Apple wins U.S. preliminary injunction against the Samsung/Google Galaxy Nexus over Siri patent

Judge Lucy Koh of the United States District Court for the Northern District of California has just granted Apple a preliminary injunction against the Samsung Galaxy Nexus, an Android-based smartphone co-developed by Samsung and Google. Here's the header section of the order (click to enlarge):

The motion for this preliminary injunction was filed in February. Samsung filed its defenses in April.

The ruling is a huge win for Apple as well as Morrison & Foerster and Gibson Dunn, the law firms working on this part of the litigation.

Apple and its lawyers convinced Judge Koh that the Galaxy Nexus likely infringes all four of the patents asserted in the preliminary injunction motion, and that all four of them are likely valid. But in the United States, injunctive relief is granted only if monetary damages are insufficient to make the right holder whole, and if other requirements are met. Courts apply the four-factor eBay v. MercExchange test. Apple's motion passed that test with respect to the "Siri patent", a patent on unified search. It must be a huge disappointment for Google to lose this lawsuit over a search patent. With respect to the other three patents at issue in this context -- slide-to-unlock, data tapping and autocorrect --, Judge Koh was not convinced that those features drive consumer demand and that Samsung's likely infringement causes irreparable harm. But Apple can still win an injunction when this case goes to trial, and even if it couldn't prove an entitlement to injunctive relief over those patents at that stage, Samsung would be liable for significant damages.

In order for the injunction to take effect, Apple has to post a bond in the amount of $96 million ($95,637,141.60 to be precise), which is exactly the amount that Samsung demanded. There's no question that Apple will post this bond in no time, and that Samsung will appeal and move for a stay.

Apple is now probably going to think about requesting a preliminary injunction against the Galaxy S III smartphone. Earlier this month, Apple wanted to add that device as a second accused product to this process. There were two patents with respect to which Apple believed Samsung's infringement had the same pattern, and the '604 Siri patent was one of them. If Apple moved for a preliminary injunction against the S III now over the Siri patent, it would be very likely to win, but it would have to accept a postponement of the trial of its first lawsuit against Samsung. This is a tough choice to make, but a motion over only one patent wouldn't necessarily cause a huge delay.

Apple is on an incredible winning streak these days against Android. Earlier this week, it won a preliminary injunction against the Galaxy Tab 10.1. Today it was also cleared, by summary judgment, of infringement of one of Samsung's patents-in-suit. And on Friday, it won, by an unusually wide margin, a battle over expert reports.

Even Judge Posner's ruling was, on the bottom line, far better for Apple than for Google. The problem is just that there are too many people commenting on these issues without understanding them, or with an anti-IP bias. As I explained in a previous post, "the decision on Apple's claims was very specific not only to the four patents at issue at that stage of the litigation but also to the course of events in that litigation (as I pointed out in my detailed analysis)", as evidenced by the fact that Apple has meanwhile won two preliminary injunctions against Samsung, while "Judge Posner's position on FRAND is universally-applicable, and it will be extremely influential, throughout and beyond the United States", to Google's (Motorola's) dismay.

Quotes from the ruling

The ruling spans over 101 pages. Here are a few select quotes:

On the likely infringement and likely validity of all four asserted patents:

"In sum, Apple has shown that claims 6 and 19 of the '604 [Siri] Patent are likely both valid and infringed. Apple has therefore shown a likelihood of prevailing on the merits of the '604 Patent."

"In sum, Apple has shown a likelihood of establishing both infringement and validity."

"Accordingly, Apple has shown a likelihood of success on the merits of its '647 [data tapping] Patent claim."

"Accordingly, Apple has met its burden of establishing that the '721 [slide-to-unlock] Patent is likely infringed by the Galaxy Nexus, and that the '721 Patent will likely withstand a validity challenge at trial."

"Accordingly, Apple has shown that it is likely to succeed on the merits at trial in its claims that the Samsung Galaxy Nexus infringes claims 18, 19, and 27 of the '172 [autocorrect] Patent."

On irreparable harm:

"The Court finds that the full extent of these losses would likely be unascertainable, difficult to calculate, and irreparable."

On the ability of Siri to drive demand:

"The Court is persuaded by the evidence in the record that the ’604 unified search functionality drives consumer demand in a way that affects substantial market share. Even accepting Samsung's argument that the intelligent voice-recognition aspect of Siri, as advertised, also contributes to consumer interest in the iPhone 4S, Apple has shown that the '604 Patented feature is core to Siri's functionality and is thus a but-for driver of demand for Siri. Accordingly, the Court finds that Apple has adequately established the requisite causal nexus between Samsung's alleged infringement of the '604 Patent and Apple’s risk of suffering irreparable harm."

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

No Xbox import ban in 2012: ITC remands investigation of Motorola complaint

Earlier this week, the ITC decided to review a preliminary ruling that found Apple to infringe a Google/Motorola 3G-essential patent but postponed a decision on the next steps in the investigation of Motorola's complaint targeting Microsoft's Xbox 360 gaming console. The U.S. trade agency with quasijudicial authority set a new deadline for Mondy, July 2, but already made its determination today.

The judge's preliminary ruling held the Xbox to infringe four Google/Motorola patents, three of which are standard-essential patents (SEPs). Motorola's assertion of SEPs against Microsoft is reportedly being investigated by the Federal Trade Commission, the United States competition autority.

In the Xbox case, the Commission, the six-member decision-making body at the top of the ITC, did not ask the parties a long list of questions as in the Motorola-Apple case. Instead, it ordered a remand of the investigation to the Administrative Law Judge (ALJ). A remand is only ordered when an ALJ's initial determination has failed to consider potentially outcome-determinative legal issues. A remand doesn't necessarily result in a different decision, but in this case a modification of ALJ Shaw's initial determination to Microsoft's benefit is virtually certain to occur. The Commission's remand decision raises two questions, both of which are good for Microsoft:

1. ALJ Shaw is told to "apply the Commission's opinion in [the S3 Graphics v. Apple case]". I followed that case closely. The final outcome ("final" except that the HTC subsidiary appealed the ruling to the Federal Circuit) was a complete dismissal, despite an initial determination that identified a couple of infringements. In December, I blogged about a redacted version of the detailed Commission decision and explained that the ITC used this opportunity to clarify the boundaries of its mandate. Apple had defended itself against some of S3G's claims by arguing that the goods it was importing into the United States were not infringing, even though some potential infringement might have occurred post-importation.

2. The Commission furthermore asked ALJ Shaw to "rule on Microsoft's motion for partial termination of the investigation filed June 22 2012". I noticed and previously mentioned that motion, but its contents are unknown until a public redacted version becomes available. I suspect that it has to do with the FRAND issues raised by Google's use of standard-essential patents. In this context, Microsoft also pointed the ITC to the FRAND part of Judge Posner's recent landmark ruling, but Google disputes the relevance of Judge Posner's decision to this ITC investigation.

The ALJ has also been asked to set a new target date for the investigation. This remand causes substantial delay, and time is not on Google's side: in mid-November, less than five months from now, Microsoft's FRAND enforcement lawsuit against Motorola will go to trial in Seattle. The outcome of that litigation is going to be a license agreement on terms set by the court. Once Microsoft is licensed, there is no more scope of import bans. Since there will now have to be a new ALJ determination, which may easily take several months, followed by a Commission review and, potentially, a 60-day Presidential review before any import ban can enter into force, it's practically impossible that Google can actually get an ITC import ban before the Seattle lawsuit takes care of the standard-essential patents at issue in this investigation (all of the asserted patents with only one exception). Even with respect to the non-standard-essential patent (which Microsoft is presumably able to work around), the remand means that there won't be a U.S. import ban on the Xbox in 2012, including the extremely important Christmas Selling Season.

[Update] I've now (after blogging about the Galaxy Nexus injunction) finally been able to look at the implications of the remand notice more closely. On that basis, I have a strong feeling that Google's (Motorola's) case against the Xbox is in serious trouble and may go away now, as opposed to merely being delayed (though the delay is significant in and of itself, especially in light of the Seattle FRAND trial coming up in November). Here's why I think the remand notice may result in a new ALJ determination that will probably clear the Xbox of the alleged violations:

In light of the aforementioned S3-Apple decision I can't see how Microsoft would violate any method claims (patent claims on a method of doing something, as opposed to product claims) by importing the Xbox. The imported goods have to be infringing in order for the ITC to order an import ban. That's what helped Apple against S3G. In the Xbox case, the claims from three of the four patents the ALJ deemed violated are all method claims. Only the claims from the '094 patent, an allegedly H.264-essential patent, are device claims. It's not too speculative to assume that the Commission's remand is pretty much a suggestion to the judge to correct his error and throw out all method claims. In that case, only the '094 patent will be left.

I said before (and further above) that Microsoft's motion for partial termination (which I cannot yet access because it's confidential except for its headline) most likely relates to some FRAND issues. The '094 patent is undoubtedly a FRAND patent. Whatever the motion is (for example, it could correspond to the near-simultaneous filing Microsoft recently made in the Seattle FRAND litigation, arguing that Google as an MPEG LA licensee has a contractual obligation to grant a license to Microsoft), if it has to do with FRAND and H.264, then it's dispositive of the '094 patent. At some point I'll find out what the motion relates to -- either because a public version of the motion gets filed, or because of a public version of a pleading or order that references it. [/Update]

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Federal judge clears Apple of infringement of a Samsung patent ahead of summer trial

Last month, Apple and Samsung brought a number of summary judgment motions in their first U.S. lawsuit. Apple's winning streak continues for now: after (finally) obtaining a preliminary injunction against the Galaxy Tab 10.1 and winning by a wide margin a battle over a long list of expert reports, Apple has just been cleared of infringement of one of the three Samsung patents it was attacking in its very focused summary judgment motions.

Judge Koh granted Apple's motion to determine on summary judgment that it does not infringe claims 25 and 26 of U.S. Patent No. 7,362,867 on an "apparatus and method for generating scrambling code in UMTS mobile communication system", but denied Apple's motion to hold U.S. Patent No. 7,456,893 and U.S. Patent No. 7,577,460 invalid for indefiniteness. It's generally very hard to have a patent claim declared "indefinite": most of the time, judges find other ways to deal with claim language that appears exceedingly broad. In her order, Judge Koh also indicated a belief that Apple's concerns over vague claim language can be addressed through the court's claim construction without throwing out entire patent claims.

Apple focused its summary judgment requests on only three of Samsung's seven patents-in-suit. With the non-infringement finding concerning the '867 patent, Samsung's case is down to six patents, and Judge Koh may very well ask for some further narrowing. Samsung isn't actually interested in this case going to trial as planned (it's scheduled to start on July 30), but it doesn't want to appear uncooperative, so if the judge asks for some more narrowing, it will presumably comply.

Samsung brought summary judgment motions that carpet-bombed all of Apple's asserted intellectual property rights. Judge Koh has not ruled on Samsung's numerous summary judgment requests yet, but I believe she will do so very soon. I guess Apple's case will also be narrowed, at least to some extent, as a result of summary judgment.

Since most of Samsung's patents-in-suit are FRAND-pledged standard-essential patents, today's news that the Federal Trade Commission is investigating Google's (Motorola Mobility's) pursuit of injunctive relief based on SEPs doesn't make things easier for Samsung, which is already being investigated by the European Commission and may at some point also face a U.S. inquiry.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Google/Motorola reportedly being investigated by the FTC for suspected FRAND abuse

This Bloomberg article cites three unnamed sources for the launch of a U.S. antitrust investigation of Google subsidiary Motorola Mobility's suspected abuse of standard-essential patents (SEPs). The Federal Trade Commission is apparently concerned about Google's pursuit of injunctive relief, such as ITC import bans, on the basis of FRAND-pledged SEPs. At this stage, Google, which completed the acquisition of Motorola Mobility in May, must accept responsibility for what's going on:

"Another focus of the FTC probe, the person said, is Google's decision to continue litigation started by Motorola Mobility over industry-standard patents after Google bought the company."

In my opinion, Google's seamless continuation of Motorola Mobility's FRAND abuse comes as little surprise in light of the statement Google sent to standard-setting organizations earlier this year in connection with the Motorola deal. It was a pretty clear indication of Google's intentions.

No matter how hard I try, I can't see a point in Google's decision to continue the pursuit of a litigation strategy that is not going to succeed, but adds to its antitrust worries. Google is already being investigated by the FTC and the European Commission over its conduct in the search business. In the United States, Google's leveraging of Android to cement its dominant market position in search has become a key antitrust concern. Now Google is separately being investigated by the same two competition authorities over its abuse of SEPs. The EU launched two formal investigations over that particular issue in April.

Google had this coming. Earlier this month, the FTC wrote to the ITC to discourage import bans over SEPs in two investigations that were instituted at Motorola's request. In its first footnote, the FTC statement clarified that it did "not address whether seeking an injunction or exclusion order for RAND-encumbered SEPs would violate Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, or Sections 1 or 2 of the Sherman Act. 15 U.S.C. §§ 1-2", but I think the FTC's intervention in and of itself should have drawn Google's attention to the writing on the wall.

U.S. lawmakers are profoundly concerned. Yesterday I reported on a letter that six Republican senators, led by the Chairman of the Antitrust Subcommittee, sent to the ITC. Previously, Members of Congress from both sides of the aisle filed letters that I published a couple of weeks ago. In addition, a number of major industry players, most of whom have no involvement of any kind in the ongoing "smartphone patent wars", made submissions on the public interest.

With investigations on both sides of the Atlantic underway, the noose is tightening and Google should withdraw its abusive requests for import bans and injunctions in the U.S. and Germany. Google has every right to defend Android. It even owes this to the Android ecosystem. But it has to do so without violating competition laws.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Google's new Nexus 7 tablet apparently infringes Nokia's patents and faces other IP risks

This week Google demoed its new Nexus 7 tablet computer, which is set to compete with the iPad as well as other Android-based devices such as the Kindle Fire. The $199 price appears aggressive, and the jury is out on whether Google will be able to sustain that price or have to raise it once it has cleared all of the necessary patent rights.

The number of small (mostly non-practicing) entities asserting patents against Android is large, but with all that's going on between major industry players, I've even lost track of the "trolls". However, it appears that Google has yet to work out license agreements with at least two of the three largest companies claiming that Android devices infringe their rights:

• They certainly don't have a license from Apple. Given that Google is using its newly-acquired subsidiary Motorola Mobility to pursue import bans and other forms of injunctive relief against Apple, and considering that Apple requested a preliminary injunction against a device co-developed by Google, the Galaxy Nexus smartphone (Judge Koh's decision could come down anytime now), there's no reason why Apple would have to treat the Nexus 7 differently than, for example, the Galaxy Tab 10.1 (against which it just won a preliminary injunction).

• At this point I don't know whether the Nexus 7 is licensed by Microsoft. There certainly isn't a direct license agreement between Microsoft and Google -- otherwise there wouldn't be litigation between Microsoft and Google subsidiary Motorola Mobility. But Microsoft has deals with several major ODMs (Original Device Manufacturers) in place, such as Pegatron, whose shareholders include ASUS, Google's partner for the Nexus 7. If Microsoft's license agreement with Pegatron covers the Nexus 7, then we already have the third instance in which Google recognizes the need to pay patent royalties to Microsoft on Android-based devices (the other two instances are the Galaxy Nexus, given that Samsung signed a license agreement with Microsoft, and Motorola's recent PR stunt of a "settlement" proposal). If the Nexus 7 is not licensed through Pegasus or another ODM, then I believe it's in Google's best interest to negotiate a license sooner rather than later.

• The third major player to assert patents against Android devices in court is Nokia. It's suing HTC and ViewSonic. In a recent reaction to a Google EU antitrust complaint, Nokia said that it "has an active licensing program with more than 40 licensees". Nokia is particularly interesting in the Nexus 7 context because it's known to hold, besides a huge number of other (mostly non-standard-essential) patents, some patents essential to the IEEE 802.11 (WiFi, or WLAN) standard. I know because it's asserting a couple of such patents against ViewSonic in Germany.

  I asked Nokia whether Google or ASUS are licensed and got the following official response from a company spokesman:

  "Neither Asus [n]or Google is licensed under our patent portfolio."

  Through its recent lawsuits against HTC, ViewSonic and RIM, Nokia has shown that it means business when it comes to patent licensing. Nokia is such a large patent holder in this industry that even Apple took a royalty-bearing license. But Google and ASUS are not among the "more than 40 licensees" Nokia referred to in a recent press release.

  I don't know how much Nokia asks for, but since Nokia has so many licensees, there's every indication that its royalty demands are reasonably acceptable. Another thing I don't know is whether Nokia has previously contacted ASUS about patent licensing, but companies with a significant outbound licensing business, such as Nokia, routinely approach significant infringers and propose to negotiate a license agreement. I venture to guess that ASUS is more than large enough to be on Nokia's radar.

It looks like Google and ASUS still have some homework to do.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Six senators oppose exclusion orders over standard-essential patents

I previously mentioned "letters from six senators, led by Senators Herb Kohl (Chairman of the Subcommittee on Antitrust, Competition Policy and Consumer Rights) and Mike Lee (Ranking Member of the same subcommittee)". PoliticoPro had reported on it, but made the letter available to paying subscribers only. Today the letter (dated June 19, 2012) also showed up on the ITC document server.

Here's the first half-page of the two-page letter (click to enlarge):

The antitrust-savvy signatories are, besides Chairman Herb Kohl (a Democrat from Wisconsin) and Ranking Member Mike Lee (Utah), Senators Jon Kyl (Arizona; notably, the Republican Whip), John Cornyn (Texas), Jim Risch (Idaho), and John Hoeven (North Dakota). All of these senators, except for Senator Kohl, are Republicans.

You can find the full text of the letter further below. As you can see in the header shown further above, it was filed in the investigations of both Google/Motorola complaints (the one against Apple as well as the one against Microsoft).

Meanwhile, the ITC has already commenced a thorough review of the preliminary ruling on Motorola's complaint against Apple, and FRAND issues receive a lot of attention based on the review questions. The ITC is still working on its decision on a review of the initial determination in the Xbox case. Google/Motorola just argued that the ITC shouldn't pay attention to Judge Posner's recent ruling.

Prior to the letter from the six senators, the following comments on the public interest had been sent to the ITC:

• Members of Congress from both sides of the aisle filed letters that I published a couple of weeks ago

• United States Federal Trade Commission (this statement was quoted and endorsed by Judge Posner in last week's ruling)

• HP, Nokia, Verizon, Business Software Alliance, Retail Industry Leaders Association, Association for Competitive Technology

• Cisco, Entertainment Software Association

• Intel, AT&T

• IBM, Activision Blizzard

Full text of the Senators' letter

Dear Chairman Okun:

We write to express concerns with regard to the availability of the exclusion order as a remedy for cases in which "stanard-essential patents" (SEPs) are asserted. Although we take no position on the particular merits of the above-captioned cases, we urge the Commission to consider the following public interest arguments carefully as it proceeds with these and other matters in which SEPs are at issue.

Business and consumers depend on a reliable standards-setting process to promote interoperability and expand choice. Industry standards underpin many of the technologies incorporated in common products used to play online video, connected to the Internet, watch DVDs, or communicate via smartphone. These standards are crucial to ensuring that consumers have access to a competitive market of compatible products.

Many companies that participate in setting industry standards contribute patented technology to the standardization process. As a result, standard-essential patents are inevitably infringed when the standard is implemented. The standards setting process thus depends on a commitment from companies contributing patents to license those patents to all parties implementing the standard on reasonable and non-discriminatory (RAND) terms.

For the standards setting process to function effectively, companies that commit to license their SEPs on RAND terms must seek to resolve disputes over patents through a royalty agreement or judicial determination of a reasonable rate. As these companies have pledged not to exercise exclusivity over such patents, they should not expect the grant of an exclusion order when they are in violation of an obligation to license the patents on RAND terms.

Any precedent that would enable or encourage companies to include their patented technology in a standard, commit to license included patents on RAND terms, and then seek to secure an exclusion order despite a breach of that commitment would thus implicate significant policy concerns. Such an outcome would severely undermine broad participation in the standards-setting process, which would in turn threaten the meaningful benefits these standars provide for both industries and consumers.

Given the value and importance of industry standards, we trust that you will carefully consider and give due weight to these critical public policy concerns in your analysis. Please keep us advised as your decision making process proceeds.

Sincerely,

[Signatories]

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Google to ITC: don't pay attention to Judge Posner's 'non-final, non-binding' decision

On Monday, Microsoft pointed the ITC to the FRAND part of Judge Posner's dismissal of Apple v. Motorola. On Wednesday, Google subsidiary Motorola Mobility filed a letter with the ITC, in the Xbox case, that just entered the public record. The letter refers to Judge Posner's ruling as "a recent non-final, non-binding district court decision" and basically (though obviously not literally) tells the ITC: "Move on. Nothing to see here."

I interpret the characterization of the ruling as "non-final" as an announcement of an appeal by Google. It was clear to me that Google/Motorola wasn't going to let the FRAND part of the ruling stand. Absent an appeal, the relevant part of the ruling would be totally final: Judge Posner's dismissal with prejudice closed the case. In fact, the header of the PACER entry of the case says:

Date terminated: 06/22/2012

After Microsoft had filed its request for judicial notice, but still on the same day (Monday), the ITC postponed the target date for its decision on the scope of the review of the preliminary ruling on the Xbox by one week. Google/Motorola is presumably concerned that this postponement is more than a mere delay of the crafting of the review questions: at the time of the review notice, certain claims could be dismissed. And that concern may have led Google/Motorola to file a letter denying the relevance of Judge Posner's ruling to the FRAND issues at the heart of the Xbox investigation.

This paragraph (the second one of the letter) states the reason for which Motorola wants the ITC to ignore that landmark ruling:

"This decision does not support Microsoft's [F]RAND defenses in this section 337 action, however. It is instead directed to the availability of an injunction in federal district court under eBay Inc. v. MercExchange LLC, 547 U.S. 388 (2006), not the Commission's statutory authority under 19 U.S.C. § 1337 to issue an exclusion order. It has elsewhere been expressly decided that eBay does not apply to Commission remedy determinations under section 337. See Spansion, Inc. v. Int'l Trade Comm'n, 629 F.3d 1331, 1359 (Fed. Cir. 2010)."

The Supreme Court's ruling on the eBay case affirmed the four-factor test for U.S. patent injunctions, while the Federal Circuit determined in the Spansion case that the ITC, unlike district courts, wasn't bound to it since the ITC is governed by its own statute (called "Section 337"). But it's incorrect that "eBay does not apply to [ITC import bans]" and that this would render Judge Posner's opinion on FRAND ineligible as authority for the ITC in the Xbox investigation:

1. The holding in Spansion was merely that the ITC is not required to adopt the eBay test. But there's nothing in that Supreme Court decision that would prevent the ITC from applying it if and when it so elected.

   In a recent post I mentioned that there are lawmakers and scholars who would like the ITC to give serious consideration to adopting eBay (or maybe parts of it). And the ITC itself clearly keeps that option open. The review notice issued on Monday in the Motorola-Apple case includes eight FRAND-related questions, seven of which (questions 7-13) contain the term "equity", and two other questions (questions 4 and 5) that don't mention the term but are definitely consistent with what could be, at least in part, an eBay-esque approach.

2. I published the whole FRAND passage of Judge Posner's ruling, and while Judge Posner makes reference to eBay in his overall denial of injunctive relief in the Apple v. Motorola case, you can read the original text in that blog post and you'll see that Judge Posner's position on FRAND is entirely independent from the four eBay factors: it's a general competition/antitrust and common sense kind of argument. Even the paragraph that starts with the term "Injunctive Relief" stands on its own and doesn't depend in any way on eBay or rely on its four-factor analysis.

In a different paragraph of its letter to the ITC, Google claims that import bans "must be" the consequence of a finding of a violation "because, in the absence of the availability of exclusion order, implementers have little incentive to negotiate in good faith towards the completion of a license on [F]RAND terms". Motorola told the same kind of thing to Judge Posner, who rejected that argument. The Mannheim Regional Court concurred with it, but Germany is, I regret to say, a unique jurisdiction in that regard.

Google/Motorola will make more efforts to downplay the importance of Judge Posner's ruling. Microsoft also submitted Judge Posner's decision to the United States District Court for the Western District of Washington, where it has a summary judgment motion on Motorola's request for injunctive relief pending. In that case, there is no ITC-specific argument: Motorola can just say that a district court decision from a different circuit (7th Circuit) shouldn't matter in Seattle (9th Circuit) -- but Judge Posner's FRAND thinking will be taken very seriously there, I'm sure.

The fact that Google-Motorola argues against the significance of Judge Posner's ruling, implicitly announcing an appeal and belittling it as a "non-binding district court decision" (Judge Posner, a circuit judge who usually only hears apeals, was sitting "by designation" on a district court for that particular case), shows that some people made a mistake (or purposely wanted to mislead) by portraying the ruling as a defeat only, or mostly, for Apple. Apple wanted a better outcome, but the decision on Apple's claims was very specific not only to the four patents at issue at that stage of the litigation but also to the course of events in that litigation (as I pointed out in my detailed analysis). As a matter of fact, Apple just won a preliminary injunction against Samsung, which shows that Apple can still succeed in court post-Chicago. By contrast, Judge Posner's position on FRAND is universally-applicable, and it will be extremely influential, throughout and beyond the United States (including, of course, the ITC). And that's what has Google/Motorola worried.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Qualcomm restructures company due to concerns over impact of open source licenses on patents

These days, when companies announce a restructuring (or the exploration of "strategic alternatives") with respect to their patent portfolios, it usually means that someone hopes to sell out or to ratchet up monetization. Today, Qualcomm announced a restructuring that is simply a precautionary measure. Qualcomm keeps almost all of its patents in the existing parent company but spins off research and development. Qualcomm forms "a new wholly owned subsidiary, Qualcomm Technologies, Inc. (QTI), which, along with its subsidiaries, will operate substantially all of Qualcomm’s research and development activities, as well as product and services businesses, including its semiconductor business, QCT". This is because "the company expects that QTI and its subsidiaries' product and services businesses will increase their work with open source software in the future and this restructuring will, among other things, help ensure that QTI and its subsidiaries’ activities do not result in the licensing of any of Qualcomm Incorporated's patents, including its 3G and 4G patents".

What does this mean? Qualcomm knows that its patents are the crown jewels of the company and is concerned that it could lose its ability to enforce some of those crown jewels against third parties just because of the patent-related pitfalls involved with open source licensing. This would adversely affect Qualcomm's licensing business and its shareholder value.

Open source licensing is a tricky thing. At first sight, many people are led to believe that such licenses as the GPL, the Apache license or the various BSD-style licenses are straightforward and have no significant downside. But those who contribute to open source projects or redistribute software under open source licenses may indeed restrict their ability to enforce patent rights against others. Open source licenses are primarily copyright licenses, but some contain clauses on patents and even those that don't mention patents at all can be construed to constitute a grant of an implicit patent license. Open source software is free, and for a company like Qualcomm it would be devastasting if some of its patents could be used on a royalty-free and largely or entirely restriction-free basis just by incorporating certain open source code with which Qualcomm is involved (as a contributor and/or redistributor) into third-party products.

BSD-style licenses are very short and usually don't mention patents explicitly. The GPLv2 (the license under which Linux, MySQL and many other open source programs are published, though it's less popular now than it used to be) makes some references to patents but lacks clarity in this area. That's why the GPLv3 was primarily created in order to make up for the GPLv2's patent-related shortcomings, but GPLv3 is ideologically-charged and much less popular. The Apache Software License also makes explicit reference to patents but is more palatable to commercial players than GPLv3. Still, the philosophy behind open source licenses is usually hostile to patents.

For a large organization like Qualcomm, it's very difficult to manage the use of open source licenses on a company-wide basis. If you have an engineer somewhere who isn't aware of the legal issues involved but contributes some code to an open source project, or incorporates open source software into some Qualcomm technology, the impact on Qualcomm's patents could be far-reaching -- and the company might not know it until it sues someone over a patent and suddenly faces a license-related defense. It's impossible to have a lawyer look over every engineer's shoulder all the time. Qualcomm was apparently aware of these risks and opted for a new corporate structure under which it can counter any license-based defense by pointing to the fact that a subsidiary cannot license out its parent company's patents.

The effort of restructuring a company of Qualcomm's size is very significant. The fact that Qualcomm undertook this effort shows how protective its management is of its patents and how profound its concern over the implications of open source licenses must have been.

The organizations behind certain popular open source licenses, such as the Free Software Foundation (GPL) or the Apache Software Foundation, will probably look closely at what Qualcomm is doing and discuss internally whether Qualcomm's restructring is a blueprint for all those who seek to circumvent the patent clauses of open source licenses in a way that runs counter to the spirit of those licenses or, even worse, renders the patent clauses of those licenses ineffectual. There will probably be some lively debate on certain internal (or even public) mailing lists.

And many other companies that make use of and/or contribute to open source software will also think about whether their corporate structure poses a risk to the enforceability of their patent rights.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Apple posts bond and wins battle over expert reports, Samsung moves to stay injunction

These days there's a flurry of Apple v. Samsung activity. Late on Tuesday by local time, Judge Koh granted Apple a preliminary injunction against the Galaxy Tab 10.1, and Samsung filed a notice of appeal only about five hours later. In the late afternoon of the following day, Wednesday, three more things happened:

1. Apple posted its $2.6 million bond right away;

2. Samsung filed a motion to stay the injunction pending its appeal; and

3. Apple won, by an extraordinarily wide margin, a battle with Samsung over the exclusion of portions of each other's expert reports.

$2.6 million bond already posted

Apple didn't hesitate to post its $2.6 million bond to protect Samsung againt the possibility of a successful appeal, in which case the preliminary injunction would be found to have been improperly granted. Here's the key part of the bond document (click on the image to enlarge):

On this basis, the injunction has taken effect and Samsung must abide by it. Otherwise Apple could ask the court to sanction Samsung for contempt.

Samsung asks to stay enforcement for the duration of its appeal to the Federal Circuit

Samsung later filed a motion to stay the injunction pending its appeal to the Federal Circuit. Samsung also asked the court for an expedited schedule to adjudicate its motion to stay. According to Samsung's proposal, Apple would have to file its opposition brief tomorrow, Friday, by noon local time. Apple actually would have been willing to agree on an expedited schedule but wanted to have until Monday for its filing. I frankly don't understand why Samsung didn't just accept Apple's proposal, given the difference of only one business day.

Samsung's motion to stay argues that it's likely to succeed on appeal because the court "erred by issuing a preliminary injunction based on a stale and incomplete record" and the injunction "is improper based on the current evidence" (which Judge Koh did not allow Samsung to present at this stage).

Samsung discusses the harm that it and "the public" would allegedly suffer from enforcement of the injunction and mentions again its relationships with wireless carriers.

Ideally, Samsung wants a stay pending its entire appeal, but it alternatively (and more realistically) asks for a stay pending the CAFC's decision on its motion to stay (knowing that Judge Koh is certain to deny a stay pending the entire appeal).

I don't want to overstate the merits of Samsung's appeal and its request for a stay. It's going to be difficult for Samsung at this stage. But I reiterate my belief that Samsung's arguments aren't entirely implausible. Just like I wrote yesterday, Samsung also notes that the CAFC actually wanted Judge Koh to perform another equitable analysis, but her order instead relied on the opinion of Circuit Judge O'Malley. It's possible that none of Samsung's "new" arguments have merit and that none of its new proposed pieces of evidence makes a difference. But if there's only one item that should have been and wasn't considered, then Judge Koh's decision to grant a preliminary injunction is less than waterproof. Since Judge O'Malley's position (that there was no need for a new equitable analysis as the record was supposedly clear) wasn't adopted by the majority of the CAFC, it can't necessarily be relied on. The safer alternative would have been to set a tight schedule and let Samsung produce its new evidence, to hear the parties, and to perform a new equitable analysis based on the latest record.

[Update] Judge Koh granted Samsung's motion to shorten time for the briefing process concerning its motion, but gives Apple 21 hours of additional time to file its opposition brief. The filing deadline is Saturday (June 30), 9:00 AM, while Samsung proposed Friday 12:00 noon. There will be no reply brief (Samsung also proposed not to file one), and no hearing. I believe Judge Koh will adjudicate the motion during the weekend, or on Monday morning at the latest. [/Update]

Apple gets many portions of Samsung's expert reports excluded but defeats most of Samsung's motions

In another battle that is relevant with a view to the trial that will start in about a month, Apple won by a wide margin a battle with Samsung over the parties' motions to exclude portion of each other's expert reports. In the greater scheme of things, this is just one of many steps in a litigation, but whether certain theories are allowed to be presented at a jury trial can make a difference.

Magistrate Judge Grewal explains in his order that "expert trial testimony in patent cases is often far from perfect" and "[t]his case is no exception", but the court can't strike everything someone criticizes. In this particular case, "many of the expert reports offer theories or rely on evidence never previously disclosed as required", and that's the basis on which a number of motions to strike succeeded.

The margin by which Apple won this battle is extraordinarily wide. Apple succeeded with motions to strike portions of

• four Samsung expert reports arguing that the D'889, D'667 and D'087 patents are invalid for indefiniteness;

• two Samsung expert reports denying the infringement of certain design patents;

• a Samsung expert report arguing that the '915 patent is invalid (Apple's motion was granted with respect to seven of 10 references);

• a Samsung expert's opinion that Apple's relevant design patents should be narrowly construed in light of subsequently issued design patents

• a Samsung expert report arguing tha the D'334 and D'305 patents are invalid;

• two Samsung expert reports opining that Apple's asserted trade dress lacks distinctiveness;

• a Samsung expert report arguing that the '381 ("rubber-banding") patent is invalid;

• a Samsung expert report arguing that the '607 patent is invalid (one of the the three portions stricken alleged inequitable conduct); and

• a Samsung expert report arguing that Apple infringes the '516 patent.

Apple did not succeed with respect to portions of Samsung expert reports on the claimed non-infringement by Samsung of the '915, '381 and '607 patents and on Apple's alleged infringement of the '460 patent as well as a supplemental damages report and a rebuttal damages report. But some of the denials came with an authorization of additional expert testimony. Apple won a total of five hours of additional depositions, while Samsung won only two additional hours of testimony.

Samsung's own motions to strike portions of Apple's expert reports were much less successful than Apple's motions. Magistrate Judge Grewal denied certain Samsung motions related to Apple expert reports on the alleged infringement of the '381 patent, tbe alleged invalidity of the '711 patent, the alleged non-infringement of the '711 patent, an expert report on damages, an expert report on the importance of design to consumers (a cornerstone of Apple's argument in this case), and certain trade dress claims. Samsung succeeded only with a motion to strike portions of an Apple expert reports opining on alternatives to Apple's design patents and only with parts of such motions targeting Apple expert reports on the state of the art surrounding Apple's design patents (Samsung got certain references to devices stricken but Apple defended its references to reviews, comparisons and design elements) and the alleged infringement of the '607 patent (Samsung lost with respect to references to laboratory results but won with respect to "an infringement theory and evidence").

I have previously stated my belief that Apple goes into this summer's trial with a fundamentally stronger case than Samsung. That belief is mostly based on the strength of the asserted intellectual property rights and the fact that Samsung mostly relies on FRAND-pledged standard-essential patents (SEPs). Both parties have great lawyers, but no lawyer can change the fact that Samsung is in a strategically weaker position here. Apple won't be able to prevail on each and every intellectual property right it asserts, but I think Apple will at least win parts of its case while Samsung will at best win a FRAND royalty but no injunction over SEPs. Samsung's non-standard-essential patents don't appear frightening so far.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Galaxy Tab 10.1 banned in the U.S. over design patent, Friday hearing surprisingly canceled

The United States District Court for the Northern District of California just became the third court to order a preliminary injunction against the Samsung Galaxy Tab 10.1, and the second, after the Düsseldorf Regional Court, to do so over an iPad design patent (an Australian injunction, which was subsequently lifted, was based on two technical patents).

Judge Lucy Koh entered the injunction at close of business on Tuesday. Only a day earlier she had scheduled a hearing for Friday. Her order explains that "further briefing and argument from the parties on the issue of the preliminary injunction is unnecessary". Given the Federal Circuit's appellate ruling and her original decision to deny an injunction (which was based on the assumption, overturned on appeal, that the design patent was likely invalid, but nevertheless stated that there was an infringement and irreparable harm), she felt that "any further delay of the injunction is not justified". The injunction will enter into effect as soon as Apple posts a $2.6 million bond.

[Update] In record time, only about five hours after the order, Samsung just filed its notice of appeal:

NOTICE IS HEREBY GIVEN that Defendants Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC appeal to the United States Court of Appeals for the Federal Circuit from the June 26, 2012 Order Granting Preliminary Injunction entered in the above-captioned action, Docket No. 1135, and each and every part thereof.

Given that the majority of the Court of Appeals for the Federal Circuit -- all but one judge -- did not want to tell the district court to enter a preliminary injunction right away, it's not entirely impossible that Samsung can raise issues concerning Judge Koh's equitable analysis. As you can read further below, Samsung asked for the admission of additional evidence, and Judge Koh's denial of that motion will be part of Samsung's appellate argument. Even if Samsung's appeal failed, Samsung simply cannot let this preliminary injunction stand without an appeal since it will want to argue some of the same issues at the upcoming trial. [/Update]

The decision strengthens Apple's "copycat" allegations against Samsung. The ruling notes that Judge Koh's court "previously found the Galaxy Tab 10.1 to be substantially similar 'in the eyes of the ordinary observer' to the D'889" and that "the Galaxy Tab 10.1 is 'virtually indistinguishable' from Apple's iPad and iPad 2". In fact, Samsung's counsel couldn't distinguish those products when Judge Koh showed them in the courtroom at a limited distance.

If Apple also prevails on this infringement issue at the upcoming trial (which is scheduled to begin on July 30), Samsung may be liable for a substantial amount of damages. Design patent infringement can be very costly.

Samsung is still going to be able to sell 10.1-inch tablet computers in the United States. The scope of a design patent is relatively narrow (which makes it all the more embarrassing for Samsung that it infringed one at all), so Samsung can design around it, as it did in Germany, where a motion for a preliminary injunction against the Galaxy Tab 10.1N (the redesigned version) was denied. At this stage of the lifecycle of the Galaxy Tab 10.1, it's possible that Samsung decides to just take it from the market and focus on new product launches. But if it wanted to continue to sell it in the United States for some more time, it would simply redesign. A redesign might lead to another push by Apple for an injunction, but that's the best way for both parties to get clarity on the scope of Apple's design patent.

Disputes over design patents are usually not settled by way of a long-term license agreement. Patent cross-license agreements typically exclude design patents, just like companies wouldn't cross-license all of their trademarks. Design patent disputes can just be settled case by case (for example, with the alleged infringer agreeing to make certain modifications).

Apple's enforcement of U.S. design patents and equivalent design rights in other jurisdictions already appears to have resulted in different design decisions on Samsung's parts. Its newer products, such as the Galaxy S III smartphone, are clearly more distinguishable from Apple's offerings. Samsung saw that it was just going to suffer all sorts of disruptions of its business, and negative publicity, by continuing to copy Apple's designs. And the commercial impact of injunctions is much greater if they come down shortly after the launch of a product.

Judge Koh will soon adjudicate another motion for a preliminary injunction against Samsung: the one targeting the Galaxy Nexus smartphone with four technical patents. A hearing on that motion was held earlier this month. That decision will be much more important since the software patents at issue in that case are potentially much broader than the iPad design patent and allegedly cover techniques that are found in many other products (other Samsung products as well as third-party products).

Samsung failed to stall

A few hours prior to the Galaxy Tab 10.1 decision, Samsung's hard-working and imaginative lawyers made a last-ditch attempt to cause a delay. They brought a motion (already the second one in as many months) to introduce new evidence. They argued that the factual record on which Judge Koh originally denied a preliminary injunction in December 2011 was outdated by now, and tried to inject new prior art and arguments related to an iPad 2 prototype Apple presented to the patent office. Judge Koh denied this 11th-hour motion in a footnote.

Interestingly, the ruling also says this:

"This Court is persuaded by Judge O'Malley's concurrence that the public interest favors an injunction here 'because the record at this stage shows that the D'889 Patent is likely valid and infringed, and there are no other relevant concerns, the public interest is best served by granting a preliminary injunction.'"

Circuit Judge O'Malley concurred with her colleagues in all respects but wanted the Federal Circuit to go one step further and order an immediate entry of a preliminary injunction. Her colleagues, however, believed that the first-line court, the district court, should perform the equitable analysis and said that this could happen quickly. Samsung's multiple efforts to delay the district court's decision on remand show that Judge O'Malley's concern about potential delay was not unfounded.

Getting a denial of a preliminary injunction overturned, even if only to a limited degree, was a significant achievement for Apple's lawyers at the Federal Circuit. It's easier to succeed with appeals of final rulings. More and more smartphone patent cases are appealed to the Federal Circuit, and if statistics are any indication, we will see more cases in which district court and ITC decisions clearing Android devices of certain infringements will be modified. This was just the first case in which it produced a result that impacts the market, but it won't be the last.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Apple narrows its second ITC case against HTC, drops one entire patent and 34 claims

Yesterday, Apple filed a motion in the investigation of its second ITC complaint against HTC (the one filed last summer). The motion entered the public record today. Apple withdraws all asserted claims of one patent as well as 34 claims from the four patents remaining in the investigation. This is a pre-trial streamlining effort. The evidentiary hearing will take place in August.

Originally, Apple asserted five patents. I listed them in this section of another post. Apple then replaced U.S. Patent No. 6,956,564, a patent on "portable computers" that Apple acquired from British Telecom, with U.S. Patent No. RE42,738, a reissued version of the '564 patent. Appe's motion withdraws all four asserted claims of the reissue patent as well as 34 claims from the four patents remaining in the investigation. Apple's motion contains a table that shows the impact of its latest streamlining. I have reformatted that table in HTML. Just like in Apple's original table, independent claims are identified in bold font. Here's the HTML version of the table:

U.S. Patent No.	Proposed Terminated Claims	Claims Remaining After Termination
RE42,738	4, 28, 36 and 37	None
7,469,381	2, 3, 5, 7, 8, 10, 12, 14, 16, 18 and 19	1, 4, 6, 9, 11, 13, 15, 17 and 20
7,844,915	4, 7, 11 and 14	1, 2-3, 5, 8, 9-10 and 12
7,084,859	15-19	14, 20, 25 and 28
7,920,129	1, 2, 8-10, 11, 17, 18-19, 21, 22, 24-26	3, 5-7, 12, 14-16 and 27-28

Prior to the latest motion, Apple had already dropped claims 15-19 and 21 of the '915 patent.

At this stage, Apple is still asserting 31 claims of four patents. There will have to be some further narrowing before and/or during and/or shortly after trial. I have no doubt about Apple's willingness to narrow the scope of the investigation step by step.

In the investigation of HTC's second complaint against Apple, some narrowing has already occurred (and been appealed) because five Google patents were thrown out by a judge. Also, Apple claims that HTC's assertion of two of the remaining three patents constitutes an abuse of standard-essential patents.

The parties are furthermore embroiled in an enforcement dispute relating to the import ban the ITC ordered last December over the '647 "data tapping" patent. The latest filing was an HTC letter.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

Apple v. Samsung: injunction hearing on Friday, design patent dropped, transparency dispute

There have been some new developments in the first U.S. litigation between Apple and Samsung pending in the Northern District of California. Time for a roundup:

1. Judge Lucy Koh has scheduled a preliminary injunction hearing concerning the Galaxy Tab 10.1 for Friday, June 29, 2012, as a follow-up to to the Federal Circuit's appellate decision. More detail below.

2. Apple has dropped an iPhone user interface design patent as part of continuing efforts to narrow the case with a view to the upcoming trial. More detail below.

3. The court is defending public access to filings against excessive sealing, pointing to Ninth Circuit law. For more detail on this one, I recommend Alison Frankel's article for Thomson Reuters News & Insight.

Galaxy Tab 10.1 preliminary injunction hearing on Friday (June 29)

At a summary judgment hearing last week (see this report by the IDG News Service), Judge Koh already scheduled a preliminary injunction hearing for Friday, June 29. A week ago I reported that a decision on Apple's post-appeal motion for a U.S. ban of the Galaxy Tab 10.1 over an iPad design patent was approaching after the Federal Circuit denied a Samsung request for a rehearing.

Late on Monday, Judge Koh entered an order for the upcoming hearing, telling the parties that, at the hearing, they "may address the two issues identified in the limited remand order by the Federal Circuit: (1) whether the balance of the hardships favors issuing a preliminary injunction, and (2) whether the public interest favors issuing a preliminary injunction", but "[n]o further briefing or evidence will be permitted".

The parties previously filed their related pleadings, so the court is already briefed. Apple brought its motion on May 18; Samsung responded a week later with a largely 4G-related argument, to which Apple replied on May 31 (see the first bullet point in this post). From the outset, Samsung argued that the district court would have to wait for the formal mandate from the Federal Circuit. Judge Koh nevertheless set the aforementioned, pretty expedited briefing schedule, but upon further consideration she canceled a June 7 hearing and denied Apple's motion as premature for the time being. In yesterday's filing, Judge Koh informs the parties that "the mandate from the Federal Circuit has been received and docketed by the Clerk" As a result, the ball is now, once again, in the district court.

I believe Judge Koh will decide very quickly on this one, either right from the bench on Friday or shortly thereafter. She also has a preliminary injunction motion targeting the Galaxy Nexus smartphone to adjudicate, following a June 7 hearing. She said that an order would issue shortly, but I predicted that this was going to take more than just a few days, though not as long as the decision on last year's motion (which took almost three months after the related hearing).

Apple drops iPhone user interface design patent (D617,334)

Last Wednesday, Apple gave notice of its "intent to dismiss claims concerning U.S. Patent No. D617,334, and a day later, Apple and Samsung filed a stipulation for the dismissal without prejudice (i.e., Apple could still enforce this patent against Samsung in another litigation) of this design patent.

During the last two rounds of narrowing proposals, Apple had already dropped two other design patents and announced that it was going to withdraw at least one more design patent. It has now apparently selected the D334 patent for this purpose.

From what I read about last week's hearing, Judge Koh keeps up the pressure with respect to narrowing. The parties will only get a limited amount of time and won't be allowed to file "thousands of documents", as Magistrate Judge Grewal informed them even ahead of Judge Koh's hearing. This means the parties will have to focus on their strongest arguments, and in order to do so, they may also decide to focus on even fewer intellectual property rights. Some pending summary judgment motions could also have a significant narrowing effect. Samsung still claims that Apple needs to drop more of its asserted rights. Apple definitely wants this case to go to trial on July 30.

There might also be some narrowing with a view to the FRAND issues raised by most of Samsung's offensive counterclaims. Judge Posner has shown how a court can deal efficiently with assertions of standard-essential patents. But Judge Koh appears to be much less aggressive when it comes to narrowing a case. And that may also benefit Apple for its own claims (which don't raise FRAND issues).

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

ITC postpones decision on review of preliminary Google-Microsoft ruling by one week

The ITC just announced a thorough review of a preliminary ruling on Google subsidiary Motorola Mobility's complaint against Apple. It also had a target date today for a decision on whether (and, if so, to what extent) to review a preliminary ruling on Motorola's complaint against Microsoft. But that decision was postponed by one week. It is now scheduled to be announced in one week from today, i.e., on Monday, July 2, 2012.

In light of the focus of the questions the Commission's review notice raised in the Apple case, I have no doubt FRAND and injunctive relief issues will also play a major role in next week's notice. But the question of whether Microsoft waived its FRAND defense will hardly come up: Microsoft's FRAND defense was discussed in detail in the initial determination, which stated that "Motorola was not interested in good-faith negotiations and in extending a [F]RAND license" to Microsoft.

Also, Microsoft had filed a lawsuit to enforce Motorola's FRAND licensing obligations even before Motorola brought this ITC complaint. That federal lawsuit will go to trial in November.

On Friday, Microsoft filed a motion for a partial termination of the investigation. The content of the motion (85 pages including exhibits) is not publicly accessible, but chances are that it also has to do with FRAND. And today, Microsoft filed a request for judicial notice of the FRAND part of Judge Posner's Apple v. Motorola decision, which I said before is the best FRAND ruling I've ever seen.

In connection with the Motorola's two ITC complaints, lawmakers, the antitrust enforcers of the FTC and various major industry players and industry groups also submitted statements on public interest considerations in connection with the ITC investigations of Motorola's complaints against Apple and Microsoft:

• PoliticoPro recently reported on letters from six senators, led by Senators Herb Kohl (Chairman of the Subcommittee on Antitrust, Competition Policy and Consumer Rights) and Mike Lee (Ranking Member of the same subcommittee)

• Members of Congress from both sides of the aisle filed letters that I published a couple of weeks ago

• United States Federal Trade Commission (this statement was quoted and endorsed by Judge Posner in last week's ruling)

• HP, Nokia, Verizon, Business Software Alliance, Retail Industry Leaders Association, Association for Competitive Technology

• Cisco, Entertainment Software Association

• Intel, AT&T

• IBM, Activision Blizzard

The ITC's announcement next week will be very interesting, I'm sure.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|

ITC starts thorough review of preliminary Google-Apple ruling, including key FRAND issues

The United States International Trade Commission just gave notice that it will review in part -- actually, in many parts -- a preliminary ruling that held Apple to infringe a wireless standard-essential patent (SEP) held by Google subsidiary Motorola Mobility.

Based on the review notice, Apple now has a realistic chance of avoiding an import ban, but Motorola's own petition for review has also been granted in some respects.

The good news for Apple is that the Commission, the six-member decision-making body at the top of the ITC, is going to look into a couple of questions affecting both the infringement and the (in)validity analysis concerning the patent that Administrative Law Judge Thomas Pender deemed valid and infringed. There is also a possibility of the Commission overruling Judge Pender with respect to Motorola's own use of that patent (only a patent holder who satisfies the domestic industry requirement can win an ITC exclusion order).

What could be even more important, especially with a view to other pending ITC investigations: eight of the Commission's 13 review questions relate to the implications of a FRAND licensing obligation to the potential entry of an exclusion order. The first of those questions relates to whether Apple somehow waived its right to raise the FRAND defense, but other questions relate to the possibility of a patent holder being generally barred from seeking an import ban over a FRAND-pledged standard-essential patent. These are the FRAND-related questions (the Commmission refers to RAND, a synomym):

6. Has Apple waived its right to assert that Motorola failed to offer a license on reasonable and non-discriminatory (“RAND”) terms? In discussing this issue, please refer to Commission Investigative Staff Motion in Limine to Exclude The Expert Opinion of Jerry Hausman filed July 14, 2011, and to Respondent Apple Inc.’s Opposition to Commission Investigative Staff's Motion In Limine to Exclude the Expert Opinion of Robert O’Hara at page 1, n. 1 filed July 22, 2011.

7. If the record of an investigation lacks evidence sufficient to support a RAND-based affirmative defense (e.g., equitable estoppel, implied license, waiver, etc.), under what circumstances (if any) should a RAND obligation nonetheless preclude issuance of an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

8. Does the mere existence of a RAND obligation preclude issuance of an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

9. Should a patent owner that has refused to offer a license to a named respondent in a Commission investigation on a RAND obligated patent be able to obtain an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order

10. Should a patent owner that has refused to offer a license on a RAND obligated patent to some entity (regardless of whether that entity is a named respondent in a Commission investigation) be able to obtain an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

11. Should a patent owner that has refused to negotiate a license on RAND terms with a named respondent in a Commission investigation be precluded from obtaining an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

12. Should a patent owner that has refused to negotiate a license on RAND terms with some entity (regardless of whether that entity is a named respondent in a Commission investigation) be precluded from obtaining an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

13. Should a patent owner who has offered a RAND license that the named respondent in a Commission investigation has rejected be precluded from obtaining an exclusion order? Please discuss theories in law, equity, and the public interest, and identify which (if any) of the 337(d)(1) public interest factors allegedly precludes issuance of such an order.

In addition to those eight FRAND questions, the Commission also raises two questions that could lead to a conclusion that injunctive relief in the form of an import ban is not warranted:

4. With regard to the ‘697 and ‘223 patents, are there substantial costs and delays associated with switching away from the standardized technology in question?

5. With regard to the ‘697 and ‘223 patents, do the patents in question cover relatively minor components of the accused products?

These questions don't suggest what the decision will look like, but it's interesting that the ITC is now looking very closely at theories that could result in the denial of an exclusion order even if a violation is identified. In other words, the ITC is looking at the implications of injunctive relief more comprehensively, and it may increasingly base its analysis on at least some of the factors that federal courts consider under the eBay v. MercExchange test for patent injunctions.

In connection with the investigations of Motorola's complaints against Microsoft and Apple, statements on the public interest have been filed, especially (though not exclusively) over FRAND issues, by major stakeholders, even including lawmakers (formally only in the Microsoft case, but with implications also for the Apple case). In the Apple case, the ITC's review notice acknowledges submissions from the following non-parties: Federal Trade Commission; Business Software Alliance; Association for Competitive Technology; Retail Industry Leaders Association; Verizon; Nokia Corporation; Hewlett-Packard Company; and Microsoft Corporation. And the Commission is now going to look very closely at the issues that have been raised. As I said before, eight of the 13 review questions relate to FRAND, and two more relate to equitable considerations that could stand in the way of the entry of an exclusion order.

The ITC is also going to review some questions with respect to three Motorola patents that the ALJ did not deem violated. I have yet to analyze whether the scope of the review suggests that the final decision could, apart from FRAND and injunctive relief issues, be even more favorable to Motorola than the preliminary ruling, but at first sight I think there's at least one more patent on which Motorola could prevail. I will look at this more closely when the parties' answers to the Commission's questions become available.

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+.

Follow @FOSSpatents

Share with other professionals via LinkedIn:

Share|