When Judge Posner dismissed an Apple v. Motorola Mobility patent infringement lawsuit in Chicago about a month ago, I analyzed his decision in detail and agreed with him in many ways, though I also predicted that the parties would appeal -- which they did yesterday -- and warned that the Federal Circuit, which is quite patent-holder-friendly, might reverse parts of it. Actually, given the large number of claims at issue in that action and the fact that the Federal Circuit reverses at last part of an appealed ruling in more than 40% of all cases, it would be a statistical anomaly if each and every one of Judge Posner's decisions was affirmed.
I believe the FRAND part of the decision is much more robust, thus more likely to be affirmed, than the part relating to Apple's claims. Not only is it extremely well-reasoned but Judge Posner is much more of an expert in antitrust law than in patent law. He volunteered to preside over this case because he "enjoys" patent cases, and was sitting on a trial court "by designation", but as an appellate judge he never gets patent cases because they are all appealed to the Federal Circuit in Washington DC.
Apple and Google subsidiary Motorola Mobility have both decided to appeal every single decision that Judge Posner made that wasn't in their favor. They leave no stone unturned.
Apple appeals (what follows is a direct quote):
those portions of the Court's summary judgment and claim construction orders that were adverse to Apple (including without limitation Dkt. Nos. 176, 526, 556, 671, 691, 706, 724, 751, 767, 826 and 1005);
those portions of the Court's evidentiary orders (including without limitation Dkt. Nos. 960 and 980) that were adverse to Apple in excluding certain evidence Apple intended to offer;
those portions of the Court's May 22, 2012 Opinion and Order adverse to Apple in which the Court struck Apple's damages expert and underlying damages theories (Dkt. No. 956); and
those portions of the Court's June 22, 2012 Opinion and Order adverse to Apple granting summary judgment against Apple as it relates to (1) Apple’s damages theories and (2) Apple’s entitlement to an injunction with respect to the Apple patents (Dkt. No. 1038).
Google/Motorola appeals (again, this is a direct quote):
those portions of the Court's summary judgment and claim construction orders that were adverse to Motorola (including without limitation Order of May 20, 2012 not appearing on the docket and Dkt. Nos. 176, 526, 556, 671, 691, 751, 747, 767, 826, 1005, 1038);
those portions of the Court's evidentiary orders (including without limitation Dkt. Nos. 771, 747, 803, 830, 900, 958, 956, 980) that were adverse to Motorola in excluding certain evidence Motorola intended to offer or in precluding Motorola from supplementing its expert reports or record evidence;
the Court's order denying Motorola's motion to dismiss or transfer this case (including without limitation Dkt. Nos. 66);
those portions of the Court's May 22, 2012 Opinion and Order adverse to Motorola in which the Court struck Motorola's damages expert and underlying damages theories (Dkt. No. 956); and
those portions of the Court's June 22, 2012 Opinion and Order adverse to Motorola granting summary judgment against Motorola as it relates to (1) Motorola's damages theories and (2) Motorola's entitlement to an injunction with respect to the Motorola patents (Dkt. No. 1038).
In terms of possible effects of the appeal, both parties claim that they are entitled to judgment as a matter of law in their favor, but the issues they raise could also result in a new trial on some or all of the issues.
One possible outcome -- and it's not too unlikely -- would be for the Federal Circuit to determine that the parties should have been given more than one bite at the apple as far as their damages claims are concerned. Judge Posner's criticism of the parties' damages reports was well-reasoned as far as I can see, but he could have given the parties the benefit of his guidance as opposed to basically saying, "you had your chance to do it right and failed, tough luck for you". By contrast, Judge Alsup (who was not a particularly plaintiff-friendly judge) gave Oracle two chances for a do-over of its damages claims against Google. And while a complaint is a different type of filing than a damages report, I think Judge Sabraw in the Southern District of California did the right thing by telling Apple how to fix its Qualcomm-related patent exhaustion complaint against Motorola. It's in the interest of justice that parties get guidance from the court to state their claims, unless it can be ruled out that there is any merit to those claims (which was not the case in the Chicago action, where Judge Posner based his dismissal of Apple's claims only on "failure of proof", not on a definitive absence of merit).
The problem with Judge Posner's approach is that on the one hand he only gives one chance to make a plausible damages claim and on the other hand he won't grant an injunction unless that damages report provides a point of reference for the claim that monetary compensation is inadequate to make a right holder whole. If a patent holder makes a very conservative estimate, he can reduce the risk of his claims being thrown out, but he won't be too likely to obtain an injunction, which is the primary goal between such large players as Apple and Google (that's why they sue so much in Germany, where injunctions are readily available), though they obviously wouldn't leave money on the table. But if the patent holder writes up a damages report that could support the case for an injunction, there's a high risk of a dismissal. This puts patent holders in a very difficult position at the time of developing their damages claims, especially when the country's first and foremost expert on the intersection of law and economics, and an outspoken skeptic of information and communications technology patents, will be the reviewer.
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