Tuesday, October 2, 2012

Apple urges court to move ahead with at least 6 of 32 patents waiting for HTC in Delaware

31 months ago to the day, Apple started its patent enforcement effort against Android, which has already been quite successful and is enjoying significant momentum, by suing HTC. But the headway that Apple made was mostly against Samsung, and against Motorola Mobility in three cases in Munich, Germany. The Motorola dispute started more than seven months after the initial filings against HTC, and the Samsung spat well over a year after Steve Jobs dropped the gauntlet to Google and told Eric Schmidt in a private meeting that he wanted Mountain View to stop using Apple's ideas in Android. But the first target, HTC, has so far come away nearly unscathed. It currently has to work around only one U.S. patent held by Apple.

HTC has been unbelievably effective in its efforts to stall Apple's enforcement. It made some smart tactical choices, and it was lucky. Out of the 20 U.S. patents Apple asserted in March 2010 (and the total of 32 U.S. patents Apple has so far asserted against HTC in the initial and subsequent complaints), only four have come to judgment. In a recent post on HTC's latest motion to stay claims over six patents that Apple originally asserted in Florida earlier this year I described the procedural twists and turns that have effectively provided mid-term immunity to HTC from Apple's patent claims, especially an unprecedented, sweeping stay of multiple actions that the United States District Court for the District of Delaware.

Yesterday Apple replied to the aforementioned latest motion for a Delaware stay. Apple's motion implores the court to have mercy on Apple and to go ahead with at least the six patents at issue in this particular case. Apple's filing addresses HTC's case-specific arguments but mostly focuses on the broader picture. Apple vents frustration about the overall situation, accurately noting that "HTC's transfer-and-stay strategy treats [the Delaware-based court] as a dumping ground for Apple's offensive cases". And if even HTC's latest motion for a stay succeeds, "it is difficult to imagine what claims Apple could bring that HTC would not contend should be transferred to this Court and stayed".

Apple explains that the stay requested by HTC "would likely be in place at least through the summer of 2014", given that the target date in the ITC investigation whose resolution HTC wants the Delaware court to wait for is next spring and "Federal Circuit appeals from ITC determinations typically take well over a year".

Also, Apple provides a table that compares the alleged overlap between that ITC investigation (over a set of different patents) and the six ex-Florida patents to any overlaps that Samsung could have alleged between the California claims that went to trial this summer and Apple's ITC complaint against Samsung. This is one of various things Apple's filing explains in order to show to the Delaware court that there must be a limit to how many cases over non-ITC patents a defendant can get stayed by pointing to the alleged efficiency gains from waiting for resolution of an ITC investigation. Defendants have a statutory right to ask for a stay of companion lawsuits that merely mirror ITC complaints -- but the Delaware court surprisingly sided with HTC last year when it wanted all of Apple's federal lawsuits pending at the time stayed, even though some of those cases were unrelated to Apple's ITC patents. Apple employs a metaphor in saying that "HTC’s theory treats its stay request like a virus, jumping from one patent to the next through a chain of fleeting associations", which Apple calls a "communicable-disease theory of stays" that it asks the court to reject.

The Google-Android (and Motorola) connection

In connection with the competitive harm Apple suffers from infringing competing products, Apple's brief indicates clearly that this is not just about Apple and HTC but very much about Google and Android:

"[T]his competition extends beyond the devices themselves: Apple’s iPhone and iPad and the accused HTC products are each used to access competing ecosystems of online stores, applications, and media. As one example, the Accused HTC products use the Google Play Store and Play Music applications to purchase and download applications (such as games), music, and other media [...]. These functionalities are precisely what is accused of infringing the '332 patent. [...] The Play Store and Music applications were released after, and compete with, Apple's pioneering App Store and iTunes Store."

In support of its argument that "the smartphone industry is one in which justice delayed is truly justice denied" (because it is "large and is characterized by fierce competition, short product lifecycles, and the constant introduction of new features"), Apple quotes Google's counsel in the Oracle litigation in California, who said that smartphone are like "cabbage" and have a shelf life of "about six months", pointing to the fact that the same law firm, Keker   van Nest, is HTC's counsel in the ITC investigation of Apple's second complaint (i.e., the investigation based on which HTC is moving for a stay).

The Google connection is also at the heart of Apple's argument that the Delaware court should at least transfer the case back to Florida "for all proceedings through Markman [i.e., claim construction]" rather than stay it. In Florida, Apple is still embroiled in litigation with Motorola, and the six patents HTC's latest motion for a stay relates to are being litigated against the Google subsidiary in Florida. Apple argues that two of its patents are asserted against "specific Android applications" (Maps, Play Store, and Android Market), which are "distributed by Google to HTC and Motorola as completed software", while the other four patents-in-suit "are asserted against, among other things, the same Android software that both HTC and Motorola receive from Google". This makes Google the most important third party to provide witnesses to both cases, and Apple therefore suggests that "depositions of Apple and third-party (e.g., Google) witnesses could be coordinated between the cases so they need only occur once, to minimize the burden on witnesses".

And even on the last page of its filing, Apple stresses the extent to which its lawsuits against HTC are about Google and Android:

"Apple’s $1 billion jury verdict against Samsung stands as an unshakeable testament to both the importance of Apple's claims against its Android competitors, and the power of an efficient district court trial to resolve such claims."

This is, by the way, consistent with something I said after the California verdict. In a number of interviews in the days and weeks after that verdict I said that Apple would leverage that huge breakthrough in order to, among other things, accelerate its intellectual property enforcement against Samsung as well as other Android device makers. The Delaware court can still order a stay, but I think Apple has made some very good points that show how inequitable such a stay would be.

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