Thursday, June 20, 2013

Federal Circuit schedules appellate hearing on Microsoft-Google ITC case for August 6, 2013

Today the United States Court of Appeals for the Federal Circuit gave notice that the cross-appeal of the import ban the ITC ordered about a year ago against Motorola's Android devices implementing a certain scheduling feature is scheduled for oral argument on August 6, 2013. The appeals court allows only 15 minutes of argument per side.

This is a cross-appeal because both parties want a better outcome. Google wants to get rid of the import ban, which has now been in effect for almost a year and required Google's Motorola to remove the infringing functionality. Microsoft was happy about its victory (by contrast, Motorola's counter-complaint failed miserably) but on appeal it is trying to prevail on up to four more patents.

Should Microsoft achieve a technically broader import ban, we may soon see Google's Motorola Mobility become another royalty-paying Android patent licensee. Almost every other major Android device maker -- including the likes of Samsung, HTC, LG, ZTE -- and the major manufacturers including Foxconn parent Hon Hai have already taken a royalty-bearing Android patent license from Microsoft. I believe Motorola would already have settled with Microsoft if it had not been acquired by Google.

German appeals court warns Microsoft and Google about delayed resolution of various pending appeals

This is the "Microsoft-Google Appeals Day" for me. Earlier today, several hours before the Federal Circuit's scheduling notice, I attended a hearing held by the Munich Higher Regional Court in connection with Microsoft's motion to lower the amount of the security it has to provide for its enforcement of the third one of three German injunctions it won last year against Motorola Mobility (over a soft input panel patent). Technically these are two injunctions, one against the U.S. parent company (Motorola Mobility LLC, previously Motorola Mobility Inc.) and another one against the German subsidiary (Motorola Mobility Germany GmbH) and a now-bankrupt service company named Bitronic that also distributed infringing devices. Today's hearing was only about the second case. Microsoft and Google were able to agree, with help from the court, to agree a couple of months ago on a drastic reduction of the bond amount from 38.5 million euros ($51 million), just for this particular case, to 6.5 million euros ($8.5 million), but Bitronic is under the German equivalent of Chapter 11 and the insolvency administrator can't easily agree to a reduction without exposing himself to (totally theoretical) liability issues down the road. He would only have a problem if the injunction was ultimately found to have been improperly granted, if damages caused by enforcement exceeded the remaining amount of the bond, and if Microsoft was then unable to pay -- the combination of all of this is unrealistic, but this theoretical possibility still complicates the matter, which is why the 38.5 million euro bond has not been released yet.

Judge Konrad Retzer, the appellate judge presiding over the senate (panel) to which all of the Munich patent infringement appeals I watch have been assigned, indicated his frustration rather clearly. He noted that the court has now already held two hearings just on the bond amount relating to this case, and the appellate hearing on the merits is still months away (it was scheduled for next week but due to the reporting judge's illness it had to be postponed and it will now take place after the Federal Patent Court's mid-November nullity hearing). Judge Retzer said that if all these smartphone patent cases represent such a burden on the court, the resolution of these cases will be delayed substantially. The Munich appeals court has so far been the fastest one in Germany, and quite fast by international standards even though German patent infringement appeals are wholesale de novo appeals (as opposed to Federal Circuit appeals that focus on a limited set of issues).

An attorney representing Bitronic's insolvency administrator said that his client basically needs a decision or at least a clear indication from the court in order to have a basis for agreeing to a reduction of the bond amount. The parties now have about a week to resolve this amicably. Otherwise there will be more work to do for the appeals court (which would likely have to deny Microsoft's motion) and the lower court, where an indirectly-related motion is also pending.

In April Google's (Motorola's) appeal of Microsoft's first German injunction was rejected. In September and December there will be hearings on two appeals of cases in which Google (Motorola) had successfully defended itself before the Munich I Regional Court, unless the court has to adjudge too many enforcement-related motions in the meantime, which is unlikely, or has to reschedule for reasons beyond the parties' control.

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