A month ago, Google subsidiary Motorola Mobility filed its second ITC complaint against Apple, seeking an import ban over the alleged infringement of seven patents. The Commission, the six-member decision-making body at the top of the U.S. trade agency, has just decided to institute a formal investigation of this complaint.
This comes as no surprise: every single one of the ITC complaints that I have been watching in this industry over the last two years resulted in the institution of an investigation. I usually don't even report on those routine decisions, but after the billion-dollar Apple v. Samsung verdict there is presently more interest than ever in these disputes, so I wanted to share my perspective.
Google filed this complaint on August 17, one week before the aforementioned jury verdict as well as a decision on Motorola's first ITC complaint against Apple. The ITC cleared Apple of infringement of three of Motorola's patents-in-suit and remanded the investigation with respect to a single non-standard-essential patent. I suspected from the beginning that Google (Motorola) just wanted to show that its patent enforcement effort is still alive despite the setbacks it presumably expected. What contributed to this impression of mine is that Motorola's complaint was apparently filed under time constraints: some certified copies of asserted patents were missing at the time of the original complaint, but had been requested from the U.S. Patent and Trademark Office.
In August 2011, Google announced its merger agreement with Motorola Mobility (MMI) and suggested that it would use MMI's patent portfolio to bring about patent peace. Unfortunately for the Android ecosystem, the transaction has not yet had any peacemaking impact for a lack of serious leverage. Apple continues to sue three leading Android device makers (Samsung, Motorola Mobility, and HTC), and Microsoft continues to sign up licensees who take their destiny into their own hands as they realize a need to address Android's massive, court-validated patent infringement issues. In May, Nokia commenced a patent assertion campaign against Android device makers (as well as BlackBerry maker Research In Motion). Other large publicly-traded companies claiming that Android infringes their intellectual property include Oracle (which will appeal a recent California judgment), British Telecom (BT), Fujifilm, and eBay (which alleges a violation of trade secrets, not patents). There are no signs of Google's post-MMI-acquisition patent portfolio deterring anyone's enforcement.
Google undoubtedly hopes that Motorola Mobility's lawsuits against Apple may at some point lead to a situation in which Apple may back down and tolerate unfettered infringement of its rights by Google and its device maker partners -- which I doubt very much to be honest.
What I like about Motorola Mobility's second ITC complaint against Apple is that there are to the best of my knowledge, no standard-essential patents (SEPs) in play. Import bans based on SEPs are highly problematic except under the most egregious of circumstances. While there are still various ways in which Googlorola tries to gain leverage from SEPs against Apple and Microsoft, it is now less aggressive in its pursuit of such claims. Last month Motorola Mobility confirmed that it accepted a proposal by Apple to take a license to its wireless SEPs in Germany, at a rate that must be FRAND but has not been quantified yet (this will have to be sorted out in German courts, but whatever the amount will ultimately be, there won't be any more injunctions against Apple over Motorola's wireless SEPs in Germany).
On Thursday, Apple won a German patent injunction against Motorola Mobility over its "overscroll bounce", or "rubber-banding", patent. This was Apple's third German injunction against Motorola Mobility, which can keep selling its products by working around them (at the price of some degradation of the user experience). It also made Europe the third continent on which Apple prevailed against an Android device maker based on that particular patent, which was previously found infringed by a U.S. jury and a Korean court.
Counting from the day on which they are instituted, ITC investigations typically take 16-18 months, and sometimes longer. The investigation of Motorola's second complaint against Apple won't be concluded before sometime in 2014.
While the major players involved in the current wave of smartphone patent disputes continue to file ITC complaints from time to time, the Washington, D.C.-based government agency with quasi-judicial authority has actually turned out to be a very difficult venue for complainants. All of them have experienced a very high drop-out rate of their patent claims, and remand decisions that result in substantial delays. I mentioned the remand of Motorola's first complaint, and the dismissal of most of its parts, further above. Apple's own complaint against Motorola was dismissed in its entirety (three patents), and a preliminary ruling issued on Friday shows that Samsung is not on the winning track against Apple. Several ITC rulings on smartphone-related complaints have been appealed to the United States Court of Appeals for the Federal Circuit. Complainants can achieve better outcomes as a result of an appeal, but in general it's easier to succeed with an appeal of a district court decision.
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