Sunday, July 10, 2022

Apple applied double standards in its attempt to prevent Colombian iPhone ban over 5G standard-essential patent

Yesterday (Saturday) I immediately reported on filing by Apple (with the United States District Court for the Eastern District of Texas) from which I learned that Ericsson had won a preliminary injunction in Colombia against 5G iPhones and iPads over a standard-essential patent (SEP), which is apparently being enforced now. I have now taken a second look at an English translation of a Colombian court order that Apple provided to the Texas-based court.

I find three contradictions remarkable:

  1. In one or more of its filings with a court in the Colombian capital of Bogotá, and in Friday's filing with the U.S. court, Apple criticized Ericsson's tactic of filing multiple Colombian patent infringement actions with different courts (one action per patent). A sworn declaration by Apple's Colombian counsel (Brigard Castro's Juan Pablo Cadena Sarmiento) describes this as "an improper attempt of forum shopping until [Ericsson] obtains a favorable decision allowing Ericsson to exclude Apple from the Colombian market."

    Apple does not explain why splitting up an enforcement campaign into multiple cases over one patent each is "improper." In Germany it's even the law: the only way that a German court will hear more than one patent in a given case is if they're from the same patent family.

    Apple itself actually went further than what it is now criticizing Ericsson for. In 2012, Apple failed with a motion for a preliminary injunction against two Samsung products in Munich, where the court doubted the validity of the patent-in-suit. Apple then withdrew its Munich case and reasserted the very same patent shortly thereafter in Mannheim, hoping for a more favorable outcome there. It didn't work, but Apple tried.

  2. Ericsson sought and obtained in Colombia an ex parte preliminary injunction, meaning that it requested the court to grant it without hearing the other party (though the defendant can then move for reconsideration, whic his what Apple did, even if unsuccessfully so). Apple then told the court that Ericsson had violated its right to due process and access to justice.

    But as Ericsson's counsel in the Colombian Apple cases, Olarte Moure's Carlos R. Olarte, noted, "the same Apple representative has requested and obtained ex parte preliminary injunctions before the Delegation of Jurisdictional Affairs of the SIC [Dept. of Industry and Commerce], which is why it is not understood why it states forcefully on this occasion that ERICSSON's action is unfair, when it itself has implemented these legal mechanisms in defense of their clients."

  3. Apple's motion for emergency relief in Texas (in the form of an antisuit damages order that Apple hopes will deter Ericsson from continuing to enforce the Colombian injunction) accuses Ericsson of "incessant attempts to subvert the [Texas-based] Court’s jurisdiction."

    Actually, a few years ago Apple closed two stores in the Eastern District of Texas to "subvert"--I'd rather say "avoid"--that court's jurisdiction.

    Figuratively speaking, Apple is now prepared to kiss Judge Gilstrap's ring just to get help from him against a foreign jurisdiction's patent infringement ruling.

It's also difficult to understand what Apple means by "irreparable harm." The English translation of that court order indicates that Apple pointed to "the net sales of Ishop, one of the distributors of Apple Colombia within the Colombian territory": US$2.6 million in 2017.

I don't expect Apple's motion for an antisuit damages order to succeed, but the fact that Apple did this may have the effect that future anti-antisuit injunctions in Germany and other jurisdictions will also bar a defendant from seeking enforcement damages abroad.

The impact of the Colombian injunction is limited. All that Apple needs to do to solve the problem is to take a license. So far Apple is spending only about 2% of its device sales on SEP royalties (less than $15 per phone). The same Apple collects 30% from those app publishers who account for the bulk of App Store revenues, and has an App Review Department that rejects thousands of submissions every day. Apple acts as a gatekeeper every day, and now there's a court in Colombia that is playing that role, too, and has ordered Apple to stop selling its 5G iPhones and iPads in Colombia, simultaneously instructing the country's customs authority to seize any shipments. For Apple, Colombia is a tiny market. For app developers, Apple's customer base of about one billion people (many of whom are among the world's richest billion people) is a huge market, but Apple denies access to that market based on partly very unreasonable--and inconsistently applied--criteria.