Friday the 13th wasn't Huawei's lucky day, but it went well for Samsung: in accordance with an inclination he expressed at a recent motion hearing, Judge William H. Orrick of the United States District Court for the Northern District of California decided to enjoin Huawei from enforcing two Chinese standard-essential patent (SEP) injunctions against Samsung until a breach-of-contract question has been adjudicated in the U.S., where a trial is scheduled for December (this post continues below the document):
18-04-13 Order Granting Samsung Antisuit Injunction Against Huawei by Florian Mueller on Scribd
As I had already predicted on the basis of the motion, Judge Orrick concluded that any differences between the fact pattern of Huawei v. Samsung and that of Microsoft v. Motorola (a previous case in which a district court in the Ninth Circuit barred a litigant from enforcing a foreign SEP injunction) weren't relevant in terms of outcome-determinative in the present context. I called this Samsung-Huawei dispute "Microsoft v. Motorola Reloaded, an assessment that is validateed by the order, which discusses that precedent at great length. However, the order acknowledges that there are "undeniable and important differences," and I guess Huawei will try to capitalize on that when appealing this order to the Ninth Circuit.
One of the potentially "important"--though, as per the order, "irrelevant"--differences relates to the extent to which the Chinese court analyzed FRAND claims in Huawei v. Samsung vs. what the German Microsoft v. Motorola court did. Based on what I've read, I have serious doubts that there is the kind of huge difference in this regard that Huawei claims there is. In any event, I published an unofficial English translation of Presiding Judge Dr. Kircher's 2012 Mannheim Microsoft v. Motorola ruling six years ago.
The following passage will play a role--maybe not on appeal, but with respect to the further proceedings:
"I am at a loss as to how I (or a jury) could decide the breach of contract claims. [...] If I take Samsung’s reasoning to its logical conclusion, I see no end to this case, and certainly no way for this action to dispose of the parties' foreign patent actions."
Different judges have different styles. Many, if not most, other district judges would have made this decision (where an appeal is extremely likely) as appeal-proof as possible. Judge Orrick, however, has a very honest and forthcoming writing style, which is very likable but the next best thing to inviting Huawei to appeal.
This does not mean to say that I believe an appeal is going to succeed. There's a whole lot in the order that will presumably enable Samsung to defend the decision at the next level, such as holding that Samsung's Chinese manufacturing operations would really face a major threat or a quote from a speech by a Huawei vice president explaining that patent injunctions in general, and in the Huawei v. Samsung case in particular, are just meant to be bargaining chips in disputes that are just about money:
"Today, the number of disputes is on the rise, but we see fewer cases of injunction. Perhaps judges are quite reluctant to hear injunction cases because of its staggering impact on the market. Sure enough, the core issue is price; 90% or even 99% of the patent disputes are about price. Even if injunction order were to be enforced, does Huawei really want to kick Samsung out of China? Is it possible? Of course not. And is it possible for Apple to kick Samsung out of the US? No. That being said, when faced with potential licensees who are negotiating in bad faith, unwilling to pay fair royalties, you may want to file an injunction order with the court. At the end of the day, your purpose is to get the royalties in return, while using legal action as a bargaining chip. This is how things have changed over time."
The part I'm personally happiest about is that Judge Orrick attached some importance to the fact that Huawei itslf had chosen to make its U.S. filing the previous calendar day. For an example, the docket text says: "Huawei should not seek to enforce those [Chinese patent injunction] orders until the [U.S.] Court has the ability to determine the breach of contract claim it chose to present in this action prior to filing the Chinese actions."
In my initial analysis, and as I was following the process, I always thought this could play a role. In other cases, including the most similar one (Microsoft v. Motorola) as well as some bearing only a high-level resemblance to this one, the sequence of filings and its legal significance was a bigger issue between the parties than here. In comparable situations, the moving party often repeats the term "earlier-filed case" like a mantra. When it didn't happen here, I was starting to worry whether my recollection of the relevant types of facts had been wrong. But as Judge Orrick's order explains, this is indeed relevant in connection with international comity (i.e., deference to the foreign jurisdiction). Additionally, it's a psychological factor: Huawei made its bed and now has to lie in it.
As you might imagine, I'm proud of having accurately predicted the decision (based on the motion and Ninth Circuit precedent). I'm now predicting affirmance by the Ninth Circuit. For a final "See I Told You So," I'd like to note that last month the Federal Circuit completely vindicated my longstanding "fair use is a fairy tale" position on Oracle v. Google. I'm not going to talk about the merits here anymore. I wrote so much about it from 2010 to 2016 that there's no point in reiterating and rehashing all of that old stuff. All sorts of people who bashed me in earlier years were simply wrong: I didn't take those positions for any other reasons than wholeheartedly believing in them, and those positions can't have been as unreasonable as my detractors alleged. Otherwise, a Federal Circuit panel wouldn't have supported my positions unanimously in two separate decisions. That said, should Google file a petition for writ of certiorari (request for Supreme Court review), which is a given absent a settlement, I'd really like the top U.S. court to provide definitive clarity on some key software copyright issues. I'd hope for affirmance there as well, but I really believe the issues are important enough for the software industry at large that cert would be warranted.
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