Late on Wednesday, January 11, 2012, Oracle and Google filed their responses to Judge William Alsup's final pretrial order envisioning a trifurcated (three-part) Android-Java trial to begin "on or after March 19".
As I expected, Google appears quite happy about the court's envisioned trial structure. It previously advocated trifurcation while Oracle objected to it. Google merely expressed concern over the time allotted for the patent liability phase (the second part of the trial). If the judge shared Google's related concern, this could increase his willingness to stay the patent part of the case pending the ongoing reexaminations of most of the patents-in-suit unless Oracle further reduces the number of patent claims it asserts. I previously said that the judge could still stay the patent part of the case after the copyright phase. While the final pretrial order didn't address this possibility, the judge never waived his right to do so.
Oracle formally renewed its objections to trifurcation by referencing a couple of earlier pleadings, but rather than making another (presumably futile) attempt to dissuade the judge from a three-phase trial, it puts forward a constructive suggestion for a slightly modified trifurcated trial, an evolutionary (not revolutionary) proposal that would have two key benefits to Oracle but may well be palatable to the judge. Oracle proposes that the court decide on a possible injunction prior to the third trial phase (damages and related issues). Should there be a break between phase two and phase three, "a new jury would be selected to hear that [damages] phase".
Oracle describes this as merely a "change in sequencing". While this is reasonably consistent with the judge's original proposal, it does have some interesting ramifications. There would be much more settlement pressure on Google if Oracle prevails in any liability phase, and the third trial would be considerably less likely to ever take place. By comparison, the plan envisioned by the final pretrial order would create, or constitute, a major incentive for Google to go the distance (i.e., see this three-part trial all the way through).
The impact of Oracle's proposed plan is not even limited to timing. Oracle's plan would require the jury to "address copyright willfulness in Phase One and patent willfulness in Phase Two". This further strengthens Oracle's argument that evidence relating to willful infringement should be presented to the jury in the liabilities phases of the trial (something that Oracle believes should happen whether or not the court adopts its modified plan).
This would again increase the likelihood of a settlement after the copyright trial. Judge Alsup previously said at a hearing that he was looking for a plan that might resolve the case just on the basis of copyright liability. I surmise he'd rather not have the jury go into intricated technical issues concerning patents and similarly complicated economic questions relating to damages theories. This particular element of Oracle's proposal could have that desired effect regardless of who wins the copyright trial.
Let me explain all of this more specifically in the following paragraphs. This is an important juncture in the Oracle v. Google process, the underlying tactical considerations are more complex than one might think, and the relevance of Oracle's key arguments in this context transcends the context of its proposed evolutionary improvement to the trial plan. I'll firstly summarize and quote from how Oracle stresses its sense of urgency, then discuss how much time and effort this plan could save, and finally also address the question of evidence relating to willfulness. If you are very interested in the potential outcome of Oracle v. Google, reading about these issues and considerations will be time well spent. If your interest is significant but limited, I recommend reading at least the following section on Oracle's urgency because it adds quite some background to the business issues underlying the dispute.
Oracle would like to move the trial up to February
Oracle begins its comments on a possible trial date by restating that it "wants this case to be tried as soon as possible". In this context, Oracle says the following:
"Google is inflicting irreparable harm on Oracle by offering proprietary Java technology, most notably the patents and copyrights in suit, for free within Android, fragmenting the Java platform. Oracle needs to obtain injunctive relief quickly to preserve the Java ecosystem and restore the 'write once, run anywhere' promise that is the core of Java's value."
While the foregoing merely reiterates what Oracle stated on previous occasions, nothing is better able to demonstrate Oracle's sense of urgency than the fact that its latest filing makes a push for an even earlier trial date than "on or after March 19". Even before it outlines Oracle's proposal for a modified three-phase trial, Oracle's response to the final pretrial order notes that "one of the scheduling conflicts that prevented an earlier trial date has now disappeared": Google's lead trial attorney, Robert van Nest, was previously scheduled to appear at a New York v. Intel Corp. trial in the second half of February, but that one was vacated just before Christmas. Oracle's counsel is flexibly available for the next several months (until May 2012). Should the court neither move up the trial nor be able to keep the March 19 schedule, Oracle would like the trial to take place between April 23 and May 30 in order to prevent further delays.
Oracle's argument for a modified sequencing of the three-phase trial starts with slightly over one page of descriptions of the harm Java is suffering due to Google's alleged infringement. Firstly, Oracle points out that "[t]he injunctive phase of this case is critical to Oracle and is the most time-sensitive aspect of the litigation" and recalls that its "goal is to employ its right to injunctive relief to bring Android back into the Java fold and end the fragmentation in the Java platform and Java community that Google's lawless conduct has generated". Oracle said so at the pretrial conference as well as in its pretrial brief.
While business is business and usually about money, I wouldn't dismiss Oracle's community-related argument. It would be both in the company's and the community's interest to reunify Java. It's true that an injunction is key, though it depends on its technical scope. I think Judge Alsup is reasonably sympathetic to the fragmentation argument and appears to see rather strong indications of Google's willful infringement (which doesn't guarantee an injunction but plays a role to Judge Alsup in this regard). An injunction is quite realistic in this case, but the technical scope depends on the jury's liability-related findings. A technically broad and powerful injunction would indeed give Oracle the leverage it needs to accomplish its goal of reunifying Java. An injunction of lesser breadth would probably have the opposite effect: in an attempt to work around it, Google would probably widen the gap between Android's Dalvik virtual machine and the official Java standard. But that possibility doesn't affect the validity of Oracle's argument.
Oracle provides an update on Android's distribution figures, citing Google chairman Eric Schmidt's speech at this week's CES, where he mentioned that 700,000 units of Android devices are now activated per day and said: "Just do a little math with the numbers I just told you, and Android is on a billion-unit plan."
Oracle also elaborates on Android's increasing adoption in areas beyond mobile phones. Tablet computers and TV sets are mentioned as well-known fields, but "[l]ess well-known is
Android’s spread into embedded systems, a traditional strongpoint for Java". Oracle says that its "sales force is seeing increasing evidence that Android is threatening Java in this area", and that this is "Google's objective" (as opposed to an unintended consequence). In this context, Oracle quotes the following passage from an AllThingsD article:
"While Andy Rubin is most focused on getting Android running on as many phones, TVs and tablets as possible, he sees opportunities well beyond that. Already, he notes, the operating system has spread to watches from Motorola and car dashboards from Mercedes. 'Tell me what screen Android shouldn't be on,' Rubin said, speaking to AllThingsD just after he finished his onstage appearance at AsiaD in Hong Kong."
Oracle furthermore cites a Technology Review blog post, tellingly entitled "Google's Android Rampages Beyond Mobile", quoting the following passage:
"Combine all that with other tech announced today that will have Android devices control everything in your home from lighting to irrigation...and it becomes difficult to think of that cute green robot representing a mobile operating system any more. Rather, Android is being pitched as the operating system, for a future brought to you by Google."
Oracle therefore urges the court to move quickly:
"The more Android penetrates into the market, the more significant its forking of Java becomes and the harder it will be to achieve Oracle's desired result. A speedy trial and entry of injunctive relief is thus ever more critical."
And then Oracle proposes to address injunctive relief as early as possible.
Oracle wants the court to switch into the "injunction" gear once Google's liability for infringement has been established
I outlined Oracle's modified plan further above, and the following sentence is key:
"If Oracle prevails in Phase One or Two, the Court would then turn to the question of injunctive relief."
This wording would even make it a possibility that the court orders an injunction based on copyright infringement before the patent liability issue is resolved. Whether the court would do this is another question, but the mere possibility would be a good reason for Google to settle quickly if Oracle wins the copyright liablity trial. Even if the injunction phase was entered only after both liability trials have taken place, Google's ability to draw this process out would be limited as compared to the original plan.
The judge probably doesn't like the part of Oracle's proposal that envisions a new jury to evaluate damages in phase three. But the likelihood of that new jury ever being needed would be greatly reduced by Oracle's proposed plan. If there's a liability finding and an injunction, Google has greater worries than the damages amount. If there's no liability finding, or one that doesn't result in an injunction (or only in one that doesn't solve the fragmentation problem), Oracle cannot achieve its primary objective and would also be much more likely to consider a settlement that would only be about money, without forcing Google to be fully Java-compliant.
In terms of case management economics, the benefits of Oracle's proposal outweigh the issue of a possible new jury for phase three (which would probably not be needed, and even if it were needed, wouldn't present any non-manageable problems).
Oracle wants willfulness evidence to be shown to the jury early on
It comes as no surprise that Oracle wants to present the Lindholm email -- a document that evinces Google's awareness of the need for a Java license -- and similar evidence (such as emails from Andy Rubin going back to the year 2005) to the jury as early as possible. The jury will be quite challenged with lots of technical detail concerning the patents and copyrights at issue, but if its members conclude from some rather straightforward business correspondence that there must be some liability somewhere, Oracle is simply much more likely to prevail on some of the important technical details.
Even prior to outlining its modified trifurcated trial proposal, Oracle says that it "believe[s], but wish[es] to clarify, that under the Court's Order, willfulness evidence may be introduced in Phases One or Two to the extent it establishes an element of liability (e.g., in connection with inducement) or counters a defense that Google has indicated it will introduce at trial". Concerning the second part, Oracle claims that "Google’s willful infringement negates its equitable defenses as a matter of law", citing precedent from New York according to which "[t]he infringer's state of mind can support a finding of egregious conduct, thereby defeating equitable defenses such as laches".
Oracle can't force the judge to provide this clarification now. He may tell Oracle that the admissibility of evidence will be discussed on a case-by-case basis later on. But it would be more efficient for everyone if the judge could indicate beforehand whether willfulness evidence is, in principle, eligible during the first two phases of the trial.
Toward the end of its brief, Oracle points out that what it considers appropriate even under the court's original plan would be a necessity under Oracle's proposal for a modified plan:
"We propose that the jury address copyright willfulness in Phase One and patent willfulness in Phase Two. Because, as noted previously, questions of intent are relevant to issues of liability, we believe this would in any case be a more efficient allocation of decision-making responsibility. But under our alternative proposal, such a reallocation would be necessary so that the damages jury does not have to hear extensive liability evidence in order to render a verdict on willfulness."
Since Judge Alsup previously said that a finding of willful infringement would have "profound imoplications" for the possibility of an injunction and willfulness is a matter of fact that the jury needs to decide, Oracle's idea of entering the injunction phase after a finding of liability wouldn't work without the jury speaking out on whether or not any infringement identified was willful.
Oracle's argument that I just quoted is a different one, however. What Oracle says there is that in the event a second jury is needed for phase three (damages), the second jury would have to hear lots of general (though already adjudicated) liability issues because those questions are intertwined. Under Oracle's proposal, however, the liability jury would establish whether or not there is willful infringement. If there is, then the damages jury just needs to determine a pre-tripling damages amount, and the judge would then triple the amount.
Oracle's desire to raise the willfulness question early on may lead to another push by Google for the right to present to the jury any non-final rejections of patent claims by the USPTO's Central Reexamination Unit. While Judge Alsup decided on a related motion in limine to the effect that only final rejections (final in the sense that the examiner is done, even though appeals to the BPAI or CAFC are still possible) may be presented but first (and other preliminary) Office actions aren't eligible, he kept the door open to requests "to present to the jury some specific item of information from the reexamination of the other patents [patents on which there is only a preliminary Office action]". It's possible that Google will argue, as it did before, that even some of those preliminary findings show that Google may have had valid reasons to deem Oracle's patents-in-suit invalid, and on such a basis Google says it wouldn't be liable for willful infringement. The argument would basically be that a non-final Office action may not have sufficient probative value with respect to whether a patent is indeed valid, the bar is lower if a defendant merely sees to show that it had a reasonable basis on which to consider a patent invalid -- and willful infringement requires someone to deliberately violate a valid patent.
Even if Google managed to inject some of the non-final reexamination stuff into the process because of its potential relevance to the question of willfulness, the upside to Oracle (having willfulness discussed and adjudicated as early as possible) would still outweigh the downside. The first trial phase is about copyright, and patent reexaminations obviously aren't relevant to that one. If Oracle won the copyright part and then headed toward a potential injunction, that might be all it takes for Oracle to achieve its objectives (and for the court to save the time and effort of phases two and three of the trial).
A speedy trial is also in Oracle's interest for the reason that most of its patents are under serious reexamination presusre and there could be further bad news from the USPTO the longer things take. That, however, doesn't diminish the validity of the fragmentation (and Android market penetration) argument.
Conversely, Google would still love to delay the trial, though it gives lip service to a swift resolution of the matter. I mentioned further above Google's complaint about the amount of trial time that it believes would actually be needed for the patent liability phase. Also, Google's recent mandamus petition to the Federal Circuit could result in some delay (usually not much, but one never knows). It appears to be a long shot, as I wrote in November. Matt Macari, an IP attorney who additionally writes for The Verge, noted on Twitter todayit's been "[l]ong established that you can't make a business (not legal advice) doc[ument] privileged by simply cc'ing an attorney". While Matt points out that there's no way to guarantee, he, too, "do[es]n't believe Google can win on this, including at the CAFC", and says this about the legitimacy of Google's tactics:
"At some point, Google is just protesting too much. Incredibly problematic, but highly relevant and admissible."
In the context of this final part of this post -- willfulness evidence -- it is nevertheless important to note that the admissibility of the Lindholm email is still contested, and there's a chance (or I would call it an off-chance) that Google can get it thrown out. In that case, Oracle would still have other ways to prove willfulness, but it would lose a silver bullet of enormous proportions.
In closing, I have a gem for you if you're interested in the neverending Lindholm story. Alison Frankel of Thomson Reuters News & Insight and of the "On The Case" column has managed to obtain, and has gratefully published, Google's petition to the CAFC and Oracle's response. Alison's article explains what kind of fundamental issue Google hopes to be able to raise. Google apparently hopes that the Federal Circuit may feel that Judge Alsup made it too hard for in-house counsel to have privileged correspondence with employees (by requiring clear references to legal strategy in what otherwise appears to be business correspondence). Oracle denies this, and says that even if Judge Alsup was considered to have been too reluctant to grant privilege to correspondence between employees and in-house attorneys, the Lindholm email still wouldn't deserve privilege for no shortage of other reasons. I, too, believe that the whole history of the Lindholm email makes it clear that adding an in-house was merely an afterthought, but I understand that Google hopes the CAFC will take a broader perspective and be more worried about the precedent this case sets than what the obviously correct decision in Oracle v. Google would be. We will see. I continue to believe that the most Google can realistically achieve here is a (limited) delay.
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