Wednesday, September 26, 2012

Upcoming Wisconsin trial in Apple-Google FRAND case to be held without a jury

Last year, Apple brought FRAND counterclaims against Motorola's first ITC complaint, and since the ITC cannot adjudicate counterclaims, they were immediately removed to a district court -- in this case, the Western District of Wisconsin. Meanwhile Motorola Mobility has been acquired by Google, and Apple made significant headway when Judge Barbara Crabb, the federal judge presiding over this FRAND case in Wisconsin, granted key parts of an Apple motion for summary judgment on multiple issues.

In a filing with the ITC, Google unsurprisingly disagreed that this was a win for Apple, stressing the fact that Apple's antitrust claims were dismissed for a lack of damage beyond litigation costs. But with the court having found that Apple has contractual rights as a third-party beneficiary of Motorola's FRAND pledges to standard-setting organizations, Apple has a better opportunity than before to prevail on its breach-of-contract claims.

This FRAND case is relatively opaque, but at least the summary judgment process brought to light some of the claims, issues and arguments in the case.

In the ITC investigation, Apple has been cleared of violation of all patents-in-suit except a non-standard-essential one. The Wisconsin FRAND case nevertheless needs to be resolved. The issues Apple raises there are relevant regardless of whether it is actually found to infringe any Motorola SEP. The Google subsidiary is going to appeal the unfavorable parts of the final ITC ruling, just like it is appealing the FRAND-related part of Judge Posner's ruling. And it could bring new lawsuits over SEPs anytime.

A trial was scheduled a while ago to start on November 5, 2012, and it was originally going to be a jury trial. But on Monday, the following text entry showed up on the docket for this case:

Unopposed Motion for Bench Trial (Sealed Document) by Plaintiff Apple Inc.. Response due 10/1/2012.

The document itself was and still is sealed. But the headline is clear: Apple asked the court to hold the trial over the remaining issues without a jury, and Google's Motorola Mobility is fine with that request.

On Tuesday afternoon, Judge Crabb entered the following text-only order granting the motion:

"ORDER granting [255] Unopposed Motion for Bench Trial by Plaintiff Apple Inc. The parties are to comply with the requirements of the order in non-jury cases assigned to Judge Crabb that they received following the July 21, 2011 pretrial conference before Magistrate Judge Crocker. Signed by District Judge Barbara B. Crabb on 9/25/2012."

This is an interesting development. I believe that FRAND issues are even less amenable to jury trials than the technical issues relating to patent infringement and validity. I've previously expressed this opinion, especially in connection with Apple v. Samsung. But in a Seattle lawsuit over FRAND licensing obligations brought by Microsoft, Motorola Mobility recently spoke out against a bench trial (Microsoft argued that Motorola had already agreed to one at a hearing). That case in the Western District of Washington has some parallels to the Wisconsin Apple case. By coincidence, it is also scheduled to go to trial in November.

Since the losing parties in such high-profile cases always appeal, it may take some time before there is a final non-appealable ruling on the Apple-Motorola FRAND issues. Nevertheless, the upcoming Wisconsin trial will be a key milestone. In Germany, the only FRAND issue left to be sorted out between these parties is how much Apple will ultimately have to pay for its license to Motorola's wireless SEPs.

Motorola Mobility recently brought a second ITC complaint against Apple over seven patents, none of which appears to be standard-essential. Last week the ITC decided (as expected) to investigate this complaint. Yesterday Apple's counsel in that action notified the ITC of the appointment. Interestingly, that one is the first smartphone patent litigation (to the best of my knowledge) in which Apple is working with Sidley Austin, a firm that has already handled a number of Microsoft patent disputes. Apple's lead counsel in the second Motorola case, Sidley's ITC expert Brian Nester, is also defending Microsoft against a Motorola complaint. Apple is embroiled in so many lawsuits that it obviously needs to work with a growing number of top-tier law firms to handle all of this. There aren't too many litigators who have handled ITC cases in this industry, and this Sidley team in Washington DC now has a lot of experience in dealing with Google/Motorola. I thought this was worth noting, but except for the parties, it's unrelated to the Wisconsin FRAND action.

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