Friday, November 18, 2011

French court to rule on Samsung motion for iPhone 4S ban on December 8

Yesterday I attended large parts of a hearing at the first-instance court for all French patent disputes, the Tribunal de Grande Instance (TGI) de Paris, on Samsung's motion for a preliminary injunction against the iPhone 4S. For purely logistical reasons I wasn't able to stay until the end, but what I say was interesting and informative. Later, Le Monde reported that the court set a target date for its decision: December 8, 2011.

Even with the incomplete information I have, I have a strong feeling that things are looking much better for Apple in France than, for example, in Mannheim, a German regional court that aspires to be the Eastern District of Texas on steroids (later today I'll go to a Motorola Mobility v. Apple hearing in that court). My prediction is that the December 8 ruling by the TGI de Paris will, most likely, come down to a dismissal of Samsung's complaint.

It was not contested yesterday that the legal standard for a preliminary injunction in France is that the plaintiff must shows it's "vraisemblable" (it must appear true, it must be likely) that he'll prevail in the main proceeding. The judges there seem to be quite diligent about evaluating that probability, and I doubt that they'll be comfortable with granting Samsung an injunction. Samsung may be able to convince the court that it's "vraisemblable" that at least one valid patent is practiced by the iPhone 4S, but that's not enough. Samsung also has to defeat Apple's two equitable defenses: it claims that Samsung's patent rights are exhausted due to Samsung's cross-license agreement with Qualcomm (the company that supplies the baseband chip for the 4S) and that Samsung must honor its FRAND licensing obligations, which it has as a result of participating in an ETSI standard-setting process (for 3G/UMTS) and commitments made to the European Commission almost ten years ago.

With respect to the probability assessment, Apple could prevent a preliminary injunction from being granted even if none of its defenses had a probability of success of 50% or more. If there was, hypothetically speaking, 20% doubt about Samsung's ability to prove at least one valid patent claim to be infringed (Samsung's lawyers spent two hours trying to argue that Apple's related defenses aren't valid), 30% doubt about Samsung's compliance with its FRAND licensing obligations, and a 40% chance of the Qualcomm agreement saving the day, then the cumulative probability (80% x 70% x 60%) of Samsung succeeding would only be about 34%. And 34% is definitely not "vraisemblable".

Another way to look at it is that there won't be a prelimianry injunction if only one of those three types of defenses looked more likely than not to succeed, even if the other factors were near-totally in Samsung's favor.

I think both the ETSI/FRAND defense and the Qualcomm/exhaustion defense look pretty promising for Apple:

  • Both parties had five or six lawyers there, and two of them -- in each case, one male and one female -- made the pleadings. Apple's female lawyer was absolutely great. She focused on the ETSI/FRAND/competition issues and explained them in clear and understandable terms. She was assertive (for example, she said that Samsung's use of standards-related patents is "so violent that the European Commission has launched an inquiry", but she was mostly factual and used such strong rhetoric only selectively) and talked relatively fast, but she really came across as a nice person who got worked up in the face of someone's wrongdoing. Her message was that Samsung participated in that 3G/UMTS standard-setting process and now has to respect the rules it submitted to. All those lawyers made a competent impression and were persuasive in different ways, but Samsung's lawyers occasionally came across as somewhat bullying (through their words, tone, gestures and mimics), which is unfortunate for Samsung since Apple had actually started this dispute in the first place.

    The European Commission's decision to start an inquiry into the use of mobile communications standards-related patents even without a formal complaint by anyone certainly adds to the probability of Apple having a point here. I believe the TGI will take this into account.

  • The Qualcomm license agreement was shown to the judges and Apple's counsel explained it. I don't know that contract, and in any contract, there can be a dozen clauses that appear to support a certain interpretation but a single sentence -- or a single word in the right place -- can change the whole picture. I have the gut feeling that there's stuff in that agreement that really does support Apple's exhaustion defense, and if there's nothing that offsets those passages, Apple may very well win on this count. But again, few people know what's in that contract.

Assuming that my feeling is right and Samsung won't get a preliminary injunction (I think the court will want to evaluate all claims and defenses in a full-blown main proceeding), and looking at how things are going in other places, the Mannheim Regional Court might become the only court in the world to grant Samsung an injunction based on FRAND-pledged standards-essential patents, due in part to the German legal system and in part to a very dogmatic approach by certain courts that try to position themselves as attractive venues for patent holders asserting their rights.

The presiding judge in Mannheim wasn't overly interested in Apple's equitable defenses. He allowed Apple's counsel to make his points, but that was just a matter of courtesy and due process. By contrast, his counterpart at the TGI appeared to be a genuinely interested in those defenses. It also says something that Apple's lawyers in France (unlike the ones in Germany) put FRAND and patent exhaustion front and center, while Samsung's lawyers emphasized technical issues related to claim construction, validity, and their infringement contentions.

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