Friday, February 3, 2012

Apple TEMPORARILY removed products from German online store due to Motorola injunction based on FRAND patent

There are two big Apple-Motorola news items from Germany today:

  • As I reported earlier, Motorola Mobility today won a permanent injunction against the push email feature of Apple's iCloud and the related client devices. As a result, German Apple customers using the iCloud (or MobileMe) email service will probably have to configure their clients so as to check periodically for new email, as opposed to getting BlackBerry-style updates pushed to them.

  • The leading German news agency, dpa (Deutsche Presse-Agentur), quoted an official Apple statement according to which the company removed last night, as a result of an injunction Motorola won in Mannheim over a FRAND-pledged patents declared essential to an industry standard, several 3G/UMTS-capable products from its German online store: the iPhone 3G, the iPhone 3GS, and the iPhone 4 (but not the iPhone 4S), and all 3G/UMTS-capable iPads.

    [Update] Apple has meanwhile won a temporary suspension of the enforcement of the injunction and plsns to put those products back online as soon as possible. I did a follow-up post on this latest development. [/Update]

    Apple pointed out that this affected only the German online store. Customers were still able to buy the product from retailers, including Apple's own signature stores -- but Motorola is also trying to enforce those same patents against Apple Inc., Apple's U.S. parent company (in fact, it already won a default judgment based on those patents, due to a no-show by Apple's counsel).

At this stage I am absolutely convinced that the removal of those products from Apple's online store is a result of Motorola Mobility's enforcement of a ruling that was handed down in early December, and not related to today's ruling. It must be nothing more than a coincidence that Apple's announcement of the removal of products -- which some observers believe already happened last night, prior to the ruling -- comes on the day of a different court decision. Here's why I think so:

  • At the mid-November trial on the case adjudicated today, the judge explicitly asked Apple's counsel whether there was a FRAND defense, and the answer was that Apple was "not currently aware" of that patent having been declared essential to an industry standard. However, the patent at issue in the other action was declared essential to GPRS seven years ago.

  • A permanent injunction by a German court does not actually have commercial impact until the party that won it formally seeks enforcement.

It appears that Motorola decided to post a 100 million euro bond to enforce the early-December ruling. There's any number of reasons why this may have taken two months. For example, Apple appealed that ruling to the Karlsruhe Higher Regional Court, and presumably couldn't convince the appeals court to stay the injunction.

The fact that the iPhone 4S is not affected by Motorola's enforcement is almost certainly attributable to the fact the iPhone 4S, unlike earlier iPhones and iPads, contains a baseband chip from Qualcomm. Earlier products use chips from Infineon/Intel (Intel acquired Infineon's baseband chip division). Assuming that Motorola and Qualcomm have a cross-license agreement in place (just like Samsung and Qualcomm do), Apple is covered by extension, as a result of what is called patent exhaustion (a patent owner gets paid only once for the same use of a patent in a product).

It's important to make a clear distinction between those two German news items.

The enforcement of a FRAND-pledged standards-essential patent is a major issue. The European Commission is already investigating Samsung because it also "sought injunctive relief" (though unsuccessfully to date) based on such patents. Motorola could be investigated over the same issue, but since the EU is also reviewing Google's proposed acquisition of MMI, it presumably prefers to focus on the merger review, at least for the time being.

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