A year and a half after Google announced the acquisition of Motorola Mobility and declared its intent to force Microsoft (and Apple) into a comprehensive cross-license, there are no indications of Google getting serious leverage in any jurisdiction, while Microsoft continues to sign royalty-bearing license agreements with device makers choosing to address Android's infringement issues on their own.
It was clear from the beginning that Motorola's strongest patents were FRAND-pledged standard-essential patents (SEPs) that would -- and undoubtedly did -- raise antitrust issues, which limited the strategic impact of that part of Motorola's portfolio. In the meantime it has additionally turned out that Google signed certain license agreements long before the acquisition of Motorola Mobility that come with grant-back obligations in Microsoft's favor relating to patents held by companies Google acquired since -- most notably, Motorola.
In a FRAND determination action in the Western District of Washington an H.264 license agreement between patent pool firm MPEG LA (whose contributors include Microsoft and Apple) and Google may result in a finding that Motorola is entitled only to modest royalties from Microsoft for the use of its allegedly H.264-essential patents. This afternoon another license agreement Google once signed was discussed at a trial held by the Mannheim Regional Court over Motorola's German push notification patent lawsuit against Microsoft: a license to Microsoft's Exchange ActiveSync protocol that, like the MPEG LA agreement, comes with a grant-back obligation.
I'd be very surprised if Google won a favorable ruling. As a user of Outlook and Hotmail I don't anticipate being deprived of push notifications anytime soon. I believe the best result Google can realistically hope for is that the case gets stayed over doubts concerning the validity of the patent-in-suit, EP0847654 on a "multiple pager synchronization system and method". The potential implications of a Microsoft-Google ActiveSync license agreement lower the hurdle for a stay, as Judge Andreas Voss ("Voß" in German) told counsel today. In fact, I made a correction earlier today to last week's report on Judge Voss's order to stay a Samsung v. Apple SEP lawsuit: I had originally assumed that the case was stayed because the patent was considered highly likely to be invalid, but a lower probability was sufficient after Samsung withdrew its request for injunctive relief. Similarly, the EAS license agreement may be found by the court to preclude injunctive relief, making the case go away in its entirety or, alternatively, narrowing it to questions of past infringement during the period preceding Google's acquisition of Motorola Mobility.
The lower hurdle for a stay is just one of several reasons for which the Mannheim Regional Court can dismiss or stay Motorola's push notifications lawsuit against Microsoft without having to contradict in any way its order of an injunction against Apple over this patent almost precisely a year ago. In the Apple case, a stay was denied but the hurdle was that Apple needed to prove a high probability of invalidity. Microsoft now has a lower hurdle to meet, which would justify a different outcome (apart from other reasons such as prior art contentions that may not have been considered in the Apple case, the EAS license and prior user rights Microsoft claims because of an Exchange beta version that it says already implemented the claimed invention before the patent's priority date).
A final ruling on this action could have come down on May 11, 2012, following a mid-March trial, but the proceedings were restarted after the court determined that Microsoft had raised at the trial a reasonably credible prior user rights defense. So today's trial was already the second one, which is why it lasted only about an hour. The Mannheim court scheduled its next decision for April 19, 2013 -- interestingly, nine days after a hearing the Karlsruhe Higher Regional Court (whose circuit includes Mannheim) will hold on Apple's appeal against the ruling Motorola has been enforcing against the iCloud for almost a year. The Karlsruhe hearing could have implications for claim construction and the assessment of the probability of the patent being invalidated later this year by the Munich-based Bundespatentgericht (Federal Patent Court), where a nullity (invalidation) lawsuit is pending.
Microsoft has wind at its back in this litigation also because of a December 21, 2012 declaratory judgment decision it won from the High Court of England and Wales. The UK High Court found Google's (Motorola's) push patent obvious for four independent reasons (any one of which would be sufficient on its own to defeat this patent), and it agreed with Microsoft's claim that Motorola's push notifications patent falls within the scope of the grant-back clause of the EAS license. In other words, Google's case is dead in the water as far as the UK court, which denied Google the right to appeal, views this matter.
Microsoft's lead counsel in this Mannheim litigation, Freshfields Bruckhaus Deringer's Professor Peter Chrocziel, cited a paragraph from the Microsoft-Google license agreement according to which all Google patents (including Google's subsidiaries' patents) necessarily infringed by an implementation of the EAS protocol -- in this particular case, its DirectPush part -- must be licensed to Microsoft. Professor Chrocziel also explained that the EAS license agreement must be interpreted in accordance with the laws of the state of New York (he did not mention this, but the profile on his firm's website mentions that he's admitted to practice in New York), which the UK High Court also applied. Google's (Motorola's) lead counsel, Quinn Emanuel's Dr. Marcus Grosch, did not dispute the existence of this grant-back obligation but argued that technically one can implement EAS/DirectPush without implementing the claimed invention. This argument is, however, centered around the suggestion that EAS/DirectPush is limited to communication between only one server and one client -- while some DirectPush functionality (such as status updates marking an email as read on one client if it had been read on another) clearly requires the involvement of a plurality of clients. Judge Lembach, the court's rapporteur on this case, was wondering whether Google's interpretation of the term "necessary" was too narrow.
I have taken detailed notes of the technical and contract-related arguments. I may talk about this in more detail before or after the April 19 decision. I will also try to obtain a copy of the UK judgment. If I find one, I will upload it and discuss it in a separate blog post, in which I will then also elaborate in more detail on the technical parts of the discussion today.
The odds are fairly long against Google. Its infringement contentions in this case and certain passages cited today from the specifications of the ActiveSync protocol appear to match. In that case, the EAS license applies. If the case is narrowed to damages for past infringement, the hurdle for a stay will be lowered substantially, and the case will then be stayed if the Mannheim court concludes that at least one of the four invalidity theories underlying the UK ruling is likely to result in the invalidation of the German part of this European patent by the Federal Patent Court. Judge Voss pointed to differences in the UK court's approach to obviousness and the standard under German law, and he was being consistent with the position he took in other cases, but again, one out of four is all that Microsoft needs to prevail. Christian Appelt of the Boehmert & Boehmert firm, the patent attorney leading Microsoft's challenge to the validity of this patent in Germany, said that it's very unlikely that the German Federal Patent Court (and, in the event of an appeal, the Federal Court of Justice) would disagree with every one of the four theories based on which the UK High Court declared this patent invalid.
Google's use of the Exchange ActiveSync (EAS) protocol has recently been in the news because Google extended its support for new Windows Phone connections via Google Sync until July 31. I'm not familiar with any patent licensing questions that may or may not have a bearing on the Windows Phone/GoogleSync situation. No reference to this EAS-related matter was made at today's trial.
If you'd like to be updated on the smartphone patent disputes and other intellectual property matters I cover, please subscribe to my RSS feed (in the right-hand column) and/or follow me on Twitter @FOSSpatents and Google+.
Share with other professionals via LinkedIn: