Thursday, May 24, 2012

Microsoft defeats Google subsidiary Motorola again, wins German patent injunction

The Munich I Regional Court today ordered a German patent injunction against wholly-owned Google subsidiary Motorola Mobility because the Android operating system infringes EP1304891 on "communicating multi-part messages between cellular devices using a standardized interface". The ruling comes six days after the United States International Trade Commission (ITC) ordered an import ban against Android-based Motorola devices that infringe on a Microsoft patent on event scheduling, and less than 24 hours after a San Francisco jury felt that Oracle did not prove Google's infringement of two virtual machine patents (the most important part of that litigation, Google's liability for its proven infringement of 37 Java APIs, has yet to be adjudicated).

I attended the court session at which Judge Dr. Peter Guntz, the judge presiding over several Microsoft v. Motorola lawsuits in Munich, announced the decision. It was the world's first patent ruling against Motorola since Google closed the acquisition of the mobile device maker on Tuesday.

This sales ban is provisionally enforceable against a 25 million euro bond. Since this patent covers operating system-level functionality, the modifications "Googlorola" would have to make to Android to work around this ruling would lead to significant complications: Android apps that make use of Android's messaging layer would have to be rewritten, and some functionality that Android used to provide to app developers would have to be implemented by the affected applications themselves. This is different from the situation Motorola faced after Apple won two German injunctions over user interface features, which Motorola was able to work around with limited reengineering effort and without any effect on its application developer community. But Microsoft's patent is not standard-essential, so Motorola is not entitled to a license on FRAND terms.

Two weeks ago, I reported on the related trial and noted that Microsoft's trial lawyers from leading German patent (litigation and prosecution) firm Bardehle Pagenberg (lead counsel: Dr. Tilman Müller-Stoy; lead patent attorney: Peter K. Hess) were clearly making headway with this case.

As I reported, there are actually two cases over this patent. Today's ruling related to the one targeting MMI itself, which has legal responsibility for its German subsidiary. Tomorrow afternoon the court will also adjudicate the case in which the German subsidiary is defending itself against the same patent. That announcement was delayed for purely administrative reasons (some edits had to be made to the decision that the court didn't get done in time for today).

Earlier this month, Motorola won a couple of German injunctions against Microsoft over patents deemed essential to the H.264 video codec standard, but it isn't allowed to enforce it because of a preliminary injunction ordered by the United States District Court for the Western District of Washington.

Motorola also won a purely preliminary ruling -- actually, more of a recommendation than a ruling -- at the ITC that could theoretically lead to an import ban against the Xbox 360, but there's no final decision yet and Motorola itself conceded that the Seattle FRAND litigation that also bars Motorola from enforcing its German ruling may ultimately also take care of the largest part of the Xbox case.

Today, the Munich court also ruled on another Microsoft v. Motorola lawsuit. At issue in that litigation (here's my trial report) was a patent on multi-lingual computer programs.

Prior to the announcements, the Munich court held two trials over other Microsoft lawsuits against Motorola. I will report on those later this week (at the latest, this coming weekend). The court will adjudicate those lawsuits in late July.

Interestingly, it wasn't Microsoft's choice to litigate in Germany. While Microsoft was first to sue in the United States, Motorola sued Microsoft in Mannheim last summer. A few months later, Microsoft brought some German lawsuits of its own in response. Microsoft filed several lawsuits in Munich, and later also brought some assertions in Mannheim. On June 22, there will be two Microsoft v. Google-Motorola trials at the Mannheim Regional Court.

Google and many of its supporters blew out of proportion the significance of yesterday's verdict. Google can fend off some Android patent claims for some time, but not all of them for all time. Android's infringement problems are huge. I will talk about the strategic situation later today, or tomorrow, in a separate post. Simply put, the German situation now faces Google with the choice of being constructive and taking a royalty-bearing license from Microsoft for its intellectual property used by Android, leaving the German market (as far as Googlorola's own devices are concerned), and dealing with significant technical complications that will affect its app developer ecosystem as well as end users. In my mind, it's pretty clear that the first option is the one Google should choose. It's increasingly clear that its $12.5 billion purchase of Motorola Mobility doesn't buy Google a free pass for patent infringement. And trying to abuse FRAND patents in order to achieve a state of mutually assured destruction is not going to work either.

Most Android devices sold in the United States already have an Android (and Chrome) patent license from Microsoft. Major device makers like Samsung, HTC and LG have opted for legal certainty, and every ruling that Motorola loses against Microsoft validates their decisions to prefer licensing over litigation.

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