Thursday, November 10, 2011

Microsoft asks ITC to compel Google to provide material related to Barnes & Noble's antitrust claims

In connection with Barnes & Noble's widely-reported claims that Microsoft is on an anticompetitive campaign targeting Android (on which I already commented more than six months ago), I have just discovered an interesting document on the ITC document server -- a motion to compel Google to respond to certain questions closely related to Barnes & Noble's allegations:

11-11-09 Microsoft Motion to Compel Google Re. B&N Antitrust

In this post, I'm not going to evaluate who's right or wrong in this context. I just feel that this document adds some valuable information for everyone trying to get the whole picture, even though such a discovery motion is obviously not a fully-developed argument.

I'm now going to mention some key facts and quote a few passages.

Scope of Microsoft's questions

The motion refers to a subpoena dated October 4, 2011. It's attached to Microsoft's motion as Exhibit A (starting on page 15 of the PDF document).

According to the letter, Microsoft's and Google's lawyers couldn't work out an agreement on five questions that relate to Barnes & Noble's patent misuse defense and antitrust allegations. The letter says that "on November 3 Google informed Microsoft that it would not search for documents responsive to the outstanding Requests, and for the first time indicated that it would not produce any documents generated after the October 5 date of Microsoft's subpoenas".

Those outstanding requests are related to "business evaluations, assessments, strategy discussions, or analyses of":

  • "the actual or potential impact, on Android distribution, of patents held by Microsoft"

  • "the impact on Android distribution of actual, potential, or threatened patent infringement lawsuits by Microsoft related to Android"

  • "the impact on Android distribution of public claims by Microsoft or Microsoft executives or employees that Android infringes Microsoft patents"

  • "Android's capability (current or projected) as a personal computer operating system"

  • "competing mobile operating systems from Microsoft"

Microsoft points to a public statement by Larry Page that appears to undercut Barnes & Noble's claims

Microsoft's motion argues that "Google is the leader of the Android Open Source Project" and "therefore can be expected to have evaluated whether, as Barnes & Noble claims, Microsoft's alleged conduct has had any business effect on Android distribution". Microsoft says:

Statements from leading Google executives indicate that Google indeed generates such business evaluations. For example, as noted above, Larry Page, Google's chief executive officer, recently stated that "[w]e're seeing no signs that [patent litigation against Android is] effective . . . If anything, our position is getting stronger." (Ex. B) (emphasis added).

A Google hand in Barnes & Noble's antitrust claims?

On page 10 of the PDF document, footnote 2 says this:

Moreover, upon information and belief, Google has provided assistance to Barnes & Noble in defending against Microsoft's Complaint. If that is the case, Google cannot help develop Barnes & Noble's patent misuse claims behind the scenes, and then refuse to produce documents related to those claims in this Investigation.

The expression "upon information and belief" suggests that Microsoft may not have hard evidence of Google's assistance to Barnes & Noble, but appears to strongly suspect this to be the case.

Search of files limited to "business custodians" including Page, Brin, Schmidt, and Rubin

On page 12 of the PDF document, Microsoft says that it made a compromise proposal to Google with respect to these discovery requests:

In keeping with its efforts to reach reasonable, good-faith compromises with Google, however, Microsoft suggested to Google that it limit its search to the files of only nine business custodians, including Mr. Page; Andy Rubin (Google's Senior Vice President of Mobile and executive in charge of Android development, and purported developer of the Android operating system); and an investor relations custodian to be designated by Google, in order to obtain evidence regarding tbe basis for statements to analysts regarding the purported business effect of patent litigation against Android.

That sentence points to a footnote that provides more names:

The remaining six custodians included Eric Schmidt, Google's chairman and former CEO; Sergei Brin, Google's other co-founder; and the four custodians Google agreed to search with respect to Requests 1-3 and 7-12.

The four persons not named in the quote above are (according to pages 172 and 173 of the PDF document) Lan Roche, Android Sales Engineer; Chris Barton, Head of Android Business Development -- Americas; John Lagerling, Director, Android Global Partnerships; and Patrick Brady, Director of Android Partner Engineering. Page 172 also explains the need to have access to documents of the high-level players mentioned above:

Requests 4-6, 15, and 16 cover higher-level business discussions within Google of the impact on Android of the alleged conduct. Therefore, it is important that senior Google executives be included as custodians, including Messrs. Page, Brin, Schmidt, and Andy Rubin. These executives have commented publicly on the alleged impact of Microsoft patents, patent claims, and litigation on Android, and may possess important evidence relevant to Barnes & Noble's claims that Microsoft's alleged conduct has had an anti-competitive effect.

Those requests (4-6, 15, and 16) are the one at issue in this motion to compel. There were various other requests, apparently of a more technical nature, and it seems that Microsoft's and Google's lawyers made more progress on those.

ITC staff's position on Barnes & Noble's patent misuse claims

Microsoft's motion contains one quote from the ITC staff's response to a Microsoft motion to strike Barnes & Noble's patent misuse defense. That motion was brought several months ago. The Office of Unfair Import Investigations supported Microsoft in a June 15 brief. It determined that Barnes & Noble's claims failed to meet the legal standard for a patent misuse defense and pointed, among other things, to the rights that patent holders have, such as the right to withhold a license to their patents or to ask for license fees of their choosing (given that they can always refuse to grant a license at all). Microsoft's motion doesn't quote that particular passage of the OUII brief, which I just mentioned to show what kind of legal position the ITC staff took.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn: