Samsung says Apple is jumping the gun, Apple says Samsung is stalling: what's an invalid patent worth?

The week before last, Samsung filed a petition for an en banc rehearing (full-court review) of summary affirmance of a partial final judgment that would allow Apple to collect roughly half a billion dollars over a set of patents, the most valuable software patent of which has meanwhile been held invalid by the United States Patent and Trademark Office (the Central Reexamination Division as well as a Patent Trial and Appeal Board). On Tuesday, the Federal Circuit invited Apple to file a response on or before November 13, 2015, but Apple didn't want to wait nearly that long: it filed its opposition the next day, Wednesday. (Obviously, Apple's lawyers were able to already prepare for this as soon as they saw Samsung's filing on October 19, so I doubt anyone had to work for 24 hours without sleep.)

Here's Apple's opposition filing (this post continues below the document):

15-11-02 Apple Opposition to Samsung Petition for Rehearing by Florian Mueller

By filing on the first day of an 11-day deadline, Apple demonstrates once again that it is very serious about collecting damages from Samsung at the earliest opportunity. Of course, Apple wants this to look like a case in which a totally legit right holder should finally, after years of litigation, get paid. Apple is legit, but that is not the case for all of its patents-in-suit (in Europe, not even one Apple patent-in-suit has been upheld so far, so at least in Europe, Apple's lawsuits were not legit based on what we know today).

Apple portrays Samsung as a defendant employing stalling tactics. For example, a footnote of the above filing says the following:

"Consistent with its strategy of delay, Samsung sought and was granted an extension of 32 days in which to file its petition for certiorari."

That footnote refers to Samsung's previously-announced Supreme Court petition over design patent damages. The Chief Justice gave Samsung until December 14 (instead of November 11) to file that petition for writ of certiorari. There is, however, nothing unusual about that extension. I generally suspect that companies request extensions for their cert petitions mostly because it gives them more time for mobilization of amici curiae, while they could easily do their own filings on schedule, and that may very well be the case here. But a 32-day extension of a 90-day filing deadline doesn't really make a huge difference in the greater scheme of things. Stalling is something else to me.

Apple's opposition filing says Samsung is wrong on the law, and portrays Samsung's argument as merely policy-based. Once again, Apple does not argue policy in this context. It knows that from a pure policy perspective, it has a losing case: a patent that shouldn't have been granted in the first place should not entitle anyone to a damages award, even if the notoriously patentee-friendly Federal Circuit didn't hold it invalid. The patent had originally been granted by the USPTO, and the USPTO itself has corrected that mistake.

As for stalling, Apple is certainly not doing anything to accelerate the reexamination-related proceedings. It has made clear in various filings over the years that it would always exhaust all appeals to defend its patents even after multiple decisions holding them invalid. But that's what it's entitled to. So I don't see a reason why Apple could accuse Samsung of stalling or the other way round.

The real issue here is whether Apple is jumping the gun. It may appear counterintuitive to say that someone who wants to collect in 2015 money that had already been awarded by a jury in 2012 is jumping the gun. But the criterion is not how many years patent litigation takes, or whose fault it is (for example, a retrial in this first Apple-Samsung case would never have been necessary if Apple had made some different decisions in the build-up to the 2012 trial). The real issue here is precisely the one Law360 has raised in a recent headline:

Damages For A Canceled Patent?

The answer to that question should clearly be no.

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Google-SAP cross-license agreement announced: is SAP once again critical of software patents?

Google has previously announced various patent cross-license agreements, with partners including (but not limited to) Samsung and Cisco. Not with Apple and Microsoft, though: those announcements merely related to the withdrawal of lawsuits, not to actual license agreements.

Today, Google and SAP have announced "a long-term patent cross licensing agreement that covers a broad range of products and technologies."

It's not unprecedented for SAP to agree with Google in the context of patents. SAP has previously joined Google in supporting Samsung against Apple's pursuit of injunctive relief over patents covering (certain aspects of) minor features. But today's announcement contains a rather interesting quote from SAP's chief IP counsel:

"We are proud to announce this important agreement with Google, a global leader in technology," said Tony DiBartolomeo, Chief IP Counsel, SAP. "Giving talented engineers and developers the freedom to build great products is key to promoting innovation. Patent cross-license agreements like this one increase freedom to operate and prevent distractions from unnecessary patent litigation. And, like Google, SAP welcomes similar discussions with like-minded companies."

The second sentence ("Giving ...") appears to imply that software patents restrict the freedom of talented engineers and developers to build great products, and are, therefore, an impediment to innovation. The third sentence proposes cross-license agreements as means of increasing "freedom to operate" and calls patent litigation unnecessary and a distraction from innovative activity.

That's clearly a much more critical view of (software) patents than merely supporting the philosophy of Justice Kennedy in the eBay case that injunctions over minor features would give patent holders undue leverage.

SAP is living (in an abstract sense) proof that innovation in software, contrary to what many patent professionals claim all the time, is not dependent on patent protection. When SAP came out of nothing and became the most significant non-American software company, software patents weren't available--neither in the U.S. nor in Europe. For a long time SAP had no software patents, and even a while after it started filing for some, it had less than a handful.

Based on what I once heard from credible sources, Hasso Plattner, SAP's former CEO, was philosophically opposed to the notion of patenting software. But SAP may have felt forced to play the game everyone else was playing, and at some point, SAP's management believed its in-house patent attorneys that software patents were strategic assets for the company. I saw SAP patent attorneys at government roundtables and in the European Parliament, lobbying aggressively for software patents.

In 2005, the European Parliament rejected a proposed directive on computer-implemented inventions (more accurately and commonly referred to as the "EU software patent directive," though it's a fact that software patents already existed in Europe and continue to exist, because the exclusion of software patents defined in the European Patent Convention had already been vitiated beyond recognition by the European Patent Office and, to a lesser extent, national courts). Before the decisive vote, SAP placed an ad in the European Voice, a Brussels-based weekly on EU affairs published by the Economist Group, calling on Members of the European Parliament to vote in favor of the proposal. That ad came in handy for the movement opposing the bill: the liars supporting software patents (including the European Commission) had said all the time that the legislative measure was not at all about software, just "technical inventions," and had pointed to computer-controlled refrigerators and car braking systems, but SAP doesn't make any products of that kind: SAP is purely a software company, so its ad exposed the CII lie.

Now, more than ten years later, SAP appears to be part of the Google-led movement that is rather critical of software patents and those seeking to extort true innovators (ab)using patents of usually very questionable quality.

I hope SAP has now come full circle.

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Court expert: I don't want to appear partial and oppose Oracle's motion, but I'm doing it anyway

Dr. James Kearl, the court-appointed damages expert in the Oracle v. Google Android-Java copyright infringement case, yesterday responded to Oracle's motion to disqualify him on the grounds that he is no longer impartial due to his work on Samsung's behalf in the Apple v. Samsung cases that went to trial last year.

Here's his filing (this post continues below the document):

15-10-28 Kearl Answer to Oracle Motion to Disqualify by Florian Mueller

I had a #facepalm moment when I read toward the bottom of the first page that he does "not believe it appropriate for [him] to oppose Oracle's motion" because he--untruthfully--says he does "not have an adversarial position vis-a-vis Oracle" and then read on. His filing is not just a declaration that serves to state some facts for the record. It simply is an opposition to Oracle's motion. Nothing more and nothing less. Anything to the contrary should be reserved for April Fools' Day.

Dr. Kearl's filing spans several pages but does not contain anything new, enlightening, surprising, or whatever else might add value to the motion process.

Oracle's motion makes clear what the concern is: he's closer to one side than to the other. For a judge who had concerns in 2012 about bloggers potentially influencing a court or a jury (if that had happened, he'd have read blogs like Groklaw that got the rules for copyrightability totally wrong), it should be a no-brainer to dismiss a court-appointed expert once there are facts that show more of a proximity to one party than to the other.

Oracle's motion didn't refer to the strawmen Dr. Kearl's filing puts up just to have something to tear down. It's undisputed that he did not provide expert testimony directly on Apple's infringement assertions against Android. He does not deny, however, that Samsung used his testimony to convince the jury (rightfully so) that Apple's damages claims in that case were not just outsized but downright irrational.

He denies that he or his firm received $5 million (Apple's lawyers told the jury that Samsung had spent $5 million on damages counterclaims of §6 million and that this fact showed Samsung's counterclaims were just about devaluing patents), but he does not say what he and his firm received instead. Also, he doesn't explain why Samsung's trial counsel didn't object to the $5 million claim.

He stresses that he "did not meet or speak with any Samsung corporate officer or employee at any time before, during or after the Apple v. Samsung trial, with the single exception that a Samsung in-house attorney was intermittently present during portions of my preparation that occurred over parts of three days leading up to my court testimony that lasted no more than 20 minutes." Samsung is not a party to Oracle v. Google anyway. But what does he say about Google?

"My communication and work was with counsel from the Quinn Emanuel law firm, which was the outside law firm for Samsung. Likewise, whatever the relationship between Google and Samsung, I had no communication before, during or after the trial with any Google corporate officer or employee. Google's role, if any, and its products and services were completely irrelevant to the work that I did. I was not provided with information regarding Google's role in Apple v. Samsung, nor did I inquire about such."

Quinn Emanuel also represented Google in the same case. Oracle's motion stressed the fact. Dr. Kearl doesn't deny it.

I don't know the man, so he may genuinely be, as he writes, "confident that [he] can assist the court as a neutral economic expert in the present action." But the question is not how he feels. The question is whether Oracle can rely on its chance to make its case on a level playing field. With him, Oracle has every reason to be concerned, no matter how honorable he may be as a person. The court should say "thanks, but no thanks" to his offer to remain involved.

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Ericsson says Apple's Alice motion against wireless patents threatens to swallow all of patent law

An Alice motion in the Apple v. Ericsson case pending in the Northern District of California has reignited my interest in this dispute, and I'll soon take a look at the ITC and Eastern District of Texas proceedings and will try to find out more about the cases that will go to trial in Mannheim, Germany, on January 19, 2016.

Yesterday, Ericsson filed its opposition to Apple's motion (this post continues below the document):

15-10-28 Ericsson Opposition to Apple Motion for Summary Judgment by Florian Mueller

I'm not convinced by Ericsson's legal argument that the challenged patents cover more than the underlying abstract ideas. Basically, Ericsson refers to all sorts of technology and real-world values that are referenced, but that's not the substance of the patent: the most important question is whether whatever may (or may not) be novel goes beyond the underlying abstract concepts. Those patents don't cover antennas, for example. They refer to radio transmissions of signals, but they aren't radio patents. They are protocol patents, and I stand by what I wrote in my previous post: protocols should be patent-ineligible under any reasonable interpretation of Alice.

Ericsson points to "the Supreme Court's caution against too broad an application of 'this exclusionary principle lest it swallow all of patent law.'" It's true that the most extreme interpretation of 35 U.S.C. § 101 could limit the patent system to little more than mechanics, molecular pharmaceutics, and maybe electricity, too. But even if Apple succeeded in shooting down protocol patents, it wouldn't even be the end of all wireless patents.

Ericsson says the following about the lack of legal certainty in the Alice context:

"The Supreme Court has not 'delimit[ed] the precise contours of the ‘abstract ideas’ category.' [...] Nevertheless, the cases in which the Court has found patent claims to be directed to abstract ideas provide guidance."

The first sentence is correct. The second one is not incorrect per se, but it's incomplete. It's a half-truth. Of course, the cases in which the Supreme Court has held subject matter patent-ineligible are even more extreme cases than protocol patents. But Ericsson doesn't talk about how little the Supreme Court actually has held patent-eligible. Legal certainty for holders of patents that involve software exists pretty much only in connection with computer-controlled manufacturing processes. Protocols are far closer to the Bilski and Alice kind of patents than the physical process patent in Diamond v. Diehr.

Apple is fighting a good fight here.

Via TechRights I've become aware of this Lexology article by four Morrison & Foerster lawyers (I had seen the names of two of them before, in Oracle v. Google if I recall correctly) about "[a] chilly reception for Section 101 challenges at the ITC." I haven't watched any ITC cases recently but will at least take a look at the investigation of Ericsson's complaint against Apple. The ITC also took a different position on injunctive relief over standard-essential patents than district courts. In connection with validity determinations, however, the ITC cannot even argue that it faces a different situation because of a different set of remedies. In that context it absolutely has to be consistent with the case law outside the U.S. trade agency.

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Apple motion against Ericsson could result in devaluation of wireless patent portfolios: protocols patent-ineligible under Alice

The Apple v. Ericsson docket in the Northern District of California was worth taking another look (after quite a while): two weeks ago, Apple brought a motion for summary judgment of invalidity of two patents asserted by Ericsson in its counterclaims to Apple's declaratory judgment complaint, and the motion is entirely based on 35. U.S.C. § 101 in light of last year's famous (or infamous in the eyes of patent attorneys) Alice ruling by the Supreme Court on patent-ineligible subject matter (this post continues below the document):

15-10-14 Apple Motion for Summary Judgment Against Ericsson by Florian Mueller

The introductory part must have all owners of wireless patent portfolios--not just Ericsson, but also the likes of Nokia and InterDigital--profoundly concerned:

"Ericsson's '917 and '990 patents, two of the seven patents in suit, claim abstract concepts in the context of cellular systems. The '917 patent is directed to the concept of generating and sending a report upon the occurrence of an event. The '990 patent is directed to the concept of following commands to an individual while ignoring commands broadcast to a group. None of the asserted claims purports to claim any inventive hardware or method for carrying out the claimed abstract concepts. The asserted claims are directed to patent-ineligible subject matter and fail the two-step framework articulated in Alice Corp. Pty. Ltd. v. CLS Bank Int'l [...], and therefore they are invalid under 35 U.S.C. § 101."

If this motion succeeds, and if a ruling in Apple's favor is upheld on appeal, the CFOs of various companies that have wireless communications patents in their books have to contemplate write-offs.

As my loyal readers know, I've watched countless wireless (especially standard-essential) patent lawsuits over the course of the last five years. Those have not all been equally weak, but I found most of them very unimpressive from a technical invention point of view. One can easily be misled to think that there is great innovation involved--but only if one turns a blind eye to the fact that a patent is only worth the delta it claims over the prior art, and that delta is usually rather questionable.

What Apple says about patents that just relate to "generating and sending a report upon the occurrence of an event" or "following commands to an individual while ignoring commands broadcast to a group" being patent-ineligible if they fail to "to claim any inventive hardware or method for carrying out the claimed abstract concepts" would apply, directly or indirectly (by applying the same standard and building, mutatis mutandis, the same kind of argument for other types of wireless patents) to most of the wireless patents-in-suit I've seen. For example, patents that cover handovers between cells (meaning that your phone connects to a different base station when you are walking or driving) could also be described as abstract concepts implemented with standard hardware.

A full-text search in Apple's filing for the word "protocol" (with Adobe Reader) didn't find a single occurrence. Maybe that's because the word "protocol" would sound too technical for Apple's purposes. But the way I see it, those patents are protocol patents. Protocols--conventions to do certain things in a certain order in certain situations--exist in the non-digital world as well. A handshake, for example, is a protocol--and the term "handshake" is also used to describe a technical concept in telecommunications.

I agree with Apple all the way: protocols per se, unless there's really some new, serious technology involved, should not be patent-eligible. I also believe that the way the Supreme Court's Alice ruling is increasingly interpreted supports Apple's case.

I admit that I underestimated the impact of Alice before and shortly after the ruling came down. Over time I realized that those who predicted from the start that this was going to kill many software patent claims--and those Ericsson wireless patents here are just software patents--had been right all along. I predicted lots of decisions in high-profile cases right, especially appellate decisions, but I've also been wrong a few times. Alice is the most important context. And with respect to Apple, I once thought--after listening to the official recording of an appellate hearing--that Apple was going to be granted injunctive relief, but it did not happen, and the next time I interpreted a recording as indicating that the court was going to uphold the denial of an injunction, and the opposite happened, though the Chief Judge of the Federal Circuit, in her dissent, took the kind of position I thought a majority or a unanimous panel was going to take (Chief Judge Prost wrote that this was not even a close case), though I'm optimistic that Samsung's pending petition for a rehearing (Apple has been asked to respond on or before November 5) will lead to a full-court review. Well, if Apple brings any new appeal of a denial of injunctive relief, you may be able to set your watch by in terms of betting on the opposite of the outcome I predict.

Back to abstract subject matter and invalid patents. The impact of Alice is really huge, and I view that as a very, very good thing. A few days ago, the thought leader of those who got Alice right from the beginning, Stanford professor Mark Lemley, pointed to a legal website that had no content to offer in a section entitled "Advice for Applicants Trying to Avoid Alice Pitfalls":

I love the fact that the "advice for avoiding Alice" section is blank. pic.twitter.com/sgu5LWsGff

— Mark Lemley (@marklemley) October 26, 2015

Yesterday, Forbes contributor Oliver Herzfeld, the Beanstalk agency's chief legal officer, gave "five reasons to copyright register your software now," and the fifth one of them is the "reduced availability" of software patents as a result of Alice.

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Samsung requests full-court review of appellate decision in Apple case: looks like Supreme Court petition

Ten days ago, the United States Court of Appeals for the Federal Circuit granted summary affirmance (i.e., summary judgment at the appellate stage) of Judge Koh's decision to let Apple collect $450 million from Samsung (against a bond posted years ago) even though one of the patents underlying the related ruling had been held invalid by an in-house court (PTAB) of the United States Patent and Trademark Office. The appeals court said its mandate would issue absent a petition for rehearing within seven days, and within that deadline, Samsung indeed filed its petition (this post continues below the document):

15-10-19 Samsung Petition for en Banc Rehearing by Florian Mueller

I predict denial of this petition, not because it would be a just outcome but simply because even Chief Judge Prost, who has a more balanced position than some of her colleagues on certain issues (above all, injunctive relief), apparently (she wrote the summary affirmance decision) agrees with Apple on this one. In order to get an en banc rehearing, Samsung needs support among Federal Circuit judges that will be hard to come by.

I can't read Samsung's lawyers' minds, but I am free to draw conclusions from what they write and how they write it. The above petition stresses Supreme Court precedent and circuit splits (divergent decisions taken on an issue by different appeals courts). Other en banc petitions I've seen were much more focused on conflicts between different decisions by the same appeals court (for example, when Apple wanted an injunction appeal to be heard by the full court in the first place). Supreme Court precedent always matters, of course, but circuit splits are usually front and center in petitions for writ of certiorari (requests for Supreme Court review). I'm not saying that circuit splits are not an argument for an en banc rehearing. It's just the relative weight of these kinds of arguments that is markedly different in this petition from the other petitions (not only but also in Apple v. Samsung cases) I've seen.

Now, this is admittedly a different situation from the other ones: here, the summary affirmance decision just said that there was no debate over the outcome, but it did not provide any particular reasoning. There was nothing in the decision that specifically referenced Samsung's argument. Therefore, Samsung's lawyers don't have as clear as target to point at as they would have if there had been a reasoned decision.

Still, I can't help but wonder whether Samsung's lawyers might be just as "optimistic" about this petition as I would be if I were in their shoes. Have they already given up on the Federal Circuit and already begun to make a case for a Supreme Court review? I don't know. All I know is that I've never seen a petition for a Federal Circuit rehearing that looked so much like a cert petition. It's not an unusual communication pattern that A writes or says things to B that are actually directed at C. I've seen court filings that were directed at the court of public opinion more so than the court of law. That's not the case here because the related legal argument is not the kind of stuff that gets the general public interested--even I'm not going to go into detail on the case law for now. Here, the actual recipient C can't possibly be the court of public opinion. But the Supreme Court, which will see this document in the event of a petition? To me, that's at least a plausible theory.

It's like a primary candidate focusing on arguments that suggest he's already looking past the primaries and toward the general election.

I currently see four or five cases (need to do some more research one of these days) to which Apple is a party that have the potential to go all the way up to the SCOTUS because of the issues. Design patent remedies, injunctive relief, partial summary judgment over invalidated patents, the royalty base (a context in which I hope Apple will defeat Ericsson because it will discourage outsized royalty claims over standard-essential patents), and possibly some procedural issues concerning the interplay of infringement cases and FRAND contract cases in different venues.

Compared to these big issues, the WARF v. Apple case is not interesting at all. The most interesting issue in that one was actually whether a university patent troll can be called a patent troll. Unfortunately the court didn't allow Apple's lawyers to tell it to the jury like it is. Other than that, the case is about nothing that makes a difference to anyone in the world other than WARF and the lawyers working on that particular case.

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Appeals court deems Google Books 'fair use' but standard helps Oracle in Android-Java case

The United States Court of Appeals for the Second Circuit has just published its appellate opinion in the Google Books case.

Early last year I wrote that I had initially been rather skeptical of Google's "fair use" argument relating to Google Books, but ultimately I found myself in agreement with Google. Today's appellate opinion says: "This copyright dispute tests the boundaries of fair use." So the appeals court also didn't find this one a clear and simple case. But all things considered it sided with Google.

I use Google Books quite frequently, but for the purpoes of this blog, "fair use" is of particular interest in connection with only one case: Oracle v. Google, the Android-Java copyright infringement case (in which Oracle yesterday brought a motion to disqualify the court-appointed damages expert).

The Second Circuit won't hear an appeal in Oracle v. Google, but this high-profile case might be cited in the further proceedings, and I don't think it helps Google against Oracle in the slightest. Much to the contrary, the standard the Second Circuit outlines is one that Google cannot possibly meet in the Android-Java case. For example, here's a key passage from today's Google Books ruling:

"Google's division of the page into tiny snippets is designed to show the searcher just enough context surrounding the searched term to help her evaluate whether the book falls within the scope of her interest (without revealing so much as to threaten the author's copyright interests). Snippet view thus adds importantly to the highly transformative purpose of identifying books of interest to the searcher. With respect to the first factor test, it favors a finding of fair use (unless the value of its transformative purpose is overcome by its providing text in a manner that offers a competing substitute for Plaintiffs' books [...]"

(emphasis added)

In a nutshell, the above passage says:

• If what Google does basically just has a promotional effect, right holders can't complain that Google helps them make more money.

• But forget about "fair use" if there is a substitutive (rather than promotional) effect.

If one applies that standard to Oracle v. Google, it means that the "fair use" defense won't even survive the summary judgment stage: neither the device makers who have adopted Android nor the end users who (like me) have bought Android devices have looked at Android and then decided to use mobile Java. Instead, Android has displaced mobile Java all the way, with Java licensees like BlackBerry and Nokia having gone down the tubes while Android attained market dominance.

There are various differences between Google Books and the Android-Java case, and rather than talk about all of them at once, I just wanted to highlight the key difference in terms of commercial impact. But I also find the discusssion of "transformative use" interesting. The Second Circuit explains that the strongest fair use cases involve "copying from an original for the purpose of criticism or commentary on the original or provision of information about it." Android does none of that with respect to Java. Google Books is not about criticism or commentary, but one can search for books that contain certain terms, which is also information about the copied books:

"We have no difficulty concluding that Google's making of a digital copy of Plaintiffs' books for the purpose of enabling a search for identification of books containing a term of interest to the searcher involves a highly transformative purpose, in the sense intended by Campbell."

Android's use of the Java APIs had no transformative effect: Java already was available on mobile devices.

Google Books is not the clear case of fair use (and, as one of the "fair use" factors, transformative use) as, for example, a rap parody of a Roy Orbison song (that's what Campbell was about). But compared to the Android-Java situation, it's a very solid case. And if a fair use case that is far stronger than any "fair use" argument could ever be in Oracle v. Google "tests the boundaries of fair use," then there is no way a reasonable jury could find in Google's favor in the Android-Java case.

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