Friday, February 24, 2012

Motorola forces Apple to deactivate iCloud and MobileMe push notifications for German customers

Last night, Apple posted some new information (in German) to its German support knowledge base, informing customers using the iCloud or MobileMe push email service in Germany of the need to pull their email manually (by bringing up their email client) or configuring their email clients to check periodically for new messages. (Just to avoid misunderstandings: iCloud and MobileMe are both operational, but their push notification features are affected, within the borders of Germany.)

This was previously reported by the leading German news agency, dpa (Deutsche Presse Agentur).

Apple points to a Motorola patent ruling that is under appeal and stresses that this "only impacts customers in Germany who use a Push setting to get their MobileMe and iCloud email". The affected customers will still receive email -- new messages just won't be pushed to them BlackBerry-style. Apple also says that it is appealing the decision and "believes this patent is invalid".

It appears that Motorola Mobility, which is in the process of being acquired by Google, has sent Apple an enforcement letter demanding compliance with a permanent (but appealable) patent injunction that was handed down three weeks ago by the Mannheim Regional Court. The Motorola patent at issue in that litigation harks back to the time of pagers, a predecessor of text messages.

This is the first time that Apple's customers (in one particular country) start to see and feel the effects of the ongoing patent disputes in the smartphone and tablet computer industry in the form of a (temporary) removal of certain functionality. Earlier this month, Apple also had to temporarily remove some of its products from its German online store.

The key difference is that the temporary removal of products was due to an injunction over a standard-essential patent. A week ago, it became known that Apple lodged a formal antitrust complaint against Motorola Mobility with the European Commission over MMI's allegedly anticompetitive use of standard-essential patents. This week, Microsoft also complained about this kind of conduct by MMI. But the patent that now affects Apple's push email service in Germany does not appear to be essential to any industry standard. If the very same patent was standard-essential, Apple couldn't just switch off a certain feature: it would have to stop selling its products altogether.

I don't blame Motorola for seeking the enforcement of an injunction based on a patent that is not standard-essential. This is fair. Like I said, it's the first time that Apple's customers experience a certain kind of technical restriction, but as a result of Apple's own enforcement of patents, Android users see this happen all the time, with features either being removed or hobbled. For example, as a Samsung customer, I no longer get the overscroll bounceback feature on my device; I have to unlock my device with the inferior slide-to-unlock circle (last week, Apple won a German ruling against Motorola based on the relevant patent); and a few months ago, after I updated my firmware, I noticed that turning pages in the Android photo gallery was different (and less convenient).

Apple may be right that Motorola's push messaging patent is invalid. One thing that German patent law has in common with U.S. patent law (but not with UK patent law, for example) is that it is designed to allow the enforcement even of patents that should never have been granted in the first place. In the United States, a court will only deny an infringement ruling if there is "clear and convincing evidence" (a relatively high standard) of invalidity, and in Germany, a regional court like the one in Mannheim will only stay an infringement case for the duration of parallel nullity actions in other courts if it is convinced of a "high probability" of invalidity. In my experience, Mannheim is a particularly difficult court to persuade of the invalidity of asserted patents. The judges there routinely point out that it's not their job to analyze in full detail whether a patent-in-suit is valid. In particular, they are highly reluctant to question the non-obviousness of a granted patent.

The big problem with the American and German approach is that in this industry, a majority of all granted patent claims are invalid as granted. Patent offices aren't really able to identify all of the relevant prior art. A patent examiner may spend about 15 hours (spread out over the course of several years) on the examination of a patent application. That's by far not enough to research the whole body of prior art in this field, where a lot of prior art isn't even contained in any patent database.

It's basically a value judgment of lawmakers (and, within their respective wiggle room, of judges) whether they think it's better to hand down too many rulings in favor of the holders of dubious patents than to be more skeptical of the validity of issued patents. In my opinion, both the United States and Germany are on the wrong track here simply because statistics show that too many patent claims are invalid as granted. If most patent claims were valid, it might be acceptable (though still problematic) to take into account that some rulings are based on patents that should never have been granted. But in this industry, the fact that a patent office issued a patent isn't sufficiently meaningful to justify injunctions and other remedies.

From a strategic point of view, it wouldn't make sense for Apple to back down at this stage and settle on Google's and Motorola's terms. The impact of this enforced injunction in Germany is visible, but it is clearly limited. It causes a minor inconvenience that won't result in any loss of sales or any appreciable reduction of customer satisfaction.

There are probably some people at Apple who look at this and think to themselves: "Is this already all that Motorola can do? FRAND abuse and a push notification patent? And that's worth $12.5 billion to Google?"

With a view to Apple's appeal, the hurdle for a suspension of the enforcement of the injunction is lower when an appeals court (in this case, the Karlsruhe Higher Regional Court) evaluates Apple's invalidity contentions. A German appeals court is willing to stay if it sees a probability above 50% of the patent being invalid. There's no "high probability" (which suggests something like 70% or 80%) requirement at that stage. But it may take Apple a year or so to get to the point at which the appeals court makes this determination (though a stay could also happen much more quickly).

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