Wednesday, December 19, 2018

Munich I Regional Court scheduled ten Qualcomm v. Apple decisions for tomorrow (December 20)

This morning, Judge Dr. Anne-Kristin Fricke, in her capacity as spokeswoman for the Munich I Regional Court on civil-law cases, confirmed that the court still plans to hand down decisions in, technically, ten Qualcomm v. Apple patent infringement cases tomorrow (Thursday, December 20) at 2 PM local time (= 8 AM Eastern). The purpose of this preview post is to focus on the forest amid all the trees.

First, in the build-up to the announcement some people got confused and expected "(final) judgments," when "decision" is a broader term that can, in connection with patent infringement lawsuits, mean any of the following (or even other possibilities):

  • a final (though appealable) judgment identifying an infringement of a presumed-valid patent (in that case, an injunction comes down unless that particular remedy is deemed unavailable due to antitrust considerations);

  • a final (though appealable) judgment of non-infringement;

  • an order to stay the case pending parallel invalidation proceedings before the Federal Patent Court of Germany or (in case of very young patents) the European Patent Office;

  • an order to reopen the evidentiary record, which necessitates a new trial date; or

  • an order setting a new decision date.

The public has to stand up for the announcement of a judgment "in the name of the people," but can sit down for (optional) explanations of the reasoning. And if the decision is not a final judgment, everyone can remain seated. There were a couple of Mannheim cases in which I already figured the court was going to order a stay just because we were told to remain seated.

Second, the technically high number of ten cases is due to procedural reasons:

  • German courts always adjudicate only one patent per case (which is good in some ways but does not serve the interests of justice when there are overlapping antitrust issues), even if multiple patents-in-suit are from the same patent family. Five patents will be at issue tomorrow, but four of them are from the same patent family and near-identical. Those four siblings are asserted against an aspect of the Spotlight search. The fifth patent is a chipset (envelope tracker, to be precise) patent.

  • In order to save time, different case numbers are assigned when a plurality of defendants includes at least one EU and at least one non-EU entity. When patent holders bring comp├╝laints against Apple in Germany, they typically sue Apple Inc. (the U.S. parent company), an Ireland-based distribution company, and the German company operating the official German Apple Stores. The Irish and German defendants get one case number (per patent), and the U.S. parent company gets a separate one because service of process takes a bit longer when it doesn't happen within the EU. At least Apple isn't known to hold things up with duct tape...

In practical terms, the pleadings overlap to a huge extent if the same patent is asserted against two sets of defendants (or if multiple patents from the same patent family are asserted), and the courts combine those cases for trial purposes and normally schedule decisions for the same day.

Now that the procedural part has been clarified, we get to what's really important (or not).

In that regard, it's an extreme variation of the 20-80 rule: 80% of the cases on tomorrow's decision list don't really matter. Even Qualcomm's counsel conceded at the September trial that iOS 12 operates differently. He obviously wouldn't concede non-infringement, but what he said was the next best thing. Apparently the difference is simply that iOS 12 displays, exclusively for German customers, a text instead of an icon in one place, and that takes care of the problem. It's preposterous, but, well, it's a software patent.

I expect at least some of the eight Spotlight cases to be thrown out because even older iOS versions didn't seem to practice a claim limitation that some (but not all) of those patents-in-suit have. I don't even believe there is an infringement here of any patent of that family, nor would I predict those patents to survive the parallel invalidation proceedings, but even if the court sided with Qualcomm on some of those eight Spotlight cases, it wouldn't have any non-negligible commercial impact anyway. It wouldn't even be symbolical (in terms of buttressing Qualcomm's claim of Apple free-riding on its innovation), given that those patents (as I explained when I listed them earlier this year) were just acquired, so they don't cover "inventions" made by Qualcomm itself.

I admire the judges and lawyers who can treat such crap seriously with a straight face; I don't know if I could.

All that's really going to be interesting tomorrow is what happens in the pair of cases related to the patent on a power-efficient envelope tracker design (EP2724461). I missed that trial, but thankfully Qorvo, the maker of the accused chip, explained to me what happened and Qorvo's account was plausible and consistent.

In that context, a stay appears unlikely (for all I've been able to research, the court was unconvinced of a serious validity problem), and an outright finding of non-infringement is even harder to imagine since, according to a news agency report, the court-appointed expert witness said he couldn't see how Qorvo's chip wouldn't infringe (though he didn't have access to the chipset schematics because of Qualcomm's tactics).

That means only two possible decisions are likely tomorrow: either the court will identify an infringement on the current basis, or it will conclude that further evidence must be taken. Since I don't know about the inner workings of Qorvo's envelope tracker either, I'll never be able to express an opinion, but what does give me pause is that the ITC (first an Administrative Law Judge, then affirmed by the six-member Commission), after evaluating the chipset schematics (which Qualcomm's lawyers didn't allow to happen in Munich, despite the same law firm--in the U.S.--having negotiated a protective order in a U.S. discovery proceeding for the purpose of use in international litigation) and talking to Qorvo's chipset designer Mike Kay, found a similar claim from the same patent family not to be infringed. That suggests to me that there is at least a possibility of a correct outcome (based on all the facts and testimony) being different from what would result from rewarding Qualcomm's lawyers for evidentiary minimalism that apparently went beyond the dose of opportunism that is par for the course in any litigation.

So, to put it simply, in connection with the envelope tracker patent the only two decisions that are likely would either be an infringement finding on a basis that would fall far short of the one on which the ITC made its decision (and the one that Qualcomm's German counsel had originally agreed to but later walked back on) or a procedural order to reopen proceedings and take the necessary time and evidence to arrive at a well-considered decision. In the latter case, Qualcomm couldn't complain about the delay because its German counsel could--instead of the about-face they made--simply have signed the U.S. protective order and presented the chipset schematics to the German court and the court-appointed expert witness.

If that Qorvo chip was deemed to infringe without all the facts having been on the table, I would feel particularly sorry for the Qorvo guys considering that Qualcomm isn't actually interested in that company (with which it even partners in some ways). Qualcomm is seeking leverage over Apple in order to get rid of the antitrust and contract law challenges pending in the Southern District of California and foreign jurisdictions, and in order to force Apple to drop Intel as a baseband chipset supplier. The latter would potentially enable the Munich court to deny injunctive relief. It's hard to avoid a patent injunction in Germany if liability has been established, but in this case the technical nexus between the relevant patent assertion and Intel's baseband chip is infinitely closer than in, say, the Spotlight search cases.

Also, I don't know how Judge Koh in the Northern District of California and Judge Curiel in the Southern District of California would view such an injunction just before they're going to adjudicate some fundamental issues regarding Qualcomm's allegedly anticompetitive conduct. Maybe we'd see an antisuit injunction aiming to prevent Qualcomm from enforcement in Germany.

In other news, Ted Boutrous, a lawyer representing Apple's contract manufacturers against Qualcomm in the San Diego federal lawsuit (and whose firm, Gibson Dunn, has represented Apple in other cases, such as against Samsung), gave Bloomberg an interview on the Chinese situation. In China, like in the German Spotlight cases, Qualcomm is apparently asserting acquired (not homegrown) patents, and Mr. Boutrous says there's no way Qualcomm could realistically get the leverage there that it seeks. For lack of access to first-hand information on the Chinese cases, I can't form an opinion at this stage, but the statements made in that interview come across as pretty plausible given how software patents are usually worked around by alleged infringers.

Share with other professionals via LinkedIn: