Thursday, June 30, 2011

Visualization of the worldwide patent war between Apple and Samsung: 8 courts in 6 countries on 3 continents

[battlemap updated with Samsung's new counterclaims in California]

I previously reported on Samsung's latest complaints against Apple (with the ITC, the U.S. District Court for the District of Delaware, the High Court of England and Wales, and an unknown Italian court).

I have updated my battlemap that shows the two litigants and -- in the middle -- the eight courts in which they are embroiled in lawsuits. Those eight courts are based in six different countries (United States, United Kingdom, Germany, Italy, Japan, South Korea) on three continents (North America, Europe, Asia). The battlelines:


Full-screen mode is recommended for viewing. You can view it in full-screen mode by clicking on the screen icon in the icon bar above, or on by clicking on the link above the graphic. From Scribd you can also download it as a PDF.

This isn't just one page. You can flip through the pages to see a slideshow of how this dispute has escalated since Apple's original lawsuit in Northern California. And after that, there are six pages of reference lists.

I have produced such visualizations for other major smartphone patent disputes as well. You can find them all in a Scribd folder.

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ITC gives Kodak a small chance to prevail over Apple and RIM -- uphill battle until August 30, 2011

A week ago I reported on the ITC's postponement of its decision on Kodak's complaint against Apple and BlackBerry maker RIM over an image preview patent.

The ITC could have taken a final decision today, either affirming the initial determination made by the Administrative Law Judge -- the ALJ found the relevant patent claim invalid and not infringed -- or reversing it entirely by finding Apple and RIM liable for infringement of a valid patent claim. Instead, the ITC decided to reverse only certain elements of the initial determination and to remand the case to the ALJ for a new analysis. Here's the ITC's decision.

The new target date for the decision is now August 30, 2011.

This is going to be an uphill battle for Kodak because the Commission still leaves it to the ALJ to decide whether the relevant patent claim is valid. If the ALJ once again concludes that it's invalid, Kodak loses. Only the infringement of a valid patent is legally relevant. If the ITC had definitively reaffirmed the judge's determination of invalidity, that would have resulted in a definitive and immediate decision against Kodak's complaint.

The area in which the Commission clearly overturned the ALJ's determination is claim construction. I recently explained the role of claim construction in connection with the ITC's investigation of Microsoft's complaint against Motorola. In the Kodak case, a few key terms must now be interpreted differently by the judge in the further proceeding than before. For two of the modified terms, today's decision doesn't take a position on whether the different constructions must result in a different determination concerning infringement. For two other terms, the Commission does state that its modified construction suggests infringement, but an infringement analysis always depends on all key elements of a patent claim, so even if some elements are now deemed infringed, there are still others concerning which the judge may arrive at the same conclusion as before.

In other words, the ALJ can still rule against Kodak, and it's reasonably probable that he will. Kodak gains more time and gets the opportunity to present new arguments. Given that Kodak is not too likely to prevail, a possible outcome now is a settlement that would cost Apple and RIM a fraction -- possibly a tiny fraction -- of the billion-dollar amount Kodak and some observers previously considered realistic. This way, Kodak would at least get some cash to finance its restructuring while Apple and RIM could eliminate the remaining risk of losing. Also, let's not forget that there are federal lawsuits going on, and Apple and RIM would presumably also like to get rid of those -- but on their terms now rather than Kodak's.

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USPTO invalidates an entire Oracle Java patent-in-suit on a preliminary basis

At Google's request, the USPTO is reexamining all seven Java-related patents asserted against Android's Dalvik virtual machine. On Monday I reported on first Office actions that had been issued with respect to four of the seven patents. I stressed the fact that those are non-final Office actions (a fact that another blog covering this matter had misled many reporters about), and I gave examples of high-profile patents that took a similar beating at the same stage but were ultimately upheld.

My favorite blog on patent reexaminations, Scott Daniels' WHDA Reexamination Alert, just reported that the USPTO issued a first Office action concerning a fifth Oracle patent, rejecting on a preliminary basis all 24 claims of that patent (U.S. Patent No. 6,125,447 on "protection domains to provide security in a computer system").

This is the first patent-in-suit that has been rejected (on the aforementioned preliminary basis) in its entirety. But it's already the third event in which all claims of a given patent actually asserted by Oracle have been rejected. Oracle did not assert all 168 claims of the seven patents. Oracle made infringement contentions concerning 132 of them. In my analysis of the four first Office actions prior to this one, I explained which claims Oracle asserted and which ones of those were rejected (on a preliminary basis).

Oracle wanted to assert all 24 claims of the patent that has been rejected (on a preliminary basis) in the latest action. And Oracle now has to convince the examiner not to reject them (or at least not all of them) in a final Office action.

As Scott Daniels explains in the final paragraph of his post on the latest Office action, a stay of this case becomes more likely if the judge feels that the validity of those patents should be determined by the USPTO before a jury trial.

There are now two more Oracle patents-in-suit concerning which the USPTO hasn't issued first Office actions yet. At least one of those Office actions is likely to be issued soon. I will continue to follow these developments.

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Wednesday, June 29, 2011

Android device makers sign up as Microsoft patent licensees -- an overview of the situation [UPDATED, TWICE]

[Updated TWICE]

  • on Thursday, June 30, following the announcement of a license deal between Microsoft and Japanese consumer electronics company Onkyo -- the third announcement of its kind during that week

  • on Tuesday, July 5, following the announcement of a license deal between Microsoft and Taiwanese device maker Wistron

[/Updated TWICE]

In a little more than a week, Microsoft announced four new license deals with Android device makers:

In April 2010, Microsoft had already announced a license deal with HTC. So as of July 5, 2011, there have been five such announcements

There are also patent agreements in place with other device makers such as Samsung and LG that may or may not extend to their Android devices. There may be even more: many patent license deals are never talked about in public.

I thought it might be helpful to analyze the information that is available on Microsoft's smartphone patent license deals. Those deals aren't just between Microsoft and its licensees. This should also be of concern to Google.

Personal perspective

I fought hard against Microsoft when the EU was considering a piece of legislation on software patents and continue to disagree with them on the desirability of such patents. My views are consistent. However, I recognized in a blog post last summer that their focus on licensing (rather than litigation) reflects a cooperative approach that allows all players to innovate.

The primary reason I campaigned against software patents was a concern over patents being used for exclusionary purposes. In a hypothetical world in which every patent holder grants licenses on reasonable terms, I would still oppose software patents but my concerns would mostly relate to such problems as the ones posed by Lodsys and MacroSolve.

Business perspective

On this blog I report a lot on smartphone-related patent litigation. Earlier today I wrote about Samsung's ITC complaint against Apple. Yesterday I discussed Oracle's damages claims against Google, amounting to $2.6 billion, and on Monday I evaluated the potential impact of certain reexaminations on the dispute between Oracle and Google. Tomorrow the ITC will hand its decision on Kodak's compaint against Apple and RIM. All of those stories are exciting to read and write about. But I've been active in this industry for more than 25 years, so I know that litigation (however exciting to watch) is a distraction and license deals that help to avoid or settle litigation are generally good news from a pragmatic, business-like point of view.

That said, I'm sure that Google is very unhappy about the fact that its vision of a "free" smartphone operating system is reduced to absurdity on a daily basis. Most people have understood by now that Android isn't truly "open" in light of Google's heavy-handedness. Android is neither "free" as in "beer" nor "free" as in "speech". I still like Android and use it extensively: my current phone is a Samsung Galaxy S II. But the facts are still the facts concerning Android's intellectual property issues.

Every device maker who feels forced to take a patent license on Android disagrees with Google's claims in the sincerest form: by putting his money where his mouth is. That is exactly what Google fails to do: it doesn't indemnify device makers because it's aware of Android's infringement.

This week's new licensees: General Dynamics Itronix, Velocity Micro, Onkyo

Frankly, if you had asked me last week to name the most famous makers of Android-based devices, I would have named more than half a dozen but I wouldn't have thought of General Dynamics Itronix, Velocity Micro, or Onkyo. However, at a closer look those are interesting licensees.

Itronix is a subsidiary of General Dynamics, a major defense contractor with a market cap of (as I write this) $27 billion. Its "rugged" (in terms of "robust") computers are "wearable": soldiers can attach them to their forearm, for example.

Not only would General Dynamics have had the financial strength to defend itself against a possible patent infringement lawsuit but it's also a company that's pretty patent-savvy. The patent database of the U.S. Patent and Trademark Office lists General Dynamics as the assignee of almost 1,000 patents (over the last few decades). By comparison, the same kind of search delivered only 701 results for Google. So it's a safe assumption that General Dynamics had the knowledge that's required to analyze patent infringement assertions, and arrived at the conclusion that taking a license was the way to go.

Since the other new licensee, Velocity Micro, is a privately-held company, it's harder to find information about it except for the company info section of its website and a Wikipedia entry, which also mentions several awards that the company has won.

What's interesting about Microsoft's license deal with Velocity Micro is that it extends to (among other devices) the Cruz Reader tablet computer. This is yet another addition to the list of tablet computers on which Microsoft collects patent royalties. That list also includes's Linux-based Kindle and HTC's tablets (such as the HTC Flyer).

With Thursday's announcement, Onkyo Corp. also agreed to take a patent license from Microsoft that covers Android-based tablets. (Onkyo also has some patent expertise, being the assignee of more than 100 U.S. patents.)

The fourth licensee to be announced in this series of four announcements, Wistron, states the following on its website about its history:

Until the separation from Acer [in 2002], Wistron operations were known as the Design, Manufacturing and Sergice (DMS) arm of Acer Inc.

So this is a company that supplies components to others. Microsoft's license agreement with Wistron may, therefore, relate to Android devices sold under a variety of different brands.

By contrast, Barnes & Noble refused to take a license for its Nook and Nook Color tablets and now has to defend itself against Microsoft in an ITC investigation and in court. When Microsoft's lawsuit against Barnes & Noble was announced, I already pointed out that it's a matter of of a level playing field that Microsoft has to require all competitors in that market to pay so as not to put those who pay at a disadvantage vis-à-vis non-paying infringers.

License deals between Microsoft and major smartphone and tablet makers

In the first part of this post I mentioned Microsoft's announcement of a royalty-bearing patent license deal with HTC relating to Android devices. The exact amount of the license fees paid by HTC under the deal was not revealed. More recently, Citigroup analyst Walter Pritchard claimed to know that HTC pays $5 per device and that Microsoft asks other Android device makers, according to him, for $7.50 to $12.50 per device. Those numbers could be accurate. The actual numbers could also be more or less. Licensors and licensees don't have any obligation to disclose their deal terms to the general public. HTC is a fast-growing, profitable company whatever the license fee may be.

An HTC competitor, Motorola Mobility, preferred to be sued. Considering how things are progressing at the ITC, I believe Motorola will ultimately have to pay royalties as well.

Several other major Android device makers -- including Samsung, LG and HP -- had or have patent license agreements in place with Microsoft according to this press release issued in August 2010 (on Microsoft's settlement with But the scope of those agreements isn't clear. Android-based devices may or may not be included. In that same press release, Microsoft also mentioned a license agreement with Apple. That agreement could also be broad or narrow. Maybe we'll find out one day.

What's clear is that Microsoft routinely enters into patent license agreements with companies of all sizes. There are about three dozen Android device makers out there, and we may see more announcements of license deals over time.

Android's problem: royalty demands by many right holders

Android doesn't have a "Microsoft problem". Microsoft is just one of many right holders who believe Android infringes on their intellectual property rights. It's obviously an important one with its portfolio of 17,000 patents, but it's by far not the only one.

Oracle is suing Google (as I mentioned). Apple is suing Samsung, Motorola and HTC. Nokia just settled with Apple and plans to grow its patent licensing business. Gemalto is an example of a medium-sized company asking for royalties. And there are literally dozens of smaller patent holders.

As a result, we'll see many license deals, and unfortunately also many more lawsuits. No single right holder is the issue. But Android device makers face a significant total cost of paying royalties to all those right holders.

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Samsung files ITC complaint against Apple:
long-time partners heading for ugly divorce? -- UPDATED

[last updated on Thursday, June 30, 2011]

The ITC website shows that yesterday Samsung filed complaint no. 337-2824 concerning the following types of products:

Mobile Electronic Devices, Including Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet Computer

"[T]he proposed respondent is Apple Inc., Cupertino, California."

I have published the ITC complaint on Scribd.

Samsung is asking for an import ban against the iPhone, iPad and iPod. If the ITC agrees to investigate such a complaint (which is pretty certain to happen here), a final decision is reached within 16 to 18 months.

Samsung first party (of the two) to involve the ITC

Apple recently amended its complaint with the U.S. District Court for the Northern District of California and countersued Samsung in South Korea (where Samsung had previously filed one of four complaints with which it responded to Apple's original complaint). While Apple may soon seek a preliminary injunction against the Galaxy product range in federal court, Apple has not (yet) filed an ITC compaint against Samsung (though Apple routinely lodges and defends itself against ITC complaint, such as in its disputes with Nokia, Motorola, HTC and Eastman Kodak).

Samsung also sues in Delaware and (maybe before this week) UK and Italy

This dispute is even bigger than it seemed yesterday when the ITC complaint became known. In addition to what was known then, there are also lawsuits in the state of Delaware and in two more countries -- the United Kingdom and Italy.

[LINK: visualization of the battlelines in this worldwide patent war]

The DocketReport, a great subscription service offered by DocketNavigator, has published a Samsung complaint against Apple that was filed with the U.S. District Court for the District of Delaware over the same five patents that Samsung asserts in its ITC complaint. Bloomberg also reported. Such lawsuits, often called "companion lawsuits", are filed most of the time because the ITC can order an import ban but not award damages. What happens is that if the ITC investigates a case, it's normally stayed at the federal court until the ITC case is over. Then the federal case is resumed to determine damages. (More likely, the parties will have settled in the meantime.)

The Wall Street Journal now reports on lawsuits filed by Samsung against Apple in the UK and Italy that I had not heard about before. I was "only" aware of lawsuits in the US, Japan, South Korea and Germany. So they are now fighting each other in three venues in the US (ITC, Northern California, Delaware), in two Asian countries (Japan and South Korea) and in three European countries (Germany, UK, Italy). That's a total of eight venues in six countries on three continents.


These are the patents Samsung asserts in its ITC and Delaware complaints:

  • U.S. Patent No. 7,706,348 on an "apparatus and method for encoding/decoding transport format combination indicator in CDMA mobile communication system"

  • U.S. Patent No. 7,486,644 on a "method and apparatus for transmitting and receiving data with high reliability in a mobile communication system supporting packet data transmission"

  • U.S. Patent No. 6,771,980 on a "method for dialing in a smart phone

  • U.S. Patent No, 6,879,843 on a "device and method for storing and reproducing digital audio data in a mobile terminal"

  • U.S. Patent No. 7,450,114 on "user interface systems and methods for manipulating and viewing digital documents"

Supplier-customer relationship lower priority than intellectual property fight

I have recently seen various reports according to which Apple has already decided to dump Samsung as a component supplier, at least with respect to chipsets. I don't know if those reports are true, but this would make a lot of strategic sense. We're looking at two fundamentally different value propositions. Manufacturing electronics components for third parties is a low-margin business compared to the opportunity of being a major consumer brand for mobile devices. That's why Samsung would rather defend its Galaxy and other nameplate products than back down only to retain Apple as a customer for its manufacturing operations. And Apple would rather find other suppliers than be limited in its enforcement of intellectual property rights by supply chain considerations.

These two companies appear to have set very clear priorities, and they may be heading for an ugly divorce.

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Tuesday, June 28, 2011

Oracle says it claims $2.6 billion in damages from Google, denies $1.4-6.1 billion range

The dispute between Oracle and Google has several interesting aspects. Damages claims are one of them, and that's what this blog post is about. But if you're interested in this dispute, I strongly encourage you to read my previous blog post as well -- it provides more accurate information on the status of the reexaminations of Oracle's patents-in-suit than previous reports by others and explains the significance of those reexaminations, which could affect the timing and the outcome of a trial as well as the future enforcement of a ruling.

Two weeks ago, Google filed what is called a Daubert motion, asking the court to exclude Oracle's damages expert and his report from the further process. I reported on it and concluded that Oracle's expert had apparently calculated damages amounting to billions of dollars. A day later, Oracle confirmed this, without stating a particular number (just "billions of dollars"). A filing made by Google on June 6 became available on June 18 in an unredacted form. It averred that Oracle's damages claims were in the range "between 1.4 and 6.1 billion dollars".

Today Oracle has responded to the June 14 Daubert motion, which it obviously opposes. In that filing, which I have uploaded to Scribd (as a PDF), Oracle denies the range stated by Google and says the actual amount of its claims is $2.6 billion (first bullet point on page 8 of the PDF document):

"Google falsely claims that Prof. Cockburn concludes that Oracle is owed anywhere from $1.4 to $6.1 billion in damages. (Motion at 1, 16, 19). He does not. His opinion is that the total damages that should be awarded to Oracle is $2.6 billion."

A paragraph later, Oracle outlines the payment schedule:

"[D]amages would be split between a $0.9–$1.4 billion up-front payment plus a revenue share of between 10 and 15 percent of Google advertising revenues on Android phones"

That percentage contrasts with the 50% "even split" a previous Google filing suggested, and the "over 20 percent" claim revealed by a more recent Google filing.

Anyway, it's important to understand these two things about Oracle's damages claims:

  • None of the Daubert-related filings indicate that the purported numbers reflect a possible tripling of damages if Google is found to have infringed willfully (something that Oracle asserts). Oracle consistently asserts that Google "ultimately chose to willfully infringe Oracle's intellectual property and release the Java-based Android platform", but the methodologies presented don't mention a tripling of any amount.

  • The total amount of Oracle's damages claims presupposes that Google continues to infringe at least some of the asserted rights "through 2021". However, Oracle also asks the court for an injunction, which might (based on the current case schedule) be issued before the end of the year.

    If Google is not found to infringe, there will neither be damages nor an injunction. Oracle would simply lose.

    But in the event Google is found to infringe, there may or may not be an injunction. In my opinion, it's highly likely that an infringement would in this case also result in an injunction, but it's not certain until the decision has been handed, and that's why we need to look at two possibilities:

    • Injunction awarded:

      In this case, Oracle says "only past damages need be awarded, in the form of the up-front payment plus revenue sharing from 2008 through the date of trial". Damages would accordingly be less than the total $2.6 billion amount, but the effect of an injunction would be that Google would then have to stop distributing any infringing technology unless it negotiates a license deal with Oracle. In that scenario, Google might have to pay even more -- going forward -- than Oracle's damages expert calculated. It might also have to make technical changes to its software to bring Android at least to some degree into line with the official Java rules and specifications.

      I just described what might happen in a scenario in which Google would either have to abandon its application platform or accept whatever terms Oracle might dictate from a position of incredible legal strength and economic leverage. Google wouldn't be able to force Oracle to offer a license on any particular terms, not even the ones found in the damages report by Oracle's expert. With an injunction in its hands, Oracle would have an absolute right to say no.

      Google would face a similar situation if it negotiated a settlement with Oracle in a situation in which Oracle believes it has a very good chance of prevailing and obtaining an injunction.

    • Injunction denied:

      In this scenario, Oracle would have to tolerate continued infringement and the damages calculated by Oracle's expert would effectively be a running royalty that Google would have to pay for as long as it infringes Oracle's rights.

      If the parties negotiated a settlement in a situation in which Oracle is very unsure of its ability to obtain an injunction, the royalty on which the parties would agree would probably not exceed whatever numbers the Cockburn report proposes. It could even be substantially less in that case.

Those were the most important pieces of information found in Oracle's filing. There are also some other details, which I'll discuss in the remainder of this blog post, but prior to that I'll invite you once again to read my previous blog post on the ongoing reexaminations of Oracle's patents-in-suit and their potential impact.

Additional details on Oracle's damages theories

Controversy over the Cockburn report

Most of the filing has to be read against the background of what the Daubert debate is about: it's about whether Oracle's damages expert (Professor Cockburn) and his report will be admitted to trial. Google wants to prevent that, or at least wants to call Professor Cockburn's credibility into question and force Oracle to reduce its demands ahead of trial by way of a modified Cockburn report. Oracle wants to defend its expert, the entirety of his report, and every single dollar it claims.

Today's filing by Oracle often says that Google may not like the Cockburn report but doesn't present legally relevant reasons for excluding the expert and his report. Instead, Oracle argues, Google might write a rebuttal report and try to convince the jury that it's right and Oracle's wrong.

Oracle essentially argues that Google fails to prove any mistakes by Professor Cockburn that would make him unreliable and unworthy of presenting his views to the jury. It is possible to exclude experts and their reports, but not just because the other party disagrees with him.

Fragmentation of the Java platform

Previous Google filings indicated that the Cockburn report added a substantial amount of money to Oracle's royalty claims on the grounds of "fragmentation of the Java platform". Google said that this concept alone corresponded to hundreds of millions of dollars.

While Oracle now says that "the dollar amount that Prof. Cockburn currently assigns to fragmentation is zero", it simultaneously admits that "the adverse consequences of fragmentation are important in informing Prof. Cockburn's analysis of how a reasonable royalty would be structured".

Based on the information that is available (which is still limited but much less limited than before), this particular disagreement doesn't seem too important to me. They could both be right at the same time: Google may be right that this fragmentation theory effectively adds hundreds of millions of dollars while Oracle may be right that the Cockburn report doesn't state a specific amount. Maybe we'll find out at a later stage (such as when Google responds to today's filing) who's right.

Global vs. only U.S. revenues

Google's criticism of the Cockburn report relates in part to the allegation that it "improperly includes revenues from international sales" while the asserted patents are enforceable only in the United States. Google would want Oracle's damages report to exclude "extraterritorial -- and therefore noninfringing -- activities". According to Oracle's filing, the part to be excluded would be "up to 88% of Cockburn's damages".

Oracle argues that some of its "four different theories of patent liability in this case" would entitle it "to damages that would include foreign sales." I must admit that I don't like the idea of U.S. patent law effectively resulting in damages including sales in other parts of the world. But Oracle cites cases in which foreign sales fell within the scope of U.S. patent law even though the patents themselves were valid only in the U.S.

In connection with damages based on foreign sales, Oracle also mentions that it asserts copyright infringement. Copyright is not country-specific in the way patents are. But Oracle doesn't emphasize copyright too much in this context. I have believed all along that the copyright part of Oracle's assertion primarily serves the purpose of portraying (and, if successful, exposing) Google as a "copycat". From an economic point of view, this really is mostly abuot patents. I don't want to go into too much detail on the copyright part of the case here because in little more than a month we will see one or two summary judgment motions related to copyright. At that stage it there'll be a much better basis for a detailed analysis of Oracle's copyright infringement assertions.

Other findings

I found many other interesting pieces of information in Oracle's filing, including the attachments. For example, Oracle tries to get some mileage out of statements made by Google's leadership to financial analysts about how big and profitable its Android business is. Some of the issues addressed in Oracle's filing in opposition to Google's Daubert motion may play an important role in the further process, and I'll be sure to address them at the appropriate points in time.

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Monday, June 27, 2011

Reexaminations of Oracle patents: preliminary rejections of claims are relevant but not final

The landmark intellectual property dispute between Oracle and Google has recently drawn more attention than any other litigation of its kind. Unfortunately, that high level of interest also enables inaccurate reports and misleading headlines to spread like wildfire.

In particular, there's one propaganda site out there (with an apparent and long-standing bias in favor of certain companies) that previously wrote: "Oracle Ordered to Reduce Claims Against Google From 132 to 3". That was simply not true. Regrettably a number of reporters amplified that untruth. But that was merely a tentative court order. This is what the judge wrote right at the start of that "order":

Having reviewed the parties' memoranda [...], the Court proposes a three-step process, as below. Each side may file a five-page (double spaced, twelve-point Times New Roman font, no footnotes, and no attachments) critique of the tentative schedule by NOON ON MAY 6, 2011. After taking any critiques into account, the schedule will be finalized. [emphasis mine]

In light of the above, which could hardly be any clearer, one had to be utterly obtuse or, like in this case, a notorious propagandist to claim that Oracle was actually ordered to reduce claims to any particular number. In reality, the final decision on this won't be taken until October. The most recent position by Oracle (also a tentative one) was to assert 21 claims at trial -- seven times as many as that false headline had stated. A filing on May 18 revealed that Oracle even rejected a Google compromise proposal of 10 to 14 claims.

Also, the proposed kind of reduction was just a routine matter of case management (with a view to the court's limited judicial resources), absolutely unrelated to the merits of Oracle's claims. The judge felt that Oracle should be able to concentrate on a few claims. That thinking is important now in connection with reexaminations and preliminary rejections -- I'll get to that further below.

From the same poisoned source that already misstated the envisioned narrowing of claims, some new confusion has emanated. The pattern is the same as before: the audience and reporters were misled by an article creating the perception of a done deal, theoretically mentioning the preliminary nature somewhere (at the end of a very long document) but practically hiding the fact from most people's view.

In a recent article on the ongoing reexaminations of Oracle's patents-in-suit, that blog talked about "rejected" claims and "[O]ffice actions" without mentioning in the article itself that the rejections were just preliminary and the Office actions were so-called first Office actions, by definition non-final. That information could only be gleaned from the text of the relevant document. That text was also published, but few people read such long and highly technical and legalistic texts until the end. The body of the blog post should have stated the preliminary nature of this upfront. It failed to do so (presumably on purpose), and as a result, various reporters ended up writing stories that were either inaccurate or at least missed the point.

By contrast, I strive to point out the scope and effect of every court filing I report on. For example, I reported a lot on Oracle's damages claims but never portrayed Oracle's position as a court order...

First Office actions issued so far

At this point, the U.S. Patent and Trademark Office (also just referred to as "Office" in this context) has issued what is called first Office actions concerning four of the seven patents Oracle asserted against Google. It's true that many of the claims under reexamination have been "rejected" in a temporary sense, meaning that the examiner is inclined to reject unless convinced not to do so in a final Office action. We will soon see Office actions concerning the other three patents (especially for two of them they could be issued any day).

Back in May I tweeted about a post on a very reliable and thoroughly-researched blog named Reexamination Alert. Its author, Scott Daniels, is a seasoned, Washington DC-based patent litigator who takes a particular interest in the impact of reexaminations on lawsuits. His blog is highly recommended.

Oddly, the blog mentioned further above -- the one that misled people as to the first Office actions -- also performed poor statistical analysis. That blog came from the assumption that Oracle asserted all 168 claims of the 7 patents-in-suit. The original complaint just asserted the patents without specifying claims, but actually, the publicly available filings (which that blog routinely publishes) indicate that Oracle's infringement claim charts related to only 132 of them, and in the meantime Oracle had to present a shortlist of 50 claims (which is, however, not in the public record, at least not yet; also, the 50 claims on the shortlist must be a subset of the originally asserted 132 claims). This is a list of the 132 claims asserted according to the claim charts, along with comments concerning their current reexamination status:

So if those first Office actions were final, two of the four patents would be lost entirely for Oracle's purposes -- a fact that others didn't point out in their reports. A third one would be seriously weakened, while the '520 patent is in relatively good shape. And for the other three patents we'll have to wait and see.

I'm sure that Google is quite happy about the current status of the four reexaminations that have already led to first Office actions. I'm also sure that Oracle feels serious pressure. But let's put this into perspective. In the next section I'll provide high-profile examples of similar first Office actions that were reversed. In the final section, I'll also talk about what relevance those numbers have. That's actually a whole set of questions. It concerns the likelihood of a trial in the fall vs. a stay pending reexamination, the probable outcome of a trial (if there is one prior to the finalization of these reexaminations), and the future enforcement of a possible judgment in Oracle's favor.

First Office actions are frequently reversed

After a first Office action is issued, the holder of the patent in question has the opportunity to dissuade the examiner from finally rejecting claims that are "rejected" on a preliminary basis. This includes arguments in favor of upholding but also the possiblity of rewording claims (so long as they are not broader than the original ones). Conversely, those with an interest in invalidation will try to defend the ground they have gained on a preliminary basis and will additionally try to present reasons for rejecting claims the examiner is inclined to uphold.

A high-profile patent dispute that recently ended before the Supreme Court was i4i's XML patent lawsuit against Microsoft. On his Reexamination Alert blog, Scott Daniels wrote:

"The PTO granted the reexamination and issued an Office Action, rejecting all pending claims on June 15, 2009. The '449 patentee traversed the rejection, and late last month [April 2010], the PTO withdrew the rejection."

That reversal was worth hundreds of millions of dollars to i4i...

Sometimes companies defending themselves against a certain patent are prematurely jubilant over non-final Office actions. That's not the case with Google here -- they don't make noise about those reexaminations and can't be held responsible for biased bloggers who try to support them. But it happened to Sun, the very company whose patents are now being asserted by its acquirer, Oracle, against Google.

More than three months ago I reported on Red Hat's license deal with Amphion and its subsidiaries DataTern and FireStar. That patent was also asserted against Oracle and Sun a few years ago (when those were still separate entities). Sun's then-general counsel said this on July 11, 2008:

"These things take time, but last week, we received a response from the PTO in the form of an office action rejecting all of the claims in the patent based on the prior art submitted by Sun. Obviously, we are delighted to get this validation from the PTO. Firestar has two months to overcome this rejection, but given what we presented to the PTO, we believe it will be a challenge for them."

That blog post is a typical example of "He who has the last laugh...". Later, Amphion (FireStar's and DataTern's parent company) bragged about the following outcome:

"[T]he 6,101,502 patent successfully completed a re-examination procedure in the U.S. Patent and Trademark Office in 2009. All 18 claims of this patent were reaffirmed and 26 new claims were added."

That patent is under attack again, and maybe at some point it will be invalidated if someone comes up with the right reasons for that. But the first Office action that Sun celebrated was clearly overturned.

Not only can the examiner change his mind before his final action but it's also possible that an examiner's final action gets appealed to the USPTO's Board of Patent Appeals and Interferences (BPAI). Software patents concerning which the examiners issued final rejections that were recently reversed by the BPAI include (among others):

And even a BPAI decision isn't necessarily final. It can be appealed to the Court of Appeals for the Federal Circuit, and subsequently even to the Supreme Court if the highest court in the United States accepts the case.

The relevance of numbers, put into perspective

In connection with the proposed reduction of claims I already said that the federal judge presiding over Oracle v. Google proposed (on a tentative basis) a narrowing down to only three patent claims (out of 132). Like I said, that was purely based on efficiency considerations. It had nothing to do with how good or bad Oracle's asserted claims are.

That proposal by the judge shows that he didn't feel Oracle would have to successfully assert large numbers of patents to achieve its objectives in this lawsuit. Judge Alsup presumably thought that Oracle should be able to pick its three strongest patent claims, making it reasonably likely that at least one or two claims succeed.

If only one or two or three patent claims are deemed to be infringed, that could be sufficient. What Oracle wants is to assert its ownership of and control over Java. If it had one "Java killer patent", that would do the job -- but it would have to be so broad that Google wouldn't be able to easily work around it. Even seven successful assertions wouldn't be helpful in the future if Google could engineer around all of them.

Oracle obviously wants to assert more patent claims. That's because having more irons in the fire means an increased likelihood of prevailing. But after you have prevailed, the number of successfully asserted claims may be secondary or even irrelevant.

That thinking is also reflected by a damages report submitted to the court by Oracle's damages expert. Let me quote a Google statment on that report. I already quoted that statement in my previous blog post

"Yet Cockburn incorporates billions of dollars into his reasonabl[e] royalty calculation for the time period between 2018 and 2025, when the '720 patent would be the sole remaining patent."

If Google's representation is correct, Oracle's damages expert assumed that even if only one infringed patent is still valid at a given time (the others would already have expired in or after 2018), the commercial relevance of the infringed intellectual property is (potentially) the same as if several patents are infringed and still in force.

Oracle's seven patents cover different aspects of Java. Five of them relate to performance increases, and two of them to security features. If any of the five "performance patents" is successfully enforced and Google has to substantially reduce the performance of Android apps, that could be all the leverage Oracle needs. If any of the two "security" patents is successfully enforced and Google can't engineer around it without creating a security gap, Oracle will also be in a very strong position.

Numbers are important when it comes to the strength of a portfolio in general. In that case, it's about numbers and other factors, such as diversity.

ZDNet's Larry Dignan recently quoted an analyst who said that Oracle owns more than 20,000 patents compared to Google's number of approximately 700. This doesn't mean that Oracle's portfolio is 30 times stronger: the difference could be more or less than that. But the ratio of the sizes of the two portfolios is an important indication because there's at least no obvious reasons for which Oracle's patents should be of a lower average quality than Google's.

It's quite likely that Oracle's vast portfolio contains other patents (other Java-related patents as well as patents in all sorts of fields of technology) that Oracle could assert against Google if the dispute ever widened (such as by Google trying to countersue Oracle).

The bottom line is that numbers are more important prior to a ruling -- and prior to a lawsuit -- than after winning in court.

Judge Alsup has previously indicated that if Oracle wants to assert more patent claims at trial than he considers "triable" (in terms of not being too burdensome on the court and the jury), he may stay the case until all reexaminations of Oracle's patents-in-suit have been completed. A stay doesn't make the case go away -- but Oracle would want to avoid it if possible.

The fact that the USPTO takes a generally rather skeptical perspective on Oracle's patents-in-suit would certainly make the judge lean ever more toward a stay. We'll have to see what the first Office actions concerning the other three patents look like, but the probability of a stay is already higher at this stage than it was a few months ago.

I think it's very likely that Judge Alsup actually wants the case to be resolved within a few months, but it depends on Oracle's cooperation in terms of narrowing its claims. The problem for Oracle is that the worse its patents fare in reexamination, the more claims Oracle will want to assert. It would be possible for the court to rule in Oracle's favor even on patent claims that the examiner rejected on a preliminary basis (the jury would probably not even be informed of that fact). But with each patent claim that gets rejected on a final basis, the value of such a verdict would be reduced.

At some point, even Oracle would prefer a stay over an assertion of too few claims if there's too much of a risk of any or all of those being invalidated later. In that case, Judge Alsup and Oracle might agree to disagree, with the result of a stay. But we're not there yet. In the coming months, we'll see what happens to the other three patents, and maybe there will be additional Office actions withdrawing some of the proposed (non-final) rejections. Maybe Oracle will reword some claims or introduce new ones.

I look forward to future reports by the authoritative Reexamination Alert blog on these reexaminations. This is important stuff. But if Oracle has a few strategically important claims in place that aren't affected by reexamination, and if the number of those elite claims doesn't exceed Judge Alsup's (unknown but likely rather low) limit, then this case will go to trial at the end of October.

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Saturday, June 25, 2011

Composition of Oracle's damages claims against Google becomes clearer

Google filed a few documents late on Friday, one of which contains additional and really useful information on the theories behind Oracle's $1.4-6.1 billion damages claims against Google.

In particular, it's now clear that the concepts of "lost profits" and "fragmentation of the Java platform" amount to additional hundreds of millions of dollars (for each of those concepts), but royalty claims account for the bulk of the numbers Oracle's expert arrived at. Also, previous filings were misleading with respect to the royalty rate. They gave the impression that Oracle wanted 50% of Google's Android-related advertising revenues. However, that number now appears to be closer to 20%.

The document that provided clarity on those items isn't even particularly new. It was originally filed on June 14, but yesterday's version reveals more of its content: some of the redactions originally made by Google were undone at Oracle's request. As IT journalist Maureen O'Gara recently put it, Oracle generally felt that Google had been "way too scissor-happy redacting documents".

I have been trying for a while to gather and infer as much information as possible even from redacted documents. On June 7, 2011 I already suspected that we were "talking about, potentially, billions." On June 15, I had no more doubt. A day later, an Oracle filing stated explicitly that "Oracle’s damages claims in this case are in the billions of dollars." Another two days later, the range of 1.4-6.1 billion dollars was finally made public.

Now some items I was wondering about in previous postings have been clarified:

  • In my June 7 posting I quoted Google's representation that Oracle's expert allegedly proposed to apply a 50% royalty to a base that was unclear due to redactions. I cautioned that the damages report itself was (and still is) inaccessible and that the royalty base could but need not relate to Google's entire Android-related advertising revenues. And I said: "Should that really be the position taken by the Cockburn report, then I do understand why Google argues vehemently against it."

    A passage that has meanwhile become unredacted states, however, that "[t]he result is an opinion that Google willingly would have paid Oracle over 20 percent of its gross revenues from advertising on all Android Devices."

    Google still believes no actor in this market would voluntarily pay Oracle that rate. But certainly 20% is far more reasonable than 50%.

  • Another now-unredacted passage shows that Oracle's expert based the royalties part of his damages claims on a very long period of time, apparently until 2025:

    "Yet Cockburn incorporates billions of dollars into his reasonabl[e] royalty calculation for the time period between 2018 and 2025, when the '720 patent would be the sole remaining patent."

    This also shows that royalties are the primary basis of Oracle's damages claims, a fact that the latest filing would have disclosed even without that particular passage.

  • Many observers of the process wanted to know what amount of money Oracle seeks on the grounds of Google's alleged "fragmentation of the Java platform". Previous documents didn't specify, but they contained references based on which one couldn't rule out that this concept alone would have been the basis for billions of dollars of additional damages.

    The (most likely correct) order of magnitude has now been stated:

    "[Oracle's damages expert] includes lost profits in his royalty determination and adds hundreds of millions of dollars more to compensate Oracle for purported 'fragmentation' of the Java platform"

    That quote relates to the two non-royalty components of Oracle's damages claims. As for "lost profits", a previous filing disclosed that the amount was "over 200 million dollars". Now we know that fragmentation is also in the hundreds of millions of dollars.

    I previously thought -- due to limited access to information -- that fragmentation might even cost billions of dollars. The problem was that I had to interpret a passage of a partly-redacted filing without the benefit of the knowledge that the court and the parties had. An unclear wording like "several times that amount" is easily interpreted if you know what the relevant amount is. If you don't, it's tricky. It's like the work performed by archeologists or by those scientists who take the archeologists' findings and try to, for instance, derive a complete version of the Odyssey from pieces found in different locations. Fortunately, there's now clarity.

    Now that the pieces of the puzzle appear to have come together, it looks like royalty claims are in the billions (based on 20%+X of an amount relating to a long period of time, presumably from the launch of Android until 2025), while lost profits and fragmentation account for hundreds of millions (each).

  • In addition to answering important questions concerning the composition of Oracle's damages claims, the latest filing also makes reference to another spectacular patent case:

    "Both Cockburn's calculation and the Qualcomm–Nokia agreement run into the billions, but that by itself is an illegitimate basis for relying on the agreement."

    Qualcomm v. Nokia was also a huge dispute. Nokia hasn't always come out on the winning side.

Finally, I'd like to mention that I am well aware of the ongoing reexaminations of Oracle's seven patents-in-suit. There have been first United States Patent and Trademark Office actions concerning some of those patents, and there may be "first actions" concerning other patents in the weeks or months ahead. First Office actions are preliminary. Those processes take much longer.

I am in touch with two experienced U.S. patent lawyers who have considerable expertise in litigating patents while they are being reexamined. They work for different firms in different parts of the United States. I will soon comment on the potential impact of those reexamations. It would be a mistake to ignore those developments, but other bloggers have misled the public by failing to emphasize the preliminary nature of those first Office actions and other important circumstances that put this into perspective. When I comment on this, I will do so comprehensively and holistically, and I'll try hard to convey the information in an understandable form.

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Thursday, June 23, 2011

Eastman Kodak v. Apple and RIM: target date for ITC decision postponed by one week

[Update] The ITC has surprisingly given notice that the target date for the decision has been extended by one week. It's now June 30, 2011. This could either be due to a delay on the ITC's part or a way for the ITC to give the parties more time to negotiate a settlement. [/Update]

The ITC was slated to issue today its decision in the investigation it instituted last year at Eastman Kodak's request against Apple and BlackBerry maker Research In Motion (RIM). The investigation's official title is "Certain mobile telephones and wireless communication devices featuring digital cameras, and components thereof" (investigation no. 337-TA-703). As the title shows, this is about the cameras built into smartphones -- but in a software (not hardware) sense: Kodak is asserting an image preview patent.

In this blog post I'll now discuss certain aspects of this dispute ahead of the decision, on which I will comment in a separate post once it has been issued.

Among other things, I'll also take a look at the patent claim at issue.

Surprisingly, no settlement (yet)

Disputes of this kind usually get settled before the ITC issues its final decision because defendants don't want to get to the point at which the ITC orders an import ban -- which is what could happen today.

For example, Kodak previously (in November 2008) filed an ITC complaint against Samsung and LG over the patent now at issue in the case against Apple and RIM, as well as other patents. On December 17, 2009, the Administrative Law Judge (ALJ) in charge of the investigation issued a so-called final initial determination (FID) in Kodak's favor. The FID can still be overruled by the ITC's highest decision-making body, the six-member Commission, which may or may not be the outcome of today's decision. LG settled with Kodak the day before the FID for $414 million, and Samsung, three calendar weeks later (considering Christmas, this was more like settling two business weeks later) for $550 million.

More recently, Apple settled with Nokia at a point that was just a few weeks away from today's situation in Kodak's case: after a FID that found no infringement of valid patent claims, the Commission had decided to take another look, and a decision was approaching.

So why hasn't it happened in this camera (image preview) patent case?

Both Apple and RIM are experienced in such processes. If they take risks, those risks are usually calculated and well-considered. The fact that neither of them has paid up suggests they are optimistic that the Commission will reaffirm the FID and/or they may believe that even if an import ban was ordered today, they could appeal this case to the Court of Appeals for the Federal Circuit (CAFC) and have such a ban stayed pending the appeal. In the latter case, Kodak would have to wait several more years, but it needs the money in the foreseeable future, which could give Apple and RIM some leverage.

Or maybe they are still negotiating and a deal will still happen at some point before the decision is issued. If the parties agreed on a license deal, an import ban wouldn't take effect anymore in practical terms.

Kodak's situation

131-year-old Eastman Kodak is a victim of technological change. It's not yet a victim in terms of having gone completely down the tubes, but it's a shadow of its former self.

A large part of Kodak's problem is that more and more consumers don't buy a digital camera as a stand-alone device anymore: they get it as part of a smartphone. The most demanding photographers still have needs that only dedicated camera devices can meet, but the mass market is fine with the many megapixels provided by today's smartphones, especially the ones at the higher end (such as Apple's iPhone and RIM's higher-end BlackBerry devices). Those consumers avoid the extra cost, weight and space requirements of a separate digital camera.

Similar effects may already affect other product categories such as alarm clocks, but probably not to the same devastating degree that Kodak and other camera makers have experienced.

This AP story contains a paragraph that describes Kodak's current economic dire straits:

Since 2004, Kodak has reported only one full-year profit — in 2007 — and expects another annual loss this year before crossing back to profitability sometime in 2012. It has trimmed its work force to 18,800 from 70,000 in 2002.

The article also talks about "four growth businesses" in which Kodak "is investing heavily". So the company hopes to find a future in one or more of those areas (workflow software, packaging, home inkjet printers and high-speed inkjet presses). It doesn't want to become just a patent troll, though a portfolio of 11,000 patents would certainly be a basis for that kind of business. Kodak looks for patent royalties to finance its transition. Of course, should that transition fail, then the world may get another patent troll, or another huge patent auction comparable to the one of the patents belonging to Nortel's bankruptcy estate (that auction is scheduled for this coming Monday).

As a tidbit, I have uploaded to this Scribd folder letters recently sent to the ITC by influential politicians from Kodak's home state of New York: Governor Andrew Cuomo, Senator Charles Schumer, Congresswoman Louise Slaughter and Congressman Tom Reed. Those letters stress the need for Kodak to generate income from patents to avoid layoffs. (I'd like to underscore that I have confidence in the independence of the ITC, which I believe will take a decision based exclusively on the merits of the case.)

Licensees of Kodak's digital imaging patents

In this recent press release Kodak listed the following licensees (not a complete list) of its imaging patents: LG, MEI/Panasonic, Motorola, Nokia, Olympus, Samsung, Sanyo, Sharp, Sony, and Sony Ericsson.

Those didn't all license those patents voluntarily. I mentioned Kodak's lawsuit against Samsung and LG before. Nokia was also sued and took a license to settle the case. (And possibly others, too.)

The image preview patent claim at issue

Kodak calls itself a pioneer of digital photography (which I think is true) and claims that 1,000 of its 11,000 patents relate to digital imaging technologies. But in this case, we're not talking about thousands of patents -- it's now all about just one patent, and even of that one everything depends on only one particular independent claim (Kodak also asserted in its original complaint several more claims dependent on that one): claim 15 of U.S. Patent No. 6,292,218 on an "electronic camera for initiating capture of still images while previewing motion images."

That title may sound like a hardware patent covering many technical aspects of digital cameras. But that's not the scope of the monopoly this patent represents (if valid) to Kodak. That scope is narrower.

In connection with yesterday's outrage over a broad multitouch-related patent granted to Apple I already emphasized (as quoted by PC Magazine's website) that a given patent claim is only infringed if the accused technology matches all of its characteristics at the same time. Let's look at what claim 15 of Kodak's patent-in-suit specifies -- and my in-line comments appear in italics:

An electronic still camera for initiating capture of a still image while previewing motion images on a display, comprising:

  • (a) an image sensor having a two-dimensional array of photosites covered by a mosaic pattern of color filters including at least three different colors for capturing images of a scene, each captured image having a first number of color pixel values provided in a first color pattern; [this is just one of the characteristics, so the patent doesn't cover all image sensors of this kind]

  • (b) a motion processor for generating from the captured images, a second number of color pixel values provided in a second color pattern having at least three different colors and representative of a series of motion images to be previewed, the second number of color pixel values being less than the first number of color pixel values, and the second color pattern being different from the first color pattern;

  • (c) a color display for presenting at least some of the motion images of the series of motion images corresponding to the captured images of the scene, the color display having an arrangement of color display pixels including at least three different colors in a pattern different from the first color pattern;

  • (d) a capture button for initiating capture of a still image while previewing the motion images presented on the color display; [all photo cameras have a capture button...]

  • (e) a still processor for generating a third number of color pixel values including at least three different colors representative of a captured still image; and

  • (f) a digital memory for storing the processed captured still image. [obviously any computer memory, such as the one found in smartphones, can store a "processed captured still image"]

So the key thing here is that Kodak obtained this patent on the idea of combining the usual elements of a digital camera with the concept of a preview image.

Out of 11,000 patents -- and 1,000 allegedly covering digital imaging -- this is the patent that Kodak hopes will give it leverage for what could be a billion-dollar deal with Apple and RIM.

There are also federal lawsuits in which Kodak asserts several additional patents. However, the ITC is Kodak's best bet for a quick but highly impactful decision.

The ALJ found in his FID that the patent claim was invalid because it was obvious as compared to existing prior art. In other words, the height of the claimed inventive step was insufficient. Digital camera technology may be inventive, but the idea of storing a preview image in memory was considered obvious.

The ALJ also doubted that the patent claim was infringed even if it was valid.

I have no position on the infringement question, but as a critic of software patents in general and trivial software patents in particular, I absolutely agree with the ALJ that this patent doesn't really add anything seriously inventive. It's a nice idea to have a still preview image, but technologically it's not really the kind of advance that I believe deserves the 20-year monopoly that a patent potentially is.

Unfortunately there are some important decision-makers who don't agree with me. The USPTO upheld this patent claim when the patent was reexamined. And in the aforementioned ITC investigation against Samsung and LG, that patent claim was deemed valid (and infringed by the two Korean vendors).

As patent reexamination expert and experienced patent attorney Scott Daniels points out on his WHDA Reexamination Alert blog (the one I recommend to anyone interested in U.S. patent reexaminations), it will be interesting to see how the ITC takes the USPTO's reexamination decision into consideration. I believe this is also somewhat interesting in light of a recent Supreme Court decision (Microsoft v. i4i) related to the evidence standard required to have a patent considered invalid in a lawsuit.

On June 30 we should finally know more about patent quality standards and evidence standards related to the alleged invalidity of a patent... and we'll know if a billion dollars (or maybe even more) changes hands or if the fight continues in the federal courts.

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Wednesday, June 22, 2011

Lodsys corrects its motion for extension of time: now asks for one more month, not two

Earlier today I published and blogged about Lodsys's motion for an extension of time to answer Apple's motion to intervene. Lodsys's motion, as entered yesterday, requested time until including August 27, 2011 -- two more months. But Lodsys has now withdrawn the previous motion and put in a new one, which I also published on Scribd and which asks for time until including July 27, 2011 -- one more month, not two.

The court docket contains the following explanation for this:

***FILED IN ERROR. PER ATTORNEY Document # 13, Motion for Extension of Time. PLEASE IGNORE.***

Document #13 was the original motion. The new one has document number 14.

This is now a more reasonable request, and I guess the court will grant it, especially since Apple doesn't oppose it.

Whether it was just an oversight on an attorney's part is another question. It could be true, in which case it doesn't reflect well on whoever did this, or it could be an excuse. But that's secondary.

There's also an update concerning the assertion against an Android game that I mentioned in my previous blog post. Cory Trese, the developer whose tweets I had quoted, received a call from Lodsys. They said they sent the document in error -- which would be good news -- but they also announced he'd get a new letter from them. So he figures he's still a target. Here are four new tweets from Cory:

#1: @AndroidPolice LodSys LLC just called and said that they sent me the package by mistake and that they would like it back. They said "sorry"

#2: @AndroidPolice I can hardly believe it myself. She gave assurances I would get another letter. No comment beyond "everyone makes mistakes"
[emphasis mine]

#3: "As a follow up to our conversation, I wanted to re-confirm Lodsys' infringement notice was set to you and your business in error."

#4: @AndroidPolice Seems strange -- taking screenshots of my APK was not an accident. All this analysis was done with purpose. Still a target =(

Maybe Lodsys should send out fewer letters and start fewer lawsuits. That would certainly make it easier to get those motions and letters right, and would avoid the hassle of having to replace them. They have too much on their plate now. Just sayin'.

Unfortunately, Lodsys's announcement of a new letter shows that the problem hasn't gone away.

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Lodsys asks for two more months to answer Apple's motion to intervene and keeps sending letters to Android developers

[Update] Lodsys now claims that the motion discussed in this blog post was "FILED IN ERROR" and has replaced it with a new one asking for only one more month, not two. I have published the corrected motion and the "FILED IN ERROR" notice in this new blog post. [/Update]

Timing is key in legal processes. I just blogged about a court order denying Samsung early access to the iPhone 5 and the iPad 3, and the implications it may have on the timing of Apple's possible motion for a preliminary injunction.

The week before last, Apple filed a motion to intervene in Lodsys's lawsuit against seven app developers. I was hoping for Apple's intervention to be allowed very soon, but we may all have to wait. Lodsys would have had to respond to Apple's motion by June 27, 2011 (Monday) but just asked the court for additional time -- for two months, in fact. Lodsys would like to have time until including August 27, 2011.

I have published Lodsys's motion on Scribd.

In that motion, Lodsys claims that "[t]his extension is not for purposes of delay" (though it will undoubtedly have that effect) and claims to have Apple's blessings:

Counsel for Lodsys conferred with counsel for Apple and Apple does not oppose the relief [i.e., the extension] requested herein.

Formally, this still has to be approved by the court. Two months appears excessively long to me, but since Apple doesn't object, the judge may rubberstamp this motion. However, it's also possible that the judge grants less time, such as only one additional month rather than two. And no matter how much time the judge grants, Lodsys may not wait until the very end.

At any rate, it will take time before Apple is (hopefully) admitted as an intervenor. The problem is that the seven app developers who have been sued and, meanwhile, formally summoned will now have to react to Lodsys's complaint. Based on Lodsys's request for such a long extension, it may be possible for the sued app developers to also get two more months to reply. But that's not certain.

The biggest problem is that app developers need to know from Apple and Google how they should handle Lodsys's missives. Lodsys continues to send out letters demanding royalties. Whoever gets contacted by them needs to know whether the platform makers will provide blanket coverage to app developers. Otherwise, app developers may be well-advised to sign a reasonable license agreement as a smarter alternative to the enormous costs of U.S. patent litigation.

It's possible that part of the reason for Lodsys requesting this additional time is that they're secretly negotiating with Apple and Google. I said before (more than once, in fact) that Lodsys has a pretty good chance of getting paid either by the platform makers or by many little app developers.

Lodsys continues to attack Android developers

In May it already became known that Lodsys also sent out letters to Android app developers, and one of the accused products in Lodsys's lawsuit against app developers is Labyrinth for Android.

Yesterday, Cory Trese, a developer of Android games, reported on Twitter that he just received a FedEx transmittal from Lodsys. Here are some of his tweets -- Cory describes his views and feelings quite vividly:

#1: Just got a big package of legal BS from LodSys LLC about Star Traders RPG for #Android. I guess using @GoogleMobile SDK = Infringing ?

#2: @AndroidPolice Did all #Android devs wake up to FedEx man w/ legal threats and a big package of patent print outs? I up late doing updates!

#3: @AndroidPolice LodSys LLC claims Star Traders RPG is infringing on U.S. Pat. No. 7,222,078 they sent me screenshots of my naughty #Android

#4: @DroidGamers I think my house is the FedEx man's first stop. I saw the Marshall, TX Lodsys LLC return and thought "oh here we go again!"

[Update] Lodsys is in an administrative disarray. Not only did it replace its motion (now asking for one more month, not two) but it also contacted Cory and asked him to send the original letter back -- he will get a new one, so the threat is still there, and as Cory noted on Twitter, they didn't do that analysis of his game by coincidence. For the latest in this context, please see this new blog post, which quotes four new tweets from Cory. [/Update]

So far, nothing is known about Google's position on the Lodsys issue. Apple didn't do as much as I'd have liked them to do, but at least they wrote a letter to Lodsys and shared it with many app developers, and they filed that motion to intervene in the lawsuit. But Google hasn't said or done anything to the best of my knowledge. That's very disappointing.

Android app developers need to know how to respond to Lodsys's letters. Let me again quote Cory Trese, the developer of Star Traders:

With this tweet he asked Google's outspoken iPhone hater Tim Bray for guidance:

@timbray Advice for concerned #Android devs? You told me "Google will support Android developers" at #io2011 boot camp. Was it real? Lodsys!

And this point is also very well-taken:

For me I suppose this Lodsys LLC event will be a major determiner in how I feel about Google and Apple regarding developer relations/support

I support Cory and everyone else who feels that way. Apple and Google: it's long overdue that you tell your developer communities how to deal with Lodsys's letters and the risk of ruinous U.S. patent litigation. Please speak out. They can't wait until the court in Texas maybe grants Apple's motion for an intervention in late August or September. They need guidance right here and now.

If Apple and Google continue to remain silent, I may soon have to recommend to app developers to take a license from Lodsys on reasonable terms. I'd hate to do that. Far be it from me to support a troll. It's just about what the responsible choice is for each developer under the circumstances. None of them should be sued into bankruptcy. That's my concern. It should also be Apple's and Google's concern, even though their hands may be tied in some ways due to the agreement under which they licensed Lodsys's patents (almost certainly from Intellectual Ventures while it owned those patents, not from Lodsys itself).

I hope Android app developers who got contacted by Lodsys will make contact with each other the way many iOS devs have already connected.

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