Thursday, March 21, 2013

Qualcomm and BlackBerry back Google against Judge Posner and Apple on FRAND patents

Nine months after Judge Posner's dismissal of a two-way Apple-Motorola lawsuit in Chicago, the appellate proceedings before the Federal Circuit have reached the stage at which the focus is on the most important part of his decision -- the one relating to FRAND-pledged standard-essential patents (SEPs). The first companies to submit amicus curiae briefs in support of Judge Posner's FRAND ruling favoring Apple were Intel and Microsoft, as I reported yesterday. Subsequently Apple also received support from a group of four law professors with a particular focus on IP and competition issues and from BSA | The Software Alliance (previously known as the "Business Software Alliance", hence BSA). Google's defense of SEP-based injunctions is backed by Qualcomm and the BlackBerry company (Research In Motion, which is now doing business as "BlackBerry" and not only selling products under that brand). BlackBerry claims to support neither party, meaning that only one (!) amicus brief in support of Google's anti-FRAND position was filed in a formal sense (versus four in Apple's favor), but BlackBerry's motion for leave (discussed and published further below) indicates that it's Google-aligned in the SEP context.

Below I'll provide a quick overview of the new filings. Judge Posner and Apple's pro-FRAND positions clearly have much more broadbased support than Google's SEP abuser-friendly stance. With the greatest respect, Microsoft and Intel's filing outweigh the Qualcomm and BlackBerry submissions, and with its broadbased membership the BSA undoubtedly has massive weight. What's particularly interesting is that Cisco and HP, which are clearly on the pro-FRAND side, have afforded the luxury to focus in their submission (which they made last year together with a number of other companies) on the question of damages (for SEPs as well as non-SEPs) because they apparently knew that there wasn't going to be a shortage of support for Judge Posner and Apple on the issue of injunctive relief.

Before I go into detail, here's a list of links that take you directly to the different sections of this post:

BSA | The Software Alliance supports Judge Posner and Apple

The headline of the BSA filing says that the organization supports Plaintiff-Appellant, which is Apple in this cross-appeal, even though Google is from a practical point of view the plaintiff and appellant with respect to the FRAND part of Judge Posner's ruling (Google is asserting SEPs and wants Judge Posner's ruling reversed as far as FRAND is concerned).

The BSA's members include (in alphabetical order) Adobe, Apple, Autodesk, Bentley Systems, CA technologies, CNC Software - Mastercam, IBM, Intel, Intuit, McAfee, Microsoft, Minitab, Oracle, Progress Software, PTC, Quest Software, Rosetta Stone, Siemens PLM Software, Symantec, TechSmith and The MathWorks. They collectively represent a high percentage of U.S. investment in software development, which dwarfs whatever Google and its Android hardware partners spend on software-related R&D.

Even if (which we won't know until the brief is public) a small minority of its members distanced itself from the organization on this issue, its support of FRAND reflects consensus in the software industry. The fact that Apple is itself a member of the BSA doesn't mean much. A group like this wouldn't take a position -- especially when such a fundamental issue is at stake -- only to please one of many members, albeit a large one. Google is a member of countless industry organizations but apparently wasn't able to drum up support from even one of them, which is not for a lack of mobilization (Google is usually pretty good at that) but because its positions on SEPs run counter to what benefits the industry at large (as well as the wider economy and, last not least, consumers).

Law professors support Judge Posner and Apple

Four law professors jointly filed an amicus curiae brief "in Support of Apple Inc. and Affirmance in Motorola, Inc.'s Cross-Appeal [i.e., the FRAND part of the case]":

  • Professor Thomas F. Cotter (University of Minnesota Law Schoo)

    "Professor Cotter's principal research and teaching interests are in the fields of domestic and international intellectual property law, antitrust, and law and economics."

  • Professor Shubha Ghosh (University of Wisconsin Law School)

    "He has authored over fifty scholarly articles and book chapters as well as several books in the fields of intellectual property, competition law and policy, international law, and legal theory." (Some of his writings focus on how to balance private intellectual property rights with the public interest in competition and innovation.)

  • Assistant Professor A. Christal Sheppard (University of Nebraska College of Law)

    Her aresa of expertise also include the "Intersection of Intellectual Property and Antitrust". She interned with then-Judge Rader, who is now the Chief Judge of the Federal Circuit.

  • Professor Katherine J. Strandburg (New York University School of Law)

    She, too, focuses on balancing IPRs with the public interest. That's what all four law professors who made this joint submission have in common. Interestingly, Professor Standburg is working on a publication entitled "Patent Fair Use 2.0".

Qualcomm opposes Judge Posner, supports Google

Qualcomm filed a brief "in Support of Reversal" of Judge Posner's FRAND decision. This is the world's largest SEP-centric company, and its use of SEPs has previously drawn antitrust scrutiny. Qualcomm's submissions on SEPs are usually the most aggressive ones, and once its filing in this case becomes publicly accessible, I'm sure we'll all see that no one contradicts Judge Posner in stronger terms than Qualcomm.

Qualcomm already threatened (between the lines, but clearly) the Federal Trade Commission with a judicial challenge if it applied its approach to the Google-Motorola SEP case more broadly.

Qualcomm already wanted to support Google (Motorola) against Apple through a filing it made with the ITC in December 2012, but its brief was full of Apple-bashing and Qualcomm's senior management decided to withdraw it, saying it had not been duly authorized. Apple is a major Qualcomm customer, but Qualcomm also does a lot of business with the Android ecosystem, and apart from any customer relationships, its business simply depends a whole lot on the enforceability of SEPs. It rarely has to enforce, but it wants to be able to threaten with strong enforcement.

BlackBerry officially supports neither party, but clearly opposes Judge Posner and substantively sides with Google)

This is the title of the BlackBerry submission:


The motion for leave to file that brief clarifies that Research In Motion is doing business as BlackBerry and subsequently refers to the company by that name. One sentence in the motion proves that a more proper description of BlackBerry's position would have been "[in] support of reversal":

"In BlackBerry’s view, however, that balance [between private and public interest in SEPs] would be threatened by a categorical rule against injunctions, such as that announced by the district court below."

In two filings with the ITC (1, 2), which it later also submitted to the FTC in connection with the envisioned Google consent decree, the BlackBerry company previously outlined its thinking on SEP-based injunctions. It described SEP injunctions as "procompetitive" if their purpose is to create a general stalemate in all patent litigation involving non-SEPs if the company with weaker non-SEPs can use its SEPs to block the non-SEP enforcer's sales. This is consistent with what Google's antitrust lawyers are saying all the time -- that the whole Google SEP problem wouldn't be there if Apple and Microsoft had never enforced non-SEPs.

No judge or authority has ever adopted RIM's proposal to condone SEP-based injunctions if they're part of a wider disputing involving non-SEPs. So far the FTC and the ITC as well as federal courts have looked at these issues separately. RIM is also unlikely to get support from the Federal Circuit. The Federal Circuit is pro-IP. It may ultimately agree with Judge Posner, Apple and others that the patent regime can only function if the pursuit of injunctions is limited by SEP-specific antitrust considerations. But I believe it won't ever agree with RIM that SEPs should be used to neutralize non-SEPS because that would be the end of patent enforcement among large players in this industry (all of whom have SEPs that they could use to reach the point of mutually assured destruction). BlackBerry's non-starter proposal would be tantamount not only to the end of patent enforcement among large players but also to the abolition of SEP-related antitrust law.

This is BlackBerry's motion (note that it's only a request for permission to file an amicus brief, but not the actual brief):

13-03-20 BlackBerry Motion for Leave to File Amicus Brief Against Judge Posner

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