Thursday, October 29, 2015

Google-SAP cross-license agreement announced: is SAP once again critical of software patents?

Google has previously announced various patent cross-license agreements, with partners including (but not limited to) Samsung and Cisco. Not with Apple and Microsoft, though: those announcements merely related to the withdrawal of lawsuits, not to actual license agreements.

Today, Google and SAP have announced "a long-term patent cross licensing agreement that covers a broad range of products and technologies."

It's not unprecedented for SAP to agree with Google in the context of patents. SAP has previously joined Google in supporting Samsung against Apple's pursuit of injunctive relief over patents covering (certain aspects of) minor features. But today's announcement contains a rather interesting quote from SAP's chief IP counsel:

"We are proud to announce this important agreement with Google, a global leader in technology," said Tony DiBartolomeo, Chief IP Counsel, SAP. "Giving talented engineers and developers the freedom to build great products is key to promoting innovation. Patent cross-license agreements like this one increase freedom to operate and prevent distractions from unnecessary patent litigation. And, like Google, SAP welcomes similar discussions with like-minded companies."

The second sentence ("Giving ...") appears to imply that software patents restrict the freedom of talented engineers and developers to build great products, and are, therefore, an impediment to innovation. The third sentence proposes cross-license agreements as means of increasing "freedom to operate" and calls patent litigation unnecessary and a distraction from innovative activity.

That's clearly a much more critical view of (software) patents than merely supporting the philosophy of Justice Kennedy in the eBay case that injunctions over minor features would give patent holders undue leverage.

SAP is living (in an abstract sense) proof that innovation in software, contrary to what many patent professionals claim all the time, is not dependent on patent protection. When SAP came out of nothing and became the most significant non-American software company, software patents weren't available--neither in the U.S. nor in Europe. For a long time SAP had no software patents, and even a while after it started filing for some, it had less than a handful.

Based on what I once heard from credible sources, Hasso Plattner, SAP's former CEO, was philosophically opposed to the notion of patenting software. But SAP may have felt forced to play the game everyone else was playing, and at some point, SAP's management believed its in-house patent attorneys that software patents were strategic assets for the company. I saw SAP patent attorneys at government roundtables and in the European Parliament, lobbying aggressively for software patents.

In 2005, the European Parliament rejected a proposed directive on computer-implemented inventions (more accurately and commonly referred to as the "EU software patent directive," though it's a fact that software patents already existed in Europe and continue to exist, because the exclusion of software patents defined in the European Patent Convention had already been vitiated beyond recognition by the European Patent Office and, to a lesser extent, national courts). Before the decisive vote, SAP placed an ad in the European Voice, a Brussels-based weekly on EU affairs published by the Economist Group, calling on Members of the European Parliament to vote in favor of the proposal. That ad came in handy for the movement opposing the bill: the liars supporting software patents (including the European Commission) had said all the time that the legislative measure was not at all about software, just "technical inventions," and had pointed to computer-controlled refrigerators and car braking systems, but SAP doesn't make any products of that kind: SAP is purely a software company, so its ad exposed the CII lie.

Now, more than ten years later, SAP appears to be part of the Google-led movement that is rather critical of software patents and those seeking to extort true innovators (ab)using patents of usually very questionable quality.

I hope SAP has now come full circle.

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Court expert: I don't want to appear partial and oppose Oracle's motion, but I'm doing it anyway

Dr. James Kearl, the court-appointed damages expert in the Oracle v. Google Android-Java copyright infringement case, yesterday responded to Oracle's motion to disqualify him on the grounds that he is no longer impartial due to his work on Samsung's behalf in the Apple v. Samsung cases that went to trial last year.

Here's his filing (this post continues below the document):

15-10-28 Kearl Answer to Oracle Motion to Disqualify by Florian Mueller

I had a #facepalm moment when I read toward the bottom of the first page that he does "not believe it appropriate for [him] to oppose Oracle's motion" because he--untruthfully--says he does "not have an adversarial position vis-a-vis Oracle" and then read on. His filing is not just a declaration that serves to state some facts for the record. It simply is an opposition to Oracle's motion. Nothing more and nothing less. Anything to the contrary should be reserved for April Fools' Day.

Dr. Kearl's filing spans several pages but does not contain anything new, enlightening, surprising, or whatever else might add value to the motion process.

Oracle's motion makes clear what the concern is: he's closer to one side than to the other. For a judge who had concerns in 2012 about bloggers potentially influencing a court or a jury (if that had happened, he'd have read blogs like Groklaw that got the rules for copyrightability totally wrong), it should be a no-brainer to dismiss a court-appointed expert once there are facts that show more of a proximity to one party than to the other.

Oracle's motion didn't refer to the strawmen Dr. Kearl's filing puts up just to have something to tear down. It's undisputed that he did not provide expert testimony directly on Apple's infringement assertions against Android. He does not deny, however, that Samsung used his testimony to convince the jury (rightfully so) that Apple's damages claims in that case were not just outsized but downright irrational.

He denies that he or his firm received $5 million (Apple's lawyers told the jury that Samsung had spent $5 million on damages counterclaims of §6 million and that this fact showed Samsung's counterclaims were just about devaluing patents), but he does not say what he and his firm received instead. Also, he doesn't explain why Samsung's trial counsel didn't object to the $5 million claim.

He stresses that he "did not meet or speak with any Samsung corporate officer or employee at any time before, during or after the Apple v. Samsung trial, with the single exception that a Samsung in-house attorney was intermittently present during portions of my preparation that occurred over parts of three days leading up to my court testimony that lasted no more than 20 minutes." Samsung is not a party to Oracle v. Google anyway. But what does he say about Google?

"My communication and work was with counsel from the Quinn Emanuel law firm, which was the outside law firm for Samsung. Likewise, whatever the relationship between Google and Samsung, I had no communication before, during or after the trial with any Google corporate officer or employee. Google's role, if any, and its products and services were completely irrelevant to the work that I did. I was not provided with information regarding Google's role in Apple v. Samsung, nor did I inquire about such."

Quinn Emanuel also represented Google in the same case. Oracle's motion stressed the fact. Dr. Kearl doesn't deny it.

I don't know the man, so he may genuinely be, as he writes, "confident that [he] can assist the court as a neutral economic expert in the present action." But the question is not how he feels. The question is whether Oracle can rely on its chance to make its case on a level playing field. With him, Oracle has every reason to be concerned, no matter how honorable he may be as a person. The court should say "thanks, but no thanks" to his offer to remain involved.

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Ericsson says Apple's Alice motion against wireless patents threatens to swallow all of patent law

An Alice motion in the Apple v. Ericsson case pending in the Northern District of California has reignited my interest in this dispute, and I'll soon take a look at the ITC and Eastern District of Texas proceedings and will try to find out more about the cases that will go to trial in Mannheim, Germany, on January 19, 2016.

Yesterday, Ericsson filed its opposition to Apple's motion (this post continues below the document):

15-10-28 Ericsson Opposition to Apple Motion for Summary Judgment by Florian Mueller

I'm not convinced by Ericsson's legal argument that the challenged patents cover more than the underlying abstract ideas. Basically, Ericsson refers to all sorts of technology and real-world values that are referenced, but that's not the substance of the patent: the most important question is whether whatever may (or may not) be novel goes beyond the underlying abstract concepts. Those patents don't cover antennas, for example. They refer to radio transmissions of signals, but they aren't radio patents. They are protocol patents, and I stand by what I wrote in my previous post: protocols should be patent-ineligible under any reasonable interpretation of Alice.

Ericsson points to "the Supreme Court's caution against too broad an application of 'this exclusionary principle lest it swallow all of patent law.'" It's true that the most extreme interpretation of 35 U.S.C. § 101 could limit the patent system to little more than mechanics, molecular pharmaceutics, and maybe electricity, too. But even if Apple succeeded in shooting down protocol patents, it wouldn't even be the end of all wireless patents.

Ericsson says the following about the lack of legal certainty in the Alice context:

"The Supreme Court has not 'delimit[ed] the precise contours of the ‘abstract ideas’ category.' [...] Nevertheless, the cases in which the Court has found patent claims to be directed to abstract ideas provide guidance."

The first sentence is correct. The second one is not incorrect per se, but it's incomplete. It's a half-truth. Of course, the cases in which the Supreme Court has held subject matter patent-ineligible are even more extreme cases than protocol patents. But Ericsson doesn't talk about how little the Supreme Court actually has held patent-eligible. Legal certainty for holders of patents that involve software exists pretty much only in connection with computer-controlled manufacturing processes. Protocols are far closer to the Bilski and Alice kind of patents than the physical process patent in Diamond v. Diehr.

Apple is fighting a good fight here.

Via TechRights I've become aware of this Lexology article by four Morrison & Foerster lawyers (I had seen the names of two of them before, in Oracle v. Google if I recall correctly) about "[a] chilly reception for Section 101 challenges at the ITC." I haven't watched any ITC cases recently but will at least take a look at the investigation of Ericsson's complaint against Apple. The ITC also took a different position on injunctive relief over standard-essential patents than district courts. In connection with validity determinations, however, the ITC cannot even argue that it faces a different situation because of a different set of remedies. In that context it absolutely has to be consistent with the case law outside the U.S. trade agency.

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Tuesday, October 27, 2015

Apple motion against Ericsson could result in devaluation of wireless patent portfolios: protocols patent-ineligible under Alice

The Apple v. Ericsson docket in the Northern District of California was worth taking another look (after quite a while): two weeks ago, Apple brought a motion for summary judgment of invalidity of two patents asserted by Ericsson in its counterclaims to Apple's declaratory judgment complaint, and the motion is entirely based on 35. U.S.C. § 101 in light of last year's famous (or infamous in the eyes of patent attorneys) Alice ruling by the Supreme Court on patent-ineligible subject matter (this post continues below the document):

15-10-14 Apple Motion for Summary Judgment Against Ericsson by Florian Mueller

The introductory part must have all owners of wireless patent portfolios--not just Ericsson, but also the likes of Nokia and InterDigital--profoundly concerned:

"Ericsson's '917 and '990 patents, two of the seven patents in suit, claim abstract concepts in the context of cellular systems. The '917 patent is directed to the concept of generating and sending a report upon the occurrence of an event. The '990 patent is directed to the concept of following commands to an individual while ignoring commands broadcast to a group. None of the asserted claims purports to claim any inventive hardware or method for carrying out the claimed abstract concepts. The asserted claims are directed to patent-ineligible subject matter and fail the two-step framework articulated in Alice Corp. Pty. Ltd. v. CLS Bank Int'l [...], and therefore they are invalid under 35 U.S.C. § 101."

If this motion succeeds, and if a ruling in Apple's favor is upheld on appeal, the CFOs of various companies that have wireless communications patents in their books have to contemplate write-offs.

As my loyal readers know, I've watched countless wireless (especially standard-essential) patent lawsuits over the course of the last five years. Those have not all been equally weak, but I found most of them very unimpressive from a technical invention point of view. One can easily be misled to think that there is great innovation involved--but only if one turns a blind eye to the fact that a patent is only worth the delta it claims over the prior art, and that delta is usually rather questionable.

What Apple says about patents that just relate to "generating and sending a report upon the occurrence of an event" or "following commands to an individual while ignoring commands broadcast to a group" being patent-ineligible if they fail to "to claim any inventive hardware or method for carrying out the claimed abstract concepts" would apply, directly or indirectly (by applying the same standard and building, mutatis mutandis, the same kind of argument for other types of wireless patents) to most of the wireless patents-in-suit I've seen. For example, patents that cover handovers between cells (meaning that your phone connects to a different base station when you are walking or driving) could also be described as abstract concepts implemented with standard hardware.

A full-text search in Apple's filing for the word "protocol" (with Adobe Reader) didn't find a single occurrence. Maybe that's because the word "protocol" would sound too technical for Apple's purposes. But the way I see it, those patents are protocol patents. Protocols--conventions to do certain things in a certain order in certain situations--exist in the non-digital world as well. A handshake, for example, is a protocol--and the term "handshake" is also used to describe a technical concept in telecommunications.

I agree with Apple all the way: protocols per se, unless there's really some new, serious technology involved, should not be patent-eligible. I also believe that the way the Supreme Court's Alice ruling is increasingly interpreted supports Apple's case.

I admit that I underestimated the impact of Alice before and shortly after the ruling came down. Over time I realized that those who predicted from the start that this was going to kill many software patent claims--and those Ericsson wireless patents here are just software patents--had been right all along. I predicted lots of decisions in high-profile cases right, especially appellate decisions, but I've also been wrong a few times. Alice is the most important context. And with respect to Apple, I once thought--after listening to the official recording of an appellate hearing--that Apple was going to be granted injunctive relief, but it did not happen, and the next time I interpreted a recording as indicating that the court was going to uphold the denial of an injunction, and the opposite happened, though the Chief Judge of the Federal Circuit, in her dissent, took the kind of position I thought a majority or a unanimous panel was going to take (Chief Judge Prost wrote that this was not even a close case), though I'm optimistic that Samsung's pending petition for a rehearing (Apple has been asked to respond on or before November 5) will lead to a full-court review. Well, if Apple brings any new appeal of a denial of injunctive relief, you may be able to set your watch by in terms of betting on the opposite of the outcome I predict.

Back to abstract subject matter and invalid patents. The impact of Alice is really huge, and I view that as a very, very good thing. A few days ago, the thought leader of those who got Alice right from the beginning, Stanford professor Mark Lemley, pointed to a legal website that had no content to offer in a section entitled "Advice for Applicants Trying to Avoid Alice Pitfalls":

Yesterday, Forbes contributor Oliver Herzfeld, the Beanstalk agency's chief legal officer, gave "five reasons to copyright register your software now," and the fifth one of them is the "reduced availability" of software patents as a result of Alice.

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Friday, October 23, 2015

Samsung requests full-court review of appellate decision in Apple case: looks like Supreme Court petition

Ten days ago, the United States Court of Appeals for the Federal Circuit granted summary affirmance (i.e., summary judgment at the appellate stage) of Judge Koh's decision to let Apple collect $450 million from Samsung (against a bond posted years ago) even though one of the patents underlying the related ruling had been held invalid by an in-house court (PTAB) of the United States Patent and Trademark Office. The appeals court said its mandate would issue absent a petition for rehearing within seven days, and within that deadline, Samsung indeed filed its petition (this post continues below the document):

15-10-19 Samsung Petition for en Banc Rehearing by Florian Mueller

I predict denial of this petition, not because it would be a just outcome but simply because even Chief Judge Prost, who has a more balanced position than some of her colleagues on certain issues (above all, injunctive relief), apparently (she wrote the summary affirmance decision) agrees with Apple on this one. In order to get an en banc rehearing, Samsung needs support among Federal Circuit judges that will be hard to come by.

I can't read Samsung's lawyers' minds, but I am free to draw conclusions from what they write and how they write it. The above petition stresses Supreme Court precedent and circuit splits (divergent decisions taken on an issue by different appeals courts). Other en banc petitions I've seen were much more focused on conflicts between different decisions by the same appeals court (for example, when Apple wanted an injunction appeal to be heard by the full court in the first place). Supreme Court precedent always matters, of course, but circuit splits are usually front and center in petitions for writ of certiorari (requests for Supreme Court review). I'm not saying that circuit splits are not an argument for an en banc rehearing. It's just the relative weight of these kinds of arguments that is markedly different in this petition from the other petitions (not only but also in Apple v. Samsung cases) I've seen.

Now, this is admittedly a different situation from the other ones: here, the summary affirmance decision just said that there was no debate over the outcome, but it did not provide any particular reasoning. There was nothing in the decision that specifically referenced Samsung's argument. Therefore, Samsung's lawyers don't have as clear as target to point at as they would have if there had been a reasoned decision.

Still, I can't help but wonder whether Samsung's lawyers might be just as "optimistic" about this petition as I would be if I were in their shoes. Have they already given up on the Federal Circuit and already begun to make a case for a Supreme Court review? I don't know. All I know is that I've never seen a petition for a Federal Circuit rehearing that looked so much like a cert petition. It's not an unusual communication pattern that A writes or says things to B that are actually directed at C. I've seen court filings that were directed at the court of public opinion more so than the court of law. That's not the case here because the related legal argument is not the kind of stuff that gets the general public interested--even I'm not going to go into detail on the case law for now. Here, the actual recipient C can't possibly be the court of public opinion. But the Supreme Court, which will see this document in the event of a petition? To me, that's at least a plausible theory.

It's like a primary candidate focusing on arguments that suggest he's already looking past the primaries and toward the general election.

I currently see four or five cases (need to do some more research one of these days) to which Apple is a party that have the potential to go all the way up to the SCOTUS because of the issues. Design patent remedies, injunctive relief, partial summary judgment over invalidated patents, the royalty base (a context in which I hope Apple will defeat Ericsson because it will discourage outsized royalty claims over standard-essential patents), and possibly some procedural issues concerning the interplay of infringement cases and FRAND contract cases in different venues.

Compared to these big issues, the WARF v. Apple case is not interesting at all. The most interesting issue in that one was actually whether a university patent troll can be called a patent troll. Unfortunately the court didn't allow Apple's lawyers to tell it to the jury like it is. Other than that, the case is about nothing that makes a difference to anyone in the world other than WARF and the lawyers working on that particular case.

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Friday, October 16, 2015

Appeals court deems Google Books 'fair use' but standard helps Oracle in Android-Java case

The United States Court of Appeals for the Second Circuit has just published its appellate opinion in the Google Books case.

Early last year I wrote that I had initially been rather skeptical of Google's "fair use" argument relating to Google Books, but ultimately I found myself in agreement with Google. Today's appellate opinion says: "This copyright dispute tests the boundaries of fair use." So the appeals court also didn't find this one a clear and simple case. But all things considered it sided with Google.

I use Google Books quite frequently, but for the purpoes of this blog, "fair use" is of particular interest in connection with only one case: Oracle v. Google, the Android-Java copyright infringement case (in which Oracle yesterday brought a motion to disqualify the court-appointed damages expert).

The Second Circuit won't hear an appeal in Oracle v. Google, but this high-profile case might be cited in the further proceedings, and I don't think it helps Google against Oracle in the slightest. Much to the contrary, the standard the Second Circuit outlines is one that Google cannot possibly meet in the Android-Java case. For example, here's a key passage from today's Google Books ruling:

"Google's division of the page into tiny snippets is designed to show the searcher just enough context surrounding the searched term to help her evaluate whether the book falls within the scope of her interest (without revealing so much as to threaten the author's copyright interests). Snippet view thus adds importantly to the highly transformative purpose of identifying books of interest to the searcher. With respect to the first factor test, it favors a finding of fair use (unless the value of its transformative purpose is overcome by its providing text in a manner that offers a competing substitute for Plaintiffs' books [...]"

(emphasis added)

In a nutshell, the above passage says:

  • If what Google does basically just has a promotional effect, right holders can't complain that Google helps them make more money.

  • But forget about "fair use" if there is a substitutive (rather than promotional) effect.

If one applies that standard to Oracle v. Google, it means that the "fair use" defense won't even survive the summary judgment stage: neither the device makers who have adopted Android nor the end users who (like me) have bought Android devices have looked at Android and then decided to use mobile Java. Instead, Android has displaced mobile Java all the way, with Java licensees like BlackBerry and Nokia having gone down the tubes while Android attained market dominance.

There are various differences between Google Books and the Android-Java case, and rather than talk about all of them at once, I just wanted to highlight the key difference in terms of commercial impact. But I also find the discusssion of "transformative use" interesting. The Second Circuit explains that the strongest fair use cases involve "copying from an original for the purpose of criticism or commentary on the original or provision of information about it." Android does none of that with respect to Java. Google Books is not about criticism or commentary, but one can search for books that contain certain terms, which is also information about the copied books:

"We have no difficulty concluding that Google's making of a digital copy of Plaintiffs' books for the purpose of enabling a search for identification of books containing a term of interest to the searcher involves a highly transformative purpose, in the sense intended by Campbell."

Android's use of the Java APIs had no transformative effect: Java already was available on mobile devices.

Google Books is not the clear case of fair use (and, as one of the "fair use" factors, transformative use) as, for example, a rap parody of a Roy Orbison song (that's what Campbell was about). But compared to the Android-Java situation, it's a very solid case. And if a fair use case that is far stronger than any "fair use" argument could ever be in Oracle v. Google "tests the boundaries of fair use," then there is no way a reasonable jury could find in Google's favor in the Android-Java case.

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Oracle moves to disqualify damages expert because Apple v. Samsung is practically Apple v. Google

The Oracle v. Google copyright retrial won't take place next May because of a scheduling conflict for Oracle's senior management with a trial against HP, and a new tentative date has not been set yet. But preparations are continuing.

The latest motion was filed by Oracle on Thursday evening California time: a motion to disqualify the court-appointed damages expert, Dr. Kearl. Oracle furthermore argues that no other court-appointed damages expert will be needed, given that the case no longer involves patents.

Here's the motion along with its public exhibits (this post continues below the document):

15-10-15 Oracle Motion to Disqualify Damages Expert by Florian Mueller

I'm familiar with the issues Oracle has raised here because I also followed the Apple v. Samsung trial last year (via the Internet). Oracle argues that the second Apple v. Samsung case in the Northern District of California "was effectively Apple v. Google" (that's also what Samsung's trial counsel told the jury). I looked at the patent infringement allegations in that case, and the case was indeed all about Android--unlike the first Apple v. Samsung case, which was partly about Android but also about designs Google had nothing to do with (if anything, it appears Google had even discouraged Samsung from using those designs).

It became known that Google paid for Samsung's legal fees--in connection with two of the patents-in-suit, to be precise, but still.

Dr. Kearl, the court-appointed expert in Oracle v. Google, was not involved with Apple's patent assertions against Android per se--he did not do a rebuttal of Apple's damages claims against Samsung. Instead, he made Samsung's case for damages against Apple. But Samsung wasn't interested in collecting anything from Apple: instead, it wanted to show to the jury how unreasonable Apple's damages claim of more than two billion dollars over a few narrow software patents was. Oracle points to what Apple told the jury Dr. Kearl's involvement was really about:

"[O]ne of the issues in that case was whether, as Apple argued, Samsung used Dr. Kearl’s analysis to give the jury a low damages number in an attempt to make all patents appear to have little value. Or, as Apple asked the jury, why else would Samsung pay experts $5 million to pursue a $6 million claim if not to try to devalue patents?"

Back then, Apple accurately portrayed Samsung's litigation strategy. The strategy worked nevertheless: ultimately the jury (although chosen from Apple's backyard) awarded Apple only about 5% of what it had demanded. Apple was so disappointed as to request a retrial (that appeal is still ongoing).

The fact of the matter is still that Dr. Kearl's work in that case was only in formal terms about a Samsung damages claim against Apple. In reality, it was about Apple's claims against Google's mobile operating system.

The strongest point Oracle makes in my opinion is the following reference to Samsung's trial argument:

"Samsung, for its part, told the jury that Apple's 'billion dollar numbers are completely unsupported,' and that it would 'show [the jury] how properly to calculate a royalty,' by demonstrating how 'Dr. Kearl calculated these damages.' [...] In other words, Samsung's lawyers directly offered Dr. Kearl's analysis as a rebuttal approach on the Android claims, not just as an affirmative calculation on Samsung's counterclaims."

So, yes, "Dr. Kearl was on the Android side of Apple v. Samsung."

Oracle's memorandum outlines the difficulties it would face if it had to ask Dr. Kearl questions in front of the jury. For example, by asking him very critical questions, Oracle could give the jury the impression of the court having endorsed Google's position.

I live in a jurisdiction where party experts have rather little weight and courts must appoint experts on technical issues and damages unless the questions only relate to what is common general knowledge. But in the U.S., party experts are the norm and court experts are a very rare exception. I remember that the mere appointment of a court expert in this case became the subject of reports in the specialized legal press, showing just how unusual this was.

In a couple of cases in which I'm a plaintiff, I also moved to disqualify damages experts because they had ties with the other side. In one case, pending before the Munich II Regional Court (case no. 5 OH 4622/14), my motion was granted a few months ago despite the two defendants' persistent efforts to keep the expert involved. In the other (much smaller) case, a judge at the Amtsgericht F├╝rstenfeldbruck (a local court, which is below a regional court; case no. 7 H 11/15) denied a motion although the expert himself had already asked to be dismissed, and my interlocutory appeal of that decision is now pending, as is my separate challenge for bias (not related to that decision, though outrageous it was) against that local court judge. The reason I mentioned my own issues with non-neutral court experts is because I feel very strongly that court experts must be neutral, and once there is a way that one party to a litigation can influence the court expert, even if only indirectly, a different expert should be appointed (or none, if none is needed, especially in the U.S., where court-appointed experts are few and far between).

As I wrote last month, I would be extremely surprised if a judge who showed concern in 2012 about the court, including appeals courts, being potentially influenced by bloggers now had no problem with a court-appointed expert--who undoubtedly and massively influences the court and the jury--being aligned with one "camp."

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Tuesday, October 13, 2015

European Patent Office intentionally treats patent applicants and staff unfairly: leaked documents

While I'm currently taking a break from patent (not copyright) blogging, there's a few EPO-related issues I quickly wanted to draw attention to (and would comment on in more detail if I had time).

Dr. Roy Schestowitz, who has been authoring the TechRights blog for nine years, obtained (after I encouraged him to do so) a copy of an internal document of the European Patent Office that stands as incontrovertible evidence of the EPO's institutionalized unfairness. Companies filing large numbers of patent applications receive preferential treatment including highly questionable package deals along the lines of "drop these 500 patent applications and in exchange we'll grant 1,000 other weak applications of yours in short order".

Article 7 of the Universal Declaration of Human Rights states the following: "All are equal before the law and are entitled without any discrimination to equal protection of the law." But the EPO doesn't believe in human rights and is, as Dr. Schestowitz accurately notes, run like a private, profit-maximizing enterprise as opposed to an honorable institution properly applying the law. I've previously likened the EPO to FIFA, but with the latest evidence I almost feel like I have to ask FIFA for an apology for this comparison, given that different standards must be applied to a sports body vs. a government institution in charge of a key area of commercial law. FIFA doesn't rig soccer matches, at least not the extent the EPO's leadership compromises the patent granting process.

The general press should take much more of an interest in the EPO's corruption. Yesterday I was pleased to see that Heise online, Germany's leading IT news site, has written about this after reading the TechRights story.

I also wanted to point to some new developments in connection with the EPO leadership's repressive actions against staff union leaders. The following letter by SUEPO's (Staff Union of the European Patent Office) Munich chair, Elizabeth Hardon, to the chairman of the Administrative Council (the politburo) of the European Patent Organization speaks for itself:

15-10-08 Letter Re. EPO Elizabeth Hardon by Florian Mueller

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Wednesday, October 7, 2015

May 9, 2016 may (or may not) be the Oracle v. Google Android-Java copyright retrial date

On Tuesday afternoon local time, Judge William H. Alsup of the United States District Court for the Northern District of California issued a third case management order in the remand proceedings of the Oracle v. Google Android-Java copyright litigation. The most important part relates to the retrial date.

The final pretrial conference is firmly set for April 27, 2016. However, for the retrial itself, "[t]here is no date in 2016 that the Court could set for Oracle v. Google as a 'firm' trial date." The retrial "is [merely] tentatively set for May 9, subject to the possibility that two other cases with priority also set on that day will settle or plead out." The order then explains that "the Court tentatively expects to bring the Oracle v. Google case to trial as soon as the trials previously set for May 9 are completed or vacated due to settlements or pleas."

In practical terms, this means:

  • May 9 is the earliest possibility.

  • It will only be May 9 if parties to other cases do things they can't be forced to do (settle, withdraw) or if the other cases are resolved ahead of trial (summary judgment).

  • If the May 9 trials don't take too long, Oracle v. Google may start as soon as those other trials are over.

  • Theoretically, despite the court's "tentative" plans, this could slip into 2017 for no fault of Oracle or Google.

Another potential uncertainty here (not mentioned in the order) is that there could be delays due to issues with expert reports or as a result of interlocutory appeals or mandamus petitions. There were some expert report do-overs in the original proceedings; there was a mandamus petition by Google (which failed, but it took time) regarding one piece of evidence. I do see the potential for some of that on remand as well. I predict a huge fight especially over jury instructions and how to interpret the Federal Circuit's guidance regarding "fair use." I also see the potential for a pretrial involvement of the appeals court in connection with the court-appointed expert (though I still trust that a judge who even express concern in 2012 about the potential influence of bloggers on court decisions sets a rather high standard for court-appointed experts, a standard that Dr. Kearl cannot possibly meet anymore).

All things considered, I'll mark May 9 on my calendar but with lots of question marks (which, come May, may or may not go away).

The only smartphone patent dispute Google still has to worry about is this case, which is, by now, a copyright-only case. Apple's "thermonuclear war" and Microsoft's five-year effort to force Motorola into an Android patent license have ended in second-class settlements (withdrawals without license agreements). The only two resolutions I can imagine for Oracle v. Google are a license-based partnership between the parties or, maybe, a strategic acquisition of Java by Google (I've seen various tweets in recent weeks and months that suggested this, and while Oracle is more of a buyer than seller of companies, Google has almost three times Oracle's market cap).

The fact that a copyright case has eclipsed Google's patent cases is not because copyright is generally stronger than patents. It's because this case here is about literal copying (a conceded fact in this case), not more or less flimsy allegations of copying as in those patent cases.

Finally, a recommendation for those interested in "fair use" cases: an article by IP litigator Mike Keyes on the "Dancing Baby" case and why it has no bearing on Oracle v. Google.

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Thursday, October 1, 2015

Patent stalemate ends in second-class settlement: Google strategically prevails over Microsoft

On the eve of the fifth anniversary of the first Microsoft v. Motorola lawsuit, Google and Microsoft issued the following joint statement to the press:

"Microsoft and Google are pleased to announce an agreement on patent issues. As part of the agreement, the companies will dismiss all pending patent infringement litigation between them, including cases related to Motorola Mobility. Separately, Google and Microsoft have agreed to collaborate on certain patent matters and anticipate working together in other areas in the future to benefit our customers."

There's nothing in it that would suggest Microsoft made any headway in five years of suing. This one is structurally reminiscent of the second-class settlement Google reached with Apple last year from a position of mutual weakness: neither do Android's enemies hold patents that would represent a serious threat to the world's most widely-distributed mobile operating system nor are the patents for which Google bought Motorola powerful enough to force Apple or Microsoft into a cross-license covering the entire Android ecosystem.

In boxing, the champion retains the title if a bout ends in a draw. Considering the facts surrounding this litigation, there can be no doubt that this is great for Google and disappointing for Microsoft (though things could always be worse). The biggest winners in this are the Quinn Emanuel lawyers who represented Google/Motorola against Microsoft in the U.S. (led by Charles Verhoeven) and Germany (Dr. Marcus Grosch).

Android is and remains the new Windows:

Infographic: Is Android Becoming the New Windows? | Statista

       You will find more statistics at Statista

In 2010, Google's market capitalization was $180 billion, while Microsoft's was approximately $250 billion. Now, Microsoft's market cap is $350 billion (an increase by 40%, mostly the "Nadella effect"), while Google's (now "Alphabet's") market cap is almost $420 billion (an increase by 130%).

Microsoft has the industry's best IP licensing team and is generating billions of dollars per year in Android patent licenses. The patent stalemate between Microsoft and Google won't entitle any of Google's partners to a refund. But Google always discouraged Android OEMs from paying Microsoft. Google told them: defend yourselves, we'll help you. If some companies were just too small to pick a fight with Microsoft, they don't matter to Google anyway. If some of the bigger ones backed down, maybe in part because they had longstanding partnerships with Microsoft, they can't blame Google. If it had been up to Google, everyone would have "done a Motorola."

I absolutely agree with analysts who view this agreement between Microsoft and Google as a sign of Microsoft's attitude toward competitors being fundamentally different under its new CEO than under Steve Ballmer and, previously, Bill Gates. Microsoft is now happy to operate cloud services that power Apple's iCloud as well as numerous iOS and Android apps (including some of the most significant ones), and Azure is great based on everything I hear from competent sources. Microsoft now also contents itself with being a third-party ISV (independent software vendor) for Android and iOS. And, who knows, maybe Microsoft will be increasingly patent reform-friendly, now that its senior management has experienced in the fight with Google that patents are not the answer.

Microsoft's most noteworthy achievement in the patent dispute with Google was that it gave meaning to FRAND (contradicting positions it had still communicated to the FTC almost a year after the first Motorola lawsuit). That's a victory for reasonableness, but not a strategic win for Microsoft over Google: by now, Google is just as interested in low SEP royalties as Microsoft. There was a time when Motorola and its acquirer Google thought they needed to get leverage from SEPs, but after half a decade it's clear that Google would have had a sufficiently strong defense even without a SEP offense.

Five years ago to the day, when Microsoft sued Motorola after Apple had sued HTC and Oracle had sued Google, I thought that the smartphone patent wars were going to last 12-18, if not 24 months, and through this blog I strategically occupied the niche of smartphone patent litigation coverage. By now, I'm no longer really interested in smartphone patents. A year ago I published statistics that show the negligible impact of those cases.

The only smartphone patent case that still matters is actually, by now, a copyright case: Oracle v. Google. I'll keep an eye on that one until the end because it's about an issue that I as a software developer care about a great deal. And after a lot of idiotic, unjustified bashing that I took in a 2012 shitstorm following an erroneous court decision that the Federal Circuit overruled and the Supreme Court declined to reinstate, that case has also become a personal matter for me. It's the only context right now in which I fundamentally disagree with Google.

I'll do only a very limited amount of patent litigation blogging this quarter, and won't do any of that next year, no matter who sues whom or who settles with whom. Again, Oracle v. Google is a copyright case by now and a different story.

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