When an Ericsson-Apple patent license agreement expired in January and infringement litigation started, I said Apple would face an "Epicsson" dilemma, meaning that Apple would end up contradicting in the dispute with Ericsson its own defenses against Epic Games' App Store antitrust case. The extent to which this has already happened is remarkable:
In February, Apple told the United States International Trade Commission (USITC, or just ITC) that companies like Samsung couldn't make "like" articles to replace the iPhone (in the event of a U.S. import ban) since their phones won't come with iOS. That's true--and it supports Epic's market definition.
At a patent infringement trial in Munich in September, Apple's counsel denied that his client had knowledge of WhatsApp's internal protocols, in response to which Ericsson's counsel quoted from Apple's App Store security claims--and if Apple didn't know how WhatsApp communicates with its servers, how could it vouch for security?
Apple's take on fair, reasonable, and non-discriminatory royalties for standard-essential patent (SEP) licenses also contrasts nicely with what compensation Apple believes app developers owe it for the use of its intellectual property.
And now I've obtained a couple of documents from the ITC docket of what otherwise appears to be the least important Ericsson v. Apple case. Apple asked the Administrative Law Judge (ALJ) presiding over the ITC trial that will start tomorrow (in Washington, D.C.) to preclude Ericsson from referencing other Apple cases, such as Epic Games v. Apple:
The exhibits to Apple's motion show that Ericsson submitted into the record some of the pleadings, a trial transcript (Tim Cook's depositions on "Friday for Fortnite"), a slide deck, and the judgment.
Apple argues that all of this is irrelevant in the context of an ITC patent infringement case. Ericsson disagrees:
ITC Inv. No. 337-TA-1301: Ericsson's Opposition to Apple's Motion in Limine No. 3
Ericsson says "the exhibits are relevant to the public interest issues" in the ITC investigation. Apple argues that even if it is held in violation of one or more valid Ericsson patents, an exclusion order (i.e., a U.S. import ban) shouldn't issue because the iPhone is indispensable and irreplaceable (those are my words) and without iPhone imports reaching U.S. customers, the sky would fall.
Switching costs between iOS and Android are a key part here--and they are in Epic Games v. Apple. But in the Fortnite/App Store antitrust case, Apple argues that switching costs are low because it seeks to deny that it possesses market power, while in the ITC case Apple argues the very opposite because companies like Samsung could otherwise easily meet all the demand for smartphones.
While we're on the subject of Samsung, it's interesting to note that Apple also said switching costs were low when it sought (and actually obtained) an import ban on Samsung Galaxy phones (ITC Inv. No. 337-TA-796). That import ban ended up useless because Samsung (partly with help from Google) worked around all four patents on which Apple prevailed, without end users even noticing any change. But the ITC had to base its public-interest analysis on the assumption that, in a worst-case scenario, Samsung could no longer import its phones into the U.S. market, and Apple argued in a June 11, 2013 submission on Remedy, Bond and Public Interest that customers should simply buy iPhones as it's easy to switch from Android to iOS.
Ericsson says the ITC should take note of what Apple said in the disputes with Epic and Samsung because all of those documents were "prepared by Apple's attorneys, and submitted on behalf of Apple, and thus represent statements made by Apple that qualify as a party's opposition statement under [Federal Rule of Evidence] 801 (d)(2)." Also, Ericsson's experts may have reasonably relied on those statements as "relevant hearsay."
The judge's decision on that one isn't publicly accessible yet. An order came down yesterday. Its title is Regarding Respondent Apple, Inc.'s Motion in Limine Nos. 1., 2, and 4 (yes, I know it's "Apple Inc."--but the comma is in the ITC docket entry I quoted). The content is confidential for now.
The "November Fortnite" Epic Games v. Apple appellate hearing (United States Court of Appeals for the Ninth Circuit) is only 11 days away. Switching costs, competition between iOS and Android, and App Store security are all going to be key issues...
