Thursday, September 20, 2012

Microsoft wins third German injunction against Google's Motorola over high-power patent

Google just suffered a strategically very important defeat at the Munich I Regional Court, where Presiding Judge Dr. Peter Guntz just announced a ruling in Microsoft's favor against wholly-owned Google subsidiary Motorola Mobility. Judge Dr. Guntz explained that "the Android operating system" infringes the invention protected by claim 23 of EP1040406 on a "soft input panel system and method". Microsoft is also asserting the U.S. equivalent of this patent against Motorola in the Western District of Washington.

The patent covers a software architecture that allows applications to flexibly receive input from sources between the user may switch, such as an on-screen keyboard and voice input, without requiring the app itself to worry about the underlying functionality that provides this level of abstraction. Out of the hundreds of thousands of Android apps that exist, many if not most make use of the related operating system functionality.

In formal terms, Microsoft won two rulings, one against Motorola Mobility Inc. (the U.S. company that now belongs to Google) and another against its German subsidiary and a distribution organization, in each case with respect to the German market. The ruling is appealable, and there is no doubt that Google will appeal and request a stay of the injunction. But such stays are an exception and not the rule in Germany. Microsoft will certainly enforce and post a bond or make a deposit of 37.5 million euros for each of the two related rulings, or 75 million euros in total. For another 10 million euros each, Microsoft can also enforce a recall.

Judge Dr. Guntz explained that the court decided on this relatively large sum in recognition of the impact of this patent. In my opinion, this is by far and away the technically most impactful patent, apart from standard-essential patents, to have been enforced against anyone in the smartphone patent wars. The kinds of patents Apple has enforced so far, which are mostly multitouch-related, are much easier to work around than this one. It remains to be seen how long it will take Google to make the necessary changes. Absent a stay, it may have to temporarily pull out of the German market or do what Microsoft has been proposing to Motorola for years: take a royalty-bearing license to the industry's leading operating system patent portfolio.

Except for Motorola, all other leading Android device makers are already paying for a patent license from Microsoft and don't have to worry about the possibility of this patent being enforced against them. Otherwise it would now be quite easy for Microsoft to enforce the same patent against the likes of Samsung and HTC (it would formally have to bring new lawsuits against them, but it would be very likely to win).

Today's ruling is further validation of Microsoft's claim that Android infringes many of its patents. Microsoft previously won a U.S. import ban against Motorola over a meeting scheduler patent and two other German injunctions: one from the same Munich court over a multi-part text message (SMS) layer patent and one from the Mannheim Regional Court over a file system patent. The different kinds of functionalities covered by the four patents Microsoft has by now enforced against Android worldwide (with most of its claims not even having been adjudicated yet) speak to the diversity of Microsoft's patent portfolio.

In my report on the trial over the soft input panel patent (back in May) I already mentioned that claim 23 appeared to be infringed. Microsoft was also trying to enforce a second, narrower claim. Since the court did not hold Android to have a "management component" of the kind required by that other claim, it cleared Motorola of infringement of that one (a decision that Microsoft may also appeal). Furthermore, one of the accused devices was not proven to be sold in Germany, and while the court granted a recall of certain devices (smartphones and tablets), it denied Microsoft an order to destroy Motorola's infringing products since the enforced claim (claim 23) is a method claim. For those technical reasons, Microsoft has to pick up more than 60% of the costs of this lawsuit, but in commercial terms, Google is the big loser.

German patent injunctions that are structured like the one announced today relate to all devices that infringe a given patent claim. The ruling says that Motorola is barred from selling, promoting etc. devices that implement the technique covered by claim 23 of the soft input panel patent, "as it has occurred in the case of [a list of exemplary infringing devices". Under German law, any "kerngleicher VerstoƟ" (violation of the same "core") automatically falls within the scope of the injunction regardless of the name of a given Motorola product.

Today's winning law firm, Bardehle Pagenberg, also won Apple two Munich injunctions against Motorola and represented Microsoft in other litigations including the one that resulted in the multi-part text message layer patent injunction against Motorola Mobility. Bardehle's team in the Munich Microsoft cases was led by Dr. Tilman Mueller-Stoy. On the losing end today, like last week in Munich and last month in San Jose, is Quinn Emanuel, whose lawyers do great work but simply have a group of clients in the Android context who infringe too much and innovate too little.

A week ago, the Munich I Regional Court also ordered an injunction against Motorola Mobility over Apple's "overscroll bounce", or "rubber-banding", patent.

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