Thursday, December 13, 2012

Judge Koh declines to rule on Apple's FRAND defenses against Samsung for lack of a need

Judge Lucy Koh, the federal judge presiding over two Apple v. Samsung lawsuits in the Northern District of California, has just issued her first ruling on issues raised at the post-trial hearing held a week ago (on December 6, 2012). It isn't even a ruling in a narrow sense: the order just explains that the court declines to adjudicate Apple's non-jury FRAND defenses (under the doctrines of waiver, equitable estoppel, and unclean hands) and counterclaims even though it has jurisdiction over them.

Apple wanted a decision, and it was hoping to render certain Samsung patents entirely unenforceable beyond this case. But Judge Koh didn't want to rule on issues that are, for the time being, not outcome-determinative because the jury didn't find Apple to infringe any of Samsung's asserted standard-essential patents. The issues aren't moot in a technical sense, but a decision on them wouldn't make a difference for the purposes of the case at hand, which is large and complex enough all by itself. The theory cited by Judge Koh is the one of prudential mootness (the notion of an issue being the next best thing to moot, making it an inefficient use of court resources to spend time on them). Should the court overrule the jury to the effect that any infringement of valid Samsung SEPs is identified, Apple's FRAND defenses and non-jury counterclaims would be looked at -- but not under the current circumstances.

The order indicates that both parties agreed with the court's approach at the recent hearing. It's obvious that Samsung wouldn't want a decision, but Apple apparently agreed as well that "the equitable defenses no longer present a live issue between the two parties in this case, and that the only effect of a ruling on Apple's claims would come through collateral estoppel in future cases" and that "while this Court does have subject matter jurisdiction to decide the equitable defenses, it would be within this Court's discretion to not decide these issues until they are before the Court as a live controversy".

One of the reasons for which the adjudication of these defenses could have been time-consuming is that Samsung's FRAND pledge to the Eureopan Telecommunication Standards Institute (ETSI) must be interpreted under French law.

This procedural decision doesn't weaken Apple's or anyone else's FRAND defenses and claims. The whole reasoning is based on the circumstance of Samsung's failure to prevail on its infringement claims (for now, prior to a decision that might overrule the jury). This is different from the recent dismissal of a FRAND contract action against Motorola Mobility in the Western District of Wisconsin, which was not tied to the merits of any particular infringement allegation. However, today's California order and the recent Wisconsin case, which was ultimately dismissed without prejudice, have one thing in common: they both allow Apple to pursue its FRAND defenses and claims if and when it needs to do so against Samsung and, respectively, Motorola Mobility.

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