Tuesday, November 5, 2013

Google accuses ITC of 'arbitrary and capricious' ruling on Motorola complaint against Microsoft

A few months after the Nortel patent auction, which Google lost, the search company acquired Motorola Mobility in hopes of gaining leverage from its patents. At this point, well over two years after the announcement of the deal and almost a year and a half since its formal closing, Google's Motorola has zero enforceable sales or import bans in place against Apple and Microsoft.

But Google keeps on trying, and it is pursuing three appeals of ITC rulings against complaints filed by Motorola.

Last month the Federal Circuit held a hearing on its first appeal (of two) of the ITC's dismissal of Motorola's complaint against Apple. I listened to the official recording and didn't get the impression that a reversal is very likely. The second appeal is at too early a stage to tell, but that challenge is also significant.

In May 2013, the ITC threw out the sole remaining patent (a WiFi-related, though not standard-essential, one) from Motorola's ITC complaint targeting Microsoft's Xbox gaming console. The Commission, the six-member decision-making body at the top of the U.S. trade agency, affirmed a preliminary ruling by an Administrative Law Judge (ALJ). In my analysis of that initial determination I wrote that Google faced a "double hurdle": the ALJ found that it had waived its indirect-infringement argument, but that it also failed on the merits at any rate. And that's what the Commission affirmed. Undeterred by the double hurdle, which would persuade patentees without deep pockets to just call it quits, Google appealed the ruling.

Today the public redacted version of its opening brief, filed on Halloween, became available. I just wanted to highlight something that I found interesting: Google (Motorola) alleges that the ITC's determination of a waiver of its indirect-infringement argument was "arbitrary, capricious, an abuse of discretion, and otherwise not in accordance with the law". This is the legal standard for which certain aspects of ITC rulings are reviewed by the Federal Circuit. Other aspects, such as claim construction, have a lower standard of review -- "arbitrary and capricious" is an extremely high standard.

This standard applies to court reviews of certain actions by government agencies. In July, Microsoft filed a lawsuit that is also related to a Microsoft-Motorola ITC decision (an import ban that Microsoft won last year) alleging arbitrary and capricious decisions by government agencies, particularly the IP enforcement division of U.S. Customs and Border Protection, which Microsoft says should have seized Motorola's infringing products.

Both parties are now accusing the U.S. government, in connection with their dispute, of arbitrary and capricious conduct. Motorola says this about the ITC; Microsoft about the enforcement arm. Both face a significant challenge. But they try. Microsoft is in a more comfortable position, though. It won an ITC ruling, and the question is just about its scope, in connection with enforcement. Motorola has yet to win a single decision against Microsoft that it can enforce at all.

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