Saturday, August 15, 2020

Epic Games' antitrust lawsuits against Apple and Google assigned to judges in San Francisco and San Jose, case management conferences scheduled for mid-November

In the 2010s, the most important legal battles surrounding smartphones and tablet computers were centered around patent infringement assertions (even Oracle v. Google, though the patent part went nowhere while the most controversial question of software copyright law took center stage and is now going to be adjudged by the Supreme Court). To the extent that major players brought antitrust claims against each other, they, too, involved patents, particularly standard-essential patents.

The strategically most important topic for smartphone-related litigation in the 2020s--though 5G and other developments will continue to give rise to patent disputes--may very well be the way the iOS and Android app stores are run. There's a lot at stake there, not only but first and foremost in monetary terms. Epic Games' long-planned and well-orchestrated litigation and PR blitz against Apple and Google is clearly bigger than any--if not all--of the pending patent cases combined, especially when considering that Capitol Hill is already looking into the same set of issues. We're still going to see spats over who invented what--but even more critical than IP ownership is the gatekeeper role that the major platform makers and app store operators play.

The Fortnite maker's two app store cases were processed by the Northern District of California's intra-district assignment system, which simply picks the next available slot:

  • Epic Games v. Apple was assigned to United States District Judge Edward Chen in San Francisco (case no. 3:20-cv-05640). Judge Chen is already presiding over an antitrust case brought by Apple and Intel against Softbank-owned Fortress Investment, in which the plaintiffs just amended their complaint (after a dismissal without prejudice), with the defendants likely to challenge the first amended complaint, too.

  • Epic Games v. Google went to United States Magistrate Judge Nathanael Cousins in San Jose (case no. 5:20-cv-05671). The parties will presumably decline to proceed before a magistrate, in which case this dispute might just end up on Judge Lucy H. Koh's docket.

These assignments make no geographic sense. Both Apple's and Google's headquarters are closer to San Jose than to San Francisco, but Google is further up north. So the assignments should have been made just the other way round.

Initial case management conferences have been scheduled in the Apple case for November 12, and in the Google case for November 18.

While Apple and Google impose different developer and app store contract terms, the cases have some overlapping questions of fact (relating to Fortnite, but also because either defendant will likely point to the other when denying or downplaying its own monopoly power) and, especially, law. Also, there would be a risk of divergent decisions. The least plausible scenario would be one in which Judge Chen would let Apple off the hook while Judge Koh (or a colleague of hers down in San Jose) would hold Google in violation of antitrust law, given that Google is less restrictive as there are alternative ways (though far less popular than Google's Play Store) to install Android apps ("sideloading" as well as app stores such as the ones run by Samsung and Huawei). I expect both cases to go up to the Ninth Circuit, where any inconsistencies could still be cured, but it wouldn't reflect favorably on the Northern District if it handed down irreconcilable decisions.

Consolidation won't happen automatically. Someone will have to take an initiative, and the court would have to agree that it's a good idea. I believe it would be, and in that case San Jose would be the logical venue for geographical reasons.

Epic is pursuing only injunctive and not monetary relief, so there's no need for a jury. But the one or two bench trials will be huge in every respect.

Share with other professionals via LinkedIn: