Monday, December 16, 2013

Federal Circuit affirms Microsoft's import ban against Motorola Mobility's Android-based devices

The Unitd States Court of Appeals for the Federal Circuit today ruled against Google's (Motorola Mobility's) appeal of an import ban Microsoft won from the United States International Trade Commission (USITC, or just ITC) in May 2012 over a meeting scheduler patent.

Motorola had conceded infringement long before this appeal. It was, however, trying to persuade the Federal Circuit to hold the patent invalid and to reverse the ITC's domestic industry finding. Patentees must meet the domestic industry requirement in order to obtain ITC import bans.

The appeals court found that the ITC's related determinations were based on substantial evidence. This is a rather difficult standard of review for appellants to overcome. It doesn't necessarily mean that the appellate judges would have decided the case the same way with the same set of facts before them. It merely means that there were facts based on which one can't blame the ITC for arriving at its conclusions, but the appeals court might have upheld the opposite decision as well.

As for the validity of the patent-in-suit, I already wrote in my report on the August 2013 appellate hearing that Google (Motorola Mobility) appeared unlikely to persuade the appeals court of its invalidity contentions.

On the domestic industry side, the situation is getting a bit confusing now, due to the standard of review. In early October the Federal Circuit already adjudicated Microsoft's appeal of the unfavorable parts of the ITC ruling (this was a consolidated cross-appeal). This month it also denied Google's petition for a rehearing on its appeal. Microsoft wanted, among other things, the Federal Circuit to reverse certain domestic industry findings that were negative for its purposes. The Federal Circuit likewise declined to overrule the ITC on those, using the same standard of review. As a result, the rulings on both parts of this cross-appeal don't provide a very specific indication as to how a company that licenses its software to device makers can satisfy the domestic industry requirement. The ITC has considerable wiggle room, and the Federal Circuit won't overrule the related findings unless there is clearly an absence of substantial evidence supporting the ITC's determinations.

Google's Motorola Mobility is one of a very few significant Android device makers to refuse to pay Microsoft royalties for Android's use of presumably numerous inventions patented by Microsoft. Patent litigation takes time, and most of Microsoft's infringement claims against Motorola haven't come to judgment yet.

The import ban affirmed today by the Federal Circuit has been in effect for almost a year and a half now, but Microsoft disagrees with the way the United States Bureau of Customs and Border Protection has enforced it and brought a lawsuit against U.S. Customs and other governmental entitites in July. No decision has been made in that case yet. Microsoft requested a preliminary injunction, while the ITC argues that the appropriate procedural path would be an ITC enforcement proceeding. Now that the Federal Circuit has affirmed the underlying ITC decision, there may finally be some progress in the District of Columbia lawsuit against the U.S. government.

As an aside, I just wrote this post quickly because Federal Circuit rulings on the cases I follow warrant exceptions from my new two-days-a-week consulting and publishing rhythm. This week I decided to work on Tuesday (Senate hearing on patent reform) and Friday (Nokia v. HTC ruling in Munich) instead of Monday and Thursday.

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