Yesterday it became discoverable that Judge Dana M. Sabraw of the United States District Court for the Southern District of California had dismissed Apple's declaratory judgment and antisuit injunction lawsuit against Google subsidiary Motorola Mobility. A hearing on Motorola's motion to dismiss took place the week before last.
At first sight, this is a major disappointment for Apple, which had already amended its complaint (which it originally brought in February 2012) once in order to address flaws raised by an earlier Motorola motion. But Apple is allowed to refile this lawsuit until August 3, and Judge Sabraw provided enough guidance that Apple's lawyers know what they have to do in order to bulletproof their case against the next motion to strike or dismiss.
Since this dispute involves a contract between Motorola and Qualcomm, a lot of related information is and remains confidential. Still it's known that Apple brought this case in order to prevent Motorola from attacking the iPhone 4S and any future Apple products that come with a Qualcomm baseband chip with patents that are implemented by a Qualcomm baseband chip. In my previous posts on this case, I explained this in more detail.
Apple's first claim is breach of contract. Originally, Motorola's attempt to shut down the iPhone 4S in Germany was key to this claim, but when Apple amended its complaint, it left out Germany. The order says that the German dispute has been "resolved", but I don't see any indication that the German dispute over Motorola's wireless-essential patents is over. All that happened is that the Karlsruhe Higher Regional Court stayed an injunction for the duration of the appeal because Apple offered to take a license to Motorola's SEPs on terms that the court felt Motorola could not reject without committing an antitrust violation. I doubt that Motorola accepted Apple's offer (I think this would have become known). Should Motorola have accepted Apple's offer, they're now just talking about the FRAND royalty rate. Assuming that Motorola has not accepted it, Apple may have simply determined that it was better to pursue the German appeal, and by excluding Germany from its Qualcomm-related patent exhaustion lawsuit, Apple presumably wanted to avoid that Motorola uses the pending U.S. lawsuit as an argument in any German court for an immediate injunction. Under the German Orange-Book-Standard procedure, implementers of standards have to act in compliance with the contract they offer to enter into even before their offer is accepted (which is not necessarily fair in a context like this one, but Apple may have decided not to take any risk).
With Germany being excluded from the exhaustion case in California, Judge Sabraw didn't see that Apple still had a claim that is "ripe" in terms of a claim that relates to a real issue as opposed to just a potential future issue. But he notes that a Motorola letter sent in January 2011 to Qualcomm in an effort to terminate the Motorola-Qualcomm patent deal with respect to Apple as a third-party customer was not used by Apple as a basis for this claim. He then says that "it appears Apple can amend the Complaint to state a claim". This basically suggests that Apple should base its breach-of-contract claim in the next iteration of its complaint on that Motorola letter to Qualcomm.
After the breach-of-contract claim, Apple brought two declaratory judgment requests. It asked the court to find that it is authorized to use Qualcomm components including the baseband chips at issue and that Motorola's relevant patent rights are exhausted (with the exception of Germany, which Apple decided to exclude). In this context, Apple actually does refer to Motorola's "termination" letter. Apple also mentioned that Motorola said in Germany that it had not yet challenged the iPhone&4S in a certain United States action for "tactical" reasons. And Apple pointed to Motorola's unwillingness to stipulate that it will not sue Apple for infringement based on its use of Qualcomm components (again, excluding Germany at this stage).
Apple's declaratory judgment requests were simply too broad and vague in Judge Sabraw's opinion. He quotes an Apple statement that defines the scope of the declaratory judgment it seeks much more narrowly than the first amended complaint did. The narrower description is mostly redacted. It has something to do with that January 2011 letter from Motorola to Qualcomm. Judge Sabraw essentially suggests that Apple should phrase its declaratory judgment requests in accordance with its "much narrower formulation of the requested relief".
Since Motorola argued that the request for an injunction is an unripe claim for the same reasons the underlying claims are unripe, Apple's request for a permanent antisuit injunction can also be amended.
Short of attaching a proposal for an amended complaint to his order, Judge Sabraw has done what he could do to make it easy for Apple to meet the requirements for justiciable claims. If Apple heeds his advice, it will only have lost a limited amount of time, and its case will then go forward.
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