The United States International Trade Commission ("USITC", or just "ITC") today ordered an import ban against all Android-based Motorola Mobility devices that infringe a particular Microsoft patent, U.S. Patent No. 6,370,566 on "generating meeting requests and group scheduling from a mobile device". With today's decision, the Commission, the six-member decision-making body at the top of the ITC, affirmed an initial determination made by Administrative Law Judge (ALJ) Theodore Essex in December 2011.
This exclusion order is subject to a presidential review and will probably enter into force in 60 days. The ITC dismissed Google's claim that public interest considerations weighed against an exclusion order.
Like some other ITC decisions, today's ruling was postponed several times.
In order to continue to sell products in the U.S. market, Motorola Mobility will most likely modify its products by removing the related feature. That is also the way in which HTC reacted to an exclusion order Apple won last year based on one of its patents (and which just caused a delay of two HTC product launch dates). For patent holders defending their intellectual property, it's also a good outcome if their enforcement activites require others to develop workarounds. Patents are, by definition, limited in scope. Non-standard-essential patents can always be worked around in some way, though the term "workaround" is often used as a euphemism for the removal of functionality.
I believe it won't take too long before Motorola will join many other device makers who have taken a license to Microsoft's many Android-related patents, such as Samsung (the undisputed market leader), HTC, and LG. According to Microsoft, more than 70 percent of all Android smartphones sold in the United States now have a license to its patent portfolio. Motorola is the only Android device maker to be embroiled in litigation with Microsoft at this stage. Microsoft recently settled an Android patent dispute with Barnes & Noble, which also resulted in a license agreement.
If and when Google closes its proposed acquisition of Motorola Mobility, MMI's patent strategy will be decided in Mountain View. Since last year, Google's Android mobile operating system has already been found to infringe several third-party patents, and the number keeps growing. Patent litigation is a slow process, and the drop-out rate of non-standard-essential patents is fairly high, but infringement only works for so long. Google can't impose its vision of everything being nominally free of charge (but advertising-financed) on the entire technology industry. It will ultimately have to play by the same rules as everyone else, and either have to respect other parties' intellectual property or pay for it, depending on the specifics of each case. Given that Microsoft is a licensing-oriented patent holder, it shouldn't be too hard to work out a deal with them.
If there is no near-term settlement between "Googlorola" and Microsoft, then this ITC ruling is only the first of many decisions that will come down on Microsoft's infringement claims against MMI. Next Thursday (May 24), the Munich I Regional Court will announce a decision on one of Microsoft's German lawsuits (while Microsoft was first to sue in the United States, Motorola was first in Germany). Several cases between these two companies are pending in the Western District of Washington, including a particularly important one concerning Motorola's FRAND licensing obligations, which has resulted in a preliminary injunction barring Motorola, for another six months or so, from the enforcement of a German patent injunction. The Seattle FRAND case may also resolve any licensing-related issues concerning the standard-essential patents Motorola is asserting against Microsoft's Xbox 360 gaming console in its own ITC complaint.
Not only is today's ITC ruling only one of many litigations between Microsoft and Motorola but it's also worth noting that ITC decisions in such high-profile cases are routinely appealed to the Federal Circuit. It's a given that Motorola will appeal the decision with respect to the '566 patent, and just like Apple appealed the ITC ruling on its first complaint against HTC in order to broaden the scope of its win and furthermore appealed the ITC's dismissal of its complaint against Motorola, Microsoft may very well appeal various parts of today's ruling that could be reversed in its favor.
All of this serves to show why licensing is way preferable over litigation. And these two parties actually can agree on solutions that benefit customers: earlier today, they filed stipulations in both ITC investigations (the one of Microsoft's complaint against Motorola's Android devices, and the one of Motorola's complaint against the Xbox) according to which any import bans or cease-and-desist orders "will not be used to exclude the importation of repair or replacement components or products subject to a certification by the importer that such importation is solely for warranty, extended service contract, insurance replacement or post warranty repair purposes".
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