Friday, September 30, 2011

Update on Apple's patent lawsuits with Samsung, Motorola Mobility and S3 Graphics

Apple keeps the courts busy around the globe. There are new developments in Apple's Australian and U.S. lawsuits against Samsung, two of its U.S. lawsuits against Motorola Mobility, and the ITC investigation of HTC subsidiary-to-be S3 Graphics' complaint against Apple. Here are direct links to the different sections of this posting:

  1. Samsung proposes settlement ahead of decision on preliminary injunction motion in Australia

  2. Verizon defends its proposal to submit an amicus brief

  3. Apple also opposes T-Mobile's brief

  4. Samsung asks court not to raise page limit for Apple filing and accuses Apple of presenting "doctored" pictures

  5. Court denies Apple's motion to stay Motorola lawsuit in Florida but Apple keeps fighting for a stay in Wisconsin

  6. AMD subsidiary ATI claims claims it's the rightful owner of the patents S3 Graphics asserted against Apple in its first ITC complaint

Samsung proposes settlement ahead of decision on preliminary injunction motion in Australia

Reports came out of Australia today on a settlement proposal made by Samsung to Apple in Australia. The terms are not known except that Samsung would get to launch the Galaxy Tab 10.1 in Australia next week and there would have to be something in it that Apple considers attractive.

The reports I saw didn't indicate whether such a settlement would mean lasting peace between Apple and Samsung in Australia, or just eliminate the need for the Federal Court of Autralia to decide on Apple's preliminary injunction motion. I strongly suspect the latter. Apple had to focus its preliminary injunction motion on only a few patents, and Samsung has worked around them except for two that are still in dispute. This report on a hearing that took place yesterday says that the remaining two patents-in-suit included Apple's touchscreen heuristics patent (which Apple also uses in several U.S. lawsuits) and "the manufacturing techniques behind the iPad and iPad 2's touch screen". While Samsung's workarounds presumably resulted in some degradation of the user experience, it seems that Samsung still feels its product will be marketable.

Apple now faces the choice of either accepting Samsung's offer or relying on the two patents at issue. One of the reports on today's settlement offer even refers to only one touchscreen patent, presumably meaning the heuristics patent. With such a narrowed case, Apple might not be able to obtain a preliminary injunction and prefer a settlement, though I suspect a settlement in Australia would still give Apple all options to assert other intellectual property rights going forward.

The Sydney Morning Herald's report on yesterday's hearing quotes a statement that confirms the Australian case does not involve design-related rights, unlike the cases in Germany (where Apple prevailed on that basis), the Netherlands (where the judge granted an injunction based on a software patent but didn't consider a design-related right valid) and the United States (where a hearing on Apple's motion will be held on October 13).

Samsung's preference for license deals is not new. But in the short term, Apple and Samsung will probably be able to agree only on limited parts of their worldwide dispute, such as the Australian preliminary injunction motion.

Verizon defends its proposal to submit an amicus brief

A week ago, Verizon asked the United States District Court for the Northern District of California for permission to submit an amicus curiae ("friend of the court") brief to voice its concerns over the impact the preliminary injunction requested by Apple would have an on the carrier's 4G (LTE) network. Apple objected to the timing of Verizon's initiative.

Yesterday, Verizon replied to Apple's objections. It took "no position on Apple's request for a response" (while Apple preferred for Verizon's motion to be denied, it at least wanted to have until October 6 to reply), which shows that Verizon primarily just wants to be heard by the court, whatever the response deadline may be.

Verizon justifies its belated filing of the proposed brief with the fact that the deadline in federal appellate courts (as opposed to a district court like the one in which this litigation is taking place) is "within 7 days of the principal brief that it supports", but Verizon recalls that "Samsung lodged its preliminary injunction opposition under seal", so "Verizon Wireless has never been able to review Samsung's opposition brief".

That argument rings hollow. While the brief itself was and remains sealed, the schedule for this process, including the deadline for Samsung's opposition filing, became publicly known on July 19, 2011. Samsung made that filing on August 22, and hundreds of pages of exhibits were made public. In those documents, I discovered Samsung's reference to a device in Stanley Kubrick's "2001: A Space Odyssey" movie, a story that received widespread media coverage around the world and especially in the United States. So if Verizon had required a reminder of Samsung having field its opposition brief, it could have found it in numerous U.S. and international media.

It gets even worse. Right after the reference to the sealed opposition brief, Verizon writes this:

"In any event, the schedule of briefing before appellate courts has little applicability to a compressed preliminary injunction briefing schedule."

In other words, Verizon apparently realizes that it won't win the "within 7 days" argument and then says that the schedule in Apple v. Samsung is "compressed" as far as the preliminary injunction is concerned. This is moronic. If there's any reasonable conclusion to be drawn from a "compressed" schedule, it's that there's an even greater -- not lesser -- sense of urgency for "friends of the court" to step forward.

With respect to Apple's argument that it would need time to conduct discovery of Verizon and possibly third parties with respect to Verizon's arguments, Verizon claims that it "relied solely on publicly available information in support of its brief". That is, however, not true. Verizon makes such claims as not being able to replace Samsung's potentially banned products with alternative solutions. Those and other claims are not "solely" based on "publicly available" but would require further discovery in an orderly process.

Verizon's proposed brief is weak, and in defense of its motion for leave it doesn't come up with a convincing justification of its untimely filing. It's now up to the court whether it wants to accept a belated filing and, thereby, reward such behavior that is neither in the interest of efficiency nor in the interest of justice. Courts tend to set a rather low hurdle for amicus briefs. Even in Supreme Court cases it's sometimes amazing to see what kinds of amicus briefs get accepted. But the question is whether the courts want to let "friends of the court" mess up their schedules.

Apple also opposes T-Mobile's brief

On Wednesday, T-Mobile also filed a proposal for an amicus brief in support of Samsung. A day later, Apple also opposed that motion.

Just like T-Mobile basically made the same argument as Verizon, just that T-Mobile didn't exclude the three asserted design patents from the scope of its motion (which wasn't credibly in Verizon's case anyway), Apple also makes largely the same argument -- mostly about timing -- in opposition to T-Mobile's motion, and if the court accepted T-Mobile's motion, Apple asks for the same response deadline as in Verizon's case October 6).

Apple highlights that both Verizon and T-Mobile claim to be "uniquely positioned" to make a 4G-related public interest argument, which is contradictory unless one ignores the fact that the word "unique" is derived from the Latin word for the number one. Here's how Apple points out the inflationary use of "uniquely positioned":

"While T-Mobile claims to be 'uniquely positioned' to argue the harm to the public interest from a preliminary injunction, Verizon, too, claimed to be 'uniquely positioned to describe how the requested injunction may harm U.S. customers, wireless carriers, and businesses.'

Apple notes that Verizon, unlike T-Mobile, didn't request to participate in the hearing. But I guess Verizon might also make such a request if its amicus brief is accepted. Anyway, Apple doesn't want additional participants in the October 13 preliminary injunction hearing "[i]n view of the many issues likely to be discussed at the hearing".

Samsung asks court not to raise page limit for Apple filing and accuses Apple of presenting "doctored" pictures

Yesterday, Apple asked the United States District Court for the Northern District of California for permission to file a 30-page reply to Samsung's opposition to Apple's preliminary injunction motion -- twice as much as the usual page limit for such a pleading, according to local rules set by the court.

Samsung would apparently have agreed to this "in exchange for [Apple] making its new declarants available for deposition next week", but Apple, according to its own filing, "objected to the linkage of the issues". Samsung would also have been fine with 10 additional pages, without asking for anything in return. It seems that 25 pages weren't enough, and Apple tries to get permission for 5 more.

I found an interesting passage in Samsung's opposition to a 30-page limit:

"Apple further bases its motion on the fact that its briefs have included various images, which take up extra space. This is irrelevant. Apple was not required to add pictures to its moving papers; it did so voluntarily because it thought this would work to its advantage. It is not as if Samsung does not have to respond to pictures as it does to text. In fact, as Samsung has already shown -- as have independent media outlets -- the pictures Apple used in its preliminary injunction motion were doctored to make the dimensions of Samsung's products match those of Apple's products, even though the products are obviously not the same size when viewed in person. [...] More disturbingly, Apple has not only shrunk the images of Samsung’s products to match its own, it has even changed the proportions of those products, making them fatter if needed to match the relative width of Appl'’s products. See At best, this is inappropriate. At worst, it is deceptive. If Apple is planning to fill its reply with similarly manipulated photos, this is just one more reason it should not be allowed to double the length of its reply brief."

The "independent media" referenced by Samsung all reference material produced by Webwereld's Andreas Udo de Haes, the reporter who analyzed Apple's German preliminary injunction motion (and subsequently also other documents) from this angle. A German court -- the Düsseldorf Regional Court -- did not take issue with those findings (I translated that court's decision in favor of a preliminary injunction). But Samsung apparently brings up this issue again in California. It apparently did so in its August 22 reply to Apple's preliminary injunction motion, which is (as I said before) sealed.

Court denies Apple's motion to stay Motorola lawsuit in Florida but Apple keeps fighting for a stay in Wisconsin

Three weeks ago, Apple filed motions with federal courts in Wisconsin and Florida to stay two lawsuits between and Apple and Motorola Mobility pending the latter's acquisition by Google, arguing that the merger agreement between Google and Motorola Mobility makes a variety of patent-related actions and decisions subject to Google's prior consent. Last week, Motorola Mobility (MMI) said that it wanted those lawsuits to continue, and even offered to try to amend the Google-MMI merger agreement in order to address any concerns the court might have.

Yesterday, Judge Ursula Ungaro of the United States District Court for the Southern District of Florida denied Apple's motion with respect to a lawsuit in that district. She didn't provide any reasoning -- she just denied. That's why it's difficult to conclude from this what it means for Apple's materially consistent motion in the Western District of Wisconsin. If Apple had won a stay in Florida, it would have increased the likelihood of a stay in Wisconsin, but the Florida lawsuit is scheduled to go to trial in August 2012, while the Wisconsin trial is scheduled for April 2012. If the decision in Florida was mostly based on the assumption that Google's acquisition of MMI would most likely be concluded by August 2012, the Wisconsin court might decide differently since its own trial is scheduled for a point in time at which the merger could easily be pending regulatory clearance.

In Wisconsin, Apple filed a reply to MMI's opposition, and along with it, Apple provided several declarations that explain the timeline of merger review processes in four major jurisdictions: the United States, the European Union, China, and Russia. In connection with the EU process, Apple's lawyers used Oracle's acquisition of Sun as an example of a merger that was approved in by United States Department of Justice in August 2009 but by the EU only in late January 2010. I was quite actively involved with that matter. China cleared the merger at a similar time as the EU, and in Russia, some remedies were still imposed in March 2010. These four major jurisdictions as well as a couple of smaller ones (Canada, Israel, Taiwan and Turkey) are critical for Google's acquisition of MMI to go through. The merger agreement specifies jurisdictions whose consent is required.

In the United States, a second request for information has just been issued by the DoJ, which shows that the merger raises issues that dissuaded regulators from granting fast-track approval. According to Apple's declarations attached to the Wisconsin filing, it seems that notifications in the other major jurisdictions mentioned above weren't made or at least not confirmed officially.

In connection with whether MMI would be prejudiced by a stay of the Wisconsin litigation, Apple notes that its motion relates to a stay of all claims, including Apple's own claims. (Actually, Apple is asserting 15 patents in that lawsuit, and MMI, 6). Apple also rejects MMI's suggestion that it has "grown tired of pursuing its claims". Apple explains that it suggested a stay of both parties' claims just "because, inter alia, it would be more efficient for the Court". As an external obsserver of many smartphone patent disputes, I certainly don't see any indication of litigation fatigue on Apple's part.

AMD subsidiary ATI claims claims it's the rightful owner of the patents S3 Graphics asserted against Apple in its first ITC complaint

The Commission, the six-member decision-making body at the top of the ITC, is currently reviewing an initial determination on S3 Graphics' first complaint against Apple. I recently analyzed the situation in that process: it appears that S3G is unlikely to win an import ban against Apple's iOS devices, and things could get better or worse for the equally accused Macintosh computers.

Meanwhile, S3G has even lodged a second ITC complaint against Apple, over two new patents.

With respect to the four patents at issue in the first investigation, there's a surprising development. On September 15, ATI and its parent company, AMD, filed a motion proposing that the ITC dismiss the case since the patents-in-suit allegedly belong to ATI rather than S3G -- and ATI has no intention of suing Apple over them.

The AMD/ATI motion includes a detailed history of the ownership of those patents, and ATI apparently believes to have acquired them years ago regardless of whatever the assignment database of the patent office may say.

I'm waiting to see S3G's rebuttal and the ITC staff's opinion on this. It's a strange story to say the least. Since U.S. patents can be sold without a report to the patent office, it's possible for such disputes to come up later, but it would be unusual, if not unprecedented, for a patent litigation to end with a dismissal just because of an ownership issue.

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