Tuesday, July 10, 2012

ITC denies review of decision that HTC cannot sue Apple over Google's patents

Not long after I published a blog post on what some recent filings tell about the structure of the Google-HTC patent deal that an ITC judge didn't recognize as an actual sale, the Commission, the six-member decision-making body at the top of the ITC, denied HTC's mid-June petition for a review of Administrative Law Judge Thomas Pender's ruling.

Here's the header of the notice (click on the image to enlarge):

The Commission's notice says that the issue of whether a joinder by one or more additional parties as co-complainants would cure the deficiencies of the relevant patent transfer agreement "is not yet ripe". At first sight, that keeps the door open, but there's also an indication (which I'll discuss further below) that an attempt to salvage the assertion of thsoe five Google patents would be quite likely to fail.

As the Commission notes, "there are no pending motions for joinder of these unidentified persons". There's no question that HTC would at least need Google to join the investigation as an additional plaintiff, but depending on the exact terms of the secret Google-HTC agreement, it's possible that a wider circle of parties would be needed (perhaps also the Open Handset Alliance and/or its members). The Commission notes that it "has not taken a position whether such other persons would have standing [...] and, if they do, whether it would be appropriate to join them at this stage of the investigation in view of, inter alia, HTC's delay in producing the Purchase Agreement". That sentence certainly doesn't encourage a motion to have Google (and possibly others) join. It comes unusually close, for a Commission notice, to an outright discouragement of such an attempt.

We're talking about a huge delay that HTC's lack of cooperation caused. In my previous post on this issue I already mentioned that HTC withheld it for five months after Apple requested it. Today's Commission notice mentions that "HTC included a copy of the Assignment with the Amended Complaint, but did not include the Purchase Agreement, even though the Assignment expressly stated that it was subject to the Purchase Agreement, and that in the event of any conflict between the two documents, the terms of the Purchase Agreement trump the Assignment". In other words, HTC started to withhold the document even before Apple formally requested it: it should have filed it along with the amended complaint, i.e., right when it asserted these patents. The Commission also confirms that "HTC continues to withhold, on the basis of privilege and work product protection, most of the documents and correspondence surrounding the Purchase Agreement." Given HTC's unwillingness to make such material available before, it's quite possible that any motion by Google (and others) to join the investigation at this point would be considered out of time, and dismissed.

It looks like Apple won't have to defend itself against those five Google patents anytime soon. I don't know if Google (and possibly others) will even ask for permission to join the investigation as co-complainants. From their perspective, the risk of a denial of their motion because of HTC's previous stalling is fairly high, but there could be some blowback from Apple at any rate. Since Apple and newly-acquired Google subsidiary Motorola Mobility are embroiled in litigation, the two companies are technically suing each other already, and Google's patent deal with HTC was another hostility on Google's part against Apple, but if Google asked to formally become a plaintiff against Apple (and not only through a wholly-owned subsidiary), I wouldn't be surprised if Apple responded in kind and sued Google itself over some patents that Android allegedly infringes.

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