Friday, November 18, 2011

Oracle opposes plan of three trials while Google pushes hard for stay of patent claims

At noon Pacific Time today, Oracle and Google had a deadline to comment on Judge Alsup's tentative plan of a trifurcated (forked into three parts) trial.

Oracle's reply has 16 pages and explains in detail why Oracle sees itself prejudiced by this plan. Google's reply is only seven pages long and supports the judge's plan. Actually, the part on the trial plan only amounts to about five and a half pages, while another page and a half represent yet another push for a stay of Oracle's patent claims.

Both parties agree on the legal principle that, in the interest of justice, breaking up the trial shouldn't prejudice anyone. What they disagree on is whether or not there is prejudice.

I follow this case in detail and I really liked many of the things I saw in Judge Alsup's orders and notices, as well as what was reported on the hearings he held. If I had to vote for my favorite judge based on my observations, I'd be inclined to support him. But every once in a while I get the impression that he sometimes puts case management considerations above the interest of justice. The first time I had this concern was when he proposed that Oracle reduce the number of asserted patent claims from 132 to 3. That suggestion was not supported by the law as I understood it. Now I'm concerned that in connection with the trial plan he may once again take considerable prejudice to Oracle into account only in order to increase the efficiency of this process for the court (which may not be -- and in my view won't be -- the case in the end, but appears to be the primary consideration) and maximize the likelihood of a settlement (which I again don't think is too likely to work out -- in my opinion, this case is more likely to be appealed post-judgment to the Federal Circuit than to be settled in the near term, and one issue, known as the Lindholm email, has already been put before the Court of Appeals for the Federal Circuit).

What's probably underlying the plan of the trifurcated trial is Judge Alsup's hope that the parties may settle this after the first trial (the copyright trial). Before he proposed this trial plan, he indicated this line of thought at a hearing. But for the reasons I mentioned before, I don't think it will work. Whatever he has tried so far to get the parties to settle has failed, and whatever he will try will probably fail, too -- the only thing worth trying is the case itself. He should take it to trial, and not to some kind of trial redux but create a situation in which this matter will be resolved to the extent a district court can resolve it (like I said, an appeal by the losing party may be inevitable).

Oracle argues -- on the basis of detailed tables -- that some of the witnesses are needed to determine copyright infringement liability, patent infringement liability, and damages. Google's proposal in today's submission is that witnesses could be videotaped the first time they appear, and then their testimony can be shown again at later stages. But I'm not sure if that gives such testimony as much weight as it would have if jurors heard those witnesses in real life shortly before deciding on all of the relevant issues.

One particularly important piece of evidence is the Lindholm email, as I recently explained. Oracle argues that it will need to bring up such indications of willful infringement by Google in order to counterbalance Google's claims that it was granted an implicit license by then-Sun CEO Jonathan Schwartz.

Google states that "[t]his case plainly is complex". I don't think anyone would disagree, especially not the judge (who told the parties that "[their] case is huge") and not even Oracle itself. But the question is which conclusions to draw from this. Oracle argues that the issues are interdependent. If a complex issue has many interdependencies, three trials with unpredictably long breaks in between make the facts harder -- not easier -- for a jury to understand. According to the judge's plan, the jury would be the same for all three trials.

I really like the solution Oracle proposed today -- a three-part trial but without interruptions:

"For the foregoing reasons, Oracle opposes bifurcation or trifurcation of the trial. As an alternative, in view of the Court’s concerns about lengthy and confusing jury instructions if the trial is not divided into phases, Oracle proposes that the Court allow the parties to present the case in its entirety in one phase. The Court would then instruct the jury in phases and the jury would deliberate each phase before receiving instructions for the next. This alternative approach would obviate the need to present the same witnesses and documentary evidence multiple times, while giving the jury a more limited set of facts to find during each deliberation phase."

I actually think that this kind of trial plan is no less but somewhat more likely than the judge's proposal to bring about a settlement. I think a settlement would still be hard to make happen, but maybe the parties would reach an agreement a day or two before the trial begins.

Google pushes (once again) for a stay of Oracle's patent claims

For about nine months, Google has now been trying -- not continually, but on a variety of occasions -- to persuade Judge Alsup to stay Oracle's patent infringement claims pending reexamination of all patents-in-suit by the USPTO.

In today's filing, Google reiterates some of its old arguments for a stay but also points out some new, or updated, information. Most importantly, "[j]ust two days ago, the PTO examiner closed prosecution for the '720 patent, with rejections on all asserted claims". Google quotes Oracle's damages expert as attaching about 10% of Oracle's royalty demands to that patent. Google also says that the asserted claims of the '720 patent "represent almost a quarter of Oracle's asserted patent claims for trial".

In a footnote, Google contradicts a statement by the judge at a mid-October case management conference. Apparently the judge "noted that only 11 percent of all claims ultimately get rejected in reexamination proceedings". But Google points the USPTO's latest (September 30, 2011) reexamination statistics and says that the appropriate metric is not the number of claims rejected in their entirety but the aggregate "number of claims that are cancelled or changed as a result of reexamination proceedings". That number amounts to 76% of all claims for ex parte and 89% for inter partes reexaminations. Of the six patents asserted by Oracle at this stage, four are undergoing an reexamination of the former type, and the other two, reexamination of the latter (even more impactful) type.

I still don't think Google is extremely likely to win such a stay, but the judge could at some point feel that the status of the ongoing reexaminations has reached a tipping point. It depends on how much weight a final decision by the examiner bears with him. Oracle can still appeal the examiner's decision to the Board of Patent Appeals and Interferences (BPAI), and the outcome could change at that stage.

I think Judge Alsup will decide very soon on the trial plan as well as a possible stay.

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