Thursday, October 13, 2016

Apple v. Samsung: stark contrast between Supreme Court and Federal Circuit

Within a few days of each other, the Supreme Court of the United States and the United States Court of Appeals for the Federal Circuit had Apple v. Samsung on their agenda. One week ago, the Federal Circuit issued a ruling that was more than surprising: a majority of the full court overruled the three panel judges, including the Chief Judge, with respect to the second California Apple v. Samsung case to reinstate a $119 million verdict for Apple. On Tuesday, the Supreme Court held its hearing on the question of design patent damages (transcript).

Was it just a coincidence that the Federal Circuit made a decision on an Apple petition for a rehearing about eight months after the original decision and just days before the design patents hearing in the top U.S. court? It may very well have been. But when there are already other oddities (such as the decision not to invite further briefing from the parties and hold a rehearing), it's not impossible that there is a hidden message or agenda.

The Federal Circuit decision certainly gives Apple leverage. Limited leverage, though: the relatively most valuable one of the three patents on which Apple had prevailed at the spring 2014 trial has expired and the most iconic one, slide-to-unlock, is about as valuable in the age of Touch ID and comparable technologies as an ISDN or floppy disk patent.

The Supreme Court hearing, by contrast, went fairly well for Samsung--to the extent that one can say at this procedural stage. While the Federal Circuit had said in May 2015 that Samsung was liable to the extent of its total profit on any phones deemed to infringe any Apple design patent(s) and that arguments against that holding would have to be directed to Congress, Apple itself softened its stance after the U.S. federal government had warned against absurd results: Apple told the Supreme Court that the "article of manufacture" with respect to which an unapportioned disgorgement of profits was warranted might be less than an entire smartphone.

At the Tuesday hearing, there really was no indication that the Supreme Court would agree with the lower courts. The focus was completely on what the right test for the relevant article of manufacture should be--a test that the Federal Circuit (and Judge Koh before it) hadn't even considered necessary. Despite the parties' agreement at this stage and the U.S. goverment's position, the Supreme Court could have said the same as the Federal Circuit: talk to Congress. It didn't. The justices appear convinced that a solution can be worked out without changing the statute, just by interpreting it reasonably. A couple of examples:

Chief Justice Roberts: "It seems to me that the design is applied to the exterior case of the phone. It's not applied to the --all the chips and wires, so why [...] So there should - there shouldn't be profits awarded based on the entire price of the phone."

Justice Breyer (sympathetically paraphrasing an Internet Association brief): "you know, wallpaper, you get the whole thing. A Rolls Royce thing on the hood? No, no, no. You don't get all the profit from the car."

In light of those statements, I would not advise patent trolls to acquire broad and trivial design patents at high prices right now. The Federal Circuit opinion on disgorgement may have encouraged some organizations to do that, but the Supreme Court decision will almost certainly be a lot more balanced.

The big question mark at the hearing was how to solve the problem (of totally unreasonable design patent damages due to the application of the law of the spoon to modern-day smartphones or entire cars or airplanes). What rule would work?

Justice Kennedy, whose concurring opinion in the eBay case on patent injunctions has been cited over and over, said something I agree with and that even the parties to this case here might agree with philosophically:

"My preference, if --if I were just making another sensible rule, is we'd have market studies to see how the --the extent to which the design affected the consumer, and then the jury would have something to do that. But that's apportionment, which runs headlong into the statute."

In the case of a design patent-infringing cupholder in a car, the impact on purchase decisions would be zero, or at least negligible. In the case of a rug or a wallpaper, design would be a huge part of the value. And when it comes to a smartphone, it's somewhere in between (not in the middle, but somewhere in between).

That kind of standard, however, would either require new legislation or an interpretation of § 289 under which the phrase "profit made from the infringement" would result in a causal-nexus requirement, which in effect would lead to apportionment despite the statute containing the world "total."

Samsung's counsel proposed focusing on "article of manufacture," which is also what certain amici had advocated in their briefs, and the patent specifications ("the article of manufacture to which a design has been applied is the part or portion of the product as sold that incorporates or embodies the subject matter of the patent"). Justice Kennedy said that as juror he wouldn't know what to do with an instruction like that, but there's lots of things that are hard for juries to resolve, such as highly technical infringement questions.

It's hard to make a prediction here but I think it's a relatively likely outcome that the Supreme Court will ultimately support Samsung's proposed approach of looking at the cost of the different components. It would be the lesser one of two "evils" the statute could lead to. The position of the courts below, which was an "entire product" or "largest saleable unit" kind of rule, could drive companies into bankruptcy. The net effect of basing damages for a design of the casing of a smartphone on the cost of the exterior parts covered by the design patent could be that design patent holders feel they are undercompensated. The result could be substantially below what Justice Breyer would like to be the test if he could make new law; but the Supreme Court has to interpret the existing statute.

Unless someone comes up with a creative new idea or the Supreme Court somewhat surprisingly goes down the "causal nexus" avenue, it will be a situation of "tertium non datur." It will be a choice between the devastating and absurd "entire product" approach or Samsung's (and also Google's, Facebook's etc.) "smallest saleable unit" rule. The latter would not drive companies out of business, which is a strong argument in its favor, and not the only one.

The reason why I would be less concerned about some potential undercompensation than about totally outrageous and absurd overcompensation is that design patent law is not the only kind of legal protection for design-oriented companies like Apple. Certain designs are protected by copyright. And designs that drive demand are protectable under trademark law including "trade dress," a type of intellectual property right Apple also asserted in this case (but on that one the Federal Circuit disagreed with it).

Apple still hopes--though probably much less now than it did before the Supreme Court hearing--to get the original verdict(s) affirmed because, according to Apple's lawyers, Samsung failed to present enough evidence that the smartphone as a whole was not the correct article of manufacture for determining design patent damages in this case. Based on how the hearing went, it's highly unlikely that the Supreme Court (except maybe one or two dissenters) would affirm the Federal Circuit decision on that basis. Apple's counsel was repeatedly told to focus on what the correct rule should be rather than stress the record:

Chief Justice Roberts: "Mr. Waxman, we're spending an awful lot of time on an issue about what was raised below, what wasn't raised below, what was raised below, what wasn't raised. Maybe it's a good time to turn to Justice Breyer's question."

Justice Sotomayor: "Please don't go to the --to the record."

It's impossible to form an opinion from the outside on whether the record contains enough evidence to support Samsung's position, but in this case the evidentiary body as a whole must amount to (literally) truckloads of material and Samsung's reply brief gives some examples on its pages 20-22. It's good news that the Supreme Court is inclined to focus on the rule rather than on the record. Further below, the record will play a greater role.

In the very short term, the Tuesday hearing could clearly have gone better for Apple. Over time, however, even Apple will benefit from case law that makes overcompensation less likely. Otherwise Apple itself could find itself exposed to various attempts to siphon off its profits.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Saturday, October 8, 2016

Majority of Federal Circuit sides with Apple against Samsung: impact assessment, next steps

Only a few days prior to the long-awaited Supreme Court hearing on design patent damages (Tuesday, October 11), there's some surprise #appsung news. For the second time this year, Apple's world-class legal team achieved a turnaround that any litigator would be proud of for the rest of his life. In January, the Federal Circuit finally granted Apple an injunction against certain Samsung devices. While useless in practical terms, Apple managed to shift the goalposts in its favor even thought he hearing hadn't gone well for it. Then, a month later, a three-judge Federal Circuit panel threw out Apple's second California case against Samsung, but now the full court (11 judges) overturned the panel with an 8-3 majority decision (PDF), thereby reinstating Apple's $119 million (roughly 5% of what it originally sought) spring 2014 verdict.

Two surprise turnarounds within nine months of each other are stunning. But this is a dispute between companies, not the legal equivalent of the Olympic Games. So what is this good for?

Enforcement of patents-in-suit won't affect Samsung's U.S. sales

The three patents are the "quick links" patent (which expired earlier this year), the slide-to-unlock patent (which even several Samsung devices at issue in this case weren't accused of infringing and which has lost relevance in the age of Touch ID), and the autocomplete patent, which never appeared to be a high-priority patent-in-suit in this case.

At this stage (who knows what new information will surface over time) there's no reason to assume that any Samsung device will have to be modified (beyond what has already been done) as a result of Apple's two Federal Circuit wins.

Implications for damages

This litigation is now about money (and reputation). The Federal Circuit has remanded the case to California for a determination on willfulness. This could result in willfulness enhancements (triple damages). It's possible that this means more money for Apple but I doubt there will be much impact, if any. Willfulness has an objective and a subjective dimension. The objective dimension appears hard to establish, given that a Federal Circuit panel (even though overruled later) found Apple had no case.

However, Apple might seek supplemental damages for the roughly two years between the cutoff date for the spring 2014 trial and the expiration of the "quick links" patent (which amounted for the bulk of the damages award, so it's the only one worth thinking about in this context). There would likely be an argument over whether or not Samsung continued to "infringe."

I must admit that I haven't been able to figure out from the en banc opinion what actually happened to the damages-related parts of Samsung's appeal. Samsung had argued, especially with a focus on the "quick links" patent, that the district court prevented it from presenting important evidence about real-world deals such as Apple's license deals with Nokia and HTC. The Federal Circuit panel never reached those parts of Samsung's appeal because it threw out the case on the merits ("In light of these holdings, we need not address the other issues on this appeal."). I tried to find a reference to those evidentiary issues in the en banc opinion but couldn't find any. If you've been more successful in this regard, please let me know via my contact form...

Maybe I overlooked something. Or maybe someone else did.

Unusual procedural events

Apple's rehearing petition had been pending for more than half a year and I had already started wondering why there was silence on the docket, and then the Federal Circuit rendered an en banc opinion instead of first granting the petition, then getting some more briefing, holding a rehearing, and finally deciding.

As at least one of the dissents notes, this is unusual.

What's also unusual is that the eight judges who were not on the panel (the three on the panel stayed firm and wrote their dissenting opinions) had to actually disagree with the panel on several issues in order to arrive at this complete reversal of fortunes with respect to Apple's offensive case.

The primary reason I had been initially (before things started taking unusually long) skeptical about Apple's petition for rehearing was that I thought a unanimous panel decision by a panel that was not an outlier -- in fact, it was pretty representative of the composition of the court as a whole, with frequently defendant-friendly Chief Judge Prost on one side of the spectrum and previously Apple-friendy Circuit Judge Reyna on the other end -- was less likely to be overruled than an outlier position or a 2-1 majority ruling.

While there are differences between the approaches of Federal Circuit judges, I wouldn't have thought that eight non-panel judges would totally agree that the three panel judges got everything (except the part about Samsung's offensive counterclaims) wrong. This is just a highly unusual discrepancy.

The combination of all of this is strange, but there really isn't anything there that would give rise to conspiracy theories like Bill Clinton's tarmac meeting with the Attorney General.

What one could imagine (and I'm not saying this is something I necessarily believe to be the case, but it would be plausible) is that somehow the eight non-panel judges' agreement was made easier by some circuit judges wanting to settle accounts with, or weaken, the Chief Judge. Previously, Chief Judge Rader was somewhere between the Federal Circuit mainstream and the "radical" pro-right-holder wing. Chief Judge Prost isn't always defendant-friendly but certainly in a completely different part of the spectrum of positions. It could be that various Federal Circuit judges feel she doesn't really represent them. She's not their boss in a strict sense anyway, but chief judges often get to speak for their court and it could be that there is a disconnect between her and some old-school patent radicals.

Prospects for a second Apple-Samsung Supreme court case

I haven't been able to find a Samsung statement on this yet. I guess Samsung's lawyers are now completely focused on the design patents case. So is Apple. But I'm not going to wait for the parties before I me share my thoughts as to the prospects for a Supreme Court appeal in this context here:

  • It's clear that the three panel judges phrased their dissents (which I like very much) with the objective to encourage, and provide ammunition for, a further appeal. Dissenting opinions always contain statements that can be viewed as invitations for an appeal but in this case the indications are unusually clear.

  • I would be disappointed if Samsung gave up, but I also want to be realistic: a further appeal here would be harder than last time. Psychologically, the Supreme Court might just not have an appetite for yet another #appsung case. But what makes this here a significant challenge for Samsung's lawyers (which are at the same level as their colleagues representing Apple) is that it won't be easy to set the right priorities. It's not just about where the en banc might be demeed to have made mistakes. Before the Supreme Court looks at the merits, it evaluates whether the issues presented warrant certiorari. And to achieve that, Samsung will also want to get broadbased support from amici curiae, as it did in the design patent case.

    The Holy Grail is an issue, or set of issues, that the Supreme Court will be willing to look at, that various stakeholders will encourage the Supreme Court to rule on, and where the Supreme Court will likely reverse the appellate opinion.

  • The dissenting judges point out that a full-bench review is not meant to just overrule a panel because of merely another opinion on an issue. It takes more than that. And they believe the court would have benefited from a rehearing (instead of handing down a written decision right away).

    The standard for a full court overruling an appellate panel is a potential issue to be reviewed here. I just don't know how attractive an issue that is for the Supreme Court and for potential amici. The fact that a decision came down without another hearing appears to me (unless there's some very interesting precedent that I don't know) to be something that wouldn't likely get traction, but even if it did, it simply wouldn't help: Samsung's lawyers would just be banging their head against an eight-judge wall then, to no avail.

  • On the substantive side, two of the patents (autocomplete, slide-to-unlock) raise questions about the weight to be given to secondary indicia of nonobviousness and the evidentiary standards for invalidation. Circuit Judge Dyk (one of the most experienced ones) explained in his dissent:

    "[T]he majority lowers the bar for nonobviousness by refusing to take account of the trivial nature of the two claimed inventions. With respect to the '721 patent, the slide to unlock feature was known in the prior art (Neonode) and the only innovation is an image associated with the sliding gesture from fixed starting to ending points. [...] With respect to the '172 patent, the autocorrect feature was known in the prior art (Robinson), and the only innovation is displaying contemporaneously the text to be autocorrected. [...] Such text displays have long been known in the prior art (though not specifically in connection with autocorrect display).

    Treating such minimal advances over the prior art as nonobvious is contrary to KSR, where the Supreme Court confirmed that the obviousness doctrine is designed to ensure that “the results of ordinary innovation are not the subject of exclusive rights under the patent laws."

    I could easily picture some great amici siding with Samsung on obviousness and it might be reasonably interesting to the Supreme Court. But it would not help Samsung with respect to where most of the money is in this case: the "quick links" patent. Samsung could, of course, raise any number of issues. But it would be an economically undesirable outcome for Samsung if the petition was granted with respect to obviousness and rejected with respect to the "quick links" patent.

  • The focus must be on the "quick links" patent (I believe Samsung should even focus on it exclusively but that's their call), one issue raised by the dissenting opinions is that Apple and Samsung agreed, during this litigation, on a certain claim construction, and at least one dissenting opinion says the majority didn't really respect that agreement between the parties. What I find more interesting is that the majority argues an Android library for identifying phone numbers etc. in an email or other text document constitues a "separate" server because it runs in a different memory location. Chief Judge Prost explains very well why that doesn't make sense and actually vitiates an important claim limitation:

    "The majority asserts that, in light of the specification, a program that is 'structurally separate,' without more, satisfies the “‘separate’ requirement.' [...] We did not so cabin the word 'separate' in our Motorola construction. Because no two program routines may physically occupy the same memory at the same time (i.e., any two separate program routines are, by definition, separate in storage), the majority’s interpretation effectively and erroneously reads 'separate' out of our construction. Relatedly, the majority also fails to give effect to the requirement under our construction that the routine is a server routine, not any piece of code. That is significant because we relied in Motorola on the plain meaning of 'server,' which entailed a client-server relationship."

    If Samsung's attorneys found a way to raise this kind of issue in a general, certworthy form by presenting a question that the Supreme Court may very well decide to review, then that would seem the most promising approach to me based on what I know today, only about 24 hours after finding out about the Federal Circuit decision.

There should be a cert petition. I think it would have a very positive effect (not thinking specifically of this case but with a view to other patent litigation) if it was granted. And in that case, I think the panel decision should be reinstated. But now Samsung's lawyers have to design a strategy, which was much clearer to see in the design patents context than it is here.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Tuesday, September 13, 2016

Samsung to Supreme Court: Apple has made a "remarkable about-face" on design patent damages

This tit-for-tat took almost four years. In December 2012, Apple informed the United States International Trade Commission of what it portrayed as a "remarkable about-face" by Samsung in the form of withdrawing injunction requests in Europe. Samsung's August 29, 2016 reply brief in support of its Supreme Court appeal concerning design patent damages--thankfully published by the SCOTUSblog (PDF)--says the following about Apple's opposition:

"In its brief, Apple makes a remarkable about-face. It now admits, agreeing with Samsung and the government, that the "article of manufacture" to which a patented design is "applied" may be only a component of a product. And it now admits, agreeing with Samsung and the government, that, where the patented design is applied only to a component of a product, the total profit under Section 289 is the profit attributable to the component, not the product."

On page 36 of Apple's July 29 brief, Apple indeed says that "article of manufacture" has a broad definition ("anything made by human labor"), specifically, "that it may include a complete final product or a component thereof." Apple, hgowever, argues that this broad definition works in its favor and doesn't limit application of the total-disgorgement rule to "decorative" articles. Apple continues to argue that even highly complex, multifunctional products may fall under that rule for infringing a single design patent.

Having re-read some older documents from this litigation, I can't help but feel that Apple has indeed adjusted--or one might just say "softened"--its position as a result of the amicus curiae brief filed by the Solicitor General on behalf of the U.S. federal government.

Very closely related to this is how some of the "friends of the court" supporting Apple argued in their filings. There's something rather atypical about it when you see certain amici raise very case-specific, partly just procedural reasons for or against a decision instead of focusing more or less exclusively on a fundamental, substantive legal question. To a non-party it normally shouldn't matter too much whether a certain party did or did not present a particular kind of evidence or raise a particular kind of objection somewhere in the process. If anything like that turned out outcome-determinative, the key substantive issue in the case might not (and often would not) be adjudicated.

If an amicus curiae just wants to do one of the parties a favor, that's a different story. But the likes of Calvin Klein aren't Apple vassals. They have an interest in design patents being as powerful as possible, and the power of design patents is a more generic question than the specifics of this litigation.

Amici should care about clarification in their favor, and somehow they appear to be afraid that the Supreme Court might agree with the U.S. government on the definition of "article of manufacture"--in fact, on the broad and inclusive definition that Apple now also, suddenly, accepts.

A simplistic way to put it is that Apple and some of its amici would now content themselves with Samsung being the last victim of Judge Koh's and the Federal Circuit's interpretation of § 289, knowing that any remotely savvy litigant in future cases would know how to avoid the same problem. For Apple, winning is the only thing. And its amici primarily just don't want to lose. Another plausible explanation is that some amici believe that even a finding by the Supreme Court that the district court was too narrowminded on "article of manufacture" wouldn't affect the value of design patents too much in the public perception because people would just see that Apple gets many hundreds of millions of dollars. That would, of course, benefit trolls asserting design patents, at a minimum by showing to prospective defendants that an unapportioned disgorgement can be the ultimate outcome. The worst-case scenario makes trolls money.

We're still about four weeks away from the Supreme Court hearing, and I'll write about this case again in the meantime. For the remainder of this post I just want to focus on what's very likely (not certain though) to be the outcome-determinative issue. A few months ago I would have assumed that the meaning of "article of manufacture" would be at the center of the hearing. It still might be if that's what the justices focus on. But if the top U.S. court agrees with both parties and the U.S. federal government that "article of manufacture" can also be a component, then the question would be whether the record of this case supports one party or the other. Unsurprisingly, either party argues that the other has the burden of proof and failed to shoulder it, so the respective party could win even without a remand. With respect to the burden of proof, Apple has the U.S. government on its side. It's the only key issue on which the DoJ agreed with Apple (the rest doesn't really matter). At the October 11 hearing, the most important indication of the outcome that the justices give could be what they say about who has the burden of proof on what the appropriate "article of manufacture" in this case was.

Samsung's argument concerning the burden of proof is that patent holders generally bear the burden of proof for their claims and that § 289 differs from other disgorgement statutes that "explicitly shift burdens to defendants." Samsung also quotes from the legislative record, and the following passage suggests rather strongly that Apple had the burden of proof:

"'the patentee recovers the profit actually made on the infringing article if he can prove that profit' H.R. Rep. No. 49-966, at 3 (emphasis added)"

If the Supreme Court (or Judge Koh on remand) finds that Apple failed to identify the relevant "article of manufacture," then there won't have to be another jury trial--and the clear message to the rest of the world would be that rationality has been restored with respect to design patent damages, period.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Friday, September 9, 2016

Oracle files proposed notice of deposition of Google witnesses regarding discovery misconduct

On August 25, Oracle and Google filed sworn statements (and Oracle also filed an objection) regarding Oracle's motion for an Android-Java copyright re-retrial over alleged discovery misconduct and lies to the jury. Judge Alsup then ordered the parties to respond to each other's filings with new sworn declarations, which were due today.

To be of service to loyal readers following the case in detail, I have uploaded Google's declaration as well as Oracle's filing (a declaration as well as a proposed notice of deposition of Google witnesses) to Scribd.

Unfortunately, I don't have time, at least at the moment, to analyze these documents in detail and share any observations. However, I don't want this to be misunderstood as my positions on the issues in this case or my belief as to the most likely outcome having changed. So I'd like to explain, just quickly:

Due to my focus on two app development projects, my blogging has slowed down massively in recent years. For example, this is only my 36th post this year (with more than two thirds of the year already behind us), while I wrote a minimum of 40 posts in any given month of the year 2012. Some slowdown would obviously have resulted from the fact that many smartphone disputes have been settled, but not to this extent.

I'm working very hard right now to launch both games (one on iOS first, the other one on Android and iOS simultaneously) before Thanksgiving weekend. Both games are almost feature-complete, with a lot of the current efforts already relating to final touchup and testing. Both have taken much longer to develop than initially planned, but they've also become even better than I would have predicted at the outset--and those were ambitious projects from the beginning.

I have to focus as there still is some hard work on my part to be done, though I have recently stopped doing any coding myself. Now, after six years of "smartphone IP wars," there are only two really big cases pending: this copyright case here and the Apple v. Samsung design patent matter. As a right holder who has already invested a huge amount of money as well as "sweat equity" in software development, I care very much about Oracle v. Google, which is no longer really about APIs as much as it is about software copyright in general. As a potential future defendant against trolls, I'm deeply concerned about the prospect of an unapportioned disgorgement of profits over a design patent on a single icon or whatever other design.

The Supreme Court will hear Samsung's appeal in a month (one month and two days, to be precise). This is obviously not the time to reduce or discontinue my coverage of that matter. It will be over soon. I guess the decision will even come down before Christmas, or in January maybe.

By contrast, Oracle v. Google will take much longer. I honestly can't predict how much time I'll find to comment on it. It could be that I'll somehow manage to find the time to blog about it like in the past, especially because I disagree with 99% of everything else I read about that case, but it could also be that my next post on this case after this one will be my commentary on the final outcome after a settlement or after all appeals have been exhausted. Or anything in between those extremes. Whatever it may be, it has nothing to do with how important this matter is to software developers like me or with what I believe the legally and factually correct outcome should be.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Thursday, August 25, 2016

Oracle pushing hard for Android-Java re-retrial while Google fails to justify its lies to the jury

In litigation, the devil is often in the detail, but not always. Sometimes there are overarching issues that decide a dispute and the legal detail is simply worked out in order to reach the only result that any remotely reasonable person could consider correct. The situation surrounding Oracle's push for a re-retrial is clear: Google's expert witnesses told the opposite of the truth to Judge Alsup and the jury. In Judge Alsup's case, there is evidence that the lies were outcome-determinative because he denied Oracle's first motion for judgment as a matter of law JMOL) on that basis. And with respect to the jury, there can be no reasonable doubt that its deliberations--the details of which are not known--would have been very, very, very different if Google had been unable to base its "transformative use" and "no market harm" arguments on the claim that "Java SE runs on desktops, Android is on smartphones" (because Oracle could have pointed to the Marshmallow-Chrome project as conclusive evidence that it was a lie).

Before the re-retrial is ordered (and I'm sure it will happen, be it by order of Judge Alsup or be it the outcome of an appeal that will, if it has to be filed, be a slam dunk), some procedural details concerning what went wrong in the discovery process may have to be discussed. But at the end of the day, it doesn't really matter what Google told its lawyers. All that matters is what absolute untruths Google's expert witnesses, directed by Google's lawyers, told the judge and, especially, the jury.

Google is trying to hide behind Judge Alsup's pretrial orders that limited the scope. It can run, but it can't successfully hide. Those orders were bad and unfair in their own right. So even if Judge Alsup tried to let Google get away with it, what would happen then? The whole thing would be presented to the appeals court (which is the opposite of hostil to intellectual property right holders). After the first page and a half of an Oracle opening brief, it would already be clear that this here is not just a case about software theft but also about a stolen trial.

Judge Alsup can only make things worse for himself by adopting Google's excuses the way he once adopted Google's misinterpretation of the Sega and Sony Ninth Circuit cases. Everyone knows how that one ended.

The appeals court would simply not let a judgment stand that is based on lies of the worst kind. The expert witnesses communicated those lies to the jury, but they presumably hadn't been briefed and instructed correctly. But the bottom line was that Google, as a party, lied to the jury. Even if Judge Alsup found Google's conduct excusable, the judges above him almost certainly wouldn't.

So instead of going into detail here on how certain discovery responses allegedly came into being and why certain things were said or not said or asked or not asked, I'll just highlight three things now and then I'll show you all three documents filed today (written declarations by attorneys for both parties, and an Oracle response and objection to last week's follow-up order to the motion hearing).

  1. I wrote above that the platform-related lies were outcome-determinative with respect to the denial of Oracle's first JMOL motion. Here's a sentence from that order:

    "With respect to Factor Four, our jury could reasonably have found that use of the declaring lines of code (including their [structure, sequence and organization]) in Android caused no harm to the market for the copyrighted works, which were for desktop and laptop computers."

  2. In my previous post I wrote I had also interpreted the Ninth Circuit's Jones v. Aero/chem decision (which remanded a case with certain similarities to a district court so a hearing would be held) the way Judge Alsup outlined in last week's order. But Oracle's declaration now explains that a "hearing on the motion" was actually held in the Jones proceedings, but, Oracle's lawyers explain, "[w]hat the district court had not done was hold its contemplated hearing where evidence could be presented in order to determine whether there was discovery misconduct."

  3. Google's arguments as they try to now say that the unified Android-Chrome platform is not a "full" version of Marshmallow are ridiculous. Two particularly crazy examples: they argue that "the Google Play Store is not part of (the Marshmallow version of) Android, but is rather a separate application that is available for Android," even though everybody knows that Google contractually requires Android licensees (unless they use Android on open source terms without the right to show the green robot logo etc.) to ship the Play Store (and other proprietary Google apps) with Android. And they write that "the runtime for (the Marshmallow version of) Android that can be run inside of Chrome OS does not include the Linux Kernel at the bottom of the Android stack," even though everybody with a modicum of technical knowledge knows that the Linux kernel has its own APIs that are simply not relevant to a case about the Java APIs.

    I will continue to admire Google regardless, but this is really very bad.

So now, finally, the three documents. I'll start with Google's declaration because Google is the party that really has some 'splaining to do here, followed by Oracle's response and objection (Oracle pushes hard for a re-retrial and argues that the declaration the court requested from a Google attorney is not sufficient but much more is needed to bring the relevant facts to light) and then, finally, a declaration by an attorney for Oracle.

16-08-25 Google Attorney Declaration by Florian Mueller on Scribd

16-08-25 Oracle Response and Objection by Florian Mueller on Scribd

16-08-25 Oracle Attorney Declaration by Florian Mueller on Scribd

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Sunday, August 21, 2016

Don't blame Ars Technica for the inevitability of an Oracle v. Google Android-Java copyright re-retrial

It ain't over till it's over, and Oracle v. Google is very far from over.

At a Wednesday hearing, Judge Alsup told Google that it should have disclosed its Marshmallow Chrome project. As a follow-up to the hearing, he issued an order on Thursday, which I'll quote from and comment on below:

"By THURSDAY AUGUST 25, AT NOON, Christa Anderson, counsel for Google, shall submit a sworn statement explaining why the discovery responses referenced in Court yesterday were not updated, including the full extent to which counsel knew Google's intention to launch a full version of Marshmallow, including the Google Play Store, for Chrome OS."

This could be one last chance for Google to justify the unjustifiable and, which is what I guess is going to happen, for Google's lawyers to avoid consequences for themselves. Oracle's counsel claimed at the hearin g that "they" were "LYING" to the jury. At least that was the net effect of what happened. In a fairly recent post I quoted those lies.

But who is "they" in "they were LYING?"

The expert witnesses were instructed by Google's trial counsel. It's highly unlikely--if not simply implausible--that the expert witnesses were aware of the secretive Marshmallow Chrome project whne testifying.

The net effect of this was that the jury was being lied to. The requested declaration may shed some light on how this happened and on who has to accept responsibility. But Google and its lawyers are less interested in bringing the truth to light. What they'll try to do is to reinforce the points they made at the hearing about why they thought Marshmallow Chrome was outside the scope of the trial though the Marshmallow version of Android undoubtedly was at issue.

I'll comment on that declaration once it is filed. I presume it will be made public, at least large parts of it. For now I doubt that it will change anything with respect to the likelihood of a re-retrial. And the primary reason I doubt it is that Judge Alsup would be headed for another overruling, far worse than last time, if he denied Oracle's motion for a new trial even though the appeals court will then see very clearly that

  • Google's expert witnesses told the opposite of the truth about the single most important issue in the case (given that Marshmallow Chrome affects the "transformative use" analysis as well as the assessment of market harm) and

  • Google itself made it clear, and reporters and industry watchers clearly understood, that the integration of Marshmallow into Chrome is totally unrelated to the App Runtime for Chrome (ARC). I'll talk about the Ars Technica article and its implications further below.

In the event of an appeal, the appeals court will also get to see a list of other problems (I'm sure there would be an appeal on multiple grounds, which is also what Oracle announced after the spring retrial) and a consistent pattern of Oracle being disadvantaged by the judge. At the hearing he again sought to justify some of his decisions to limit Oracle's ability to present the full story to the jury with case management arguments. I've been watching this case for more than six years now and while Judge Alsup has put case management above the truth on various occasions, he has not even been perfectly consistent (for example, he didn't care in 2012 about wasting jury time instead of firstly ruling on copyrightability but then bifurcated merits and damages on remand) except that his case management decisions have always helped Google and harmed Oracle. That kind of consistency would also be easy for the appeals court to see, and let's not forget that the Federal Circuit is generally quite sympathetic to intellectual property right holders trying to enforce their rights against infringers.

"By the same date and time, Annette Hurst, counsel for Oracle, shall submit a sworn statement setting forth, after full inquiry, the full extent to which Oracle neglected to update its discovery responses by reason, in whole or in part, of one or more rulings by the judge."

The word "neglected" in the above passage is a bit strange. All dictionary definitions of the word show that it has a very negative connotation in terms of a failure to do something a careful person should have done. A non-judgmental term would have been "decided not [to update]" or something like that. He certainly was non-judgmental in the paragraph quoted further above concerning Google's statement, though in Google's case it's now clear that something was not disclosed that should have been disclosed, while in Oracle's case it's, at best, hypothetical (it's possible that no such thing exists at all but, above all, there doesn't appear to be the slightest indication of any wrongdoing). But I've seen far worse things in connection with this case. Maybe I'm just being hypersensitive after all that has already gone awry. (Again, I'll try my best to look at the proceedings relating to a re-retrial, unless Judge Alsup denies it and the appeals court orders it (in which case it would be absolutely impossible to have too much faith in his fairness), as if nothing had gone wrong before.)

Can this part help Google? I doubt this, too. At most Oracle's response might bring up stuff that would have to be discussed at a re-retrial. But the question of whether a re-retrial is necessary has everything to do with Google's conduct and nothing with Oracle's conduct.

"The same statement shall explain why counsel repeatedly represented that the Jones v. Aero/chem decision required an 'evidentiary hearing' when that decision, as it turns out, made no mention of an 'evidentiary hearing' and instead remanded because no 'hearing' or other consideration at all had been given to the issue of discovery conduct by the district judge."

Despite my other concerns and reservations, I took a quick look at that decision and I understand that decision and the circumstances leading to it just the way Judge Alsup also describes that precedent. What I don't know is what exactly Oracle's counsel said about that case at the hearing. So let's see what Oracle files.

This, again, is nothing that can have any bearing on the pressing need for a re-retrial.

"By the same date, counsel shall meet and confer and advise the Court whether the form of judgment should be amended to reflect that it is not a final judgment but a Rule 52(c) judgment on partial findings, given that Oracle is entitled to challenge further uses of Android herein."

This paragraph here is hard to interpret because everything depends on what will happen with respect to Google's decision to keep the Marshmallow Chrome project secret from Oracle's lawyers. What's certain, however, is that it reflects the fact this dispute could get substantially broader soon.

I don't have the slightest idea of how Oracle and Google's lawyers will address this one. In my opinion, it was a final judgment that must be set aside because Marshmallow was part of the case and the jury was being lied to. However, if the case continues, it might indeed make sense to present everything to the jury including other devices than just smartphones. That is more of a question of admissible evidence to me than anything else.

Ars Technica

In my previous post I already linked to and quoted from the Ars Technica article Google's counsel presented at the Wednesday motion hearing.

Oracle's counsel called Ars Technica "the premier publication in this industry." That's hyperbole, and I attribute it to two factors. One, she obviously wanted to give that article maximum weight at the motion hearing. Two, she had written an op-ed for Ars Technica after the spring retrial.

Ars is certainly influential and widely read. And one could probably define a set of criteria based on which it would be number one. But it's not number one in this industry by all measures and standards. Also, its coverage of Oracle v. Google is neither enlightening nor fair.

Interestingly, when the author of that Ars Technica article heard about how Oracle tried to use it at the trial, he immediately felt compelled to portray another story, but for lack of knowledge about what was really at issue in the motion hearing, he actually just confirmed again why his article helps Oracle:

It is all about the underpinnings. It's about the inner workings.

That's because the App Runtime for Chrome (ARC), which according to Google could not even have passed its Android compatibility test, really was separate from Android, while the Marshmallow Chrome project serves as a great unifier.

What shocked Oracle's lawyers? Not the fact that Google would in some way, shape or form make Android apps run on Chrome. That was old news. The shocker was that Google would actually incorporate the Android Marshmallow APIs into Chrome: APIs that contain APIs Google should have licensed from Oracle a long time ago.

Many people out there have been misled. If all software developers truly understood what this case is about and what it is not (for example, the retrial was not about whether APIs are protected but just about whether Google's trial counsel could manipulate a jury by presenting witnesses who made it sound like everything related to Java, especially the APIs, was for the taking), Ars Technica's Ron Amadeo wouldn't have had to try to put his article into perspective. I'll talk about implications for developers again on some other occasion. The timing of that will very much depend on procedures. I, for my part, would be shocked if the request for a re-retrial was denied.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn:

Wednesday, August 17, 2016

Judge may order a new Oracle v. Google retrial over evidence unwisely withheld by Google

Thanks to Twitter coverage by Mike Swift (MLex), Sarah Jeong (Motherboard, EFF) and Ross Todd (The Recorder), I just had the opportunity to "follow" the Oracle v. Google post-trial motion hearing in the Northern District of California. Since I already shared my observations, opinions and predictions last week, I can keep this post here brief:

  • As expected, Judge Alsup is not going to agree with Oracle on JMOL. He continues to believe that the jury had a reasonable basis for reaching its verdict based on the evidence and testimony it saw/heard.

  • I'm pleased to see that Judge Alsup, Google and Oracle all affirmatively agreed with me today that Oracle could, as a last resort, bring a new copyright infringement lawsuit to raise issues that were kept out of this year's retrial. Such consensus is unusual. Google tried to somehow nuance its concession by saying "collateral estoppel issues aside," but it's unclear how that would work--not just to me but, more importantly, also to Judge Alsup.

  • Based on the quotes I read on Twitter, I initially felt that Judge Alsup was not quite inclined to order a new trial. But Oracle's counsel, Orrick's Annette Hurst, didn't give up. She pointed to how Google's lawyers had "lied" to the jury and committed "fraud" by centering a transformative-use argument around differences between personal computers and smartphones. She also dealt a blow to Google's argument that the integration of the Marshmallow APIs into Chrome OS was essentially just the same as the Android App Runtime for Chrome (ARC), and in this context she read parts of this Ars Technica article aloud. Here's an unbelievably powerful passage that makes Google's ARC-based excuse downright ridiculous:

    "The real shocker here is that this release of Google Play on Chrome OS is not based on ARC. Zelidrag Hornung, the engineering director of Chrome & Android, filled us in on the details: "We have redone this completely differently. There are no connecting points between the two projects (ARC and today's announcement) from an implementation perspective."

  • Judge Alsup told Google that at the time it decided not to disclose its Marshmallow Chrome project, "this was possibly an important point." And while he made it clear that he wasn't yet at the point of expressing his position on the new trial motion, a re-retrial definitely is a possibility, especially since he also told Google's counsel: "If I had been in your position, I would have disclosed it."

    It's also important to consider that Marshmallow was part of the retrial and the jury verdict was not about particular devices but about Android versions up to and including Marshmallow. I noted on Twitter that this is a key difference between Oracle v. Google and the various Apple v. Samsung trials, where juries made device-specific determinations on the merits and on damages.

All in all, the things I read on Twitter suggest that Judge Alsup was a whole lot more evenhanded today than at any point during the retrial and its preparations. I do believe that this "fair use" issue should never have been put before a jury in the first place, but if a new trial is ordered and the Marshmallow-related evidence becomes part of the case, even Judge Alsup's JMOL analysis (under those new circumstances) may be a different one than so far. What I consider less important is that he appears to consider a Google motion for fees "greedy" and said he might just deny it if the parties couldn't reach an agreement on this one. A motion about a few million dollars of expenses is just a sideshow in the context of a multi-billion dollar case. But the Marshmallow Chrome issue is absolutely pivotal, and in case Judge Alsup orders a re-retrial, it will be a whole new ball game and in that case I'll form my opinion on each and every decision before, during and after the re-retrial as if the things that went wrong last time had never happened in the first place. Yes, the spring 2016 retrial may soon be water under the bridge, and a correct outcome may be possible even prior to an appeal.

In retrospect it's really hard to understand what Google did here. And even harder to justify.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn: