Tuesday, March 6, 2012

June will be key month for Apple's disputes with Motorola and Samsung in the United States

It's been two year (and four days) since Apple brought its first lawsuit against an Android device maker (HTC in that case). Since U.S. patent litigation takes time -- a lot of time -- and companies pursuing it face a learning curve, there hasn't been a knockout punch on either side. More recently, Germany has become the number one hotbed for Android-related patent litigation (with some important decisions also scheduled for this month and next), but there are still many lawsuits pending in different U.S. venues. In about three months, there will be four important events -- three trials and one hearing on a preliminary injunction motion, which is the closest thing to a trial -- relating to Apple's disputes with Motorola Mobility and Samsung:

  1. May 31-June 6: ITC hearing on Apple's complaint against Samsung

  2. June 4-June 15: ITC hearing on Samsung's complaint against Apple

  3. June 7: hearing on Apple's motion for a preliminary injunction against the Samsung Galaxy Nexus (United States District Court for the Northern District of California)

  4. June 11: start of Apple v. Motorola Mobility trial in Chicago (MMI's claims against Apple will be tried immediately thereafter)

This schedule will pose some logistical challenges to Apple's in-house legal team. But if there are any delays or postponements, the schedule may ultimately be more relaxed than it appears today.

Based on the patents at issue in those litigations, June could be a breakthrough month for Apple. There's also some risk due to the patents that its rivals assert, but all of Motorola's three patents-in-suit in Chicago are FRAND-pledged standard-related patents, and so are some of the patents Samsung's ITC complaint asserts.

Recently, it's been difficult for anyone to successfully enforce smartphone-related patents at the ITC. Only about one out of 20 patents results in a finding of a violation. If the past is any indication, neither Samsung's ITC complaint against Apple nor Apple's ITC complaint against Samsung will result in a highly impactful decision. But the federal actions in California and Illinois could make a real difference.

Last year, Apple failed with a preliminary injunction motion against Samsung in the same California-based court, and it took the judge almost three months after the motion hearing to make a decision. This time around, Apple has selected stronger intellectual property rights and strengthened its case for irreparable harm. The judge may also decide more quickly this time.

In the case in the Northern District of Illinois (i.e., Chicago), Apple is asserting six patents and Motorola is asserting three. On a couple of key patents, claim construction worked out in Apple's favor. Of all U.S. smartphone trials in the first half of the year, that one is likely going to be the most interesting one.

Even if Apple won a Chicago ruling based on some important patents, it won't necessarily get to enforce it: Motorola Mobility would almost certainly appeal and request a stay, and the appeals court would then decide whether to stay the decision for the duration of the appeal.

In preparation of the Chicago trial, Judge Richard Posner (the most-cited U.S. legal scholar of the 20th century) granted an important discovery motion brought by Apple but sided with Motorola on a motion to strike supplemental expert reports related to "the FRAND issue" (as the order calls it) that Apple brought after what appears to have been a deadline set by the court. Furthermore, Apple didn't persuade the judge to transfer a separate FRAND-focused litigation from the Western District of Wisconsin to Chicago to consolidate it into this infringement case. Judge Posner wanted to "keep the present litigation within manageable bounds", a decision that in my view favors a quick resolution of the parties' infringement claims over other considerations. It would certainly have been efficient and appropriate to discuss Apple's FRAND-related claims as part of an infringement case involving three Motorola FRAND patents. I actually like the "FRAND first" approach of some courts, such as the United States District Court for the Western District of Washington in a Microsoft v. Motorola Mobility case. Unfortunately, it won't happen in this Illinois case.

Apple's successful discovery motion requires Google and Motorola "to provide discovery concerning Google's acquisition of Android, Inc., Google's development of the Android OS,
and Google's acquisition of Motorola".

Apple had brought that motion on Friday. It's a very comprehensive one, listing 86 topics and requesting 80 categories of "documents and things". Most of those items relate to technical issues concerning Android, but some of them have to do with Google's proposed acquisition of Motorola.

Six months ago, Apple already tried to win a stay of two lawsuits between Apple and Motorola Mobility because of the restrictions imposed on Motorola under the merger agreement for the time until the deal is formally closed. In that context, Apple already proposed some discovery of the Google-Motorola transaction, but to no avail. Now Apple gets its way with respect to discovery of the Google-MMI deal, but on the basis of a different argument: Apple said this kind of discovery was needed with a view to the parties' damages claims against each other. For example, there might be some indication as tho how Google values certain MMI patents at issue in the Chicago litigation.

The broad scope of the granted discovery motion is almost an invitation for Apple's lawyers to conduct a fishing expedition of enormous proportions. But it remains to be seen whether any parts of Apple's requests get quashed: Google will almost certainly complain that some of those requests are too burdensome.

Assuming that Google and Motorola still have to provide a significant amount of information concerning the transaction, I wouldn't rule out that Apple might find a smoking gun somewhere, possibly the next Lindholm email. In this particular litigation, Apple may only be able to present information that's reasonably closely related to the question of damages, but once Apple's external lawyers know that there's something that could be used in other contexts, they can bring targeted requests in other lawsuits.

While it's definitely interesting that Apple is allowed to conduct discovery not only of Motorola but also of Google, the most important part of the case is still about the patent infringement allegations that will apparently be adjudicated in a few months' time.

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