Microsoft just filed its reply to a Motorola brief opposing Microsoft's motion in the Western District of Washington for a temporary restraining order and preliminary injunction barring Motorola from the enforcement of an injunction it might win next week in Mannheim based on two standard-essential (H.264-related) patents.
A hearing on this urgent issue will take place on Wednesday (April 11, 2012), and a decision will probably come down later this week, or (more likely) next week.
Microsoft's reply brief places a lot of emphasis on the fact that its U.S. lawsuit alleging Motorola's breach of FRAND licensing obligations was filed first (in November 2010), while Motorola's German actions against Microsoft began roughly eight months later. In particular, Microsoft holds this chronology of filings against Motorola's "international comity" argument (which comes down to saying that a U.S. court shouldn't interfere with a foreign jurisdiction for reasons of diplomacy):
"Where one party seeks an injunction directed toward a later-filed foreign action, the impact on comity is not only 'tolerable,' but the interests of comity actually weigh in favor of granting relief."
The argument of first-filed vs. later-filed is frequently outcome-determinative in venue disputes in the U.S. (i.e., cases in which parties can't agree in which district a matter at issue in cases in two different districts should be adjudicated). The issues raised here are sort of (I repeat, sort of) an international venue dispute.
In connection with international comity and other considerations, Microsoft's reply brief also points to the fact that the requested relief is "narrow" and "targeted": Microsoft only wants to ensure that Motorola won't seek enforcement of the injunction it might win while the FRAND litigation in Seattle is ongoing.
In a similar context, a footnote of Microsoft's brief also states what I highlighted last week: it's an "open question" whether an offer to take a license would have to be of worldwide scope in order to satisfy the requirements German courts may impose going forward. In that case, the FRAND enforcement action in Seattle would be effectively replaced by a future determination of a royalty rate by German courts.
Microsoft's reply brief takes issue with Motorola's suggestion that FRAND royalties should be set on a country-by-country basis:
"Motorola now urges some unknowable patchwork of actions, in Germany and elsewhere, to resolve RAND issues locally [...]"
"Motorola's balkanized view of RAND enforcement [...]"
In this regard, Microsoft points to
the worldwide scope of Motorola's FRAND licensing declarations to the relevant standard-setting organizations,
the worldwide scope of the license Motorola offered to Microsoft in 2010, and
the fact that Microsoft's Seattle action has consistently sought enforcement of FRAND licensing obligations on a worldwide basis.
I think Motorola's primary challenge at the Wednesday hearing will be to explain to Judge James L. Robart why it absolutely needs to be able to enforce an injunction in Germany, despite the advanced state of the Seattle action. The judge knows that Motorola even refused a $300 million bond. It can always say no to any offer, but in this case the refusal exposes an enforcement-centric game plan.
Lastly, it's interesting that Microsoft also contradicts Motorola's assertion that the legal standard for an anti-suit injunction is "more stringent" than for other preliminary injunctions. According to Microsoft, "it replaces one factor with a set of other factors". While Microsoft is right about the replacement of factors, Motorola is probably right that the criteria for an anti-suit injunction are harder to fulfill in a majority of cases. But in this particular case, there are circumstances in Microsoft's favor (first-filed lawsuit, narrowly-tailored request for relief etc.) that make some of the antisuit injunction criteria much easier to meet than Motorola suggests.
The primary risk for Microsoft's motion appears to be that the kind of court order it requests isn't a routine thing. Motorola's lawyers will try to capitalize on that fact. They will try to make the judge uncomfortable with the idea of issuing the requested injunction. But their biggest problem is that they can hardly deny their client's transparent intentions.
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