Judge William Alsup (U.S. District Court for the Northern District of California) has just filed his response to Oracle's and Google's joint case management memorandum, about which I blogged on Wednesday.
Besides accepting all items on which Oracle and Google had reached agreement in their joint memorandum, the judge granted Oracle its most important wish: the final decision on the number of asserted patent claims to go to jury trial will not be taken now but instead at the final pre-trial conference. But the judge also wanted to put a clear damper on Oracle's hopes of being able to assert a large number of claims: based on Oracle's demands, the judge might still order a stay of the entire case pending reexamination of the patents-in-suit by the USPTO, which would take years. The judge even writes that he "doubts that the number of claims Oracle would ask a jury to learn and to evaluate is 'triable'". That's a strong message that he considers Oracle's most recent position (21 claims) excessively high and wants Oracle to reduce its demands substantially.
While the judge keeps the pressure on Oracle in that regard, this is very significant headway for Oracle. About three weeks ago the judge had proposed a "tentative case schedule" according to which Oracle would have been required to reduce the number of its asserted claims (from originally 132) to 3. But Oracle strongly opposed that proposal and wanted both a higher number and wrote that "[j]ust as important, the ultimate decision on the number of claims should be made closer to trial". At the time I wrote that I thought the number of three claims was an overly aggressive proposal by the judge, and with today's decision to determine the number closer to trial, it's clear that the judge didn't want to order a reduction to three (at least not at this stage). Since that point in time, Oracle has consistently asked for the right to assert 21 claims (three claims from each of the seven patents-in-suit), and has consistently proposed a postponement of this determination. I pointed out before that the most important metric will be how many different patents Oracle gets to assert. Oracle certainly wants to assert multiple claims per patent, but not getting to assert several claims per patent would be much, much less of a lost opportunity for Oracle than having to drop entire patents.
Claims bargaining postponed
The way the judge phrased today's order is not merely face-saving. I think he does maintain a position of significant strength. Come October (the trial is scheduled to begin on October 31 unless there's a stay), Oracle will find itself in front of both a carrot and a stick. The carrot is the possibility of a trial in the very near term. That could put significant pressure on Google to settle, although I wouldn't be surprised if Google actually took its chances and let this case go to trial. But the stick is that the judge could still stay the case pending reexamination unless Oracle reaches an agreement with him on the number of asserted claims.
The postponement of the decision is a huge improvement for Oracle over the proposal the judge made three weeks ago. It's also a major opportunity for Oracle to convince the judge in the meantime that the claims Oracle wants to assert are so distinct from each other that Oracle is entitled to all of them under applicable case law, i.e., the Katz case.
I'm sure the judge fully understands Oracle's rights, and I guess that's why he decided not to put in an order that would deprive Oracle of due process. Instead, the judge argues with the court's caseload, pointing to "the number of civil cases that will be ready for jury trial during the period between the current lengthy criminal RICO-VICAR trial and those to follow". That fact still wouldn't change anything about Oracle's rights, but the judge wouldn't impose a narrowing of claims on Oracle: he would just stay the case if Oracle's demands are overreaching.
Based on today's order it's impossible to know whether the judge would actually negotiate with Oracle or simply let Oracle take its chances. Each of them knows where the other stands: Oracle wants 21 (if not more), the judge proposed 3. The judge could discuss beforehand with Oracle which number Oracle should request at the pre-trial conference in order to get a trial starting on October 31. But he might also tell Oracle to make its formal proposal without knowing where the judge's limit is. That would be tough.
I have to point out that in formal terms, the judge actually outlines three possibilities for what could happen after Oracle determines the number of claims it seeks to assert: the scheduled three-week trial (starting October 31, 2011); a further (possibly small) delay "until [the case] is trial-ready"; or a trial stay pending reexamination. In practical terms, the first and the third option are the ones that appear most likely. The judge previously explained that the clerk who has learned about all the details of this case won't be available after November, so I believe it really comes down to the two alternatives of either the scheduled trial or a stay.We might ultimately see Oracle propose one claim per patent (seven in total). But it's too early to speculate. I just venture to guess that three won't be the number, a number that some had reported prematurely three weeks ago.
Agreed-upon items were rubberstamped
While most of the order addresses the contentious issue of the number of asserted patent claims, in formal terms it "simply approves the agreed-on points", i.e., everything on which Oracle and Google reached agreement in their joint memorandum. In my understanding this includes a stipulation that Google will bring a maximum of four grounds of invalidity against each patent claim asserted by Oracle.
Under the agreed-upon items, Oracle now has a little over a week (until June 1, 2011) to create a shortlist of 50 patent claims to be potentially asserted later. Two weeks later, Google will create a shortlist of six grounds of invalidity per patent claim asserted by Oracle. In my report on the joint case management memorandum I quoted a passage on how "six grounds" has to be interpreted here. In that blog post I also summarized the parties' agreement on a schedule for summary judgment on Oracle's copyright infringement claims (which was now also approved by the court). We will see Google's opening brief (and possibly also an opening brief by Oracle if they file their own summary judgment motion concerning the copyright issue) on August 1.
This will be a busy summer for Oracle's and Google's legal teams, and there's enough potential for disagreement that things could heat up. But recently they both seemed to be cooperating more smoothly than at any previous stage of the process, as far as I can tell based on the filings I saw. I have no idea how heated their closed-door talks might have been...
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