Friday, March 9, 2012

Oracle offers withdrawal of three more patents in exchange for spring trial against Google

Oracle and Google just responded to Judge William Alsup's February 24 order to comment on the status of the reexaminations of its five remaining (out of originally seven) patents-in-suit. Oracle has not yet dropped the entire patent infringement part of its lawsuit against Google, but it has now given the court a clear indication that it's more interested in a trial that might start in mid-April than in maximizing the number of asserted patents. Based on Oracle's offer, it appears rather unlikely that more than two out of the original seven Java patents would be put before the jury, and according to Google, those two are of questionable commercial value. Oracle is willing to withdraw, with prejudice, three other patents subject to a condition explained further below.

Oracle definitely wants to take the '520 patent (the only patent the asserted claims of which were affirmed in reexamination) and the RE'104 "James Gosling patent" (the asserted claims of which was just declared invalid by a non-final Office action) to trial. Google points out in its brief (which was written without Google having knowledge of Oracle's proposal, since Oracle refused to share its position beforehand) that "Oracle has attributed to this patent the least value of any of the seven patents originally asserted" (a 0.3% apportionment percentage in Oracle's latest damages report). With respect to the Gosling patent, Google highlights that the Gosling patent will "expire[] on December 12, 2012, so the potential damages period is relatively narrow and the propriety of an injunction questionable".

Not only does Oracle want to take those two patents to trial but even with respect to the three patents Oracle is willing to withdraw with prejudice (the '720, '205, and '702 patents), Oracle still keeps the door open to some extent. Oracle will withdraw only those claims (from those patents) "that remain rejected as of the time of a spring trial". Oracle's brief explains that a request for reconsideration by the examiner has been filed with respect to one of them (the '720 patent) and will soon be filed with respect to the other two. Oracle claims that it "has substantial arguments supporting reconsideration, raising a credible prospect that one or more of the rejections will be reversed by the examiners". Oracle appears somewhat optimistic here, and if the case goes to trial next month, time is not on the side of those patents anyway.

I'm not sure that Judge Alsup will be satisfied with Oracle's offer. He really wants to streamline the case to reduce the burden on the jury but also in order to save court resources. He can't force Oracle to withdraw anything, but he can delay resolution of the case, and that gives him enormous leverage. Oracle's conditional offer to withdraw claims from three patents unless the USPTO reconsiders between now and a spring trial would serve the purpose of streamlining the trial but the judge might prefer an immediate withdrawal in order to simplify trial preparation (including some damages issues that remain controversial).

Moreover, while Oracle's brief gives various reasons for which the Gosling patent may still be salvaged, Judge Alsup is aware of the fact that any Oracle patent claim that was deemed invalid at the stage of a first Office action was also rejected in a final Office action. The Gosling patent could be different, especially since it's an "outlier" (it took far longer for the USPTO to issue a first Office action on that one than on the other six patents Google attacked).

Google argues that Oracle should withdraw irrevocably the three patents that stand rejected as of now (something that the court can't force Oracle to do, but it can make it a smart choice) and that the whole case shouldn't go to trial before the fall, allowing reexamination of the Gosling patent to run its course. Google predicts that final rejection of the Gosling patent will happen by the summer unless Oracle stalls.

Oracle notes that the reasons for the USPTO's preliminary rejection of the Gosling patent claims are different from Google's invalidity arguments presented in this litigation. While a table created by Oracle indicates that there are differences between the two sets of invalidity theories, the non-final rejections rely on two pieces of prior art ("Gries" and "Chaitin") that Google also raised (though Google apparently didn't reference "Chaitin" in connection with most of the claims, while the USPTO relied, at least in part, on Chaitin in connection with all of the six relevant claims). I doubt that this alleged "mismatch" will impress Judge Alsup too much.

I guess the judge will try to get Oracle to withdraw the Gosling patent as well. In that case, the case would be down to one patent, the '520 patent. Many patent trials involve only one patent (but that's because many patent lawsuits relate to only one patent at the outset). If Oracle wants a one-patent trial, it will get it. Judge Alsup could tell Oracle that the need to prepare for both a copyright and a patent trial will result in a delay, but so far that was not an issue.

With a view to streamlining, Oracle says that "in fairness and to further reduce the burden on the jury, the Court should encourage Google to withdraw with prejudice its invalidity defenses that failed in the reexaminations". Since the '520 patent will benefit from an enhanced presumption of validity, it's unlikely that Google can convince a jury that the patent is invalid, by clear and convincing evidence, if it raises the very arguments that failed in the reexamination. I think Oracle has a point.

The bottom line is that Oracle may have to make further concessions to the judge, but even if it didn't, a spring trial would make this case primarily a copyright and not a patent infringement matter.

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