Friday, May 3, 2013

Federal Circuit denies Google motion to terminate Apple's appeal of Wisconsin rate-setting dismissal

Google, which has recently suffered far more (and more important) losses than wins in the ongoing smartphone patent disputes, has just failed with its initiative to dismiss Apple's appeal of the dismissal of a FRAND determination action in the Western District of Wisconsin (and Google's related cross-appeal) or, in the alternative, to transfer the cross-appeal to the Seventh Circuit (Judge Posner's court). In an order that issued this morning, the United States Court of Appeals for the Federal Circuit states that it "deems it the better course to deny the motion and for the parties to address this court's jurisdiction in their briefs".

The order denies Google's (Motorola's) motion and directs the parties "to discuss the jurisdictional issues in their briefs". Apple's opening brief will be due in 21 days.

While it's still possible that the jurisdictional issues raised by Google's Motorola prove outcome-determinative, the fact that Apple successfully opposed the motion to dismiss or transfer indicates that the case will probably be decided on its merits.

In my previous post I listed the three most important smartphone-related appeals that are ongoing. This appeal of the Wisconsin dismissal is the fourth-most important one in my opinion. It's less important than the other three because it's mostly about the dismissal (though it will also be interesting to see Google fight against certain summary judgment decisions favoring Apple). Still, it's somewhat important, too. The envisioned FTC-Google consent order requires implementers of standards to bring a FRAND determination action in order to unilaterally eliminate the threat of injunctive relief. Apple doesn't have to fear that its products will be banned in the United States over Motorola's standard-essential patents. But it would presumably like to get this matter clarified sooner rather than later, and that's why it seeks to overturn the dismissal. It will also be interesting to see whether Apple re-raises the theory of an enforceable options contract (meaning that a court can order the specific performance of a SEP holder to make a FRAND licensing offer even if the implementer doesn't unconditionally commit to taking a license on court-determined terms), which came up in the aftermath of Judge Crabb's dismissal of the Wisconsin case, and if so, what the court will think of it. This will be relevant not only to Apple but also to numerous other industry players large and small.

Jurisdictional issues will also have to be addressed in connection with Apple and Google's cross-appeal of Judge Posner's ruling. I mentioned in March that Microsoft's amicus curiae brief says certain issues are "not properly before" the Federal Circuit in this case. In a brief filed on April 25, defending the FRAND part of Judge Posner's ruling, Apple raises the question of whether the appeals court should even rule on the question of injunctive relief in light of the envisioned FTC-Google consent order:

"Motorola struggles to explain why money would not suffice as compensation for use of patents that it repeatedly vowed to license on FRAND terms. But it does not struggle at all to explain--indeed, does not even mention--its latest commitment, in the form of an FTC consent decree, 'not [to] file a claim seeking, or otherwise obtain or enforce' an injunction (at least not without making irrevocable offers to license and arbitrate, which it has not done). FTC Decision at 9. The omission is glaring, because this latest commitment raises serious questions as to this Court's jurisdiction to consider Motorola's demand that this Court ''remand and direct the district court [to] determine Motorola's right to an injunction.'' MB 71. Even if this Court were to oblige, the relief would do Motorola no good; the consent decree would still block Motorola from pursuing injunctive relief on remand. Thus, this dispute is moot because it ''is no longer embedded in any actual controversy about the plaintiffs’ particular legal rights.'' Already, LLC v. Nike, Inc., 133 S. Ct. 721, 727 (2013) (citation omitted)."

I'll keep an eye on these jurisdictional disputes.

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