Monday, December 22, 2014

Samsung argues Apple still can't tie patented features to lost sales, latest bid for ban should fail

On Wednesday, Samsung responded to Apple's opening brief (shown in this October 2014 post) in its appeal of Judge Koh's August 2014 denial of a permanent injunction based on the spring 2014 trial in the second California litigation between these parties. The public version of Samsung's brief became available late on Friday (this post continues below the document):

14-12-17 Samsung Brief (Reponse to Apple Appeal of Injunction Denial) by Florian Mueller

As usual in the dispute between these parties, it's a very persuasively-written document. Apple argued in its opening brief that it should, at long last, get a permanent injunction because it believes is evidence of a causal nexus between the infringements identified (Samsung notes that it's appealing the merits in parallel) and the alleged irreparable harm is better and because it's now seeking a more feature-specific kind of injunction than before. Now Samsung is saying that Apple's causal-nexus evidence is still too weak and the distinction between a "product" injunction and a "feature" injunction is "mere semantics, since an injunction targeting 'features' in complex, technological 'products' would equally force the 'products' with those features 'off the market'" and, in Samsung's opinion, just as much as any other injunction "threatens to unfairly sow fear, uncertainty, and doubt about the product in the marketplace; to hinder competition; and to grant overprotection to patents."

It's an interesting debate to follow. Of the four ways in which legal blogging can give value to readers (identifying otherwise-overlooked facts, digesting/summarizing, putting into context, commentary), I'll focus on the latter two because, without context, this is all very confusing. As Samsung's brief mentions, this is already the fourth time for the Federal Circuit to look into an injunction question involving the Apple-Samsung dispute. All previous decisions were basically saying "yes, a patent holder can obtain an injunction in principle, but these are the requirements." It's obvious that Apple can find a number of "yes, you can" passages in those prior rulings (and from decisions in cases involving different parties) while Samsung can find (even more) "however, provided that" type of statements.

It's difficult to predict the outcome because what one party argues to be a fundamentally stronger case for an injunction can often be described by the other party as merely a gradual (at best) or cosmetic (at worst) improvement. In the past I tended to be too optimistic for Apple. In the first half of this year, a failure by Apple to win an injunction was the only major smartphone IP decision on which this blog made the wrong call (while it got five other key decisions right). I now tend to come down on the skeptical side, and that's to some extent also (though not only) because this second California Apple v. Samsung case was already fairly advanced when the more recent decisions relating to injunctive relief came down, so I believe Apple may not have been able to present its strongest case simply because some procedural doors had closed when everyone was wiser after some other event.

Assuming for the sake of the argument that my skepticism is wrong, inhowfar would it matter if Apple obtained some kind of an injunction this time around? I can see a couple of tangible benefits to Apple. More than anything else, this would show to the industry at large that Apple finally figured out how to obtain sales bans over individual, arguably minor features of highly complex and multifunctional products. That would serve as a deterrent going forward, not with respect to patents that have been asserted before and have turned out to be of a rather narrow valid scape, but possibly with respect to future patents. And, generally speaking, it would make Apple look and feel better. But none of that means that this would hurt Samsung's business: with the particular patent claims-in-suit here, Samsung would have a strong workaround case for every one of them (the clearest one is slide-to-unlock since Apple didn't even accuse all of the products at issue in this year's trial of infringing that one).

I know it sounds cynical but chances are that, apart from the aforementioned benefits to Apple, this would merely be an opportunity for lawyers to have arguments about workarounds in light of the "no more than colorably different" standard. These two companies kept many smartphone patent litigators around the world very busy for a few years. The days of the Smartphone Patent Litigators Full Employment Act are over, but if Apple got an injunction, we might see some wrangling in the form of contempt motions and hearings over, for example, the '647 "quick links" patent. There would be some more clarity about the limits of that patent but Apple could try to relitigate the claim construction that Judge Posner adopted and the Federal Circuit previously affirmed. That is so because after the Federal Circuit ruling, no formal mandate was issued before Apple and Google entered into a second-class settlement. It would obviously be an uphill battle to try this, and I'm not even sure they would try, but that's the kind of thing that could happen if Apple won an injunction. Samsung would have to handle it, and it would be able to handle it, I'm sure.

It's really time for them to settle the U.S. part of their dispute as well (everything outside the U.S. already ended this summer), as I wrote in my previous post. But as long as they don't, the question of injunctive relief is probably Apple's highest priority--not because the devalued and defanged "quick links" patent could deal a major blow to Samsung but because Apple wants the world to see that it knows how to enforce its patents against rival smartphones and tablet computers.

It may be helpful now to do a quick recap of Apple's previous attempts to obtain injunctions (not talking about ITC import bans here) against Samsung in the U.S.:

  1. In 2011, Judge Koh originally denied Apple a preliminary injunction over three design patents and the rubberbanding software patent. Apple's motion failed for a combination of liability and equitable (access to injunctive relief) issues.

    Apple appealed, and in May 2012, the Federal Circuit reversed Judge Koh's decision only with respect to a tablet-related design patent. The remand was more of a formality (Judge O'Malley did not even deem it necessary, but the other two judges on the panel did want to leave it to Judge Koh to reevaluate the question). Apple finally obtained a "preliminary" injunction, at a time when the product has pretty much reached the end of its lifecycle. And that one had to be lifted after the 2012 jury did not hold that design patent infringed.

  2. In the early summer of 2012, Apple won a short-lived preliminary injunction against the Galaxy Nexus smartphone over a unified search-related patent (this was already part of the second California case). Shortly after it entered into force, that preliminary injunction was stayed pending the appeal. It never became enforceable again because the Federal Circuit held that Apple was not entitled to an injunction over this patent for equitable reasons (no Nexus injunction for lack of a causal nexus between infringement and alleged irreparable harm). Also, the appeals court expressed serious doubt about the underlying merits. This combination was a worst-case scenario for Apple, and the "causal nexus" part of that ruling generally upped the ante for Apple's further pursuit of injunctive relief against Samsung.

  3. Meanwhile the first California Apple v. Samsung case had gone to trial and Apple was able for the first time in this litigation to seek a permanent injunction. But Judge Koh said no. While Apple had several liability findings from the jury trial in its favor, Judge Koh applied the "causal nexus" standard the way she understood it from the Nexus preliminary injunction ruling, and the result was that Apple didn't get its sales ban. Apple appealed, and in late 2013 the Federal Circuit upheld the denial of an injunction over certain design patents but with a view to three software patents found that Judge Koh had not given enough consideration to a piece of evidence (a so-called conjoint survey). But the appeals court did not direct Judge Koh to enter an injunction. She just had to look at that piece of evidence again, but she ultimately wasn't impressed and denied Apple's renewed motion for a permanent injunction.

    Apple's initial reaction was that it wanted to fight and give it a third try. But it probably realized that none of the three software patents was likely to give it much leverage (if any). And litigation fatigue set in after this year's trial didn't go too well for Apple (it got only about 6% of the damages award it demanded). So in late July 2014, Apple dropped its cross-appeal (Samsung had meanwhile, after a partial retrial, been able to appeal the underlying merits; the related hearing took place last week).

Everyone's wiser after the event. If Apple had known all of the above decisions (the reasons more so than the outcome) at the outset of the Samsung litigation, it might have been able to present theories that would have been more likely to succeed than the ones it used based on the knowledge it had at the time it had to make its choices. But I don't think this is Apple's biggest problem here. The biggest problem is that those devices are multifunctional and Samsung's products are substantially lawful. In this industry, no one can build a complex, highly multifunctional product without being held to infringe a third-party patent from time to time. That's everyone's problem, not just Apple's, and especially not just Samsung's. In light of this reality, courts are hesitant to give too much leverage to patent holders unless they can really prove that something is a reasonably significant driver of demand. With "quick links" and stuff like that, and with claims that can be worked around (Apple itself doesn't even implement all of them), a causal nexus probably couldn't be established even if Apple could go back in time, use today's knowledge and develop and present its evidence accordingly.

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Friday, December 19, 2014

Apple loses very important round over its pinch-to-zoom API patent, Samsung tells appeals court

Two weeks ago, the United States Court of Appeals for the Federal Circuit held a hearing on the damages award and underlying liability issues in the first Apple v. Samsung case. In my commentary on the official recording of the hearing, I also talked about something that was not discussed at the hearing at all: Samsung's challenges to the validity of the '915 pinch-to-zoom API-related patent. The fact that the judges didn't ask questions about it and that counsel had a different focus does not at all mean that the related part of Samsung's appeal is going nowhere. The only thing it suggests is that everyone felt that everything had already been said and that the issue was ripe for decision. And it would increasingly be a surprise if that decision was favorable to Apple:

Earlier this week Samsung informed the appeals court of a decision by a Patent Trial and Appeal Board (PTAB) of the United States Patent and Trademark Office (USPTO) that could cost Apple up to $150 million just in that one lawsuit. The '915 patent, Apple's relatively most valuable software patent in the first Samsung case (most of the damages related to design patents, but Apple's per-unit royalty claim was higher for the '915 patent than for rubber-banding and tap-to-zoom-and-navigate), has been on a rough reexamination ride for some time. From the first Office action two years ago, the USPTO's Central Reexamination Division has consistently held all claims of this patent, including the one Apple asserted against Samsung (claim 8), invalid. Another thumbs-down Office action (called "final" though it wasn't "final" in the true sense of the word) came down in July 2013. About a year ago, Apple realized that the only option it had left was to appeal the examiner's rejection decision within the USPTO, to a PTAB. On appeal, the examiner stood by his decision as I reported in July (this year). A PTAB hearing was held recently, and the three-judge panel just affirmed the examiner's rejection of all claims (this post continues below the document):

14-12-16 PTAB Decision Affirming Rejection of Apple's '915 Patent by Florian Mueller

In a notice filed with the Federal Circuit, Samsung's counsel argues that "[a] final decision by an administrative body has collateral estoppel effect" and describes this as "an additional reason to reverse the $114 million in lost profits awarded for infringement of the '915 patent and to vacate the $35 million in royalties awarded for infringement of the three utility patents-in-suit."

The latter part about vacating that award would, even though the amount is relatively small by the standards of these companies and their dispute, require a damages retrial involving more or less all products at issue. And a retrial may be necessary anyway because of the design patent and/or trade dress damages issues in the case (which the appellate hearing focused on).

So for the first Apple v. Samsung lawsuit, there is no end in sight. And the process concerning the '915 patent isn't over either. Apple can choose to immediately appeal the '915 decision to the Federal Circuit. Samsung's notice to the appeals court also says that "Apple can request a discretionary [PTAB] rehearing."

Even if the appeals court disagreed with Samsung on collateral estoppel, the USPTO decision can't be ignored. The credibility problem the '915 patent faces is that no one at the USPTO who looked at this patent after an anonymous requester presented some new invalidity theories-- by now, four persons: the (re)examiner and the three PTAB judges--believed at any point that a single claim of this patent deserved to be upheld. That is, frankly, pretty damning. Of course things can always change, but it's less and less likely.

If the appeals court didn't agree with Samsung on collateral estoppel, it would still have to make its own decision on Samsung's invalidity theories. The legal standard for invalidating a patent in an infringement litigation is higher (clear and convincing evidence) than at the USPTO (preponderance of the evidence), but the consistent stance of the USPTO (again, four persons) has been clear and convincing.

Apple's decision in the summer to drop its cross-appeal (i.e., not to pursue an injunction anymore in that case) may also have to do with Apple's realization that this patent is going down the tubes even though it still can appeal the USPTO's final decision to the Federal Circuit. The '915 patent was the only patent in the first California case with respect to which Apple argued that Samsung continued to infringe (though Samsung said it had a workaround). If there was any patent in the first Samsung case over which Apple would have liked to win an injunction (in order to then have a debate over whether the workaround indeed is a workaround), it would have been this one. But Apple is now, instead, fighting hard for an injunction in the second California case against Samsung, which Judge Koh denied in August. Samsung had a deadline this week to respond to Apple's opening brief on appeal, and the docket indicates that the filing was made but it's not yet publicly accessible (I'll comment on it when it's available).

The state of Apple's patent enforcement efforts and the strategic landscape

Apple's patent assertions, despite the undoubtedly great work performed by the lawyers involved, have massively underperformed the expectations I used to have for some time (even in the summer of 2013 I still thought that, after some setbacks, there were signs of Apple still turning this around). I do know that a lot of people in different places were very surprised when they felt this year that my tone had changed. I can understand that, but conspiracy theories are a poor substitute for facts. The reason I adjusted my position was that after the summer of 2013, several important things happened that showed to me Apple wasn't going to get huge leverage. There came a point when I had to face those facts and draw the appropriate conclusions. And I was indeed thoroughly disappointed when I saw Apple bring an outsized damages claim in the second Samsung case. It looked to me like a desperate act after repeatedly failing to win (lasting) sales bans, and it was inconsistent with Apple's own positions on the value of patents in other contexts--positions I always supported and never disagreed with.

Apple itself vindicated the adjustment of my positions through its strategic retreat. It agreed with Google/Motorola to drop all pending litigation between those companies; it then agreed to confine the once-earth-spinning Samsung dispute to only one jurisdiction, the United States. And it hasn't brought any new cases, neither against long-time rival Samsung nor against any other Android device maker, in a long time. So it wasn't just me who determined this year that this was going nowhere for Apple. Apple's leadership recognized this and decided accordingly.

Even the remaining part of the Apple-Samsung will go away at some point--I find it hard to imagine that they (meaning both companies, but particularly Apple because it started this) really want to have a third California trial in just their first lawsuit (or a fourth trial in total).

For as much as Apple's supposedly "thermonuclear war on Android" underperformed my expectations, Apple's ability to command premium prices and still sell incredibly high volumes of products, has to a comparable extent outperformed them. According to Gartner's latest data, more than 83% (five out of six) of smartphones sold in the world run on Android, and more than 12% on iOS. But then there's also data that shows iPhone and iPad users are really much more active, and obviously many low-cost Android phones are technically smartphones but practically used as feature phones. In fact, just for app testing purposes I bought various low-cost Android phones (all of them in the 50 euro price range) from different vendors with screen sizes from 3" to 4". If you look at it strictly through a functionality lens, those are smartphones and you can run a million apps or so on them. But Apple is still doing very well. Incredibly well in fact.

I also bought an iPhone 6 Plus and an iPad Air 2. I now use the iPhone alternatingly with an Android phablet. My Android phablet has a significantly higher resolution, and when you view photos, it's quite a difference, and it's even noticeable when you just look at the standard user interface. But there's definitely some magic detail about the iPhone user experience. For example, when switching (in a test program for a component of an app I'm working on) from portrait to landscape (or the other way round), it's not just a sudden repositioning of all items but a smooth animation that I haven't seen in any Android app to date. That animation won't be patentable. But it's one example (and I could give more of these) of how Apple still manages to differentiate. Without litigation. Without injunctions.

What also still helps Apple to justify a price premium (and also has nothing at all to do with patent litigation) is the average quality of the apps available for the two platforms. I regularly look at many apps on both platforms. The two game categories I follow most closely are trivia games and puzzle games. In the trivia game genre, there's no noticeable difference in quality between Android and iOS, thus no reason to pay a premium price for an iPhone. In the puzzle games field, however, the difference is rather significant. While Candy Crush and some other titles from major publishers look and feel the same on both platforms, I've seen some really great games in this genre from smaller developers that exist only on iOS (or all you may get for Android is an unauthorized clone of inferior quality). There's still a lot of talented developers who develop primarily for iOS and invest more heavily in their iOS versions, despite the fact that you can reach so many more people in the world with an Android app. That's because iPhone users have more purchasing power than Android users.

It turns out that patent litigation was neither a winning strategy nor a necessary last resort for Apple. I can still understand why they thought they had to enforce their rights, but Apple's greatest strategic assets appear to be unprotectable by patents. IP has never been the only entrance barrier in this industry. It will continue to be important, and even Apple may at some point get more leverage out of its patents in different contexts. But stuff like a patent on a pinch-to-zoom-related API turned out to be of no value in the end. It's time for the U.S. part of Apple v. Samsung to end. With the Holiday Season so close, it may not happen this year, but next year is most probably the year for the definitive settlement.

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Friday, December 12, 2014

Government delegates express 'concern at an incident unique in the history of EPO': suspension of judge

On its website, the European Patent Office has published a "communiqué" concerning this week's meeting of the Administrative Council (AC) of the European Patent Organisation (the international body running the EPO) that contains a sybilline sentence on the suspension of an EPO-internal judge (member of a board of appeal) for disciplinary reasons. The suspension was widely criticized, including but not limited to a letter by (internal) members of the Enlarged Board of Appeal (EBA) to the AC, a letter by two external EBA members, Lord Justice Floyd and high-ranking Dutch court official Robert van Peursem, which was subsequently endorsed by leading patent judges from six other countries, and an email sent by a German patent litigator to his country's AC member.

The aforementioned sybilline sentence is at the end of a paragraph that says the AC "unanimously decided to suspend [the judge in question] from active duty on full salary until 31 March 2015" and will take further decisions after completion of the investigation:

"The [Administrative] Council expressed its concern at an incident unique in the history of EPO."

If this sentence explicitly mentioned a reprimand of President Battistelli for compromising judicial independence, its meaning and its significance would be clear. However, "an incident unique in the history of the EPO" is vague enough that this could also mean unanimous backing of the executive's action and concern over whatever the suspended judge may have done. That interpretation is less likely to be correct than disagreement with the way the executive leadership handled the matter, but it can't be ruled out completely in light of the unanimous endorsement of the suspension.

Let's take a look at the third paragraph:

"The Council took this opportunity to reiterate its full endorsement of and support for the principle of independence of the members of the Boards of Appeal, as specifically set out in Article 23 EPC and generally embodied in internationally recognised principles of judicial independence."

Article 23 EPC is very clear:

(1) The members of the Enlarged Board of Appeal and of the Boards of Appeal shall be appointed for a term of five years and may not be removed from office during this term, except if there are serious grounds for such removal and if the Administrative Council, on a proposal from the Enlarged Board of Appeal, takes a decision to this effect.

(emphasis obviously added)

Still, what's really missing from the communique is an unequivocal condemnation of the fact that a judge was indeed removed from office without an EBA proposal, let alone a Council decision.

There's a part I don't understand, at least not without further explanation. In the very same communiqué, the Council emphasizes Article 23 EPC and announces a unanimous suspension decision. Article 23(1) allows a removal from office of a judge only "if the Administrative Council, on a proposal from the Enlarged Board of Appeal, takes a decision to this effect." (emphasis added)

The letter from the Enlarged Board of Appeal to the Council, however, contains no indication whatsoever that the EBA proposed such a removal from office. If anything, it suggests the opposite.

The EBA letter refers to other articles, and Art. 10(h) allows the president to propose disciplinary action to the AC, which then decides under Art. 11(4). In this case, the suspension quite apparently occurred before the AC decided. So for the time between the suspension taking effect and the AC endorsing it, it appears to me that the removal from office had no legal basis whatsoever--at least none that I'm aware of.

But if this is all about Articles 10 and 11, why does the AC emphasize Rule 23? The standard under Rule 23 is higher: it takes (besides a factual basis) an EBA proposal and a Council vote, not just a presidential proposal and a Council vote. Is this an attempt to mislead the general public? Or did they just want to avoid any direct references to the article(s) the president violated?

In my opinion, the Rule 23 standard is the right one and even the combination of Articles 10 and 11 is too low a standard. But even that lower standard apparently wasn't met.

Officials have been forced to resign over smaller things than this. But in politics it's not unusual at all that those who appoint someone stand by the appointee for as long as possible, hoping that the storm will subside. If it doesn't, they can still take further action. The AC definitely keeps an important door open. If they want to sack Battistelli, they can do so whenever the investigation has been completed and it turns out that apart from the president acting ultra vires, the alleged misconduct by the suspended judge fell clearly short of anything that would justify a removal from office even if the proper procedures had been followed.

All in all, despite the unanimous endorsement of the suspension and my disappointment over it, I tend to see a significant crack in the shell here. The next few weeks and months will prove decisive. For now, Battistelli remains in office. But for how long is uncertain.

Coverage of this scandal in the general press will also play a key role. I heard that a Munich area center-right newspaper, Münchner Merkur, published an article in yesterday's print edition, entitled "Die letzte Diktatur auf deutschem Boden" ("the sole remaining dictatorship on German soil"). Things can't stay that way forever. The AC's "communiqué" should be interpreted by the IP sector and by innovative companies depending on high-quality patents (I heard from an unofficial source that a compensation scheme with potentially disastrous implications for European patent quality was approved yesterday) as an invitation to push even harder for serious reform. It shows that all these recent efforts, by EPO staff and by others, didn't go unnoticed, but they will one day have been in vain unless there's even more pressure now.

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Tuesday, December 9, 2014

Oracle effectively says Google jumped gun with Supreme Court petition in Android-Java copyright case

James Niccolai of the IDG News Service was first to obtain a copy of Oracle's response to Google's petition for writ of certiorari (request for Supreme Court review) in the Android-Java copyright case. Here's the brief (this post continues below the document):

14-12-08 Oracle Response to Google Petition for Writ of Certiorari by Florian Mueller

This is one of those documents that are most interesting when read backwards. The order in which it lays out Oracle's argument against Google's petition makes sense for those looking at the case for the first time, but after more than four years of coverage on this blog, I guess most of you already know the history of the case and the fact pattern that gave rise to this case in the first place. If the latter is new to you, or if you're looking for a refresher, the "Ann Droid" story Oracle told to the Federal Circuit is a more lively version of it. Then Oracle goes on to explain why the law has always been what it is, and I have viewed it that way for a long time, including a time when I was at loggerheads with Oracle. There's a simple plausibility test for the whole non-copyrightability claim: look at whatever cases Google and its allies show you in which copyrightability was denied (and that's different from finding in favor of fair use); then look at whether the affected material was a similar combination of quantity and originality as in the case of the Java API declaring code, and you'll find in each case that there was no such combination--and you can find numerous examples of cases in which material way less worthy of protection than the Java API declaring code was held copyrightable by U.S. courts. Life's too short to be a broken record, so I'll focus on what's new and what it means in strategic terms. And to that end, it happens to be most fruitful to start at the end.

Interlocutory appeal: why now? why not later?

The very last section argues that Google's interlocutory appeal to the Supreme Court was premature. An interlocutory appeal is an appeal prior to a final judgment. Here, the alternative for Google would have been to let the remand to California happen, to have the judge or another jury decide on "fair use", and to further appeal after losing the case. (Oracle's appeal to the Federal Circuit was not interlocutory because, if it had not been brought, the case would have been over.)

When Google chose not to ask the Federal Circuit for a rehearing, I was already wondering whether Google would focus on "fair use." Maybe Google was also thinking about the pro's and con's then, but at any event it decided it wants to take this case directly to the Supreme Court.

That, all by itself, does not mean Google's petition will fail. As the SCOTUSblog wrote in 2005, "the importance of the interlocutory status of a case is often grossly overstated." In reality, "[t]he Court regularly grants cert in non-final cases that raise important issues even when the proceedings on remand could illuminate the record in relevant respects and could affect the legal issue presented."

In this case, there is an extraordinarily strong connection between the questions of copyrightability and fair use, and that is so because of the way Google elected to argue the case in district court and on appeal. Oracle is right that Google can't seriously claim the software industry needs a quick resolution of an alleged "circuit split" (inconsistencies between different regional appeals courts) that it claims has existed for decades when the U.S. software industry, and especially the software industry in the Ninth Circuit (i.e., the West Coast, meaning mostly Silicon Valley and Microsoft), undoubtedly thrived. Still, the interlocutory status of the case doesn't guarantee the failure of Google's petition (nor does it make things any easier for Google given the huge number of petitions the Supreme Court receives).

The reason I'm interested in this has nothing to do with what the Supreme Court may or may not decide. Other factors are going to have more weight in that regard, so in case the Supreme Court denies the petition, the interlocutory status probably won't have been the reason. The most interesting aspect is that Google, to say it cautiously, does not quite exude confidence in its "fair use" defense with this tactical choice. It's old news that I don't buy the "fair use" defense here. But if Google really believes in it, why doesn't it just let the case go back to district court, try to win the "fair use" debate based on its "compatibility" argument, and if Oracle appealed again, Google could still try to take the copyrightability part, if it became necessary, to the Supreme Court? This is conjectural but the more I think about it, the more I feel that Google is not nearly as convinced of its two defenses-- non-copyrightability and "fair use"--as it claims and as its supporters claim. The Federal Circuit provided some guidance on "fair use" that ups the ante for Google, and what will up the ante to an even greater extent is that its equitable defenses failed, enabling Oracle on remand to ask the district court to preclude Google from making certain arguments that the first jury (with a bright foreman who couldn't dissuade other jurors from an illogical stance) probably thought had a bearing on "fair use" (Schwartz testimony etc.).

I can't see a winning strategy here for Google with respect to copyrightability, and its only chance with fair use is to get another jury involved that doesn't figure it out, though it will be easier to figure out next time. I wouldn't put it past Google that this here is mostly about delaying the resolution of the case. Nonsensical arguments like saying the software industry (which is mostly on Oracle's side anyway) needs this resolved immediately don't look strong.

There's another indication (that is not in the Supreme Court briefs) of Google's lack of faith in its defenses. Yesterday, Google finally released the first official non-beta version of Android Studio, version 1.0. The Android developers on the team I'm leading and I really like Android Studio (in light of Apple's Swift, Google should do even more to increase developer productivity). But somehow Google is cautious about directly integrating Java material into Android Studio, as this Stack Overflow discussion shows (it slightly predates version 1.0, but the situation is still the same). This doesn't solve Google's entire Java copyright problem. Still, what reason other than a desire to at least limit the extent of the problem would Google have to deliver an IDE--which means Integrated Development Environment--without fully integrating Java, if it's supposedly for the taking?

Google's petition addresses only one of the two reasons for which the Federal Circuit agreed with Oracle

The first subsection of the last section of Oracle's brief is short--merely two paragraphs--but raises an important issue:

"Although one would never know it from Google's petition, the court of appeals found that Oracle's work is protected on two separate bases: (1) the original declaring code and (2) the packages' creative structure and organization."

This is correct. Here's a quote from the Federal Circuit's own summary of its reasoning:

"[W]e conclude that the declaring code and the structure, sequence, and organization of the 37 Java API packages are entitled to copyright protection."

Oracle notes that Google's petition is all about the declaring code per se and "does not address the structure-and-organization rationale." According to Oracle, the failure to address an adequate alternative basis for affirmance means the petition must be denied.

Google's request for Supreme Court review (unlike certain amicus curiae briefs) is all about the functional nature of code. However, as Oracle writes in its response, "[w]hatever might be said about declaring code, the structure and organization is not used 'to operate the methods, i.e., the pre-written programs.'"

This potential reason for denying Google's petition is closely related to what Oracle says in the next subsection: Google now bases its theory on "system" and "method of operation" in the cert petition "[b]ut in the court of appeals, Google made no such argument."

I've said it before: Google's approach does not exude confidence. In its quest for some reason to get 7,000 lines of highly creative (and creatively-structured) material held uncopyrightable, it isn't consistent.

It would be easy for the Supreme Court to deny Google's petition

The previous paragraphs discussed potential reasons for a denial of Google's petition beyond the simple fact that such a massive body of highly creative (and creatively-structured), original, expressive material has always been and will always have to be copyrightable.

This article discusses how litigants are most likely to succeed in opposing a cert petition and says the following about the top court's selection criteria:

"Instead of seeking merely to correct erroneous decisions, the Court is looking, Chief Justice Rehnquist has written, for cases 'involving unsettled questions of federal constitutional or statutory law of general interest.'"

Google's primary argument for presenting an "unsettled" question is that the Supreme Court was divided a long time ago over 50 words used as menu items. As Oracle's response to the petition clarifies, that is not a question of software copyrightability. The way I view it is (apart from the question of whether we're talking about text or code) that if the Supreme Court didn't unanimously hold those menu items uncopyrightable, Cisco is fine with its 500 multi-word commands, but even those multi-word commands are very simple if you compare them to some of the more complex lines of declaring code in Oracle's Java APIs, such as this example cited by Oracle in its brief:

public abstract void verify (PublicKey key, String sigProvider)
throws CertificateException, NoSuchAlgorithmException, InvalidKeyException, NoSuchProviderException, SignatureException

That's a lot longer than the Math.Max example Google and its supporters like to point to (and which may have helped Google to confuse the district judge).

Oracle's brief also notes that one can't compare (as Google did in its petition) the QWERTY keyboard layout (the order of a couple dozen keys) to declaring code like the line above.

Getting back to Judge Rehnquist's criteria, it has to be a combination of "unsettled" and "of general interest." Unless one lowers the standard, there is no such combination here.

When I read Google's brief and the amicus briefs urging a review, I can't help but feel that they base their hopes on factors that reside at a meta-level rather than the factual, logical level. They try to make this a case that is all about interoperability, and I'll talk about that in the next section of this post. They try (some more overtly, some more subtly) to capitalize on what they believe to be friction between the Supreme Court and the Federal Circuit.

It won't be easy for them to get a Supreme Court review on that basis, but even if they did, I still can't see how they could ultimately prevail at that meta-level.

"Partial interoperability" is a contradiction in terms, says Oracle

While not putting those Sony and Sega fair use cases front and center at this juncture, Google still tries to leverage the (important) concept of "interoperability" (or its synonym, "compatibility") to get the Supreme Court interested. Oracle makes a few references to this in its brief that I wish to highlight.

In connection with "overwhelming [record evidence] that Android is incompatible with the Java platform," Oracle describes the notion of "partial interoperability" as a "contradiction in terms." If products are interoperable, they work together. If they are not, they don't. They can obviously work together to varying degrees, but the problem in this case is that what Google and the district judge meant by "partial interoperability" would more accurately be labeled as "familiarity." Interoperability happens (or doesn't happen) at the technical level, while familiarity is a state of mind. Some will argue that one can make changes to Java code in order to make it run on Android, and vice versa. But apart from this kind of definition having no boundary, it involves some additional work to be performed by human beings.

Google didn't advance the cause of interoperability when it sought to shut down Microsoft products implementing two industry standards (a jury thought this behavior warranted a $14.5 million damages award). It won't do the concept a favor by trying to stretch the definition of the term beyond recognition. So I, too, believe that "partial interoperability"--the way the district court and Google meant it--is a logical fallacy.

Oracle also addresses Google's argument that Oracle's asserted code must be devoid of copyright protection in order to prevent a "lock-in":

"[B]ecause Google deliberately made Android incompatible, when a programmer writes for Android, that programmer and program are locked into Android and locked out of the Java platform.

In the policy context, Oracle firmly rejects Google's (and Google's friends') argument that such material as the Java API declaring code would have to be free for the taking in order to enable innovation:

"Google is wrong that unauthorized copying of others' code is just how the software industry works."

Oracle doesn't say that incremental innovation shouldn't occur. The question is just on which basis. Building on top of what others create and making products work together with existing ones, or making them run on existing platforms is fine, as long as you write your own code. Using what others created is fine if you take a license. But "[t]heft is theft whether the work is a novel or complex software." Except, of course, if the "fair use" defense applies (which could be evaluated very quickly if the Supreme Court denied Google's petition).

Free software advocates speak out against the Federal Circuit and Google's petition

The Free Software Foundation and the Software Freedom Law Center have filed an amicus brief that technically (but not substantively) supports Oracle. The free software advocates engage in a balancing act. They are on Google's side with respect to copyright and with respect to copyleft, but they have a procedural preference for denial of Google's cert petition.

I've read their brief and would just like to explain what I believe their strategy is, and the philosophical and legal issues involved.

Richard Stallman, the founder and president of the FSF, leads the life of an itinerant preacher and one can only admire him for how committed he is to his cause. I've disagreed with Eben Moglen, who used to be the FSF's counsel for some time and still works closely with the FSF through his Software Freedom Law Center, on more than one occasion, but he's always extremely interesting to listen to.

Tim O'Reilly described the problem with the free software philosophy more than seven years ago:

"I continue to feel that the focus of the free software movement on 'software' rather than on 'freedom' is the real lost opportunity. [...] Focusing only on free software is as limiting as focusing on free hardware. It's freedom that matters."

The GPL licensing regime puts the freedom of program code above the freedom of developers. The copyleft principle requires all derivative works including GPL-licensed code to be made available under the GPL. This ensures that one cannot enjoy the freedoms granted to him by the GPL and then publish a derivative work under, for example, a proprietary, closed-source license. By contrast, non-copyleft open source licenses don't guarantee that the related code will always remain available on the same terms, but they give commercial software developers the freedom to incorporate it into their products.

The GPL is not about freedom-freedom. It's about enforceable freedom. And in order for anyone to enforce the GPL, the legal system as it stands (where copyleft is not enshrined in statutory law) only offers copyright for a basis. Copyleft wouldn't work without copyright enforcement. Yes, this is an oxymoron.

The dependence of copyleft on copyright is why Richard Stallman counterintuitively criticized the Pirate Party for proposing to limit copyright terms. RMS (he's frequently referred to by his initials) warned that this would allow "marauding giants" to incorporate free software into non-free software after only a few years. For someone advocating general freedom as opposed to just software freedom, this wouldn't be a big deal: one could simply let both approaches, free software and commercial software, compete. But that's not acceptable to the free software community.

RMS and Eben Moglen are copyright minimalists. They want just the level of copyright protection that is needed to make the GPL work in principle. Anything beyond that is undesirable to them. The Pirate Party proposed a copyright reform that would fall short of what the GPL needs. But other than that, less copyright is more if you ask RMS or Professor Moglen.

And now comes the part where they are demonstrably inconsistent. While they generally don't want commercial software developers to incorporate free software into their products ("marauding giants"), and while Richard Stallman considers commercial software to be immoral, they still know that the popularity of Linux (GNU/Linux as they would call it) depends on the availability of non-GPL software (other open source software as well as commercial software) for Linux.

If they were 100% principled, they'd have to like the Federal Circuit's clarification of longstanding principles of U.S. copyright law because it can prove useful in GPL enforement, or at least they should be neutral about it because free software is not made any less free by it. But their objective now is to describe the Federal Circuit opinion (incorrectly) as an outlier that shouldn't have any weight going forward. That's what their brief is really about. They don't want the Supreme Court to look at it because (without saying so) they're afraid of the outcome, knowing that the law is what it is and has been for a long time. If the Supreme Court granted certiorari, the free software guys might file another brief or just hope that what they submitted yesterday would help Google at that stage. But ideally, they just want the process to end. They want to have their cake and eat it. They try hard (but in my eyes fail) to hide the fact that this initiative of theirs runs counter to free software philosophy and is driven by the less than principled desire to let free software like Linux power non-free software like Android.

One of their claims is that the copyrightability question plays no role in this dispute because Google could always use the relevant material under the GPL. The commercial reality is that Google doesn't want to release Android under the GPL. It's a complete non sequitur to me in the FSF/SFLC brief how Google could use the Java API declaring code under the GPL, incorporate it deeply into its own products, and not have a copyleft "share-alike" obligation. So the free software brief is more of a mystery than it provides clarification. The greatest mystery is how the GPL would moot the question of past damages. But frankly, it's not worth worrying about.

The FSF/SFLC brief does, however, show to the Supreme Court that even some of those who don't like the Federal Circuit opinion would like the case to go back to district court now for a "fair use" analysis.

I don't know if any other amicus briefs will be filed. Presumably the software industry at large is just fine with the Federal Circuit ruling, which means business as usual.

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Monday, December 8, 2014

Top-notch patent litigator sees judicial independence at the European Patent Office compromised

This week's meeting of the Administrative Council of the European Patent Organisation (the multinational entity running the European Patent Office), scheduled for Thursday, is set to be the most dramatic crisis meeting in the history of the EPOrg/EPO. Not only has the current, allegedly autocratic president lost the faith of very large parts his staff (there's an ongoing strike and at a demonstration last week, a significant number of participants chanted "Battistelli -- démission!") but through his actions he has created a situation in which the community of patent practitioners ever more publicly sides with the staff. I can't help but see certain analogies between the pace of current developments at the EPO and the events that led to the Fall of the Wall 25 years ago.

Normally, patent attorneys and litigators stay above the fray of labor conflicts at the EPO. They discuss their patent applications and draft claims with examiners, they plead their cases to the boards of appeal, but they don't take positions on internal matters of the Office. That is, unless things get completely out of hand and the actions of a few people at the top become a threat to the functioning and the reputation of the IP sector at large. And that points appears to have been reached now.

Earlier today I said I had not yet been able to verify reports (particularly by the IPKat blog) of a suspension of a member of a board of appeal (i.e., an EPO-internal judge) by the president, which would be completely irreconcilable with the EPO's own rules and the judicial-independence standard of the civilized world. I have for approximately ten years repeatedly taken the position in political debates that EPO-internal judges should be appointed for life instead of being dependent on reappointment by the leadership. But even if they are only appointed for five-year terms, a certain process must be followed if they are "suspended" before the end of the term. And that process has, as more and more sources say, not been followed in a recent case.

From what I hear, one can see a printout of this webpage, on which the patent firm of Zimmermann & Partner (known for work on behalf of blue-chip clients in multiple fields of technology) expresses its support for the EPO staff, on many doors at the EPO's different locations (Munich, The Hague, Vienna, Berlin). And I venture to guess that an English translation of an email sent by one of Germany's leading patent litigators, Bardehle Pagenberg's Dr. Tilman Mueller-Stoy ("Müller-Stoy" in German), whose work on behalf of Microsoft I've mentioned various times (and whose other clients include, inter alia, Amazon and a major automotive company) to German Federal Ministry of Justice official and EPO Advisory Council member Christoph Ernst will also rise to tremendous popularity in the corridors of the EPO (this post continues below the document):

Email to Mr Ernst - Concerns About Judicial Independence at EPO by Florian Mueller

In this letter to the German representative on the Administrative Council (basically the board of directors) of the EPO, Dr. Mueller-Stoy urges the national governments controlling the EPO "to take measures which are appropriate for safeguarding the independence of the Boards (i.e., the EPO-internal courts)" in light of measures of President Battistelli that "ultimately discredit[]" the patent system as a whole. The email expresses concern to say the least (one might even say outrage) over the fact that "the President obviously acted autonomously by using disciplinary power" to effectively depose a judge, though there should be, according to the rules, a clear separation of powers that ensures the judicial independence of the members of the boards of appeal.

The letter draws attention to a second, less publicly-known way in which "the President also transgresses his powers." It apparently used to be a matter of routine that the chairman and the members of the boards of appeal were reappointed at the end of their five-year terms. Now, however, reappointments are frozen. I recently received, from an anonymous source, an official document that according to which at least two boards of appeal are (or will shortly be) without chairmen. As a result, "Members of the Board whose appointment period is due to expire shortly consider themselves put under pressure by the President until their reappointment has been made." This, quite obviously, compromises their independence.

The penultimate sentence of the email describes the current situation at the EPO in drastic terms:

"In addition to these described developments at the Boards of Appeal, there seems to currently prevail an 'atmosphere of fear and terror' which results in numerous disciplinary procedures against unwelcome staff members of the EPO."

I keep my fingers crossed that a tipping point has been reached now or will be reached over the next few days, and that even wider parts of the European IP community will stand up in support of fundamental rights, due process, patent quality, and judicial independence. But this is not just about a few individuals at the top of that organization. There are serious structural deficiencies that have led to the current situation, and they must be addressed as soon as possible.

[Update] IPKat has published and commented on "a letter which is unprecedented in the 40 year history of the European Patent Organisation": a reqest by the members of the Enlarged Board of Appeal (the highest in-house judiciary body) of the EPO that the Administrative Council act against President Battistelli's "clear challenge to the judicial independence of the Boards of Appeal." The letter also mentions that the suspended judge's "computer was confiscated by the [President's] investigation unit, which has given them access to possibly confidential information regarding the preparation and deliberation of cases by the member's board, without proper, legally sound guarantees." I'm speechless. There's a banana republic-style enclave in the heart of Munich (notably with a vice president facing multiple corruption charges in his own country but having stayed in power nevertheless), and so far this banana republic has been condoned and supported by governments that constantly preach human rights and democracy to countries like China and Russia. But it's not a banana republic at all levels (as the Enlarged Board's letter shows, there's plenty of principled people at work). Only at the very top. [/Update]

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European Patent Office: examiners fear they won't "be able to ensure appropriate quality standards"

This morning, the EPO-FLIER team, an anonymous group of European Patent Office employees who send independent information to private email addresses of colleagues and are not affiliated with the official staff union (SUEPO), distributed two PDF documents that I thought warranted publication with a view to the meeting of the Administrative Council of the European Patent Organisation on Thursday (December 11).

I've previously reported on the fight of EPO staff for certain rights (at least some of which are considered fundamental and inalienable human rights that require no discussion, let alone strikes or protests, anywhere in democratic Europe except in this context) and a demonstration in Munich last Tuesday. I won't be able to cover this labor conflict in all respects and from all angles, and you can find some interesting information on other sites, such as the World IP Review and the IPKat blog (which also reported on the alleged suspension, without what would be considered due process in European countries, of a judge, which I haven't been able to verify but which would be disconcerting if confirmed). But I've been saying for a long time that patent quality is key, so I'm concerned when I read an open letter from EPO employees warning that "EPO examiners will no longer be able to ensure appropriate quality standards" if a so-called New Career System (NCS) was put in place. Those staff members oppose an "entirely performance-based career proposal" and say it runs counter to core European Union policy positions. For example, the European Commission's Industrial Property Rights Strategy for Europe of 2008 document noted that "[h}igh quality rights are an essential requirement for all aspects of the system – support for business including SMEs, facilitation of knowledge transfer and effective enforcement of rights to combat counterfeiting and piracy."

Here's the open letter to national delegations to the Administrative Council of the EPOrg (this post continues below the document):

EPO Examiners Can No Longer Ensure Appropriate Quality Standards by Florian Mueller

I don't have an opinion on examiners' pay and will never express one, except that these are obviously highly-qualified people (advanced technical education, training in patent law, and at the EPO they must be fluent in three working languages in addition to their native tongue). But regardless of how much these examiners earn, it's one of the most crucial questions of patent policy (in my opinion, at a level with or arguably even more fundamental than such questions as access to injunctive relief, damages theories, bifurcation etc.) whether quality or quantity is incentivized at the examination stage. Therefore, the above open letter warrants consideration.

On a completely nonjudgmental basis (except for opinions I've previously expressed) I'd also like to show you the latest "EPO-FLIER" (again, it's completely unofficial), which is entitled "The spirit of the regulations" and focuses on human rights and rule-of-law/governance questions:

EPO-FLIER 13 - The Spirit of the Regulations by Florian Mueller

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Friday, December 5, 2014

Cisco suing Arista over set of 500 commands: original interface material IS copyrightable

Cisco agrees with Google on a lot of patent-related issues (so do I), but strongly disagrees with it on interface-related copyright questions (so do I, too). That's one of my conclusions from having looked at the copyright infringement complaint Cisco filed today against Arista. Cisco simultaneously brought a patent suit and a copyright suit, alleging "promotion of theft."

Google and the amici curiae (1, 2) supporting its Supreme Court petition in Oracle's Android-Java copyright case incorrectly claim that the industry at large had for a long time relied on the non-copyrightability of anything related to application programming interfaces (APIs). No matter how many IP professors and programmers the Electronic Frontier Foundation can persuade (or doesn't even have to persuade because they're Google employees or otherwise Google-aligned) to put their good names under bad claims, it's simply not true. Today's copyright infringement action by Cisco is just the latest example of how the IT industry has actually relied on copyright protection for all creative, expressive code (whether or not interface-related) ever since.

I said Cisco is just the latest example. Oracle received overwhelming support from the software industry last year in the form of amicus briefs submitted to the Federal Circuit. Cisco wasn't active at that time, but its Arista complaint is, silently and indirectly, a wholesale endorsement of Oracle's core positions on copyright.

If Cisco is right on this one (and I am already convinced that it is), the expression, organization and hierarchies of at least 500 multi-word commands from Cisco's command-line interface (CLI) is copyrightable. I don't have a position on whether Arista infringed, but Cisco alleges outright copying and is rather specific in its pleadings.

I have looked at Exhibit 1 to Cisco's copyright complaint (you can find it further below), which lists those 500 multi-word commands. On that basis I have a few observations to share regarding copyrightability:

  1. This stuff is expressive, original material to me. The authors of this set of multi-word commands could undoubtedly have written and structured it in a practically infinite number of different ways. That's why I believe this material does enjoy copyright protection under long-standing U.S. law. And it isn't deprived of copyright protection only because of someone's subsequent choice to provide programmers with a "familiar" interface.

  2. Just like any body of copyrightable material, it obviously contains some elements that wouldn't be copyrightable if taken out of context and viewed absolutely separately (just like this blog post is composed of words and I don't own copyright in any one of those words, but in the text as a whole). For example, "ip host" all by itself isn't copyrightable. Same with "show inventory." Arista could have copied one or two of those and Cisco couldn't complain if that were the case. But when one looks at the whole list of 500 multi-word commands, many of which truly involve creative choices (for example, "show ip igmp snooping querier" or "spanning-tree potfast bpdufilter default"), the threshold for copyrightability is easily met.

  3. While the threshold for copyright protection is a non-issue in my view for the 500 CLI multi-word commands Cisco is asserting against Arista, the degree of creativity that went into the 7,000 lines of Java API declaring code is undoubtedly far greater. Most Java function and variable names also consist of multiple words each, and then there are additional parameters. I believe there are strong arguments for saying that the average line from the Java API declaring code is more expressive than the average CLI command, but even if one disagreed with me and only considered them to be at a similar level, the Java API material would be far more massive and far more creatively-structured.

    As for "massive," it's not about quantity being a substitute for quality; I'm saying this because the size of such a work has exponential implications for the number of alternatives that the authors could have chosen.

    In a recent blog post I noted that Google's supporters increasingly recognize the flaws of the overturned ruling from the Northern District of California (where Oracle filed in 2010 and Cisco filed today), and one of them (who demonstrates enormous strength and confidence by conceding he had overlooked one or more key issues when he originally sided with Google) wrote that "[o]ne thing Oracle really had going for it [...] is the sheer size and complexity of the Java API library", going on to say that "surely somewhere in there is a spark of creativity."

    As for "far more creatively-structured," those 500 multi-word commands are simply an alphabetical list, while the asserted Java APIs were taken from 37 packages, and the decision on which package should contain a particular element is also a creative act that simply doesn't occur when someone creates an alphabetical list. (Cisco would perhaps argue that even this alphabetical list has some sort of structure because, for example, one could view all multi-word commands starting with the same word, like "show", as a kind of package. But those Java API packages involve a more creative kind of structure.)

    So, to put it that way, if Cisco prevails on its CLI claim, there's absolutely no way that Google is right with its non-copyrightability position in the Oracle case. (But theoretically--though I don't think that's where it is--the legal threshold could fit comfortably in between Cisco's 500 multi-word commands and the 7,000 lines of Java API declaring code, in which case Cisco would lose and Oracle would prevail.)

  4. Cisco's complaint disagrees with the "Google camp" in an additional, highly interesting way. While Google's supporters blame Oracle's appellate victory on the Federal Circuit and continue to claim that Ninth Circuit law supports their position and that the Federal Circuit allegedly got Ninth Circuit law (which it had to apply here) wrong, Cisco is demonstrably convinced that it will prevail if and when the case is appealed to the Ninth Circuit: if it had brought a combined patent and copyright complaint (as Oracle did, though patents are no longer at issue in that dispute), the copyright part would also have gone to the Federal Circuit in the event of an appeal, but Cisco filed a copyright complaint that is separate from the simultaneous patent infringement complaint, undoubtedly making the Ninth Circuit the future appellate forum.

  5. One last observation. It has unfortunately become pretty common that patent holders allege "copying" even in cases that actually involve independent invention and legitimate kinds of imitation and, for the most part or entirely, lawful competition. I oppose that kind of stretch, though I do recognize that willful and reckless infringement does sometimes occur (and in those cases, "copying" isn't necessarily the word I would consider my first choice but may be somewhat appropriate). In Oracle v. Google, the patent case might have fared better under a different judge (even in the same district, thinking of Judge Koh, for example), but it's probably no coincidence that in cases involving literal copying, copyright is an even more powerful intellectual property right to enforce than patents. Cisco has just filed its two complaints and it remains to be seen where those cases go, but at this stage it's already clear that copyright is not just an afterthought but instead an absolutely central part of Cisco's litigation strategy.

Here's Exhibit 1 to Cisco's copyright complaint with the list of those multi-word commands:

14-12-05 Exhibit 1 to Cisco v. Arista Copyright Infringement Complaint by Florian Mueller

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