Friday, July 27, 2012

With German FAT patent ruling, Microsoft scores third court victory over Google in as many months

This morning, Judge Andreas Voss ("Voß" in German) of the Mannheim Regional Court, who has already presided over more smartphone-related patent lawsuits than any other judge in the world, announced a ruling in Microsoft's favor against Google subsidiary Motorola Mobility. Motorola's Android-based devices have been found to infringe a File Allocation Table (FAT) patent: EP0618540 on a "common name space for long and short filenames".

Microsoft won multiple remedies including an injunction (which is not self-executing, but Microsoft can enforce it against a 10 million euro bond), a recall of infringing products from retail, and damages (the amount of which will have to be determined).

As I'll explain further below, a Linus Torvalds email that Motorola cited as prior art didn't ultimately persuade the court to stay this case for the duration of a parallel nullity action in the Federal Patent Court.

This is already the third patent ruling in Microsoft's favor against Motorola Mobility. On a worldwide basis, ten Apple and Microsoft software patents have now been deemed valid and infringed by Android-based devices. In addition, certain Android-based Samsung devices have been held to infringe two Apple design patents. Or if you add up the two categories of patents, we're now talking about a dozen patents.

Motorola Mobility is the only major Android device maker to refuse to take a royalty-bearing patent license from Microsoft. For example, more than 70% of Android devices sold in the United States have a license from Microsoft. Earler this month, Microsoft announced two more sign-ups (1, 2). Those licensees, which include the undisputed market leader Samsung as well as other major players like HTC, don't have to worry about possibly being sued by Microsoft. But Google appears to be fundamentally opposed to the concept of inbound licensing, though it's simply the way industry players commonly address patent infringement issues. With every licensee that Microsoft signs up and every court ruling that Microsoft wins, Google's ability to dissuade other Android device makers from signing a license agreement is further impaired, no matter how often Google chairman Eric Schmidt argues that Google, not Microsoft, created Android. Patent law doesn't work the way Mr. Schmidt implies.

If today's ruling is enforced, Motorola Mobility will have to switch to a different file system (Linux offers various options) and, more importantly, its customers (who buy future products designed to work around this injunction, or who bought them before but download future system software updates) will experience a significant loss of convenience in connection with file transfers from and to their devices. As a Samsumg customer, I will continue to be able to simply plug my phone, with a USB cable, into my PC and read and write files to the phone like to any external storage medium. That's how I usually download photos or audio recordings.

In connection with the technical implications of the decision, I'd like to point out that Judge Voss said at last month's trial that this patent does not have the exclusionary effect of a standard-essential one because there are other ways of organizing files. He gave Motorola Mobility one last chance to raise a FRAND defense, but its counsel remained silent. The court raised this issue in connection with the economic impact of this case, based on which the court determines its own fees and the attorneys' fees to be reimbursed by the losing party.

The patent will expire in early 2014, and Motorola Mobility will definitely appeal today's decision and ask the appeals court, the Karlsruhe Higher Regional Court, for a stay of the injunction. But it won't be particularly easy for Motorola to win a stay since the Federal Court of Justice upheld this patent two years ago. While the prior art that was presented back then differs from the references cited in the Motorola case,. any patent that survives a contentious inter partes proceeding enjoys an enhanced presumption of validity.

In its efforts to win a stay of the infringement proceeding in Mannheim, Motorola Mobility relied primarily on an email that Linus Torvalds posted to a mailing list in the early 1990s. The ITC (which also found the patent infringed by Motorola's Android-based devices) didn't overturn an Administrative Law Judge's finding that the Torvalds email, in combination with another prior art reference, rendered the patent "obvious" in his rather surprising opinion. Microsoft has appealed various parts of the ITC ruling, without a doubt including the one concerning the validity of the FAT patent; Motorola Mobility also appealed the decision, for a different set of reasons.

In Germany, district courts are very reluctant to make a determination on obviousness. In almost all of the cases in which they stay infringement actions, they do so because they feel strongly that some prior art anticipated (and retroactively renders non-novel) the patented invention before it was applied for. Judge Voss recalled this fact on the occasion of today's announcement. He said that the court didn't rule out that this patent may ultimately be deemed invalid, but Motorola Mobility did not meet the threshold for a stay, which is that the court would have to consider it highly probable that the patent will be invalidated (the numerical equivalent would be a probability of 80% or greater).

Microsoft and Motorola Mobility have brought a number of lawsuits against each other in the United States, Germany, and (for purely defensive purposes) the UK. Yesterday, the Munich I Regional Court cleared Motorola Mobility of infringement of a Microsoft patent on an event management architecture. But Microsoft previously won a U.S. import ban against Motorola Mobility's Android-based devices implementing an event scheduler feature (that import ban has meanwhile taken effect and presumably required Motorola to remove a feature that its licensed competitors can still provide) and a German injunction over a patent on a multi-part text message (SMS) layer.

Prior to today's ruling, courts in different jurisdictions already found numerous Android-based devices to infringe 11 valid Apple and Microsoft patents.

If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.

Share with other professionals via LinkedIn: