Friday, January 6, 2012

Microsoft and Motorola both ask the ITC to overrule an Administrative Law Judge

It's hard to please everyone, especially in legal disputes, but Administrative Law Judge (ALJ) Theodore Essex has made neither Microsoft nor Motorola Mobility entirely happy with his preliminary finding that the mobile device maker infringes four claims of one of seven patents asserted at this stage.

Both companies have asked the Commission, the six-member decision-making body at the top of the ITC, to "review" -- i.e., overrule at least in part -- the ALJ's initial determination between now and the April 20, 2012 target date for the final decision, which could be an import ban.

Microsoft's and Motorola's petitions aren't publicly available at this stage. Redacted versions will become available after a while (in February, I guess). But the ITC Electronic Document Information System (EDIS) indicates four new filings, all of which were made before close of business yesterday and listed today. Microsoft filed a 107-page "petition for review of the initial determination" and a 12-page summary. Motorola filed a 113-page "petition and contingent petition for review" and a 13-page summary.

This means that both companies want a review instead of an outright adoption of the ALJ's recommended decision. The lengthier title of Motorola's filing ("petition and contingent petition") shows that Motorola raised some issues -- presumably related to the four patent claims it was found to infringe -- on a definitive basis and some others "just in case". The contingent part of Motorola's petition presumably relates to those patents the ALJ did not deem valid and infringed.

The ALJ's initial determination leaves a lot to be desired, not just in terms of the parties' different ideas of what an ideal outcome would be but also in terms of the quality of the reasoning. A week ago I wrote a whole blog post on some of its more obvious shortcomings. Without even going into more technical detail at this stage, I just gave some examples of what's wrong with it, such as the rather surprising (if not outrageous) claim that Android is "almost the epitome of hardware dependent software".

There's certainly room for improvement from Microsoft's point of view. With six patents not having been deemed valid and infringed, a review could lead to infringement findings with respect to one or more additional patents. Microsoft also has to request a review in order to preserve its record with a view to a potential subsequent appeal to the Federal Circuit.

While Motorola was initially quite happy with the fact that the ALJ didn't find a wider-ranging violation, it apparently isn't comfortable with the import ban the ALJ recommended. Also, as I mentioned a few days after the initial determination, Motorola hoped that the initial determination would "provide clarity" concerning the patent deemed infringed and help Motorola "avoid infringement of this patent in the U.S. market". Unfortunately for Motorola, the low quality of the initial determination also affects the part on the infringement finding. That part falls far short of the kind of specificity that would provide Motorola with useful guidance for a workaround. Motorola could only throw out the protected feature (creating scheduler items from a mobile device) altogether.

Microsoft's petition for review isn't surprising. Last week, its lawyers asked the ITC to extend the deadline for such a petition by five business days. Motorola apparently opposed that request. The ITC granted an extension by two days.

I can't imagine that the ITC will adopt the ALJ's recommendation without a thorough review. Not only have both parties asked for it but the ITC will probably also arrive, all by itself, at the conclusion that the ALJ's initial determination is fundamentally flawed in a variety of ways, even to the extent of being contradictory in itself. If the ITC adopted the ALJ's initial determination and if this one was subsequently appealed (which is quite likely in my opinion, without having any knowledge of the parties' intentions), the outcome of an appeals proceeding could be an embarrassment for the ITC as an institution.

Since there are so many issues, I wouldn't be surprised if the ITC determined that it cannot meet its April 20 deadline for a final decision. But for now, the next step is for the ITC to decide whether to conduct a review. I'm pretty sure that this will happen, as it does all the time, but it will have to put together a catalog of review questions (which could be quite long in this case), a process that will probably take several weeks.

We are now entering the most important phase of this investigation.

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