I just heard from a local source watching developments that the United States District Court for the Western District of Washington granted a Microsoft motion for a temporary restraining order and preliminary injunction against Motorola Mobility. This U.S. court order prevents the handset maker from enforcing a patent injunction it might win in Mannheim next Tuesday based on a couple of patents allegedly essential to the H.264 video codec standard. Motorola is asserting those patents against Windows 7, the Internet Explorer, the Windows Media Player, and the Xbox gaming console.
Via Twitter, Microsoft just issued the following statement:
"Motorola promised to make its patents available to Microsoft and other companies on fair and reasonable terms. Today's ruling means Motorola can't prevent Microsoft from selling products until the court decides whether Motorola has lived up to its promise." -- David Howard, Microsoft Deputy General Counsel
Motorola opposed Microsoft's motion. It didn't even want it to be brought in the first place, realizing that this initiative could -- as it did -- thwart Motorola's attempted end run around the Seattle litigation. Microsoft brought its federal complaint over Motorola's alleged breach of FRAND licensing obligations in November 2010, approximately eight months before Motorola's German lawsuits against Microsoft.
German courts readily grant injunctive relief against implementers of industry standards, a fact that poses considerable risk to technology companies and has led Microsoft to relocate its European distribution center from Germany to the Netherlands.
But German injunctions aren't binding on a defendant until the prevailing plaintiff formally demands compliance with the injunction and meets other requirements. In particular, enforcement during an ongoing appeal requires the posting of a bond with a local court. Therefore, today's decision by the court in Seattle doesn't represent an interference with the Mannheim case per se: Motorola isn't obligated to withdraw any of its German lawsuits, and the Mannheim court is free to make whatever it deems the right decision under German law. But Motorola can't use the injunction it may (or may not) win next Tuesday to disrupt Microsoft's business in any way while the U.S. FRAND case is pending.
Motorola had argued that Microsoft should meet whatever requirements under German law to protect itself against sales bans. But Microsoft's reply stressed that the objective of the Seattle action is to enforce Motorola's FRAND licensing promises with worldwide effect, and rejected Motorola's "balkanized view of [F]RAND enforcement".
The ruling hasn't been published yet. I will write a follow-up post when I am able to provide further explanation of the reasoning. [Update] The Seattle Times reports that the judge set a $100 million bond; Microsoft had offered Motorola a bond over three times that amount, but the injunction-focused handset maker rejected it. While waiting for the written decision, I also recommend this GeekWire article and this IDG News Service story, both of which quote from how the judge explained his decision. TechFlash also has a summary of what happened. [/Update]
The FRAND issues before the Seattle court will be decided later this year. The main trial is scheduled for late November, but a separate FRAND "mini-trial" will take place ahead of the main trial. It's possible that the outcome of the mini-trial (and any directly related, subsequent rulings) will determine whether Motorola gets to enforce the injunction it may in the meantime win in Germany.
The Seattle decision isn't the only thing standing between Motorola and the enforcement of the injunction it hopes to win next week. Should Motorola win next week, Microsoft has already said it will immediately appeal, and the Karlsruhe Higher Regional Court could also suspend the enforcement of such an injunction, as it recently did in a Motorola Mobility v. Apple matter. Furthermore, Motorola Mobility and its future owner Google will have to proceed with caution in light of two ongoing antitrust investigations of Motorola's suspected abuse of standard-essential patents launched by the European Commission last week.
Motorola also has non-standard-esssential patents in play, but those are generally far less damaging than standard-essential ones. Non-essential patents can usually be worked around in one way or another, or if it comes to worst, the features they cover can be removed from a product but the product is still marketable. But if a patent is truly standard-essential and a related injunction enforced, then an entire range of products can no longer implement the standard (in this case, H.264).
If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.
Share with other professionals via LinkedIn:
