Tuesday, October 2, 2012

Google's Motorola Mobility withdraws its entire second ITC complaint against Apple

In one of the most surprising developments in the ongoing smartphone patent disputes, Google subsidiary Motorola Mobility has just withdrawn its second ITC complaint against Apple. The complaint was filed in mid-AugustY (a week before the Apple v. Samsung billion-dollar jury verdict) over seven non-standard-essential patents. Two weeks ago, the ITC announced its expected decision to formally investigate the complaint.

Here's the text of Google's (Motorola's) filing:


Under 19 C.F.R. § 210.21(a), Complainants Motorola Mobility LLC, Motorola Mobility Ireland, and Motorola Mobility International Limited (collectively, 'Motorola') hereby move to terminate all claims in this investigation without prejudice based on Motorola's withdrawal of the complaint, with Motorola and Apple each bearing their own costs and attorneys' fees. There are no agreements between Motorola and Apple, written or oral, express or implied, concerning the subject matter of this investigation. Respondent Apple Inc. and the Office of Unfair Import Investigations Staff Attorney have confirmed that they do not oppose this motion.

The simplest explanation for a motion like the above would be a global settlement deal between the parties. But dismissals in such situation are usually with prejudice. Also, note the passage saying that "here are no agreements between Motorola and Apple, written or oral, express or implied, concerning the subject matter of this investigation". The ITC has strict requirements that settlements must be disclosed to it in full detail. The ITC requires parties to make truthful representations in that regard.

Just yesterday, the case was reassigned to Administrative Law Judge Theodore Essex. Judge Essex was also in charge of the investigation of Microsoft's ITC complaint against Motorola and of some other recent cases. In my observation, he doesn't make things easy for complainants. Maybe it's not just a coincidence that Motorola withdrew its complaint shortly after his appointment.

Another issue that could play a role here is that Motorola was having problems with tracking down all of the documents related to some of its patents-in-suit. By the time it filed its complaint, it did not have certified copies of all of the relevant documents (patent documents, prosecution history documents, assignment documents) attached. Maybe Motorola realized that it proceeded too hastily with its initial complaint and that this could be outcome-determinative in Apple's favor, especially with a very strict judge such as Mr. Essex. Maybe Motorola will refile its complaint once it has obtained all of the document. There could also be problems with the legal process involving some of the patents, so if Motorola reasserts some of these patents, it may actually decide not to pursue its claims concerning some others.

Also, Motorola's first ITC complaint was recently remanded (by the six-member Commission, the top decision-making body of the ITC) to a judge. The remand could have resulted in a consolidation of the remanded case and the newly-filed one, delaying resolution of the ITC's perspective on the sole remaining patent in the first investigation. For the remand investigation, Judge Pender today set a target date of April 22, 2013, while the new investigation wasn't going to be resolved before 2014.

I have checked on the dockets of a couple of federal lawsuits pending between the parties, and there are no signs of withdrawals or an impending settlement there.

This could still be a unilateral goodwill gesture on Google's part toward Apple if high-level settlement talks are progressing well. But it could also be a tactical decision involving a plan to reassert the same claims in a federal court. For now I think it's more likely than not that Google identified some reasons for which this complaint was unlikely to succeed at the ITC, and that its overall fight with Apple is continuing as usual. Withdrawals at such a very early stage of an investigation are really unusual -- two weeks into an investigation that was scheduled to take at least 16 months.

For now it remains a mystery what has led Google to withdraw an entire ITC complaint. I provided some possible reasons above, and it could be one of them or a completely different one. Maybe one or both of the parties will shed some light on the reasons behind this surprise withdrawal when they comment on this filing that was made yesterday and entered the public record today.

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