Friday, May 31, 2013

German court gives Google a second chance to avoid Google Maps ban over Microsoft patent

After Microsoft felt forced for procedural reasons to add Google Inc. to a German patent infringement action originally brought only against its Motorola Mobility subsidiary, a Microsoft v. Google and Motorola Mobility trial took place in early March, and the court's preliminary inclination at the outset of the trial was that Google (including but not limited to Motorola Mobility) is liable for infringement of a Microsoft patent by Google Maps (the Android app as well as the web-based service). A decision (which could have been a final ruling including the grant of an injunction) had originally been scheduled for this coming Monday, June 3, 2013. Today the press office of the Munich I Regional Court informed the media that the announcement has been canceled. The court has instead decided to reopen the proceedings and to hold a second trial on October 24, 2013, where the focus (according to the court's brief statement) will primarily be on new invalidity contentions presented at a late stage. (As an aside, October 24 is after Oktoberfest, which always begins in September and ends in the first half of October.)

Should Google convince the court at the October retrial that Microsoft's patent-in-suit (EP0845124 on a "computer system for identifying local resources and method therefor") is highly likely to be invalidated by the Federal Patent Court in a parallel proceeding, then the case may be stayed pending the nullity proceedings. Otherwise an injunction is very likely. As I just explained in connection with a Mannheim decision to reopen a VP8-related infringement case, German courts don't reach the question of (in)validity unless there is a finding of infringement. There are some procedural differences between the approaches of the Mannheim Regional Court and the Munich I Regional Court: the Munich court always holds at least two hearings (the second one is a trial), while Mannheim holds only one. The statement by the Munich court concerning Google Maps says that the focus at the retrial would be "mainly" on the question of (in)validity, which is a strong indication of a likely infringment finding, Judge Voss did not indicate at today's announcement in Mannheim regarding VP8 that there would be any other issue on the agenda of the reopened proceedings than (in)validity.

A Google Maps ban in such a large market as Germany would put major settlement pressure on Google. Google's counsel urged the court in March not to order an injunction, or at least to enable Google to avert enforcement by giving security. The court is aware of the commercial implications of this case in the context of the wider global dispute between Microsoft and Google. Google got its day in court in March (the trial lasted more than six hours, which is about three times as long as most German patent infringement trials), and it will get another day in court in October. Then there will be a decision, and any other outcome than an injunction or a stay pending the parallel nullity action is extremely unlikely based on where things stand today.

Google purchased Motorola Mobility for $12.5 billion in hopes of leveraging its patent portfolio against Apple, Microsoft and other companies who might bring infringement claims against Android, but the deal has failed to pay off for Google. A week ago the United States International Trade Commission (USITC, or just ITC) tossed Motorola's complaint against Microsoft's Xbox. A month earlier it had already thrown out whatever little was left of Motorola's complaint against Apple. And a federal district court concluded at the end of an in-depth analysis that Motorola Mobility's standard-essential patents don't contribute enough to Microsoft's products (Windows, Xbox) to justify a substantial FRAND royalty. In other words, Google isn't able to force Apple, Microsoft or anyone else to settle. The only question is when it will realize that it needs to take a royalty-bearing license from Microsoft (just like pretty much every third-party Android device maker) and agree on some kind of settlement, probably involving an anti-cloning provision, with Apple. For the time being, Google prefers litigation over licensing. But licensing will be the outcome, sooner or later, before or after the Munich retrial over Google Maps in October.

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