Wednesday, November 13, 2013

Judge certifies Microsoft's FRAND victory over Google, which goes forum-shopping on appeal

More than two months after a federal jury rendered (figuratively speaking) a guilty verdict against Google's Motorola Mobility for breach of a FRAND licensing commitment relating to its H.264 (video codec) and IEEE 802.11 (WiFi) standard-essential patents (SEPs) through the pursuit of injunctive relief against Microsoft, Judge James L. Robart of the United States District Court for the Western District of Washington has certified a partial final judgment (this post continues below the document):

13-11-12 Microsoft v. Motorola Rule 54(b) Judgment by Florian Mueller

Within three weeks of the trial, Judge Robart tossed the parties' post-trial motions (Google's was denied on the merits, and Microsoft's as moot). The following month both parties wanted a partial final judgment but disagreed on details. Technically, Judge Robart has granted Microsoft's motion for such judgment, but to the extent that Google's request for a very inclusive judgment was legitimate, the order clarifies that, for example, the groundbreaking FRAND determination is part of the subset of decisions reached in this case so far that can now be appealed.

Judge Robart declined to certify items on which he had not yet had to rule, such as defenses by Microsoft that may or may not be reached further down the road. The August 2013 (just before the trial) summary judgment ruling is included, but the December 1, 2012 summary judgment order against injunctive relief is not part of the package because the court reserved the right to change its position on that one under future circumstances.

A preliminary injunction barring Google's Motorola from the enforcement of a couple of German H.264 SEP injunctions had been affirmed by the United States Court of Appeal for the Ninth Circuit, which also denied Google's request for a rehearing.

While the Federal Circuit has jurisdiction over all patent infringement cases, patent-related contract matters are a matter of state contract laws, and district court decisions are appealed to the regional circuits. That's why Google itself appealed the preliminary injunction case to the Ninth Circuit, not the Federal Circuit. But the Ninth Circuit backed Judge Robart all the way -- not only in the narrow context that was put before it but it also indicated in an obiter dictum that Judge Robart's approach to this matter generally made sense.

After last year's rather sobering experience, Google doesn't want to return to the Ninth Circuit on this matter if it can avoid it. The burnt child dreads the fire. Google being Google (i.e., utterly self-contradictory in the patent litigation context), it has now changed its preference and, all of a sudden, feels that this is a patent infringement case (some patent infringement claims were consolidated into this action later) over which the Federal Circuit has jurisdiction. Here's Google's notice of appeal (click on the image to enlarge or read the text below the image):

NOTICE IS HEREBY GIVEN that Motorola, Inc., Motorola Mobility, Inc. and General Instrument Corporation (collectively, "Motorola"), Defendants and Plaintiffs/Counterclaim Defendants in the above-captioned case, appeal to the United States Court of Appeals for the Federal Circuit from the Federal Rule of Civil Procedure 54(b) Judgment of the District Court entered on November 12, 2013 (Dkt. 932) and all other orders or rulings merged or incorporated therein.

The notice of appeal was filed shortly after the final judgment. (Due to the time difference between Seattle and where I live, I saw both only this morning, but this is the first case in which I've seen a notice of appeal filed on the same day as the judgment it relates to.) Apparently, Google isn't sure that Microsoft will agree with its choice of appeals court, and it may somehow hope that being first to file could make a difference. Maybe it will help Google in psychological terms, but from a legal point of view, this is really about substance, not timing. The earlier-filed appeal here has a huge credibility problem because Google itself chose to file its previous appeal from this litigation to the Ninth Circuit. This, too, doesn't matter in legal terms, because jurisdiction depends on substance.

If it turned out that the Federal Circuit has jurisdiction, then it would also have had jurisdiction over the previous appeal (at least I can't see a difference for the time being). This could become a mess. There are jurisdictions (such as Germany) in which a lack of jurisdiction is rendered irrelevant if both parties show up at the decisive hearing without bringing an objection based on jurisdiction. That doesn't seem to be the case in the United States, however.

There are patent infringement claims in the same consolidated case, but the partial final judgment is on totally separate contract issues. It's too early for me to take a position on who's right or wrong. I'll follow the further process and report on the arguments the parties are going to make.

Even if Google won this potential fight over appellate jurisdiction, it might not gain anything in the end from this opportunistic behavior, which is commonly referred to as "forum shopping". I can see why Google thinks it has nothing to lose by eschewing the Ninth Circuit, but two months ago Chief Judge Rader of the Federal Circuit repeatedly called Google's royalty demands from Apple "crazy" -- and that assessment related to one of Motorola's cellular SEPs, which Judge Robart actually considered, relatively speaking, much more valuable than the video codec and WiFi SEPs at issue in the Microsoft case...

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