Friday, January 13, 2012

Preliminary ITC ruling doesn't hold Motorola to infringe three Apple patents (including a strategically important one)

If a trade agency at which mobile patent complaints have generally had limited success so far hands a preliminary ruling on Friday the 13th, a complainant doesn't even have to be superstitious -- but merely look at the track record -- to expect that the outcome will be negative.

Today, the ITC published a notice by an Administrative Law Judge according to which Motorola Mobility is, on this preliminary basis, not considered to infringe any valid claim of three Apple patents. MMI is, rightfully and understandably, "pleased with today's favorable outcome".

This initial determination is subject to review by the Commission, the six-member decision-making body at the top of the ITC. It's a given that Apple will file a petition for review, and the final decision, which could still be somewhat different, will be due on May 14, 2012.

Apple's ITC complaint against Motorola, filed in October 2010, was its "smallest" one to date in terms of relating to only three patents. By comparison, Apple asserted nine against Nokia, ten in its first complaint against HTC, five in its second complaint against HTC, and seven (five technical and two design-related) patents against Samsung.

One possible reason for this is that Motorola won the race to the courthouse in October 2010, by a few weeks. At that time, it was clear that the two companies were heading for a clash, but Motorola's internal and external lawyers were better prepared or worked faster (or both). It's possible that Apple was then scrambling to put together its own ITC complaint. Maybe Apple thought it had more time to bring an action, and with more time, it might have asserted more patents.

Whatever the reason for picking only three patents might have been, I believe two of those are less important than the third. The less important ones are U.S. Patent No. 5,379,430 on an "object-oriented system locator system" (yes, "system" appears twice in the title) and U.S. Patent No. 7,812,828 on an "ellipse fitting for multi-touch surfaces". The '828 patent is one of many patents Apple is asserting against Samsung in the United States, but it isn't nearly as essential to Apple's litigation strategy as another patent at issue in this preliminary ITC ruling and in use against Samsung in Apple's federal lawsuit in California: U.S. Patent No. 7,663,607 on a "multipoint touchscreen". The '607 patent is the broadest touchscreen-related hardware patent Apple has, and if the courts interpreted it as broadly as Apple would like them to, it would be extremely hard to work around.

The "multipoint touchscreen" patent also has international equivalents that Apple would very much like to enforce. For example, it's one of the two patents based on which an Australian court granted a preliminary injunction that was lifted because the judge set the bar too low for a preliminary injunction (especially in terms of the required likelihood of success). The main proceeding of the Australian dispute is now continuing. Preliminary injunction requests are adjudicated in fast-track proceedings and, as their name indicates, they aren't final.

Even though this ITC ruling is only preliminary, it can adversely affect Apple's lawsuits against Samsung in which the multipoint touchscreen patent is being asserted.

Getting back from the wider implications to the dispute between Apple and Motorola, Apple has many more patents in play in other litigations. For example, last month a lawsuit involving 15 Apple patents was transferred to the Northern District of Illinois, where it may go to trial later this year. Before it goes to trial, Apple will presumably narrow the case and drop some of the patents, but there are lawsuits in other districts as well (Western District of Wisconsin, Southern District of Florida, District of Delaware).

Meanwhile, Motorola's own ITC complaint against Apple went to trial last month, and an initial determination is due on April 23, 2012. This month, Motorola dropped (which is common, and even expected, in ITC investigations) one of its patents. It had dropped another one prior to the hearing, so in total it narrowed the case to four patents.

I don't want to speculate about the outcome of Motorola's own complaint, but in general it appears that the ITC is not the forum in which any of the major smartphone disputes will be effectively decided by a single ruling that forces someone into a settlement. Litigants will need to win federal lawsuits, and all of the major Android-related disputes except for Oracle's lawsuit against Google include international litigations, particularly (but not only) in Germany. The outcome of those large disputes is likely going to depend on a combination of rulings in multiple jurisdictions, even though most of the major players probably thought at the outset that the ITC, which has tighter schedules than most United States district courts, was going to be the strategically most important venue.

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