Sunday, May 27, 2012

Motorola's German patent problem may exacerbate with two rulings in late July

In light of the German patent injunction Microsoft won against Google's Motorola on Thursday only six days after it obtained an ITC import ban, I agree with CNET's Roger Cheng that "a settlement has to be something both sides are weighing heavily". Google may like to claim that Android is "free", but courts in multiple jurisdictions have already found Android to infringe third-party patents, so there's a problem that needs to be solved somehow. Thus far, no one has presented a viable path other than licensing (whoever comes up with a better idea should file for a patent on it).

In my report on Thursday I mentioned that the Munich I Regional Court also held trials on a couple of other Microsoft v. Motorola lawsuits. In practical terms, we're talking about two patent infringement lawsuits, though formally (due to administrative delays in cross-border service of complaints) there are separate lawsuits targeting Motorola's German subsidiary on the one hand and its U.S. parent company on the other hand.

Decisions on those matters will be made on July 26, 2012. There could be rulings or stays pending parallel nullity proceedings. It appears that these cases will likely be adjucated in two months since the key questions are on the infringement side, though Motorola is also challenging the validity of those patents.

In the following, I will summarize the key questions that came up at the Thursday trials.

EP1040406 on a "soft input panel system and method"

A first hearing concerning this patent, which covers a certain way to manage multiple input methods (such as on-screen keyboards or voice input) took place in mid-February.

What's truly remarkable about Judge Dr. Peter Guntz' court -- and was again apparent at this trial -- is its open-mindedness that gives litigants a chance to make their case even on issues that the court views very skeptically prior to a hearing. All courts should be open-minded, and most courts, including in Germany, are. But sometimes it's hard to tell whether a party's counsel gets the chance to make a certain point only for the sake of due process or whether a court tirelessly seeks to understand deeply technical issues.

The Munich court holds at least two hearings on each case, and sometimes three, before a decision, while other German courts typically hold only one. Motorola, which usually sues in Mannheim, complained on Thursday that Microsoft's counsel presented new arguments at each hearing, and the fact that the Munich court looks at cases from potentially different angles at different hearings is certainly a challenge, especially for defendants who should be able to react promptly.

In his introductory remarks, Judge Dr. Guntz explained that Android appears to practice every limitation of claim 1 of this patent except for having the "management component" that is also disclosed. It was clear that Microsoft's counsel faced a very significant challenge (to say the least) to argue that Android has a management component that meets the criteria specified in the patent. But at the end of the trial I felt that any outcome with respect to claim 1 was still possible.

There was no dispute that Android has different components that collectively perform what the disclosed "management component" is supposed to do. The question was only whether different bits and pieces of Android's code perform the functions of that "management component" in a manner that cannot be considered sufficiently coherent to meet the relevant limitation. Microsoft's counsel argued that software components aren't necessarily monolithic and can't be compared to physical components in, for example, a mechanical invention, while Motorola's counsel argued that Android doesn't have such a "management component" since the outermost limit of a component is where one process ends and another process begins. In today's technological environment Motorola's proposed boundary would be unthinkable, but even at the time when the patent was filed, inter-process communication was well-known. Also, when we're talking about different "processes" running on a smartphone or tablet computer, we're not even talking about a truly distributed environment but just about what happens inside a single device.

Even if Motorola defended itself against claim 1, it would still have to fend off claim 23, which is another independent claim that doesn't disclose a "management component". Motorola argues that the architecture implied by claim 1 should also influence the way in which claim 23 has to be understood. The court didn't give a clear indication and listened patiently, but Microsoft's counsel made some points about the claim structure that I felt made more sense in light of general claim construction principles.

EP0651328 on an "event architecture for system management in an operating system"

This was the court's third discussion of this patent with these two parties. I reported on a mid-April hearing at which it was apparent that Microsoft's counsel had made significant headway since a first hearing in December. On Thursday, Microsoft again appeared to be closer to winning, though this is too close to call. The only thing that's certain is that an infringement finding is now a realistic possibility. That's why the court also took another look at Motorola's argument that the case should be stayed pending a parallel nullity action.

The technical issue that the court viewed differently on Thursday from a preliminary assessment in April is that the passing of an interface pointer between objects does occur in Android: it's just that the pointer isn't passed between existing objects but at construction time. The court hasn't decided yet whether the patent claim language has scope for this, but that may be the conclusion in the end.

The discussion of this infringement theory resulted in a disagreement of fact between the parties concerning whether a certain static method returns a particular pointer. That is rather unusual. Typically, the parties disagree on whether undisputed facts fall within the legal scope of a patent claim.

I'm sure this factual disagreement will be sorted out swiftly. The court also appears to be optimistic that this factual dispute won't be relevant or that clarification can be provided very soon. That's why the decision remains scheduled for July 26, 2012 (the same target date as for the decision on the soft input panel patent).

That announcement will be one of the more interesting ones, unless the parties can reach an agreement within two months. Now that Google is in full control of Motorola Mobility, any discussions between Motorola and Microsoft (as well as those between Motorola and Apple) can be held without uncertainty about the "Googlorola" merger.

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