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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Thursday, September 29, 2011

Oracle wants jury in Google lawsuit to look at 26 patent claims: 15 distinct ones plus 11 'mirrors'

Tomorrow (Friday, September 30) there will be a third and presumably last pre-trial mediation talk between Oracle and Google in court. I'm not too optimistic about that one, but I think we may see a settlement shortly before trial. For now, a trial is scheduled on a purely tentative basis to start on Halloween.

Google's proposed acquisition of Motorola Mobility is now under in-depth regulatory scrutiny, and I think Google probably won't settle as long as it hopes to obtain clearance for that acquisition prior to a final decision in the Oracle case. But if the Halloween trial date was confirmed definitively, Oracle would be reasonably likely to obtain an injunction well ahead of the conclusion of the merger review, and then Google may realize that it has to settle to prevent the worst.

Meanwhile, preparations for a trial -- even though its date is uncertain -- progress unabatedly. Oracle just filed a case management statement requested by Judge Alsup, the federal judge presiding over this case. The judge wanted Oracle to specify which patent claims (a patent can consist of multiple claims, and software patents typically consist of dozens of claims) it still wants to assert at trial.

The tricky thing for Oracle is that if it insisted on putting too many patent claims before the jury for the judge's taste, the judge might use his discretion to stay the case in whole or in part, given that the ongoing reexaminations of Oracle's patents-in-suit by the USPTO could lead to the invalidation of some claims (so far there have only been preliminary positions taken by the USPTO, which don't count), which would make the case more efficient (the jury wouldn't have to waste time on claims that aren't valid). But if Oracle asserted too few just in order to maximize its chances of a near-term trial, it would greatly increase the risk of losing the case just because a small number of asserted claims leads to a result that is much less predictable. Oracle wouldn't be able to use those claims in the same context (meaning: against Google in connection with materially the same infringement allegation) in a subsequent lawsuit. Any claims that Oracle drops now it drops forever with respect to the allegations at issue in this litigation.

Oracle's narrowing of claims doesn't mean that there's anything wrong with those claims. It's all about case management: the judge wants to make sure the trial isn't overly burdensome on the court and the jury, so Oracle has to focus. Let's put today's proposal of 26 claims (effectively 15 different ones plus 11 mirrors into the context of how these numbers of claims evolved.

Oracle's reduction of asserted patent claims from 132 to (now) 26

In its original complaint, Oracle asserted seven patents without listing the asserted claims. A few months later, when Oracle presented infringement claim charts (tables specifying its patent infringement contentions), it asserted 132 claims from those 7 patents. In this blog post I published a list of those 132 claims along with their reexamination status (as of a few months ago).

In the spring, there was some misinformation spread by propagandists and and picked up by various media, suggesting that Oracle had to drop 129, or 98%, of those 132 claims. In this blog post I commented on that misinformation and referred to earlier posts in which I explained on this blog that there would be a reduction, which is normal, but hardly to 3 claims, which was only an idea tossed out by the judge -- a tentative order to start a discussion, not a definitive one.

In mid-May, Oracle and Google filed a joint memorandum on case management. They agreed on some items and disagreed on others. They failed to agree on the number of claims to be asserted at trial. Google proposed a "compromise" of 10-14 patent claims, but Oracle insisted on 21. What they did agree upon included an intermediate step of Oracle narrowing its claims from 132 to 50 -- basically creating a shortlist from which to select the ones to be asserted at trial -- by June 1, 2011.

That shortlist wasn't made public right away. But it showed up in a filing in July, and at the time I published a table jointly submitted by Oracle and Google to the court, reporting the reexamination status of the claims from the shortlist of 50 claims.

A mid-August filing by Google indicated that in the meantime there had been another reduction of the shortlist from 50 to 41 claims.

Today, Oracle proposed to assert 26 patent claims, but selected in a way that some can be looked at by the jury as a group, which is why Oracle says that the "effective number of claims to be tried" comes down to only 15, which "improves upon [Oracle's compromise proposal of 21 claims] by more than 25%, ensuring that the case is ready for trial".

Oracle would be happy to put just 15 distinct claims before the jury if Google accepts that if one claims of a given technical scope is infringed, its "mirrors" are also infringed. By "mirrors" Oracle means claims that repeat the language of another claim except that the original claim might, for example, be a "method" claim, while one mirror claim is an "apparatus" claim and another one possibly a "computer-readable medium" claim.

Oracle also drops one patent -- the '447 patent -- entirely.

Here's Oracle's list of claims to be asserted at trial:

"Applying the mirrored claim approach, Oracle proposes to try the following 26 claims from 6 (of the originally 7) asserted patents:

'104 patent – 3 effective claims: Claims 11, 27, and 40, and mirrored Claim 29 (a mirror of Claim 27) and Claims 39 and 41 (mirrors of Claim 40).

'205 patent – 2 claims: Claims 1 and 2.

'702 patent – 3 effective claims: Claims 13, 15, and 16, and mirrored Claims 1 and 7 (mirrors of Claim 13) and Claims 6 and 12 (mirrors of Claim 15).

'520 patent – 3 effective claims: Claims 1, 8, and 12, and mirrored Claim 20 (a mirror of Claim 8).

'720 patent – 3 effective claims: Claims 1, 6, and 21, and mirrored Claims 10 and 19
(mirrors of claim 1) and Claim 22 (a mirror of Claim 21).

'476 patent – 1 claim: Claim 14."

By continuing to insist on a significant number of claims to be tried, Oracle sends out an unequivocal signal of strength on the day before the third mediation conference. The judge had once proposed three claims on a tentative basis and has repeatedly threatened to stay the case unless Oracle greatly reduces the number of claims it seeks to assert. If Oracle was under pressure to take this case to trial very quickly, it would probably have gone down to 6 or 7 claims. But by standing pretty firm on the number of claims to be asserted, Oracle shows that it isn't worried about a stay. Oracle is clearly more interested in a favorable outcome than in a quick resolution of the case.

It's possible that the judge agrees with Oracle's logic of "grouping by technical subject matter" and that he welcomes this reduction. There could still be some more bargaining ahead of a trial. But the immediate effect is that Google has to negotiate with a plaintiff who's determined to win, even if it still takes another year or two.

Part of Oracle's consideration could also be that besides the patent part of the case it has a pretty good chance of success with its copyright infringement claims. Those claims wouldn't be affected by a partial stay of the case since copyrights can't be reexamined by the patent office. Just winning on the copyright count might already give Oracle enough leverage to force Google to settle.

There are complicated tactical considerations behind all of this, and for observers like me it's difficult to figure out what the parties want since only parts of the information enter the public record. However, the public filings provide an indication as to the judge's agenda and the strategies of the parties.

Google is under immense pressure. Samsung's decision to pay patent royalties on Android to Microsoft shows that Android has serious intellectual property infringement issues, and Oracle is another major industry player who wants to make money on each and every Android device sold. Apple is also enforcing its rights (more aggressively than anyone else, in fact), and there are numerous smaller patent holders (smaller operating companies as well as non-practicing entities) lining up to be paid. Google's "free" Android strategy worked very well in the past but isn't sustainable, which is why Google now wants to acquire and become a device maker. Oracle's royalty demands play an important role in this development, too.

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Wednesday, September 28, 2011

T-Mobile also files brief in support of Samsung against Apple

T-Mobile just submitted an amicus curiae ("friend of the court") brief in support of Samsung against Apple with respect to a possible US-wide preliminary injunction, along with

  • a formal request for permission to be admitted to the proceedings as a third party and

  • a motion to shorten time in order to ensure that the court will decide on the admission of T-Mobile ahead of the October 13 hearing on Apple's motion for a preliminary injunction

Verizon made a similar submission on Friday, and Apple objected to that one on the basis of untimeliness (and will certainly disagree with its substance if the court accepts Verizon's submission at all).

T-Mobile's argument is materially consistent with the one made by Verizon: they don't want important 4G devices banned during the Christmas selling season. I have uploaded T-Mobile's brief to Scribd:

11-09-28 Apple v Samsung T-Mobile Proposed Amicus Brief

Similarities between the points made by the two proposed briefs are striking. T-Mobile's brief even says explicitly that "[t]o the extent applicable, T-Mobile incorporates the arguments of [Verizon's brief]". But there are also some differences, especially this one:

"T-Mobile's public interest arguments, however, apply to all the asserted patents, including the Design Patents."

In my report on Verizon's letter I already said that Verizon's formal limitation of its argument to the one software patent asserted by Apple wasn't credible. T-Mobile is forthright about its opposition to an injunction on any ground, whether based on the software patent or any or all of the three asserted design patents.

T-Mobile's motion to shorten time (for the exchange of pleadings with respect to its proposal to appear as a "friend of the court") refers to Apple's objections against the timing of Verizon's submission, and argues that an accelerated process is needed to ensure that T-Mobile can participate in the October 13 hearing. However, T-Mobile doesn't really explain why it files its submission now and didn't do so a while ago. After all, Apple's motion for a preliminary injunction was filed on July 1.

If AT&T had previously obtained clearance to acquire T-Mobile, this initiative might never have happened. But the U.S. Department of Justice is trying to block the merger, and T-Mobile continues to operate independently.

Any support will be appreciated by Samsung, which on another patent-related note took an Android patent license from Microsoft that was announced earlier today.

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Samsung takes Android patent license from Microsoft rather than wait for Motorola

Microsoft just announced a patent license agreement with Samsung, under which "Microsoft will receive royalties for Samsung’s mobile phones and tablets running Android". This is the most important Android-related intellectual property deal in its own right, and even more significant against the background of Google's proposed acquisition of Motorola Mobility. If Samsung truly believed that Google's acquisition of Motorola Mobility was going to be helpful to the Android ecosystem at large, it would have waited until that deal is closed before concluding the license agreement with Microsoft. But Samsung probably knows it can't rely on Google. It decided to address Android's intellectual property issues on its own.

The substance and the timing of this announcement call into question the extent to which Google and its major hardware partners are committed to each other (apart from everyone's lip service).

A new Microsoft blog post also addresses Google and its recent comments on Android's patent issues.

By taking a royalty-bearing license, Samsung recognizes that Android has intellectual property problems that must be resolved with license fees, and reduces to absurdity the idea that Google is going to be able to protect Android after the acquisition of Motorola Mobility. Since Google announced the merger agreement with Motorola Mobility, Microsoft has signed up three more Android OEMs as patent licensees, including the number one in the market.

Samsung owns approximately 28,000 patents just in the United States. That's far more than the combined number of granted patents and pending patent applications held by Motorola on a worldwide basis (approximately 24,500). Around the globe, Samsung holds more than 100,000 patents.

Samsung clearly hedges its platform bets: Earlier today I read about Samsung's co-leadership (together with Intel) of a new mobile Linux initiative named Tizen. Samsung recently also announced plans to invest into its own Bada platform. Today's announcement indicates that Samsung's partnership with Microsoft will continue and possibly be expanded. This is a rapidly-evolving field, and the prospect of Google becoming a device maker is anything but reassuring for an OEM like Samsung. Those OEMs have to take care of themselves now, even if it's embarrassing for Google in some cases.

Microsoft's seven Android-related patent license agreements

By now, including an earlier Microsoft agreement with HTC (announced in April 2010), the top two Android device makers -- together accounting for than 50% of the U.S. Android business according to a Microsoft statement -- have taken such a license. "That leaves Motorola Mobility, with which Microsoft is currently in litigation, as the only major Android smartphone manufacturer in the U.S. without a license", Microsoft wrote...

A settlement of Microsoft's litigation with Motorola Mobility will just be a matter of time. Interestingly, a recent SEC filing by Motorola Mobility suggested that the company was seriously considering such a settlement (though the filing didn't name Microsoft specifically).

In between the agreements with HTC and Samsung, Microsoft also closed license deals with six smaller Android device makers (smaller in terms of market share). Between June 27 and July 5, 2011, Microsoft signed up four more licensees (General Dynamics Itronix, Velocity Micro, Onkyo, and Wistron). About three weeks ago, on September 8, Microsoft announced two more license agreements (Acer and ViewSonic).

In my opinion, Samsung currently builds the best mobile devices. I bought a Galaxy S i9000 last year, and this spring switched to its successor, the S II. And I'm now awaiting the Galaxy Note with great interest. I'll take a look once it's released in Germany. (Unlike the Galaxy Tab 10.1 and the 7.7 version, the Galaxy Note is going to become available here.)

Solution in sight?

Microsoft's statement also says that "a solution [to the smartphone patent wars] is increasingly in sight". HTC and Samsung are defending themselves in court against Apple but were able to work out license deals with Microsoft without a need for litigation. Observers have agreed all along that disputes between major technology companies always result in settlements and license agreements. That is true. However, it doesn't mean that the outcome of all of this has no further effect. This isn't just much ado about nothing. It's serious business.

The terms on which companies ultimately settle can vary greatly. The reason why some of these matters go to court in the first place is that positions are often far apart. Just look at how difficult it proves to be for Oracle and Google to negotiate a settlement at this stage (though I'm sure that at some point they, too, will agree on something).

I guess it will still take some time to sort out everything between the large players in this industry, but at some point new litigation will probably just be brought by non-practicing entities.

Terms unknown

Most patent license agreements aren't announced at all, and those that are announced remain confidential for the most part. Today's announcement doesn't specify the terms other than making it clear that Samsung pays for each Android-based device.

A couple of months ago, reports came out of Korea that Microsoft and Samsung were negotiating, and those reports suggested that Microsoft asked for $15 per device and Samsung was trying to move the amount closer to $10. None of this is verifiable, of course. The amount could be above that range, or below, or whatever.

Apple v. Samsung is a different story

Today's announcement is relevant to the situation between Apple and Samsung in the sense that it shows Samsung recognizes Android's patent problems and is willing to conclude license agreements to address them.

However, a cross-license between Microsoft and Samsung does not mean that Samsung can use any Microsoft patents against Apple. It just means that Samsung is allowed to practice the inventions protected by Microsoft's patents to the extent allowed by the agreement.

As far as Samsung builds devices running Windows Phone, it will also benefit from Microsoft's patents: Apple brings infringement lawsuits only against Android devices, not against Windows Phone products (at least so far). In its lawsuits with HTC and Samsung, Apple consistently accused exclusively Android-based devices.

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Tuesday, September 27, 2011

Apple complains about timing of Verizon's proposed amicus brief in Samsung case

On Friday, the largest U.S. wireless carrier, Verizon, asked a federal court for permission to file an amicus curiae ("friend of the court") brief in support of Samsung against Apple, and provided its proposed brief at the same time. I reported and commented on this.

On Tuesday, Apple asked the court to throw out the proposed brief or alternatively let Apple respond by a deadline that minimizes disruption of the process. Here's Apple's filing (and below, my analysis):

11-09-27 Apple Opposition to Verizon Motion

At this stage, Apple doesn't address the substance of Verizon's brief. In my view, that brief is weak and flawed, and I'm sure that Apple has no shortage of ideas for how to respond to the content of that brief, but for now this is just a proposed brief and the first question is whether the court will let Verizon intervene at all.

Apple notes that "[t]he Federal Rules of Civil Procedure do not provide for a non-party's submission of amicus briefs in district courts". In all of the many lawsuits concerning wireless devices that I monitor, this is indeed the first attempt by someone to file such a brief. In U.S. Supreme Court cases there are usually many amicus briefs -- for example, companies like IBM and Google filed amicus briefs in the Bilski case concerning the patent-eligibility of business models. But appellate court decisions on fundamental legal issues are quite a different thing from the public interest issues Verizon is trying to raise in Apple v. Samsung.

Apple's primary concern at this point is timing. According to Apple, Verizon's submission "would have been untimely by several weeks" even if it had been submitted in an appellate court, where such a brief should be filed "no later than 7 days after the principal brief of the party being supported". Samsung filed its reply to Apple's motion for a preliminary injunction on August 22, so Verizon's amicus brief would have been due by the end of August.

Apple's motion for a preliminary injunction was filed almost three months ago; discovery was closed about a week ago; Apple's reply brief (defending its motion for a preliminary injunction against Samsung's opposition) is due in a few days; and the hearing on the motion is less than three weeks away. If the court does accept Verizon's brief, Apple at least wants to be "allowed to respond to Verizon's submission on October 6, 2011 – a week after it submits its reply brief [to Samsung's opposition to the motion for a preliminary injunction]" in order to "avoid conflicts with Apple's preparations relating to that brief".

There's an interesting footnote in Apple's letter:

"Verizon's counsel first sought Apple's consent for Verizon to submit an amicus brief on that same day [September 23, the day when Verizon filed its brief]."

Verizon probably didn't expect Apple to support its plan anyway, but it looks like Verizon was in a real hurry last week. It may have taken Verizon quite some time to decide whether and how to try to influence Apple's litigation with Samsung, siding with one of its handset partners against another. Whatever the reason for the delay may have been, Apple considers this timing to be "disruptive to Apple's ability to present its positions to the Court in an orderly fashion" and to deprive Apple of the "opportunity to seek discovery (whether from Verizon, Samsung, or another company) to rebut Verizon's claim that a preliminary injunction is contrary to the public interest".

The (un)timeliness issues Apple raises might be enough of a reason for the court to deny Verizon's request for permission to file an amicus brief. But even if the court admitted Verizon's brief, it can easily set a convenient deadline for Apple to respond, given that Verizon's filng was unusually late.

At the end of my original reaction to Verizon's filing I already said that its substance wasn't particularly convincing. It looks like more of a "political" initiative. Verizon may have achieved its primary objective -- giving the impression of support for Google and Samsung among major carriers (though Verizon is only one of them) -- whether or not the court formally accepts its amicus brief.

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Monday, September 26, 2011

Judge asks Oracle and Google for input with a view to stay-or-go decision

On Friday, Magistrate Judge Paul S. Grewal ordered a third (and likely last) mediation talk in court between Oracle and Google for this coming Saturday, October 1. So far, it looks like a settlement isn't possible yet.

Today, Judge William Alsup, the federal judge presiding over this litigation, issued an "order requestinc case management statements". The order sets three deadlines for statements to be submitted by the parties. All of these deadlines show that the judge hasn't given up on the (uncertain) Halloween trial date and wants to reach a conclusion rather soon as to whether the case will go to trial in the near term or be stayed. A stay could relate to the case as a whole, or to certain claims while those are being reexamined by the United States Patent and Trademark Office.

I'll quote the order item by item and add my comments below each quoted section:

"By NOON ON SEPTEMBER 29, 2011, counsel for Oracle America, Inc. shall submit a case management statement listing each patent claim it will actually assert at trial and shall explain why the total number of such claims is consistent with prior representations made to the Court. In stating the claims to be tried, counsel must remember that any claim not asserted will be deemed foregone as to all accused matters."

In late May, when the judge accepted the parties' proposal for a tentative Halloween trial date (the parties had to choose a day in October and agreed on the last day of the month), he expressed doubts that "the number of claims Oracle would ask a jury to learn and to evaluate is 'triable'". This meant to say that Oracle would want to put so many patent claims (most patents have multiple claims, each of which is like a patent on its own as far as the infringement analysis is concerned) before the jury that the judge would rather stay the case (in whole or in part, as I'll discuss further below) than overburden the court and the jury.

The last position taken by Oracle on the number of patent claims it wants to assert was 21 (three claims for each of the seven patents). Oracle might go down from that position now in order to increase the likelihood of a near-term trial, but I believe Oracle will rather accept a stay (since it won't run out of cash in the meantime) than abandon too many of its claims. As the section quoted above says, any patent claims that Oracle drops now are lost forever with respect to its dispute with Google.

It's important to understand that this reduction of the numbe of asserted claims is purely a matter of case management. It has nothing to do with how strong or weak those patent claims and the related infringement allegations are.

I would be less surprised if Oracle still insisted on the assertion of 21 patents than if Oracle went below seven claims. At the very least I believe Oracle will want to assert one claim per patent.

Of the three deadlines the judge set, this is the only date that's right before the upcoming Saturday settlement meeting.

"By NOON ON OCTOBER 3, 2011, counsel for Google Inc. shall state separately as to each such claim the full extent to which counsel concede any such alleged infringement but for any issues of invalidity and shall specify, claim by claim, any and all invalidity defenses to be asserted at trial."

Only the infringement of a valid patent claim matters. However, if a patent claim is deemed valid, then the court also has to decide on its infringement. The first part of this quoted section (everything until "issues of invalidity") means that Google should say to which infringements it admits even though by doing so Google wouldn't waive its right to still contest the validity of an infringed claim.

Realistically, Google won't admit anything. Google will continue to say that all of the asserted patent claims are neither valid nor infringed. The question raised by the judge could, however, indicate that some infringements are pretty clear, especially since Google lost the claim construction battle, an important interim step toward an infringement finding. In a recent blog post ("Not much left of Google's 20 affirmative defenses against Oracle"), I discussed Google's "no infringement" defense right at the start and said, "Google will have a hard time convincing the jury (which the judge will instruct to construe those disputed terms according to his [claim construction] order) that it doesn't infringe at least a significant number of Oracle patent claims".

Google's final list of invalidity defenses is important information for the court, and for Oracle. At this stage, hundreds of invalidity contentions are in play. Just like Oracle will have to narrow its infringement assertions, Google will have to limit its invalidity contentions as well.

"By NOON ON OCTOBER 4, 2011, both sides shall update the Court on the status of each re-examination pending for each such claim and shall explain why the case should not be stayed in whole or in part until the re-examinations are completed. Counsel are expected to honor their full duty of candor as officers of the court."

Google made some initial headway with the reexaminations of Oracle's patents, which the USPTO started at Google's request. However, a high rejection rate at the stage of "first Office actions", which are by definition just preliminary, is not unusual, and the final outcome of such reexaminations typically looks very different. Also, those Oracle patent claims that survive reexamination will enjoy an enhanced presumption of validity.

Given that a couple of Oracle patents held up pretty well even at the stage of first Office actions and that the copyright part of the case (which Google failed to have thrown out on summary judgment) is not subject to reexamination, a complete stay of the case is less likely than a partial one. I think Oracle isn't afraid of either possibility. A complete stay would cause a delay and might open a window of opportunity for a Google countersuit, but Oracle could probably deal with all of that. A partial stay might even be good for Oracle. It could possibly prevail on the first few claims (copyright and a couple of particularly strong patents), and then later have a second trial with additional claims, some of which might then enjoy an enhanced presumption of validity. But going into any trial with a very few claims is risky. Within about a week we'll see if Oracle argues that the case should be tried or stayed as a whole rather than in part.

Google is likely going to argue for a complete stay, as it did on previous occasions, but will want to secure at least a partial stay.

"Also in the October 4 submissions, all counsel shall state the minimum number of hours needed for all direct and cross examination per side."

This is additional information for the judge with a view to how time-consuming a trial will be. It can also affect his inclination toward a stay or a go-ahead.

"Also state the extent to which plaintiff's latest damage study rests on copyright issues versus patent issues."

There's been plenty of confusion about Oracle's new damages calculation in the media. The judge now wants to know what role the copyright part plays in the overall damages calculation. It seems to me that the copyright part plays a significant role, though most of the damages are presumably patent-related.

"All submissions are limited to ten pages. The Court recognizes that some of this information will be provided in the final pretrial statements, but the Court requests the information now in order to manage its overall docket."

The page limit is just an administrative thing. The last sentence justifies why the judge asks for information at this stage that would usually just be required at the time of a pre-trial conference. It's clear that the judge wants to make all preparations that enable him to either confirm a near-term trial date or order a stay, which could last more than a year, possibly up to two years.

I don't expect today's order to make the parties change their positions fundamentally with a view to the meeting on Monday. Oracle has been aware all along of the possibility of a partial or complete stay. Google will continue to hope for a stay -- or any other delay -- until there's a 100% definitive trial date. Most likely, the Saturday meeting will end without a result.

The judge has certainly tried everything to force them to settle. But either party is entitled to its day in court.

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Apple-Samsung court hearings in South Korea, Australia and the Netherlands

With 20 (or more) lawsuits going on between Apple and Samsung around the globe, it happens that hearings in two such cases take place on the same day. Today, there was a hearing in Australia, and as I write this, one is going on in the Netherlands. On Friday, there was a hearing in South Korea.

In between those two hearing days, on Saturday, I spotted a letter filed by Verizon, the largest U.S. wireless carrier, in support of Samsung with a U.S. district court. Earlier today, wrote the following in its pre-market commentary:

"In stock-specific news, Apple shares are down about 1.5 percent after [FOSS] Patents reported that Verizon was backing Samsung against Apple in the U.S. patent fight between the two companies."

I'm not sure that movement is attributable to my reporting. The Euro crisis is taking its toll, and there could be other Apple-related reasons. Should it be true, I just reported on material in the public record and any resulting stock movement is unintended. I haven't held or traded any tech stocks or derivatives thereof since spring 2010 just to avoid conflicts of interest.

Now I'll comment on those hearings country by country, in chronological order.

South Korea (Friday, September 23, 2011)

I'm not aware of any media report on that hearing. I received information from an independent observer of the proceedings.

Samsung was first to sue Apple in Korea, but Apple countersued later. The focus of the Friday hearing was on two patents asserted in Apple's countersuit. The related Korean patent numbers end with '120 and '459:

  • The '120 patent is the Korean equivalent of what I called "Apple's favorite make-Android-awkward patent": a list-scrolling patent. That patent is also the only intellectual property right Verizon's intervention formally relates to.

    I've been told that Samsung argues against the validity of that patent with different pieces of prior art, particularly including (but not necessarily limited to) an email program named LaunchTile, an AOL patent, and a Japanese electronic dictionary. Apple argued that there are fundamental differences between those technologies and Apple's list-scrolling technique. In connection with LaunchTile, Apple also appears to dispute that it's admissible prior art since it resulted, allegedly, from a study sponsored by Microsoft and wasn't made public prior to Apple's patent application.

  • The '459 patent is the Korean equivalent of the slide-to-unlock patent a Dutch judge previously deemed (preliminarily) invalid because he considered it to be trivial in light of prior art, in particular, a Swedish device named Neonode N1m.

    Since Samsung was (on a preliminary basis) successful with its invalidity contentions in the Netherlands, I would be surprised if they couldn't also prevail with those in their home court.

I learned that the Korean court will have another hearing on November 25 to discuss different patents. I don't know yet whether those other patents are Apple or Samsung patents.

Overscroll workaround

With respect to the list-scrolling patent, it seems that Samsung already has a workaround in place. One of my readers (a different source than the one for the Seoul court hearing) sent me this screenshot taken from an Android version 2.3.5 update to Samsung's firmware that is currently being tested prior to its official rollout:

In that screenshot (which you can enlarge by clicking on it) you can see that the topmost menu item, "Wireless and network", appears in a lighter shade of blue than the other items. That's the "overscroll glow" effect: instead of moving the list along with the user's finger and bouncing it back so the list aligns with the edge of the screen, the edge where the user hits the end of the list gets a temporary glow.

The glow should steer clear of infringing Apple's list scrolling patent, but it's suboptimal as I explained before (with two YouTube videos). As a Samsung Galaxy S II user, I'm very, very unhappy that at some point in the near future I'm going to get an update that replaces the intuitive overscroll with a counterintuitive glow. Updates should usually enhance -- not degrade -- the user experience. If Apple succeeds with several more patents of this kind, I'll have to choose another platform than Android. Seriously.

Australia (Monday, September 26, 2011)

A month ago I reported that Samsung apparently felt forced to delay the launch of its Galaxy Tab 10.1 in Australia by another month, and that the Sydney-based Federal Court of Australia had scheduled hearings for September 26 (today) and 29 (Thursday).

For information on today's hearing in Australia I can recommend three articles:

The Netherlands (Monday, September 26, 2011)

A month ago, the Rechtbank 's-Gravenhage (an old name for the Dutch city of The Hague) ordered a formally EU-wide preliminary injunction against a few Samsung smartphones. That injunction will take effect in a couple of weeks, and since the technical scope of the injunction was rather narrow, I believe Samsung will be able to work around that one. I heard from someone that Samsung has already modified the photo gallery page-flipping functionality in its firmware. Also, the related patent was registered in only a few European countries.

Meanwhile, Samsung brought four countersuits against Apple, asserting different patents declared essential to the 3G (UMTS) wireless communications standard. Apple raised a FRAND defense just like in the United States, and the court in The Hague held a hearing today to discuss those FRAND standards issues first. If the court agrees with Apple, Samsung cannot seek an injunction against the iPhone and iPad based on those patents. Prior to today's hearing, I applauded the court (in an interview) for addressing those FRAND issues ahead of all other aspects of Samsung's claims.

Today's court hearing didn't lead to a decision, which will be announced on October 14 at 2 PM Central European Time with respect to those FRAND issues (which are outcome-determinative for the case at large), but it revealed some interesting information. Webwereld's Andreas Udo de Haes tweeted live from the courtroom. For a detailed account of all that was said, I refer you to his Twitter page (if you click on that link on one of the following days, look for his tweets dated September 26, 2011). I'm sure he will write a report on today's hearing and I will link to that one when it is published.

9to5Mac picked up an interesting piece of information that was supposed to be strictly confidential but disclosed by Apple's counsel during one of the public parts of today's hearing: for each of its 3G-related patents (I believe there are four that Samsung is asserting in the Netherlands), Samsung wants 2.4% of the price of the related chip as a royalty. Considering that there are at least several hundred patents that are declared essential to a standard like 3G, such a per-patent royalty demand appears to be completely out of line.

Samsung's lawyers apparently tried to claim that Apple can't make a distinction between its "crown jewels" (its multitouch-related patents) and Samsung's standards patents, but the fact of the matter is that it's a lot easier to acquire monopoly power by cooperating with other major industry players in a standard-setting process than to do so singlehandedly the way Apple did with the iPhone and iPad.

It's also a fact that FRAND licensing commitments must be honored, and Apple's lawyers didn't exaggerate the importance of this when they told the court that Samsung's approach to those patents calls into question the way standard-setting organizations like ETSI operate.

Apple's lawyers compared Samsung to Rambus, a company whose demands in connection with patents gave rise to an EU antitrust proceeding. Since ETSI is a European organization (operating under French law), I wouldn't be surprised if Apple filed an antitrust complaint with the European Commission at some stage. At least there were a couple of statements by Apple's lawyers today that clearly accused Samsung of violating European competition law with its behavior. But antitrust proceedings are slow and Apple wants a quick resolution of this. My prediction for October 14 is that the judge will probably conclude that Samsung is not entitled to an injunction against Apple and that Samsung is in breach of its FRAND licensing obligations.

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Saturday, September 24, 2011

Largest U.S. wireless carrier Verizon sides with Samsung against Apple, asks court to deny preliminary injunction

Verizon, the largest U.S. wireless carrier, implores the United States District Court for the Northern District of California to deny Apple's request for a US-wide preliminary injunction against four Samsung products (the Infuse 4G, Galaxy S 4G and Droid Charge smartphones, and the Galaxy Tab 10.1 tablet computer), arguing that such a decision would run counter to the public interest as it "would hinder Verizon Wireless in developing and deploying its next generation high-speed LTE [fourth-generation] network, the job growth dependant [sic] on that network, and will undercut key public policy goals, including expansion of American's [sic] access to broadband networks and faster communication with emergency personnel."

This attempt by Verizon to interfere with Apple's enforcement of intellectual property rights against Android in general and Samsung in particular is a declaration of war that may have far-reaching consequences in the U.S. market. I'm sure that Apple will view this move as a self-serving attempt to game the system in Android's and Samsung's favor, as another sign of Verizon being staunchly Android-aligned in exchange for market-distorting favors from Google, and as an attack on the intellectual property-centric business model of Apple and other innovators.

Verizon, which recently proposed that President Barack Obama should exercise his presidential veto right against possible ITC import bans against Apple's as well as Android-based devices, filed a motion for leave (a request for permission) to file an amicus curiae brief in support of Samsung ahead of a court hearing scheduled for October 13, after which there might be a preliminary injunction against four relatively new Android-based Samsung products. An amicus curiae brief is a way for third parties with an interest in the outcome of a lawsuit to present their views to the court. The judge will now have to decide whether Verizon is admitted as an amicus curiae, which literally means "friend of the court". Verizon has already filed its proposed brief, and most likely the judge won't deny the carrier's request to intervene. However, it remains to be seen whether the judge will believe that the market-leading carrier represents the public interest, given that Verizon's objective of commodotizing smartphone technologies is transparent and that the same California-based federal court has in its records for another case, Oracle v. Google, a document that shows Verizon and Google promised each other unspecified favors, potentially anti-competitive ones since they did not document them in writing.

Verizon's brief formally -- but really just formally -- relates to only one of four intellectual property rights asserted by Apple in its motion for a preliminary injunction. Apple asserts three design patents as well as a software patent. Verizon's brief is officially limited to that software patent, which I previously explained on this blog (with videos to show what it covers) as "Apple's favorite make-Android-akward patent". Apple is also using that one in its recently-filed second ITC complaint against HTC. Officially, "Verizon Wireless takes no position on whether a preliminary injunction should be granted if the Court finds a likelihood of success on the infringement of Apple's design patents", but that's just because Verizon may want to appear neutral with respect to the design part of the dispute and avoid the impresion of supporting a company Apple denounces as a "copyist". However, the public interest-related arguments that Verizon presents address the potential impact of a preliminary injunction, which is independent from the question of which particular categories of intellectual property may serve as its legal basis. As I'll explain further below, it's pretty transparent that Verizon is also against an injunction based on design-related rights.

U.S. courts grant injunctions -- and especially preliminary (fast-track) injunctions -- not simply because an infringement of valid intellectual property rights is proven. They perform a hardship analysis and consider the public interest. That is different from, for example, the German legal system, where a regional court already granted Apple two preliminary injunctions against Samsung (one for the Galaxy Tab 10.1 and another one for the Galaxy Tab 7.7). I will address and comment on Verizon's public interest argument further below.

Verizon's complicated relationship with Apple

Verizon Wireless -- 55% of whose shares are held by Verizon Communications, with the remaining 45% belonging to Vodafone, a major international operator headquartered in Europe -- played a key role in accelerating Android's adoption in the U.S. market, while its closest competitor, AT&T, used to be Apple's exclusive iPhone partner for some time. Earlier this year, Verizon also started selling the iPhone. That commercial partnership between the companies may continue if both parties consider it mutually beneficial, but it certainly won't benefit from Verizon's hostile move against Apple in connection with the Samsung dispute.

There's a constant power struggle between carriers and device makers. Carriers neither own nor need much intellectual property to operate their services profitably. Some of them also apply for limited numbers of patents, but they are pretty well protected by owning the infrastructure and the related operating licenses, and by network effects. From a carrier's point of view it may appear to be desirable to bring down the official price of smartphone and tablet computer operating systems to zero -- especially for the one company that's the closest ally among carriers of the company driving this commoditization, Google.

But it's another question whether Verizon makes the right choice for the long haul. Its management might regret its pact with Google later on:

  • From a short-term perspective, it would certainly be great if every device maker could steal every original innovator's intellectual property. Carriers and consumers would benefit temporarily from more choice and lower prices. But it's important to distinguish between competition and "copytition" (a term that recently came up in a discussion on I've been highly critical of the German injunctions based on an excessively broad design-related right, and my position on software patents is no secret. However, there needs to be a rational approach, and Verizon appears to be pursuing a rather unsophisticated, ill-conceived anti-intellectual-property stance. Its recent call on the President of United States to veto ITC import bans was completely out of line in my view. It reflected a lack of respect for the law and for the independence of the judicial system.

    I'd rather live in a world in which some wireless devices get banned from time time than in a dictatorship with a weak rule of law. I seriously wonder whether Verizon's top-level management is completely incompetent with respect to intellectual property issues and perhaps being a bit irrational, or whether it's just doing all of this in exchange for whatever Google may have promised them.

    In the long run, even Verizon's management should have an interest in ensuring that innovators are sufficiently protected by the legal system. Otherwise everyone can copy whatever has been created before, but investments in continued innovation in this field might be reduced to a trickle. There's room for improvement. There's need for improvement. But Verizon's proposals are too radical to be helpful in any way.

  • Verizon's management either fails to understand this or its strategy is too shortsighted, but the problem is that Google's vision of commoditization would sooner or later also affect Verizon's own core business. What Google wants to do to Apple and other innovators is just the beginning. It wouldn't be the end.

    In connection with Google's proposed acquisition of Motorola Mobility I wrote about Google's vision for this industry: everything in information and communication technologies (hardware, software, services) should have a price or at least a margin of zero -- and all the revenue should come from online advertising, which is Google's strength.

    Google doesn't simply give away Android. There's a strategy, and Google executes it quite heavy-handedly. Verizon has so far had some privileges compared to other companies. For example, some Android-based devices that Verizon sells (or used to sell) were allowed to have Microsoft's Bing as their default search engine. But that's an exception (possibly due to special contractual arrangements) that proves the rule. Generally, Google does not allow officially-licensed Android handset makers (and their resellers, including carriers) to set a different default search engine than Google. Korean antitrust enforcers recently raided Google's offices in Seoul because of suspicions of anticompetitive conduct in this particular context, further to complaints lodged by two Korean competitors of Google.

    Android's growing market share will give Google increasing leverage against everyone -- including Verizon itself.

In its brief, Verizon says that it "supports without reservation the protection of intellectual property rights", but apparently Verizon's support of intellectual property rights ends where their actual enforcement begins. Verizon loves intellectual property -- as long as it's just a toothless paper tiger.

Verizon's public interest argument -- an overview

Verizon's amicus brief is all about what Verizon portrays as the public interest. It explicitly "takes no position on whether Apple is likely to succeed on the merits of its infringement claims". It focuses completely on raising concerns that "an injunction may cripple the free flow of goods to Verizon Wireless, businesses and consumers".

While Samsung would benefit from a denial of a preliminary injunction, Verizon Wireless claims that it seeks to "minimiz[e] the adverse impacts to persons who are not parties to this dispute", which the introductory part of the brief summarizes as follows:

"The requested injunction of certain Samsung products will harm Verizon Wireless and U.S. consumers. It also has the possibility of slowing the deployment of next-generation networks -- such as Verizon Wireless's -- contrary to the stated goals of the U.S. government."

LTE (long-term evolution) is the fourth-generation wireless communications standard (the third generation was/is UMTS). Verizon states concerns that without Samsung's new LTE-compatible devices being available during this Christmas selling season, its expensive LTE infrastructure might not be used as much by consumers as otherwise:

"An injunction would prohibit some of the newest, most advanced wireless devices sold today and impede the growth of Verizon Wireless’s high-speed 4G network. The accused Samsung devices are among the few products that can access Verizon Wireless's next-generation high speed network and therefore are among the most sought-after devices by early-adopting consumers – a critical market segment in the industry. Verizon Wireless has invested and is investing billions in developing and deploying its next-generation Long Term Evolution ('LTE') 4G network; that investment depends on consumers having access to devices that can make use of that network. Samsung is one of only six manufacturers (including HP, HTC, LG, Motorola, and Pantech) that has developed and is offering a limited number of such devices today. Moreover, the motion to enjoin Samsung’s devices comes at a critical moment: when Verizon Wireless is expanding its LTE network to paying customers and right before the holiday shopping season."

It won't be easy for Verizon to convince the court that consumers wouldn't have plenty of other choices. Also, the injunction Apple requests wouldn't force Samsung out of the U.S. market forever. Samsung could modify its products accordingly and sell them. Since Verizon's brief is officially focused just on one software patent, an injunction based exclusively on that patent would not have to prevent Samsung from selling devices in the United States in the coming months. That patent covers one way -- not all ways -- to scroll lists, maps and similar objects. Granted, it's the best list-scrolling solution for touchscreen devices, but Samsung could still sell LTE-compatible, reasonably marketable devices without that functionality.

Contrary to what Verizon claims, its brief is about Apple's enforcement of design-related rights, too

I said before that Verizon's brief limits itself to that one software patent only in formal terms. In connection with its official scope (that one patent), the LTE-related argument of the brief (which is what the whole brief is mostly about) doesn't make sense. In fact, "stock Android" (the version that one can download from comes with scrolling code that does not infringe the patent in question. Samsung could use that code and ship. Since the preliminary injunction motion was filed almost four momths ago, Samsung probably already has everything prepared for the event that an injunction is ordered only with respect to that scrolling patent.

Therefore, the whole brief only makes sense if, contrary to its official scope but according to common sense, it effectively also relates to Apple's design-related rights. If Apple prevailed on those, Samsung would have to physically redesign its products as opposed to making a little software change. So that's what Verizon really wants to prevent from happening -- but it isn't honest about it.

Verizon complains that Apple's preliminary injunction motion relates only to relatively new products -- but that's always the only way it can work

Another unconvincing point made by Verizon is this: Verizon complains that Apple's motion for a preliminary injunction targets "only Samsung devices that make use of wireless carriers' next-generation networks" (I listed the four products in the first paragraph of this post), while "[t]here are nearly two dozen other devices accused in the current lawsuit [meaning the regular proceeding, not the fast-track part related to a preliminary injunction]". Verizon says the products over which Apple is suing Samsung in the main proceeding -- but not on the special preliminary injunction track -- are "mainly older devices that are not designed to make use of Verizon Wireless's and other carriers' next-generation networks". Therefore, Verizon argues, "the proposed injunction would disproportionally affect the very devices that are most critical to adoption and expansion of Verizon Wireless's next-generation network".

What Verizon doesn't recognize here is that preliminary injunctions granted at the end of a fast-track proceeding -- unlike permanent ones decided on a regular schedule -- always require a sense of urgency. That sense of urgency varies between jurisdictions, but the underlying idea is the same around the globe: if you want to rush the courts to a decision, you have to demonstrate that you also act very quickly. You can't wait for a year to sue and then ask the court to decide within days, weeks or months. If Apple had asked the court for a preliminary injunction against all of the accused products, including the two dozen older devices Verizon refers to, most of the motion would have been dismissed right away just on the grounds of undue delay in bringing the motion.

Data points on LTE investment and adoption

After presenting its logic, which I, frankly, consider a total non sequitur, Verizon goes into further detail. Among other things, Verizon touts its investment in LTE network infrastructure:

"Verizon Wireless has invested enormous effort and resources into building and marketing its 4G LTE network, which already covers more than 100 markets and which will cover more than two thirds of the U.S. population by mid-year 2012. Since it was formed, Verizon Wireless has invested more than $65 billion – $6 billion on average every year – in its networks and services. In 2008, Verizon Wireless paid $9.36 billion for a group of wireless spectrum licenses for use in launching its LTE network.6 Verizon Wireless deployed its LTE network on December 5, 2010, in 39 major metropolitan areas covering more than 110 million people. Verizon Wireless's LTE network is on track to cover over 175 markets and more than 185 million people by the end of 2011."

Then Verizon explains the need for such a new network to be adopted by consumers, who in turn need devices that implement the new standard. According to its brief, Verizon had "500,000 LTE subscribers" by the end of the first quarter of 2011 and sold 1.2 million LTE devices "[d]uring the second quarter of 2011 alone".

Verizon underscores the importance of two of the four Samsung products targeted by Apple's preliminary injunction motion in connection with Verizon's LTE offerings:

"Verizon Wireless currently offers five models12 of LTE smartphones. The Samsung DROID Charge, one of the smartphones at issue in the motion, is one of the marquee products offered by Verizon Wireless to showcase its LTE network. Samsung's Galaxy Tab 10.1, which is also the subject of the motion, is the first LTE tablet sold by Verizon Wireless."

Verizon argues that consumers may "choose non-4G devices – and thus decrease the rate at which customers adopt LTE services" as a result of a preliminary injunction.

One paragraph of Verizon's brief stresses the importance of finding early adopters for new types of services to make them take off, and argues that "[i]f the early adopters are prevented from buying a Samsung device, they will be less likely to influence other, later users from subscribing to Verizon Wireless's LTE network".

The fast-approaching Christmas Selling Season

That point is followed by a seasonal argument: "The harm from the proposed preliminary injunction would be increased if it issued during the holiday and year-end sales season." Verizon says "the time and money spent on [its holiday sales campaigns] would be lost" due to an injunction at this time of the year.

The broader public interest Verizon claims to represent: economy, jobs, first responders

Finally, Verizon discusses the broader public interest in LTE adoption. The brief mentions that the U.S. government considers "expansion of wireless broadband technology a key policy goal" and quotes the President:

"High-speed wireless service is the next train station, the next off-ramp. It's how we'll spark new innovation, new investments, and new jobs."

But the same President has repeatedly described patent protection as being crucial for innovation, investments, and jobs -- most recently on the occasion of the signing of the first overhaul of U.S. patent law in more than 50 years. Verizon has to accept the fact that there's no such thing as patent protection without patent enforcement.

Verizon makes different arguments related to job creation. Besides a general claim that "[e]ach dollar invested in wireless deployment is estimated [by economist Lawrence Summers] to result in as much as $7 to $10 higher [Gross Domestic Product]", also refers to an article by AllThingsD on a "Smartphone Job Market Survey" according to which, Verizon claims, "jobs for Android developers rose 20% in the second quarter of 2011". Verizon does not mention that Apple's platforms are actually much more lucrative, in total but especially on a per-device basis, for app developers than Android.

In the last part of the section on the broader public interest argument, Verizon stresses "the importance of wireless broadband networks in helping first responders and other public safety officials" and the fact that "[s]peed and information are critical assets in an emergency and wireless broadband technology offers both". Verizon argues that subscriptions from consumers are needed to finance the infrastructure of such networks. Otherwise, Verizon says, there would be "less revenue to continue expansion of Verizon Wireless's LTE network, which is used by first responders". While there may be emergency-related technologies in which the speed of data transmissions can play a role, I can't see how anyone's voice call to a first responder would be noticeably faster on an LTE than any other wireless network.

Conclusions: substantively weak, politically strong

I'm sure Apple will oppose Verizon's brief and will find many flaws in its logic. But the substance of the brief may not be the most important thing here anyway. This is clearly more of a political initiative. Verizon probably hopes that the court -- but also all those watching this process, including in Washington DC -- will take note of the fact that the leading U.S. mobile network operator sides with Samsung and raises concerns about the economy and the job market, concerns that don't look well-founded to me but certainly get attention in the current climate in the United States.

For Samsung this is definitely good news regardless of the weak and flawed substance of Verizon's filing and the transparency of its Google-aligned agenda.

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