So far I have seen Motorola Mobility assert four standard-essential patents in Germany (two wireless ones and two that allegedly read on the H.264 video codec) but only one non-standard-essential patent: a push notification patent that harks back to the era of pagers and is being enforced against Apple. On Friday, the Mannheim Regional Court, which ordered an injunction against Apple over this one, held a trial on a Motorola Mobility (MMI) lawsuit over the same patent against Microsoft.
MMI's original complaint asserted claims 1 and 3 of the now-famous patent (EP (European Patent) 0847654 (B1) on a "multiple pager status synchronization system and method", which is the European equivalent of U.S. Patent No. 5,754,119). At that stage, MMI's lawsuit targeted a long list of Microsoft products and services implementing ActiveSync DirectPush and/or RPC (Remote Procedure Call, a protocol for remote connections with a corporate Exchange Server). But on the morning of the trial day (patent trials in Germany typically take a couple of hours only), MMI withdrew its assertion of claim 3. At this stage, all of the infringement allegations relate to ActiveSync DirectPush, and none to RPC. The list of accused technologies includes Exchange online, Microsoft Exchange Server, Hotmail, Windows Phone 7, and Outlook mobile, while Live Messenger, Live Mail and the Xbox were dropped. The court had further questions about which technologies are still being targeted an, pointing to a new landmark ruling by the Federal Court of Justice of Germany, requested further clarification, so there could be some further narrowing in the aftermath of the trial. For example, neither Microsoft nor one of the judges were able to see in which way Hotmail, a web-based service, might make use of ActiveSync DirectPush.
At the trial, five defenses raised by Microsoft were discussed. Four of them were talked about in depth while a fifth one named Verwirkung, which is somewhat similar to the concept of laches under U.S. law, was given short shrift by Judge Andreas Voss, saying that it is reserved for very rare circumstances under German law and that the less litigious climate in this industry in earlier years needs to be taken into consideration.
As I said before, there are no FRAND licensing obligations here, nor is patent exhaustion an issue (Microsoft doesn't appear to incorporate any licensed technologies into the accused products), but besides disputing infringement and the validity of the patent, Microsoft also raised a contract-based defense (a covenant not to sue that forms part of a license agreement Microsoft and Motorola signed in 2002 or 2003) and claims prior user rights.
The contract-based defense appeared to have considerably more traction than the others, but MMI will have to overcome all four lines of defense. In the following, I'll sum up what I learned about thse four defenses at the Mannheim trial on Friday. A decision will come down on May 11.
Covenant not to sue
I don't have access to the contract in question but gleaned some information from what was said in open court.
IT appears that Microsoft and Motorola signed an agreement -- about seven or eight years before Motorola spun off MMI -- under which Microsoft licensed certain patents (presumably ActiveSync-related) to Motorola and Motorola entered into a covenant not to sue, during the term of the agreement and even for five more years, Microsoft over certain Microsoft technologies (presumably including, at least, all products that implement ActiveSync). The parties referred to this as "the non-assert clause".
MMI disputes that the covenant not to sue prevents it from pursuing this matter. Judge Voss listed four key objections, but only two of them are likely to be outcome-determinative: MMI's claim that it is a separate legal entity from the original Motorola company (now known as Motorola Solutions) and, therefore, not bound by that license agreement, and its claim that DirectPush does not fall within the scope of the agreement.
Based on the discussion on Friday (which is not a substitute for access to the agreement itself), I would be surprised if MMI succeeded with its argument that it's not bound by that agreement. While there is some asymmetry at first sight in the sense that new affiliated entities of Motorola weren't automatically added to the agreement as far as the grant of a license to some of Microsoft's patents is concerned, I think Microsoft explained this quite convincingly: if any new affiliated entities were automatically included, Microsoft's grant could have benefited an unpredictably wide range of entities and their respective products, while the covenant not to sue cannot be reasonably circumvented by transferring patents to a newly-created legal entity.
Toward the end of that part of the Friday trial, I got the impression that the court is now more interested in the question of whether DirectPush, which was introduced by MS Exchange Service Pack 2, is covered by the agreement. I took a position on the bound-or-not argument because the parties' quotes from the agreement appeared to indicate the overall structure of the deal, but the inclusion or exclusion of DirectPush is really a matter of how broad or narrow certain wordings are, and I'm unable to form an opinion on what the outcome is going to be. Both sides presented arguments that sound pretty good, but if I knew the contract, I would probably come down on one side (which is what the court has to do now).
Judge Voss noted that the license agreement must be interpreted under U.S. law but its effects on litigation in Germany will have to be analyzed under German law. It wasn't clear at the trial what effects other than a dismissal of MMI's lawsuit (if it turns out to have been barred from bringing this action in the first place) the court might deem appropriate. There appears to be a dispute over the exact date on which the post-contractual obligation not to sue will end, but it will be at some point in 2012.
Infringement dispute
At the start of the discussion of Microsoft's non-infringement defense, Judge Voss said that he believes this part of the debate isn't going to be outcome-determinative. Nevertheless there was some in-depth discussion of Microsoft's argument, which relates to differences between how DirectPush works as compared to pagers. DirectPush involves ping request messages from the client to the server that check on messages that are waiting to be pulled from the server (in addition to the server then informing, during a certain interval, the client of new messages), while pager messages weren't stored anywhere: they would appear on a device in real time, and if a pager was switched off at the relevant time, a message was simply lost.
In my opinion, there are valid reasons for which the courts should not interpret this patent too broadly. The patented invention had a tangible user benefit (synchronization in a scenario of a user having different pagers attached to different garments) for that particular type of service. If one now gives that basic idea very broad scope, push notifications of various kinds might be considered infringing -- but in that case, the patent would cover a basic idea of three messages in a network, with the second one triggering the third, and a broad interpretation would render the patent trivial, and likely invalid. I'm not saying that inventions made in connection with one generation of technology should never be deemed to read on newer technologies, but in this case I believe there are sufficient differences between today's email services and pagers that infringement should be denied on that basis.
Prior user rights
Microsoft says that the essence of today's DirectPush technology was already made available, as a beta version (of Exchange, I guess) in 1995. Microsoft said it has witnesses for this fact, and that it has provided written declarations from such witnesses.
Judge Voss said that clarification of this issue might require a second trial to take place. But he also pointed out that prior user rights would only serve as a defense for technologies that are materially consistent with what was made available to beta testers back in 1995.
Invalidity
Microsoft's invalidity contentions were discussed, but the same panel of judges previously wasn't swayed by Apple's invalidity defense against the same patent. However, it's possible that Microsoft's invalidity argument went beyond Apple's (without access to the relevant documents, it's hard to tell).
The notes I took at the trial enabled me to track down one of the prior art references: U.S. Patent No. 5,128,981 on a "radio communication system and a portable wireless terminal". It was granted to Hitachi. There was also some prior art reference that is available only in Japan (but a certified German translation was provided to the court).
At the trial, the court appeared inclined to interpret the push notification patent very narrowly by making a distinction between messages per se and messages that inform a client of the change of the status of a message. But Microsoft's legal team included two patent attorneys, one of whom explained in detail why the cited prior art references also cover techniques in which information on the status of messages is sent in a certain order and with a certain causation.
It's possible that MMI will overcome all of Microsoft's defenses as far as the Mannheim Regional Court is concerned, but this case apparently presents a greater challenge to MMI than the one against Apple over the same patent.
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