Standard-essential utility models are major loophole in proposed EU SEP Regulation, presumably because of fundamental rights issues: structural problems

At this week's Warsaw conference on standard-essential patents (SEPs), Professor Jorge Contreras (Utah)--who is generally in favor of the proposed EU SEP Regulation, which I attribute to his well-known preference for softer SEP enforcement rather than unbiased analysis of the bill's incurable flaws--criticized one major loophole: the draft regulation doesn't cover standard-essential utility models.

That is indeed a loophole, and quite a big one. The version that leaked in late March actually defined SEP in a way that explicitly also covered utility models (SEUMs), which are registered--but not examined--property rights covering technical inventions and available in certain jurisdictions, particularly Germany, but also Spain and Italy. The current proposal does not pertain to SEUMs.

SEUMs are not just a hypothetical possibility. They do exist and actually get enforced. In December 2018, I attended a SEUM trial in Munich, where the defendants were represented by Professor Peter Chrocziel (one of the best patent litigators Germany ever had; at the time of that SEUM trial, he was a Bardehle Pagenberg partner, and now running his own IP and antitrust law boutique in Munich, focusing on strategic advice).

If the EU SEP Regulation entered into force, contributors to standards could easily work around it by obtaining German utility models and enforcing those, without enforcement being delayed or the commercial terms being impacted by the envisioned FRAND rate determinations. German national courts would presumably apply the Sisvel v. Haier standard, but that is--relatively speaking--the best a defendant to a SEUM assertion could hope for.

Utility models come with two key limitations. One is that they will be enforceable for only 10 years, not 20, from the priority date. The other is that there is no presumption of validity, so the hurdle for defendants seeking a stay pending a parallel validity determination is rather low. However, if there already is some case law relating to a patent based on the same original invention, or if there is no reasonably strong invalidity argument, German courts will order injunctions. And in Spain, it appears that it is even harder to invalidate a modelo de utilidad than a patent (it must be very obvious--not merely obvious--over the prior art).

There's an independent second reason for which contributors to standards may be more interested than ever in additionally obtaining utility models: they do not fall under the jurisdiction of the Unified Patent Court (UPC) (this week I attended the first-ever preliminary injunction hearing in the UPC). For right holders who want to hedge their bets in enforcement, it's a major opportunity to be able to seek national (particularly German) injunctions in parallel to enforcing European patents in the UPC. A complementary utility model is often a superior alternative to opting out a patent. You can ha

While Professor Contreras accurately identified the loophole and the potential for circumvention of an EU regulation, the solution is not the one he suggested.

Putting back the definition that originally leaked wouldn't work. I attribute it to a conscious decision--not an oversight--that DG GROW removed utility models from its definition of the term SEP. There are two possible factors here:

• The delays and restrictions of enforcement that the proposed regulation would impose are highly problematic with a view the EU's charter of fundamental rights as well as international obligations such as TRIPS. That is also an issue with a view to patents, but what exacerbates the problem in the case of utility models is that a delay by about a year is far more harmful when an IPR expires after 10 years (not 20). Given how much time it takes from the creation of a standard to its commercial adoption, the enforcement window is extremely short for SEUMs, so it would be very difficult to justify a delay of enforcement by roughly a year.

• There may also be limitations on the EU's ability to regulate utility models, while there already is some EU primary law relating to patents.

So what is the solution? As often in life, the roadmap to a solution starts with being honest and realistic:

There are numerous details to criticize about the proposal, and the SEUM loophole is another one to add to the list. But as I explained in a recent post, the problems are fundamental. They're structural. It's not going to get us anywhere to try to address them one by one because fixing some of those issues will create others, and in some cases the choice is between having a regulation that makes no sense or to get into serious conflicts with fundamental rights, international obligations, and the constitutions of one or more EU member states.

That's why we should all be able to agree that DG GROW's proposal is--as Mr Justice Marcus Smith accurately noted--"a wholly bad idea." The solution is not to turn left or right, but a 180-degree turnaround. Go back to Square One and devise something workable and reasonable. When computer programmers find that a certain problem-solving strategy won't work, they will at some point throw away an entire code segment and start again from scratch.

The Warsaw conference put on full display that those who drafted the bill lack regulatory humility. Their attitude is irresponsible; their competence must be questioned in light of such unbelievable stupidities as suggesting that an entire SEP family is either essential or non-essential based on the assessment of a single patent; and there is no evidentiary basis for doing what they propose to do. Those who defend the proposal resort to disingenuous methods such as incorrectly limiting the fundamental rights issues to a mere delay of enforcement.

The net-licensee camp needs some voices of reason now.

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Video of Steve Jobs's iPhone presentation kills Apple's photo gallery touch patent in Germany

Steve Jobs is a named inventor of more than 300 Apple patents, and when he presented the original iPhone in January 2007, he said, "boy have we patented it!"

But Apple forgot about an important difference between U.S. patent law at the time and the patent laws of the rest of the world, especially Europe. In the United States in the pre-America Invents Act days, innovators had a twelve-month grace period to file for inventions after making an invention, and during those twelve months nothing that anyone would show publicly or publish would be eligible as prior art. In Europe, however, there never was such a grace period for patent applications, and even an inventor's own public demos could always be held against his own patents if they took place before the filing of an application. Even now, with the AIA in force, U.S. patent law has an exception in place for pre-filing disclosure by the inventor (35 U.S.C. 102(b)(1)(A)). Europe has always been stricter.

As a result of this difference between jurisdictions, the Munich-based Bundespatentgericht (Federal Patent Court of Germany) today sided with Samsung and Google's Motorola Mobility in declaring an Apple iPhone patent, EP2059868 on a "portable electronic device for photo management", invalid within the borders of Germany because a video of the original January 2007 iPhone presentation already showed the famous bounce-back effect in the photo gallery, which is what this patent is all about. The court also rejected various amended claims proposed by Apple, which were an attempt to distinguish the patent from what was shown in the video, because it found them to be, at best, obvious over the Steve Jobs video, which Google's lawyers from the Quinn Emanuel firm submitted to the court in April 2013. In other words, even an amended version of the patent would be trivial, but not over what others created before -- only over Apple's own public demo.

This is a member of the rubber-banding patent family. The rubber-banding patent itself was affirmed by the United States Patent and Trademark Office in June and is subject to an opposition proceeding before the European Patent Office, where Samsung and Google are challenging it and may very well defeat at least some if its claims based on the Steve Jobs video. The photo gallery patent is narrower than the general rubber-banding patent. It claims mostly the same priority dates, and the relevant priority date for the purposes of the German nullity case is in late June 2007 -- five months after the original iPhone demo. Earlier today I applauded Google for promoting, as part of a broadbased industry coalition, balance and rationality in connection with the rules of procedure of Europe's future Unified Patent Court, and I congratulate its lawyers on having presented the outcome-determinative prior art reference to the Federal Patent Court of Germany in the photo gallery case. For jurisdiction-specific reasons I'll explain further below, today's victory over the photo gallery patent is not only appealable but, more importantly, paves the way for successful assertions by Apple of a rubber-banding utility model against Samsung (that case was stayed in Mannheim but could be resumed soon), Motorola Mobility, and other Android device makers.

The Steve Jobs video was shown in open court but only on a laptop close to the bench. The critical part must be what you can see around 33:40 in the following YouTube video:

Apple had won a Dutch preliminary injunction over this patent against Samsung in August 2011 (affirmed in November 2012) and a Munich injunction against Motorola Mobility in March 2012 (a couple of months before the closing of its acquisition by Google), and a case against Samsung was stayed by the Mannheim Regional Court pending this nullity proceeding. The Mannheim court predicted the right outcome for the wrong reasons: as it deemed highly probable, the Federal Patent Court indeed declared the patent invalid, but not based on the prior art evaluated at the time of the infringement ruling.

When the Presiding Judge of the Second Nullity Senate, Judge Vivian Sredl, opened the hearing in the morning, the court's inclination, outlined in detail by another member of her panel, was to invalidate this photo gallery bounce-back patent due to anticipation by at least one prior art reference, "Lira" (PCT Publication No. WO 03/081458 on "controlling content display", by AOL/Luigi Lira, published on October 2, 2003), and probably also a second one, "LaunchTile" (a study sponsored by Microsoft in the middle of the last decade; video, article). The parties had been aware of the court's thinking for several months. The court's inclination upped the ante for Apple. If a patent is deemed to have been non-novel at the time of filing, the patentee has to overcome not only this assessment of anticipation but also prove an inventive step. I considered the Federal Patent Court's preliminary opinion exceedingly strict. While in favor of high patent quality, I thought that this stretched the concept of anticipation: at most, there was a question of (non-)obviousness in my view.

Apple, represented by two Bardehle Pagenberg patent attorneys (Johannes Lang, who had prosecuted the application, and Dr. Christof Karl, who is also an attorney-at-law litigating infringement cases) who were joined by Freshfields Bruckhaus Deringer IP litigator Dr. Markus Gampp, accepted -- and mastered -- this challenge. After several hours, the court agreed with Apple that the photo gallery patent -- except for its claim 1 -- was novel and inventive over "Lira" and "LaunchTile". While Judge Sredl did not refer to those prior art references when she announced the ruling in the late afternoon, I believe the court's written decision will be favorable to Apple in this regard. The patent will still be deemed invalid as granted and as amended because of the Steve Jobs video, a holding that Apple can appeal (as a matter of right) to the Bundesgerichtshof (Federal Court of Justice). But in the greater scheme of the smartphone patent disputes, Apple's achievements with respect to "Lira" and "LaunchTile" are very relevant, even though less than outcome-determinative today.

In addition to the rubber-banding and photo gallery European patents, Apple also obtained a super-comprehensive utility model, Gebrauchsmuster DE 21 2008 000 0001, which it registered with the German Patent and Trademark Office. German utility models are sort of second-class patents: they are valid for only ten years, and they are not examined. Apple asserted it against Samsung, which instigated a revocation proceeding before the German patent office. The Mannheim court stayed the case. Since utility models don't undergo any examination, they don't enjoy any presumption of validity until they survive a challenge (in all of the smartphone patent cases I have watched, only one patent granted by the European Patent Office has been found valid by the Federal Patent Court of Germany on a preliminary basis -- a Microsoft patent on multilingual computer programs -- and only one other patent survived in an amended form -- a Microsoft patent on an event management architecture; but at least there is some examination, even if it results in a majority of patents that are invalid as granted).

There are other differences between utility models and patents, and one of them limits the eligibility of prior art. Samsung and Google (and potentially other companies worried about Apple's utility model) can't hold the Steve Jobs video against it because German utility models enjoy a Neuheitsschonfrist (novelty grace period) of six months for prior public disclosure by the patentee. Also, prior art is limited by territory, though the worldwide availability of a YouTube video might overcome that hurdle.

The German patent office has not yet ruled on Samsung's challenge to this utility model. Apple can still inject into the proceedings one or more amended claims that cover what the photo gallery patent claims. The iPhone presentation video won't count because it just about falls within the novelty grace period. Samsung will have to rely on other prior art, and its best-case prior art references are Lira and LaunchTile, of which Apple convinced the Federal Patent Court today that those don't render the photo gallery patent invalid. The Federal Patent Court reviews any determinations by the German patent office. The German patent office will most likely treat the Federal Patent Court's opinion on the photo gallery patent as binding case law for the purposes of the utility model revocation proceedings; if not, Apple can always ask the Federal Patent Court to review the decision, and a panel presumably consisting of partly the same people would probably affirm the previous decision in the new context. If Apple salvages at least a photo gallery bounce-back claim at the end of those proceedings, it can ask the Mannheim court to resume the utility model infringement action against Samsung. It can also sue Google's Motorola Mobility and others, at the appropriate time, over the utility model, which will be in force until mid-2017.

That said, today's ruling shows that "boy have we patented it" was overly optimistic -- as was Steve Jobs's claim in the same presentation that the iPhone was five years ahead of the competition. As Apple found out, it took Samsung only six months to copy it -- and Samsung didn't even make the first iPhone-clone Android phones.

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Most of Apple's German lawsuits get stayed (the latest one today): here's why

This morning, just before the Mannheim Regional Court announced an order to continue its analysis of a Motorola complaint against Microsoft over a push notification patent (a patent that is already being enforced against Apple), yet another German Apple lawsuit was unsurprisingly stayed pending resolution of a parallel revocation proceeding before the Federal Patent Court. In the latest Apple action to be stayed, the intellectual property right at issue is a utility model that, among other things, cover "pinch to zoom": German Utility Model ("Gebrauchsmuster") No. DE 21 2008 000 001).

In the following section, I'll explain "bifurcation". If you're already familiar with that concept, I recommend you to skip right to the part discussing the state of Apple's offensive lawsuits in Germany that have come to judgment.

A bifurcation primer

Bifurcation -- the rule that the validity of patents and utility models can be challenged only in separate actions from an infringement lawsuit -- is one of the reasons for which even weak patents often cause major damage in Germany. The two tracks -- infringement and validity -- aren't truly synchronized. Typically, it takes two to three times as long to get a first-instance decision on invalidity from the Munich-based Federal Patent Court (not to be confused for the Munich I Regional Court, which is a popular venue for infringement cases and has a certain exchange of judges with the Federal Patent Court) as it takes to win a first-instance ruling on infringement. This provides holders of patents that shouldn't have been granted in the first place with a window of opportunity to enforce injunctions.

While the courts that adjudicate infringement cases don't perform a complete evaluation of an invalidity defense, they try to assess the likelihood of success on the merits of the parallel nullity action. If a regional court (first-instance court) believes that a patent is highly probable (80%+) to be invalidated, it stays the infringement case pending clarification of the validity of the patent (or at least until there is further news from the nullity action). Higher regional courts (appeals courts) order a stay even if the probability of invalidation is, in their assessment, only 50%. That's because enforcement is pretty much a given after a ruling by a higher regional court, while Motorola is an exception and seeks preliminary enforcement ("preliminary" in the sense of enforcement prior to a decision on a pending appeal), which requires prevailing plaintiffs to make substantial deposits.

The percentages I just stated relate to patents. Patents enjoy a presumption of validity because there's some examination (in my opinion, examination by the European Patent Office or USPTO is not good enough to justify anything more than a weak, if not very weak, presumption of validity, but courts decide based on a relatively strong presumption). Utility models, however, are a special German type of intellectual property right, sort of a second-class patent that is not substantively examined (thus doens't enjoy any presumption of validity) and valid for a maximum of 10 years (patents are valid for 20 years). Getting a utility model lawsuit stayed requires a showing that the registered right really will survive a revocation proeeding (the equivalent of a patent nullity action).

Apple's statistics against Samsung in Germany (excluding design rights): three stays and one dismissal

To date, Samsung hasn't won anything against Apple anywhere in the world. It also lost its first three German lawsuits. Apple has had some successes, but in Germany, it has yet to enforce a technical patent or utility model (as opposed to a design-related right or unfair competition claim).

In March, the Mannheim court threw out an Apple lawsuit over a slide-to-unlock patent: Apple didn't convince the court of its infringement contentions.

Also in March, the same Court stayed an Apple lawsuit against Samsung over a slide-to-unlock utility model. In that case, infringement was pretty clear, but validity was not.

A week ago, I was actually surprised (not hugely, but somewhat) by the Mannheim court's decision to stay a patent case over a photo gallery patent Apple successfully enforced elsewhere. But in general, I think German courts should stay more, not fewer, patent cases (of course, all plaintiffs must be held to the same standard, though these cases are always hard to compare).

A few more Apple assertions against Samsung are going to come to judgment soon. I think we'll likely see at least a couple more stays.

If Apple's asserted rights are proven valid, Samsung will be in trouble

It would be a mistake to equate a stay to a dismissal. Even though time is of the essence, it's possible that the dispute between Apple and Samsung will take a couple more years to be resolved. Any of the stayed cases can be resumed if Apple's asserted intellectual property rights are affirmed.

One thing that happens very frequently is a narrowing of an asserted right as a result of a nullity or revocation action. For example, some claims may survive while others don't, and/or additional limitations (elements) may be added to claims in order to have them survive.

If Apple defends any of its asserted claims in the form in which they were granted, it can get an infringement decision very quickly. If the claims change (which is what happens most of the time), there will have to be a new infringement analysis, but sometimes lawyers manage to modify claims in a way that makes them narrower in terms of being harder to challenge while maintaining the kind of breadth that is needed to prevail over infringers. But if any narrowing is necessary, it can slow things down considerably.

It's no coincidence that Apple's German lawsuits have a particularly high rate of stays

For the most part, the high rate of stays affecting Apple's German lawsuits is due to Apple's litigation strategy. In addition, there's also an indication that the kinds of "inventions" Apple asserts contributes to the statistical pattern I just described. I'll start with the issue that is inherent to the rights Apple primarily asserts.

1. Most of Apple's assertions in Germany relate to touchscreen user interface features such as slide-to-unlock, pinch-to-zoom, or page-flipping in a photo gallery. For infringement purposes, those patents are relatively easy to understand -- certainly easier than, say, Microsoft's operating system patents. That can be an advantage in some cases. But it also makes it easier for the courts to doubt the inventive step between those patents and the defendants' prior art references. For example, if other computer programs already had sliders long before the iPhone, or on-screen on/off toggles, then what Apple created on top is more of a cool idea from a user experience point of view than hardcore technological innovation.

   On average, engineering is valued in Germany like no other country in the world, while many other nations appreciate design (including user interface design) to a greater extent. But the European patent system is also much more focused on true technological innovation than the U.S. patent system, which seeks to protect pretty much anything that is a good idea or, as legislators once put it, "anything made by Man under the Sun".

   The judges at the infringement courts have a legal, not technical, education. Nevertheless some of them show an impressive ability to analyze technical issues -- while I don't always agree with them (and largely disagree with them on FRAND issues), Judge Voss and his deputy, Judge Dr. Tochtermann, clearly have a grasp of technology that's hard to find among judges (probably even harder to find in the United States than over here, where other specialized panels, such as in Munich, have also built a lot of expertise in this regard).

   But again, these judges are lawyers, not engineers, and I sometimes feel that the pseudo-technological way in which some patents are presented (including Motorola's push notification patent) is overrated. From an engineering point of view, a lot of wireless communications patents are no less trivial than slide-to-unlock. For example, they sometimes cover simple countdown algorithms or relatively simple bit operations -- but if you talk about electromagnetic waves and orthogonal sequences of numbers, it somehow sounds like rocket science, even if the "inventive step" is even less deserving of patent protection (and the resulting monopoly even more negative) than slide-to-unlock or pinch-to-zoom.

   Given the focus of the European patent system on "technicity", Apple is lucky that the companies defending itself don't try to turn some of those Apple patents-in-suit into poster children of software patents that the European Patent Office shouldn't grant in light of Article 52 of the European Patent Convention, which prohibits patents on computer programs "as such". I never saw Motorola or Samsung raise those issues (Samsung's lead counsel here is a big proponent of software patents). I saw HTC try this in Munich, but without pushing really hard. Still, even if only indirectly, the European approach that a patent should solve a technical problem with technical means is a challenge for the kinds of patents Apple primarily asserts. Companies like Microsoft, Motorola or Nokia are in better shape in this regard.

2. Apple's choice of patents-in-suit suggests that a high drop-out rate is accepted from the beginning. While some of Apple's patents aren't particularly broad (such as the photo gallery page-flipping patent), a few of them are unbelievably broad, and I'm sure that the people who decided to assert them clearly opted for a "high risk, high gain" strategy. So far, that strategy hasn't yielded any result against Samsung in Germany, but at some point Apple may get to enforce some really powerful patent against Samsung, Motorola or HTC -- or two of them, or even all three of them.

   Apple has the resources to afford this kind of gamble: it can afford to lose many patent lawsuits. At the same time, it has a strategic necessity because all of its rivals have brought claims of their own, making it critical to have leverage as early as possible in order to force settlements on one's preferred terms.

3. Apple's focus on quick but impactful strikes is further evidenced by its various motions for preliminary injunctions and by the fact that it asserts utility models at all, which is a clear gamble.

With non-standard-essential patents, it's hard to find patents that are broad enough to be (a) infringed and (b) hard to work around while still being defensible in a nullity or revocation action. It's understandable that Apple takes its chances in hopes of identifying a winning team of powerful patents. This process takes time, but there is progress -- even if Samsung has so far been lucky in Germany, a market in which its market share is particularly high.

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Mannheim stays Apple-Samsung lawsuit over photo gallery patent, postpones decision on pinch-to-zoom

This morning, the Mannheim Regional Court stayed Apple's German lawsuit against Samsung over the photo gallery page-flipping patent (EP2059868 on a "portable electronic device for photo management") pending the resolution of a parallel nullity (invalidation) proceeding at the Federal Patent Court. I attended the announcement made by Judge Andreas Voss ("Voß" if not transcribed).

German regional courts stay patent infringement lawsuits only if a defendant shows a high probability (80%+) of the patent being invalidated.

Interestingly, this is a patent that Apple successfully enforced in the Netherlands last summer and in Munich (against Motorola) in March. While both Samsung and Motorola have been able to work around those rulings by settling for a less convenient photo gallery page-flipping solution, a win in Germany would still be of some tactical value to Apple (and entitle it to damages for past infringement, which is, however, a less than secondary consideration in the dispute between the number one and the number two in this industry). Basically, every successful enforcement helps to draw a line in the sand that restricts Google's ability to imitate Apple's user interface and functionality.

Obviously, device makers always deny that their workarounds or throwouts have any negative effects. No one will say that his products just got worse. But most of the time, that's what happens. And even in cases in which reasonable people can disagree over whether a workaround constitutes a degradation, an equally good replacement or an improvement, there's always significant value to Apple in being distinguishable. "Think different."

All of these Apple patent lawsuits are increasingly making (and maintaining) a difference. However, since those patents aren't standard-essential, they don't have the one-bullet-to-kill effect touted by Motorola.

The Mannheim court had originally scheduled another Apple v. Samsung decision for this morning, but due to internal delays, a decision (which may very well be another order to stay) on "pinch to zoom" (one of the gestures covered by German Utility Model ("Gebrauchsmuster") No. DE 21 2008 000 001) was postponed by a week until Friday, May 11, 2012. On that day, the court also plans to hand down a decision on Motorola's push notification lawsuit against Microsoft.

Other German Apple-Samsung decisions

The first German court ruling involving Apple and Samsung that made headline news was the design-right-based injunction against the Galaxy Tab 10.1 the Düsseldorf Regional Court granted in early August 2011.

But in Germany, Samsung was first to sue Apple back in April 2011 over three standard-essential patents, in response to an Apple lawsuit in the Northern District of California. Those three Samsung v. Apple cases have already been adjudicated by the Mannheim court (all three of them were tossed because Samsung failed to prove its infringement allegations) and appealed to the Karlsruhe Higher Regional Court.

In February, the Munich I Regional Court denied Apple a preliminary injunction against the Galaxy Tab 10.1N and the Galaxy Nexus over a touchscreen scrolling/zooming patent. Apple later asserted this patent in Mannheim.

In March, the Mannheim Regional Court stayed an Apple lawsuit against Samsung over a slide-to-unlock utility model. Unlike patents, utility models don't enjoy a presumption of validity, making it much easier to get lawsuits over that kind of intellectual property right stayed.

Also in March, the Mannheim court threw out an Apple lawsuit over a slide-to-unlock patent.

Today's decision included, Apple's German lawsuits against Samsung over technical inventions (as opposed to designs) have resulted in two stays, one denial of a preliminary injunction, and one dismissal.

Since the drop-out rate of those two parties' claims against each other is extremely high, there will be no immediate pressure to settle when the companies' CEOs and chief lawyers meet in San Francisco later this month for court-moderated settlement talks.

The parties have brought more than 50 lawsuits against each other in 10 countries.

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German courts appear inclined to halt one Microsoft-Motorola and another Apple-Samsung lawsuit

A busy smartphone-related court schedule in Munich (yesterday) and Mannheim (today) has resulted in a backlog of trials for me to report on. I always prioritize decisions over trials and pleadings.

I've previously blogged about an Apple-Motorola case in which the Munich I Regional Court isn't prepared to grant Apple an injunction prior to further clarification of the validity of the asserted patent, Friday's decision by the Mannheim Regional Court to stay an Apple-Samsung case (over a slide-to-unlock utility model) pending a parallel revocation proceeding at the German patent office, and a decision by the Karlsruhe Higher Regional Court not to suspend the enforcement of a Motorola injunction against Apple (over push notifications). Presumably, Apple's primary argument was its invalidity defense.

Now that we're on the subject of stays over doubts about the validity of asserted intellectual property rights, I'm going to report on two German cases that went to trial these days and need not but may very well be stayed. One is a Microsoft v. Motorola case in Munich, and the other one an Apple v. Samsung case in Mannheim. Subsequently, I'll do a blog post on a complex Motorola v. Microsoft case in which a trial took place today, at which Microsoft raised a diversity of defenses (including, but not limited to, non-infringement, invalidity, a covenant not to sue, and prior use).

Microsoft lawsuit against Motorola Mobility over multi-part text messages

On Thursday afternoon (a couple of hours after the Apple v. Motorola "dynamic ornamental appearance" trial), the Munich I Regional Court also tried a case in which Microsoft is suing Motorola over EP1304891 on "communicating multi-part messages between cellular devices using a standardized interface". This patent relates, quite specifically, to multi-part text messages (Short Message Service, SMS).

It appears that the primary benefit of the claimed invention is to provide applications with a separate layer that handles multi-part message-related functions, particularly the tasks of sending (after dividing) and receiving (and passing along in an aggregated form) such messages.

Motorola's primary non-infringement argument is that Android splits up into two function calls what the patent refers to as "the" function call. In doing so, Android gives some control back to the application level (the application could perform operations on data after the first operation), but also requires the application to make another call. While the court took an even stronger position earlier that day on the infringement of an Apple patent by Motorola, it also appeared to be rather firmly on the side of an infringement finding in this case.

From my own programming experience I would agree that the difference between a single call and two subsequent calls shouldn't be outcome-determinative in a case like this. In terms of what this looks like in practical terms, it's more of a syntactic issue than anything else. Most of the time, a function call with multiple parameters spans the same number of lines as two calls, each of which has a subset of the list of parameters. As far as additional ways to interact with data during the call is concerned, those could even be provided under a single function call by means of asynchronous callback parameters. Therefore, I think the court's inclination is right that this can't be a way out of infringement.

But Motorola's invalidity defense has much more traction. While the court didn't support it to the same extent that it did in the Apple case earlier that day, Judge Dr. Guntz did express serious doubt about the validity of the asserted patent. Motorola's primary prior art reference relates to data communication in a heterogeneous network (i.e., a network connecting computers running two or more different operating systems), and Microsoft's lawyers stressed significant technical differences between the invention claimed by the patent-in-suit and network communications (in which a mobile device could fulfill the function of a modem). Still, if the court had had to decide immediately, I believe it would have ordered a stay until a parallel nullity (invalidation) action yields results.

Recognizing that this case hinges on validity more so than on infringement, Microsoft's lawyes asked for leave to file a post-trial brief. In that case, Motorola would have been granted the same right. The court told the parties the next morning that this motion was denied. The parties can always make legal arguments, but this means that new facts won't be considered anymore.

The court is now going to consider the next step. It would be an exaggeration to say that a stay is a foregone conclusion, but that's where the court was leaning at the end of the trial. However, there was a similar situation at a December trial involving Apple's slide-to-unlock patent, but Apple ended up winning an injunction. The threshold for a stay is high: the court orders it only if it believes there's a probability of at least 80% of the patent being invalid. If that probability estimate is pushed below the 80% threshold, even if only slightly, in the weeks following trial, then the case can be adjudicated immediately.

Apple asserts utility model against Samsung's pinch-to-zoom functionality

Apple has so far sued Samsung in Mannheim over at least seven different intellectual property rights (only one of which has ended, but most likely been appealed already). On Friday, another one of those matters went to trial: Apple's lawsuit over German Utility Model ("Gebrauchsmuster") No. DE 21 2008 000 001, which is related to U.S. Patent No. 7,469,381, which I dubbed "Apple's favorite make-Android-awkward patent". In this lawsuit, Apple particularly accuses the "pinch-to-zoom" functionality of Samsung's Android-based devices of infringement.

While the '381 patent is primarily known for its relevance to list scrolling, it also has claims that read on "pinch to zoom". As far as list scrolling is concerned, most Android devices now come with workarounds. Even "stock Android" (Android as published by Google) provides a different kind of list scrolling. But Apple still asserts that patent, and its international equivalents such as this German utility model, against Android's pinch-to-zoom feature.

As I explained on previous occasions, a utility model is a German intellectual property right that comes with significant limitations relative to a patent. There is no presumption of validity, so the threshold to convince a regional court of a stay is only a 50%+X probability of invalidity, as opposed to 80%.

This is the first Apple v. Samsung lawsuit in which I've seen Samsung concede infringement and focus entirely on its invalidity defense. The judge recalled this fact, and Samsung's counsel didn't object.

Samsung's primary prior art contention is this article, entitled "Precise Selection Techniques for Multi-Touch Screens", by a researcher from Columbia University and two of his colleagues at Microsoft. It was published in 2006, well ahead of Apple's 2007 application.

The article doesn't describe exactly the pinch-to-zoom gesture known from Apple's devices and all those who copied it. Also, it refers to operations performed on a part of the screen content (as opposed to an electronic document that is often much larger than the screen). But Judge Andreas Voss of the Mannheim Regional Court pointed out that the two most important terms in the language of the claims, "gesture" and "electronic document", are very broad, a fact that makes him doubt whether the relevant claims of this utility model are valid.

In case of doubt, Judge Voss appears inclined to stay such a case pending the resolution of a parallel revocation proceeding. He prefers to let the technical judges of the Federal Patent Court (whose primary education is in engineering) detemine whether the differences between Apple's asserted utility model claims and the referenced prior art constitute an inventive step of sufficient height.

A decision (which could be a final ruling or a stay, or an order to appoint an independent technical expert) has been scheduled for May 4, 2012. I would be surprised if the court decided right away. I think that a stay or the appointment of an expert are much more likely options.

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Mannheim court halts Apple's second slide-to-unlock case against Samsung

It's taking Apple and Samsung time to win any decision against each other in Mannheim. Two weeks ago, Samsung lost its third 3G/UMTS-related case in a row and Apple saw the first one of its two German slide-to-unlock cases against Samsung thrown out. This morning, Apple's second slide-to-unlock case was stayed for the duration of a parallel proceeding before the Deutsches Patent- und Markenamt (German Patent and Trademark Office) that could lead to the revocation, in whole or in part, of Apple's slide-to-unlock utility model. Judge Andreas Voss said that the court was unconvinced of the validity of that intellectual property right in all respects, with particular concern about the broadest group of claims.

When I reported on the related trial, I already explained the key differences between patents and utility models. A utility model is a fast-track patent that is valid for a maximum of ten years, and unlike a patent, which undergoes at least some examination, utility model registrations are a mere formality. In light of that difference, utility models, unlike patents, don't enjoy a presumption of validity. If you assert a utility model, you bear the burden of proof. If you assert a patent in court, the defendant has to meet a certain standard to succeed with an invalidity defense, or to at least win a stay.

I don't know about the status of the revocation proceeding at the German patent office. But those can take time, especially if there are further delays due to appeals (in which case the Mannheim court would have to decide again whether to extend the stay or decide in Apple's favor based on the decision taken by the patent office). Since this utility model is already about five years old, every passing year significantly reduces its commercial value. Justice delayed is often justice denied in a fast-paced industry, but it's a good thing that courts approach utility models with a healthy degree of skepticism once there's an invalidity defense that's reasonably plausible. In this case, the jury is out on whether that utility model will be revoked, but based on how the trial went, Samsung had a reasonably credible defense based on its primary prior art reference, the Neonode N1m. Still, Apple could have overcome that invalidity contention if the court had determined that the obscure Swedish device wasn't eligible as prior art against a utility model (which requires a certain level of visibility in Germany). Judge Voss didn't comment on the Neonode N1m at today's announcement, but I saw at the trial that Samsung's invalidity defense depended on this device.

This is the second Apple case in as many days to be halted by a German court over doubts about the validity of the asserted intellectual property right. Yesterday, the Munich I Regional Court said clearly (though a more formal announcement is due on March 29) that an Apple lawsuit against Motorola over a "dynamic ornamental appearance" patent can't be adjudicated as long as the court has the current level of doubts about the validity of that patent. The key difference here is that Motorola had to show to the Munich court an 80% probability of invalidity (the standard for patents), while Samsung merely had to meet a standard comparable to preponderance (more than 50%) for the utility model.

Some of the claims of the utility model are rather sweeping, and if they were held valid, infringement would probably be a given for most if not all implementations of slide-to-unlock.

There was a third slide-to-unlock case in Germany, and Apple won that one against Motorola in Munich last month. In that one, Apple was asserting the slide-to-unlock patent. I don't know whether Apple is also suing Motorola over the slide-to-unlock utility model.

There will be two trials today in Mannheim (on a Motorola lawsuit against Microsoft and another Apple lawsuit against Samsung).

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Apple says Galaxy Nexus infringes slide-to-unlock utility model in Germany

A few hours after pronouncing a ruling on one of Samsung's numerous lawsuits against Apple, the Mannheim Regional Court held a hearing on one of Apple's many infringement lawsuits against Samsung.

Today's hearing relate to a Gebrauchsmuster ("utility model"), which is an intellectual property right that could be vaguely described as a fast-track patent that comes with various limitations. Companies are free to file for patents and utility models on the same invention (or on closely related inventions), and that's what Apple did with its ever-more-famous slide-to-unlock image invention. Stemming from the same original application, two manifestations of this intellectual property right exist in parallel in the German market: a patent (EP1964022 as well as a German utility model (DE212006000081).

By now I have watched three German court hearings related to the slide-to-unlock invention. In mid-December, the Mannheim court heard Apple's slide-to-unlock patent lawsuit against Samsung. In its original complaint, Apple asserted both the patent and the utility model, but the court deemed it appropriate to sever the utility model-related claims from the patent case given the complexity and unique characteristics of both sets of issues. The slide-to-unlock patent is also being asserted against Motorola in a Munich-based court. At the Munich hearing, I believe some reference to the utility model was made, but it's unclear whether it was part of the same case or also at issue in a separate proceeding there -- or whether it was only mentioned in connection with validity issues common to both. Unlike in U.S. court proceedings, complaints and similar documents aren't publicly available over here.

Two fundamental differences between utility models and patents played a key role at today's hearing:

• Since utility models are registered without an examination process comparable to the examination of patent applications, there is no presumption of validity. It's a prerequisite for an infringement ruling that the court concludes that the claimed invention was novel and non-obvious at the time of registration. In this case, the court believes a potential decision on validity or invalidity is too close to call, at least before today's oral argument took place. As a result, the court may opt to stay this case pending the resolution (at least at the first instance) of a parallel invalidation proceeding before the Munich-based Federal Patent Court. As courts do in all cases in which a stay is a possibility, Judge Andreas Voss pointed to the benefits of a more efficient use of court resources as well as the avoidance of inconsistent rulings.

• The strongest counterargument against a stay is that justice delayed is justice denied. In this case, that argument is particularly strong since Apple registered the asserted utility model in 2006. The maximum term of validity of utility models is 10 years (while patents are valid for up to 20 years). After the resolution of all of the pending issues, the asserted utility model would be on the verge of expiration and, therefore, commercially devalued.

  Apple's counsel said that it wasn't possible to assert this utility model against Samsung's products much earlier because they are relatively new. Samsung's counsel replied that some of them are two to three years old. At least in some cases, I have no doubt that Apple's couldn't-sue-sooner claim is correct. The best example is the Galaxy Nexus, with respect to which Apple today filed (with yesterday's date) supplemental infringement contentions.

  I haven't previously seen the Galaxy Nexus named explicitly as an accused product in any Apple lawsuit. It doesn't even appear to be targeted by a new design rights lawsuit brought by Apple in Düsseldorf this month. The Galaxy Nexus didn't show up on the list of accused products that Germany's most-read IT news site obtained from a spokesman for the Düsseldorf court. The Galaxy Nexus is an "Android lead device" (for the latest Android version, dubbed Ice Cream Sandwich), which makes it particularly key to Google's strategy.

On March 16, 2012, the Mannheim Regional Court will pronounce some kind of a decision, which could be a ruling (if the court considers the broader claims of that utility model valid, infringement appears to be beyond reasonable doubt), a stay (pending the aforementioned parallel nullity proceedings), or a decision to appoint an independent expert in order to help the judges assess whether the claimed utility model is obvious or non-obvious over certain prior art combinations. Apple would obviously prefer for the court to reach that ocnclusion without further delay, but as a second-best solution it could live with the appointment of a court expert. It just hopes to avoid a stay.

In connection with the disputed validity of that utility, Samsung emphasizes an obscure Swedish device that previously persuaded a Dutch judge to doubt the validity of Apple's slide-to-unlock patent. In the utility model case, the Mannheim Regional Court could decide in Apple's favor without even having to go into technical details on the Neonode device. In order for the widely-unknown device to be eligible as prior art in a utility model case, the standard for availability is higher than for patents. It's not clear whether Samsung can prove that this device counts as prior art in this context.

Rather than going into further detail on the issues surrounding the slide-to-unlock invention, I'll just wait for the court order that will come down on March 16.

In closing I'll tell an anecdote from the beginning of today's hearing. Samsung's counsel moved to stay the case until Apple posts a bond covering its potential liability for court fees and Samsung's legal fees according to the German "loser pays" principle (which in cases like this awards amounts that are typically much less than what a defendant like Samsung actually spends). In my estimate, that amount is on the order of a few hundred thousand euros. That's not a lot of money for these two companies. Such a bond is formally necessary because the plaintiff in this case, Apple Inc., is domiciled outside of the European Union. Apple's counsel objected to this untimely motion, and after a recess of about 15 minutes, the court agreed that it would be sufficient for Apple to post the required bond at a later time. If Samsung's motion had succeeded, it would probably have delayed the case by only a few weeks -- over an amount that no reasonable creditor would have to be worried about if Apple, a company that has far greater cash reserves than anyone else in the industry.

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