me quickly explain the context:
In early October 2010, Motorola knew that Apple was going to sue it any moment, and brought an ITC complaint as well as a few federal lawsuits as a pre-emptive strike. One of those lawsuits was a declaratory judgment action filed in Delaware, relating to 12 patents Apple previously asserted against HTC in the same district. If you hold a bunch of patents and someone sues you for declaratory judgment that those aren't valid and, even in the event they are valid, not infringed, you can't let that happen. At the very least you'll fight the validity part, but if you think they are also infringed by that company, you then have to assert those patents or else you will lose your ability to do so against that particular entity (with respect to the products named in the declaratory judgment complaint). Apple indeed picked up this gauntlet and, on December 1, 2010, asserted those 12 patents against Motorola, but it did so in the Western District of Wisconsin (not in Delaware, where the DJ action was filed).
In Delaware, Apple brought a motion to dismiss or transfer venue. That happened the next day (December 2, 2010). Apple asked for Motorola's DJ action to be transferred to Wisconsin in order to consolidate it into litigation that included, besides some assertions brought by Motorola, Apple's (subsequent) offensive action over those same patents.
At the time, Motorola opposed Apple's motion, arguing that Apple itself had asserted many of those patents against HTC in Delaware, and some against Nokia in the same district.
For more than a year (!), the Dela-y-ware court didn't rule on a possible transfer. During all of that time, Apple never responded in substance to Motorola's DJ complaint. The case was technically alive, but nothing was going forward for a long time.
In the meantime -- very recently -- the Wisconsin court passed the case including Apple's offensive assertions of those (and three other) patents on to the Northern District of Illinois -- Motorola's home court.
Another thing that recently happened is that Motorola, with Apple's consent, amended its DJ complaint to drop one patent belonging to NeXT. Apple had argued that the Delaware court didn't have personal jurisdiction over NeXT. The amendment was filed in late December 2011.
Yesterday, the Delaware court finally ruled on that old motion to transfer. In a formal sense, it granted Apple's motion -- but it decided that the Northern District of Illinois, and not the Western District of Wisconsin, was the right location, in light of the Wisconsin-to-Illinois transfer I just mentioned. What looks like an Apple victory over Motorola isn't really useful to Apple by now. If the case with Apple's offensive assertions had stayed in Wisconsin, Apple would have liked the Delaware DJ action to go to Wisconsin, but Apple was against a transfer from Wisconsin to Illinois, claiming (among other things) that this wasn't a neutral place given that Motorola is based there.
The Delaware court somehow doesn't like to deal with Apple's lawsuits. The week before Christmas, it stayed all cases brought by Apple against HTC in that district pending an ITC investigation. As a result, HTC has nothing to fear from Apple's patents in all of 2012.
There's no question about the "judicial efficiency" argument here: it would be a waste of court resources to have a declaratory judgment action over a set of patents in one district and an infringement case in another court. But for that reason, the court could have transferred the case much sooner. Anyway, it now finally agreed, but the chief judge reproaches Apple for having argued that Delaware is a "forum non conveniens", i.e., a venue that isn't reasonably acceptable to Apple. Given that Apple brought a number of patent lawsuits in Delaware, back in 2010 but also quite recently, it's an understatement to say that the "inconvenience" argument rings hollow. It's an insult to human intelligence, and the chief judge couldn't help but tell Apple (and anyone else dealing with that court) that this argument "strikes [the court] as disingenuous" and "appear[s] less than forthright" (click on the image to enlarge):
It's possible that Apple never would have chosen Delaware if Nokia hadn't started its litigation against Apple in that place. I believe that Apple later hoped to slow Nokia down by also suing HTC there and trying to consolidate all of that litigation, an initiative that failed. But at any rate, the court noted a clear contradiction between Apple's words and Apple's actions.
While I can understand that the chief judge didn't want to deal with an argument belied by Apple's own actions, the usual approach is always that lawyers use any argument -- they even throw in the kitchen sink -- that could possibly work for their client. This applies to in-house lawyers as well. They're all afraid that by not raising an argument that meets the legal minimum standard (Rule 11), they could make a mistake that's prejudicial to their client. But in this case, the chief judge really thought that this argument was unreasonable to make, even in light of the usual modus operandi I just described.
It's possible that Apple already regrets ever having brought any Android-related litigation in the District of Delaware instead of merely responding to Nokia's Delaware actions there and suing Android device makers elsewhere. By now, Apple may even have reached the point at which it prefers Motorola's home court in Chicago over Delaware...
Maybe Apple's argument about Illinois and its lack of neutrality was no more forthright than the "inconvenience" argument concerning Delaware. The outcome of the Illinois case could be a pretty good one for Apple. They could get a great jury that's totally committed to finding out the truth regardless of where the parties are based. We'll just have to wait and see. One thing is sure, though: those two companies are doing a great job keeping the ITC as well as multiple U.S. district courts busy (and three German regional courts, too).
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