Samsung's appeal of ITC ruling on its complaint against Apple only about standard-essential patent

Right after the Presidential veto of an import ban of older iPhones and iPads over a standard-essential patent, Samsung told reporters that it had appealed the unfavorable parts of an ITC ruling: Apple was cleared of infringement of three of the four patents-in-suit at the time because the Commission (the six-member decision-making body at the top of the U.S. trade agency) reversed the Administrative Law Judge's decision with respect to only one patent-in-suit. So Samsung had the opportunity to pursue three patents on appeal: one standard-essential one and two non-SEPs.

Samsung filed its opening brief with the Federal Circuit yesterday, and the public redacted version of that one became available today. Two things I want to mention up front:

1. Samsung is pursuing only the (other) SEP on appeal (U.S. Patent No. 7,486,644, which is about HSUPA), despite the Presidential veto relating to the other SEP-in-suit (the '348 patent), but none of its two non-SEPs-in-suit, over which it would certainly win an import ban if it prevailed on liability.

   This suggests that Samsung is primarily interested in keeping that SEP alive for damages purposes, since it would be a long shot to win an import ban (on the remand it seeks) in light of the last veto (though not 100% impossible if the FRAND-related facts changed in the meantime, such as new offers made in negotiation that might warrant a new public interest analysis down the road, most likely in 2015). The veto itself is not appealable.

   Furthermore, Samsung's choice indicates that it doesn't believe too much in the strength of its non-SEPs-in-suit. On a worldwide basis it has not been able to prevail over Apple on a single one of its own non-SEPs.

   More than a year ago I analyzed the Administrative Law Judge's initial determination (preliminary ruling) and said the '348 patent (the one on which Samsung prevailed in the decision that then got vetoed) was its best shot. For the '644 patent, which it's now pursuing on appeal, I saw a "steep challenge" after not only the judge but also the ITC staff cleared Apple of infringement. I considered one of the two non-SEPs unwinnable and was skeptical about the other one, too.

   The ITC cannot award damages. But a Federal Circuit finding of infringement would be binding for a district court. Samsung filed a companion federal lawsuit in Delaware, and the Delaware case was stayed pending the ITC investigation (including any appeals) but will be resumed at some point (most likely in 2015).

   Regardless of the Delaware damages case, by simply pursuing this appeal, Samsung improves its ability to argue to a court, in the event that an Apple-Samsung FRAND rate determination is made in the meantime, that the patent is still alive.

2. With respect to the '348 patent (the "vetoed" patent), Samsung affirmatively said that an import ban would not affect Apple products incorporating Qualcomm baseband chips. But now, for the '644 patent it's pursuing on appeal, Samsung does argue that Qualcomm chips, too, infringe it. The exemplary accused product with a Qualcomm chip is the iPhone 4S, which comes with the Qualcomm MDM6610 baseband processor; older iPhones and iPads came with Intel chips. What I haven't found out yet (and may never find out due to heavy redactions of confidential business information such as license agreements) is whether Samsung simply thought that Qualcomm's chips didn't infringe the '348 patent (the "vetoed" patent) for technical reasons, or whether it feels it has a better chance to overcome a patent exhaustion defense with respect to the '644 patent (the patent-on-appeal). Patent exhausion and similar theories (third-party rights under a covenant not to sue customers or whatever) will likely play a role in this appeal, just in case Samsung wins a reversal of the ITC's non-infringement finding. In Europe it lost a couple of cases because of Qualcomm-related licensing issues. If the Federal Circuit sided with Apple on this question with respect to the '644 patent, it would have implications for Samsung's dispute with Apple beyond this ITC case.

From a tactical perspective this is going to be a very interesting appeal to watch. Finally, here's the public version of Samsung's opening brief:

13-10-31 Samsung Opening Brief in Appeal of ITC-794 Ruling by Florian Mueller

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Apple insists on adding Galaxy S4 to second California patent case against Samsung

About a month ago it became known that Apple intends to add the Samsung Galaxy S4 smartphone to the list of accused devices in the second California litigation between the two companies. Still in May, Apple identified the patents it says the Galaxy S4 infringes in the same way in which earlier Galaxy devices do. Considering that the Galaxy S4 could substantially increase the damages base should any Apple patents be found infringed at next year's trial, it was clear that Samsung wasn't going to let this addition of its new flagship gadget happen without a fight. It opposed Apple's motion. A hearing is currently scheduled to take place on June 25. Judge Lucy Koh has delegated the related issues to Magistrate Judge Paul S. Grewal.

Late on Tuesday, Apple replied to Samsung's opposition brief (this post continues below the document):

13-06-11 Apple Repy in Support of Addition of Galaxy S4 to 2nd California Case

Apple addresses the three pillars of Samsung's opposition argument:

1. Samsung claims judicial estoppel: Apple had successfully opposed the late-stage addition of the iPhone 4S to the parties' first California lawsuit, so, according to Samsung, it can't now move for a similar addition. But Apple says "[t]he circumstances here are dramatically different". Apple argues that the infringement issues are identical, so basically Samsung just needs to download some Galaxy S4 source files, which it keeps in the same repository as its other source code, and provide sales data (Apple notes that "[r]eports indicate that Samsung has already sold between 6 and 10 million units of the Galaxy S4". By contrast, Samsung's assertions of cellular standard-essential patents against older iPhones targeted Intel/Infineon baseband chips, while the 4S was the first iPhone that came with a Qualcomm baseband chip, raising different implementation and patent exhaustion issues and requiring third-party discovery.

2. With a view to Apple's pursuit of damages and injunctive relief, Samsung also argues that "demand for the Galaxy S4 is driven by new features that are not accused here (such as 'Air Gesture')", but Apple says Samsung is free to raise such arguments at trial. This is part of Samsung's argument that it would be "prejudiced" by the late-stage addition of the S4. Apple, of course, denies this.

3. Samsung interprets a recent case-narrowing order by Judge Koh so as to require the parties to select ever smaller subsets from their original lists of accused devices. Apple, however, says "Judge Koh's orders did not limit which products the parties may accuse, only the number of products the parties may accuse". And Apple has said all along that it would be willing to drop another product from the list in order to make room for the S4, if and when it's allowed to add that one.

I wouldn't bet money on Apple obtaining permission to add the S4 to this case. While I don't think Samsung's judicial-estoppel argument is strong (there are different fact patterns between the Galaxy S4 and the iPhone 4S) and furthermore don't believe Samsung would face a huge challenge in responding to the addition of the S4 if granted (and, very importantly, no third parties would be affected), it's quite possible that Judge Koh really meant case narrowing the way Samsung interprets her order. Apple is right that her order didn't explicitly state that new products couldn't replace older ones: she only talked about the number of accused devices. Still, one could understand the spirit of her order to mean that the parties started with certain lists of accused products and should now, step by step, drop products from that list (as opposed to replacing products). I guess this is going to be a key issue at the hearing. I believe the S4 should be added because, in the alternative, the 2014 trial would basically be about products that became obsolete more than a year before the trial, which would be ridiculous. But U.S. patent enforcement is slow and inefficient, and that's generally a problem for Apple and a boon to Samsung.

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Samsung affirmatively says U.S. import ban would affect only older iPhones and iPads

In the previous post I discussed a revelation contained in Apple's response to the United States International Trade Commission's questions relating to remedies and the public interest in the investigation of Samsung's complaint. A ruling is due on May 31 (unless postponed again), and it's pretty clear that the ITC is inclined to hold Apple to have infringed one or more claims of U.S. Patent No. 7,706,348, an allegedly UMTS-essential patent. One of the questions raised by the Commission in March relates to the scope of an import ban, should one be ordered:

"4. With respect to the '348 patent, Samsung’s infringement case before the Commission relied upon accused third and fourth generation Apple products that operate on the AT&T wireless network. If the Commission were to issue remedial orders covering articles covered by the asserted claims of the ’348 patent, would such an order cover (a) Apple products that operate on other wireless networks in the United States, and (b) later generation Apple products (e.g., iPhone 5, later iPad versions)?"

In the proceedings before the ALJ Samsung accused only older Apple products of infringement of the '348 patent: the AT&T models of the iPhone 4 (but not the 4S or 5), 3GS and 3, and of the iPad 3G and iPad 2 3G.

Apple's response was written without knowing what position Samsung would take. Apple felt that Samsung couldn't enforce an exclusion order against newer Apple products, arguing that those don't infringe for technical reasons and that, in any event, the components in those products that implement the relevant invention are Qualcomm baseband chips, resulting in patent exhaustion as Qualcomm is licensed. The Office of Unfair Import Investigations ("ITC staff") acknowledged that there is no evidence in the record concerning other networks or newer Apple products, and "agreed with Apple that any exclusion order issued in this investigation should include a certification provision to assist in enforcing the order", presumably designed to avoid that customs officers mistakenly hold shipments of current-generation iPhones and iPads. But the ITC staff argued that "Apple could have presented evidence at the hearing concerning unaccused products in an effort to demonstrate that they do not infringe", pointing to the fact that Samsung did the same in the investigation of Apple's complaint (with a view to the problems this course of actions raises, let me refer you to a post I wrote a few months ago).

Furthermore, the ITC staff wouldn't want the exclusion order itself to be limited to particular model numbers and wrote that taking a position on devices not at issue in the investigation "would be tantamount to issuing a pre-exclusion order 'advisory opinion,' for which the Commission Rules do not provide". Instead, "the question of whether such products would be within the scope of a remedial order based on the '348 patent would have to be determined in the future on a case-by-case basis, either by the U.S. Bureau of Customs and Border Protection through a certification process or scope ruling, or by the Commission in an advisory or enforcement proceeding". This is inconsistent with the ITC staff limiting its whole public interest argument to the specifically-accused AT&T versions of older iPhones and iPads: the analysis would be different, and potentially lead to a different result, if the scope of the import ban goes beyond the exemplary infringing devices. would not be acceptable to Apple given the commercial uncertainty it causes at the enforcement stage. Apple, before it knew what Samsung would say, wanted to achieve that the Commission would at least remand the investigation to the Administrative Law Judge in order to clarify these infringement issues.

Samsung has now taken the position that not only the AT&T versions of the accused iPhones and iPads but also versions sold by other carriers infringe and should fall within the scope of an import ban -- but newer products incorporating Qualcomm chips (the mentioning of Qualcomm is redacted, but having watched this dispute for a while, I can figure) would clearly fall outside its scope:

"At the time the complaint was filed, Apple's iPhones and iPads with UMTS connectivity were only available through AT&T. Since then, Apple has expanded its sales to other UMTS carriers. Because all iPhone 4 (UMTS version) and iPad 2 (UMTS version) devices infringe the asserted claims of the '348 patent, regardless of carrier customer, they would be subject to the Commission's remedial orders. However, AT&T remains the largest UMTS iPhone 4 carrier by volume. [...].

Based on Samsung's understanding, the current configurations of the iPhone 4 (CDMA version), iPhone 4S, iPhone 5, iPad 2 (CDMA version), iPad (third and fourth generations) and iPad mini contain [REDACTED]. Accordingly, unless these devices are altered to incorporate [REDACTED], they would not be subject to an exclusion order or cease and desist order. Similarly, future devices incorporating [REDACTED] would not be subject to an exclusion order or cease and desist order."

In commercial terms the second part -- where Samsung confirms that Apple products incorporating Qualcomm baseband chips are fine -- is far more important than the first one (other carriers). Should there be an import ban of older iPhones and iPads, Apple will only be affected at the low end and in the repair business. The problem could be solved for the most part by a delay before an import ban takes effect. In the meantime, there will be another generation of devices, and the oldest devices currently still on sale will then be replaced as entry-level devices by the second-oldest ones. I still don't believe the ITC will actually ban any Apple products, given that courts and regulators have concluded that Samsung failed to comply with its FRAND licensing obligations, but if it happens nevertheless, its impact will be very limited.

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Where on Earth could Samsung get the iPhone 5 banned over 4G/LTE patents?

In the context of Friday's dismissal of a Japanese Apple lawsuit against Samsung, I mentioned (as I previously did on other occasions) that the problem of the Android camp in general and Samsung in particular is that they can't score meaningful offensive wins against Apple. Fending off patent lawsuits is not enough when facing a company with a fast and large-growing portfolio of relevant patents. Defensive wins merely delay the inevitable.

What Samsung needs are enforceable injunctions over impactful non-standard-essential patents. Thus far, Samsung hasn't won any injunction of that kind. It previously relied largely on standard-essential patents (SEPs), and a Korea Times report published on Friday suggests that Samsung is once again contemplating a multijurisdictional push for preliminary injunctions against a new iPhone (or iPad 4G):

"Samsung confirmed that it will immediately sue Apple if the latter releases products using advanced long-term evolution (LTE) mobile technology."

It tried this trick last year with 3G patent assertions against the iPhone 4S, with a hit rate of zero. I would strongly discourage Samsung from trying to use 4G/LTE-essential patents to shut down the iPhone 5. It won't improve Samsung's position. It will only make things worse, especially with antitrust regulators. In my view, the reasonable approach for Samsung would be to sue for FRAND royalties over its SEPs, not injunctions.

The Korea Times article cites research according to which Samsung owns the world's third-largest 4G/LTE portfolio. But the size of a portfolio related to a given standard is only indirectly relevant if someone seeks injunctions over SEPs. As an expert report filed with different courts by now-Google-subsidiary Motorola Mobility noted, "it only takes one bullet to kill".

Obviously, the larger a portfolio is, the more likely it is to contain truly essential patents, as opposed to merely declared-essential patents. But Samsung's unsuccessful 3G enforcement campaign against the iPhone 4S failed primarily because of licensing issues. The other respect in which a large portfolio of patents specific to a given standard can help is that a larger portfolio typically (unless there are serious validity or essentiality issues) entitles a patent holder to a higher royalty rate. The reasonable royalty rate is a factor to some courts who look at whether the implementer of the standard was made a FRAND offer. But even with 12% of all 4G/LTE patents, Samsung can't claim a 2.4% royalty on Apple's products. If you extrapolate this percentage to the entirety of 4G/LTE patents, Apple would have to pay 20% of its sales -- tens of billions of dollars a year -- to the collective owners of 4G/LTE patents. That's still far out of the FRAND ballpark.

It's not just the percentage Samsung asks for but, especially, the royalty base. I explained that issue on previous occasions, such as this post on one of Apple's pre-trial filings with Judge Koh's court. The proper royalty base would be a fully-licensed baseband chipset, or at the most a cheap feature phone, just like a jalopy and a sports car pay the same highway toll, as Apple noted in a letter to U.S. lawmakers. Also, Samsung won't get 2.4% of the price of an airplane if it comes with on-board 4G/LTE functionality.

Patent exhaustion is also going to be a big issue. From what I heard, the iPhone 5 will come with a Qualcomm baseband chip. Qualcomm and Samsung have a patent license agreement in place. Samsung tried to terminate it with respect to Apple as a third-party beneficiary (Motorola, advised by the same lawyers, tried the same thing). But in some jurisdictions, Samsung's push for injunctions against Apple devices incorporating Qualcomm baseband chips failed just because that termination theory was rejected, especially in light of Samsung's promise to grant irrevocable FRAND licenses to its SEPs. I don't know the Samsung-Qualcomm agreement but most likely it won't make a distinction between 3G and 4G patents as far as termination is concerned -- and participants in 4G/LTE standard-setting also had to promise to grant irrevocable FRAND licenses.

Should Samsung really try to get the iPhone 5 banned over 4G/LTE SEPs, it will have to find at least one jurisdiction of economic relevance in which it can surmount all of the following hurdles in addition to the usual requirements for patent enforcement (validity, infringement) and potential claims that it failed to disclose its patents and patent applications on a timely basis:

1. the contractual implications of its own FRAND pledge

2. Qualcomm-related patent exhaustion-like issues

3. antitrust issues (in court as well as blowback from regulators -- the European Commission is already investigating Samsung's related conduct)

Let's now look at the situation in different jurisdictions. It's clear that the only country in which Samsung is reasonably likely to succeed is Korea. Other countries are, at best, a gamble.

North America

In the United States, earlier disputes over SEPs were settled before any precedent that could be useful to Samsung was set. Recent decisions by judges in four different federal districts strengthened the rights of good-faith implementers of standards. The most notable one is also the one that most specifically addresses injunctive relief: the FRAND-related part of Judge Posner's dismissal of a two-way Apple-Motorola lawsuit in Chicago. While not specific to injunctive relief, summary judgment decisions in Wisconsin and Washington (state) strongly support a FRAND-related contract-based defense. In the Northern District of California, Judge Koh allowed Apple to take most of its FRAND counterclaims to trial against Samsung. The jury verdict didn't support Apple's counterclaims, but juries don't make law and have at the most an advisory role in connection with equitable defenses which are decided by judges. The jury dismissed Samsung's SEP assertions on two grounds, either one of which would have been sufficient on its own. The patents were not demeed infringed, and if they had been deemed infringed, the jury sided with Apple on patent exhaustion (interestingly, only Intel chips were at issue, and from the outside it appears that Apple's patent exhaustion argument is stronger in connection with Qualcomm than with Intel).

Furthermore, U.S. antitrust regulators don't take FRAND abuse lightly. Officials from the Federal Trade Commission and the Department of Justice spoke out on injunctive relief (particularly in the form of import bans) over SEPs at a recent Senate hearing. Also, the FTC filed a pretty clear statement with the ITC.

I'm unaware of similar cases in Canada. That country has a common law system, which means that principles of equity will be considered before injunctive relief is granted. This is speculative, but Judge Posner's reasoning on FRAND (which is very general in nature and not specific to U.S. law) could be quite persuasive in all English-speaking common law jurisdictions.

Europe

With the ongoing European Commission investigations, Europe is the last continent on which it would make sense for Samsung to sue. All of Western Europe's large economies are EU member states. But there are rumors that Samsung is nevertheless looking at Europe as a priority region for 4G/LTE SEP enforcement against the iPhone 5.

In Mannheim, Germany, Samsung has a couple of trials over 3G/UMTS SEPs coming up this month. Theoretically, their outcome could also have an impact on the iPhone 5 (at the trials I hope to learn about the scope of the injunction Samsung is seeking). Its previous three Mannheim lawsuits against Apple all failed because Samsung couldn't prove actual infringement. Motorola was more successful on the infringement side, but it turned out last month that the Google subsidiary ultimately felt forced to grant Apple a wireless SEP license, the financial terms of which have to be sorted out in court (they just agreed on an unspecified FRAND rate). If Apple was able to deal with Motorola's SEP assertions in Germany, it will also find a way to deal with Samsung's attacks within the Orange-Book-Standard framework. Apple never has a problem with paying FRAND rates, as long as FRAND really means FRAND.

In some parts of Germany, especially in the circuits the courts in Mannheim (primary venue for SEP lawsuits) and Düsseldorf (second most popular venue for this) belong to, preliminary (as opposed to permanent) injunctions are generally unavailable over patents that have not been defended in a contentious proceeding (reexamination or nulity action). In Munich, such untested patents can result in preliminary injunctions, but it doesn't take too much doubt over the validity of a patent to fend off a preliminary injunction motion. Also, SEP holders generally don't sue in Munich, presumably because they feel the FRAND defense is weaker in Mannheim and Düsseldorf.

In the Netherlands, Samsung's 2.4% royalty demand was considered to be far outside of the FRAND ballpark. As a result, injunctive relief was ruled out even before the court looked at infringement and validity. One Samsung 3G/UMTS SEP was actually deemed valid and infringed, but Samsung is only entitled to what will be a modest sum, and the same ruling indicated that Apple is fine as far as its products incorporate Qualcomm baseband chips.

In France and Italy, Samsung's preliminary injunction requests against the iPhone 4S were turned down by courts in Paris and Milan. In both cases, the decision was primarily based on Qualcomm-related exhaustion issues, but both courts also had a fairly FRAND-friendly inclination.

In the UK, it's generally very hard to win patent injunctions. Most patent assertions don't even result in a finding of liability because the High Court of England and Wales tends to consider more patents invalid than its counterparts in other European countries and also takes a conservative position on infringement questions. Even if there is liability, there still isn't necessarily an injunction. A few months ago, SEP assertion entity IPCom received a clear indication from the court that it wouldn't be able to win an injunction against Nokia. Even prior to that, trying to get products banned in the UK over SEPs would have been a long-shot proposition. And now, even more so.

Last year, Huawei filed a lawsuit in (among other countries) Hungary against ZTE, apparently also involving 4G patents, but no outcome is known.

Apple and Samsung already have some design rights matters pending in Alicante, Spain, where the EU agency administering Community designs (EU-wide design patent equivalents) is based. If Samsung brought a SEP infringement action in Spain, it would probably alienate European Commission Vice President (and competition commissioner) Joaquín Almunia, a Spaniard who is personally very concerned about the overall FRAND abuse situation.

There are literally dozens of other Europan countries, and while none of them represents a huge market, some of them have affluent populations. We'll see if Samsung is going to enter unchartered SEP litigation territory. Even if it won an injunction in some smaller European country, it's likely that Apple wouldn't lose much of its sales opportunity because the resellers based there would just simply purchase the iPhone 5 in other EU member states (no customs duties within the EU's single market). Samsung could try to put pressure on retailers, but that's difficult to do and could affect its own sales.

Asia

South Korea is the only country in the world in which Samsung has been able to win an injunction against Apple so far, even two of them at the same time, and to add insult to injury, both over SEPs. Those two injunctions appear likely to be stayed for the time being and relate to products that do not come with Qualcomm chips. What is known about the ruling was markedly sympathetic to Samsung's arguments, but Samsung also has to think about the political implications of turning its country into a FRAND rogue state.

I don't know about SEP injunctions in Japan. Last year the Wall Street Journal reported on a Samsung announcement of a motion for a preliminary injunction against the iPhone 4S in that country, but I never heard about the iPhone 4S actually being banned there.

China is probably the most interesting country worldwide in which Apple and Samsung are not yet known to be suing each other. But there are various reasons to doubt that Samsung would succeed there. China has traditionally limited the exclusionary use of patents through compulsory patent licenses. I understand that the Chinese patent office has some authority in this regard. Also, the Chinese Ministry of Commerce (MOFCOM) was genuinely concerned about Motorola's use of SEPs in its protracted merger review. And Apple's gadgets are built there.

India generally has a reputation of weak patent rights.

Australia

A two-way Apple-Samsung trial is sort of ongoing there, though it appears that it will take months before any kind of decision. A Bloomberg report on one of the trial sessions indicates that a federal judge called a dispute over "wireless transmission technology" (i.e., wireless SEPs, as opposed to Apple's technologies) "ridiculous" and felt that mediation (to set a royalty rate) was the appropriate next step. An injunction against Apple over wireless SEPs in Australia appears unlikely, and a preliminary injunction (or temporary restraining order) is even less likely.

Rest of the world

I previously focused mostly (even if not exclusively) on jurisdictions in which Apple and Samsung already have litigation pending. There are still some countries I didn't address. For example, two of the BRIC countries, Brazil and Russia weren't mentioned. I don't see an obvious reason why the courts in those countries would adopt the Korean stance as opposed to the European and North American line. Also, one country in which technology companies file for lots of patents, but so far don't sue, is South Africa. And since I mentioned Australia, I might also mention that New Zealand is currently reforming its patent system.

Maybe Samsung will surprise us and really find a place to sue that nobody thought of. But if it really wants to gain massive leverage over Apple, it will have to focus on the places I discussed. For the vast majority of Apple's customers on this planet, Samsung's 4G/LTE-essential patents most likely won't have an impact on the availability of the iPhone 5.

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Apple refiles contract lawsuit against Google to protect its latest 3G/4G gadgets

The judicial process rewards a healthy degree of doggedness. No plaintiff is ever beaten unless his lawsuit is dismissed with prejudice. In that spirit, Apple just made its third attempt at bringing a patent-exhaustion-based "antisuit" lawsuit against Google subsidiary Motorola Mobility in an effort to protect, on a worldwide basis, those of its products that come with a Qualcomm baseband chip (the iPhone 4S, the 4G version of the new iPad, and presumably Apple's next products such as the iPhone 5).

Apple originally brought this contract lawsuit in February 2012 in the Southern District of California, where Qualcomm is based. Apple seeks to enforce its rights as a third-party beneficiary of a Qualcomm-Motorola patent license agreement. The original lawsuit had worldwide scope and sought declaratory as well as injunctive relief.

At the time of its filing, Apple's most immediate concern was the situation in Germany, where it was temporarily forced to remove certain 3G-compatible products from its online store, and where Motorola had just started to attack the iPhone 4S. When Apple made its original filing in Southern California, it had won only a temporary stay: a stay for the time it was going to take the appeals court (the Karlsruhe Higher Regional Court) to rule on a motion to suspend enforcement of the injunction for the entire duration of the appellate proceedings. That temporary stay could have been lifted only a few weeks later, but in late February it was extended for the duration of the appeal.

Motorola wanted Apple's California lawsuit dismissed for a variety of reasons, and Apple presumably determined that it was prudent to exclude Germany from the scope of the "antisuit" lawsuit. If Apple had continued to pursue relief in the U.S. with respect to Germany, Motorola would probably have called into question Apple's commitment to the licensing offer it made under the German Orange-Book-Standard procedure. Apple's first amended complaint also laid out a legal basis for bringing a lawsuit in federal court rather than state court.

But Motorola Mobility also challenged the first amended complaint, and two weeks after a hearing that took place in early July, Judge Dana M. Sabraw dismissed Apple's first amended complaint, but allowed Apple to refile until yesterday (Friday, August 3) and provided pretty useful guidance as to how Apple could state justiciable claims that would be more likely (if not certain) to dismiss a future motion to dismiss. Apple did not decline this invitation to pursue its cause, and indeed filed a second amended complaint (its third complaint in this case) late on Friday. As far as I can tell based on the public redacted version of the complaint, Apple adopted the judge's advice.

In the previous paragraphs I linked to several earlier posts on this lawsuit, and you can find further detail on this "antisuit" action in them. There are no fundamentally new facts in the second amended complaint. What's worth noting is that Apple's second amended complaint repeatedly quotes a passage from a filing Motorola made with the Karlsruhe Higher Regional Court:

"Also the further assertions with regard to the iPhone 4S are inaccurate. There is no strategy in place not to challenge these products. The fact that the Plaintiff has not yet challenged the 4S in Wisconsin has tactical reasons of a procedural nature, which the Plaintiff naturally will not expose to the Defendant."

In light of that statement, it's clear that a 3G-related patent infringement lawsuit by Google against Apple in the United States over the iPhone 4S and other products incorporating Qualcomm chips (such as the new iPad 4G), and/or in other jurisdictions around the globe, is only a matter of time unless the Southern California action proves dispositive through a determination that Motorola does not have the right to sue Apple for its use of Qualcomm baseband chips. One of the questions that will have to be resolved in San Diego is Motorola's "termination" of its license agreement with Qualcomm with respect to Apple as a third-party beneficiary, which Apple itself calls "ineffective". A similar strategy has not worked for Samsung so far, with courts in at least three different jurisdictions (the Netherlands, France, and Italy) having determined that patent holders who made a FRAND pledge according to ETSI rules must grant irrevocable licenses.

In a recent filing with the ITC, Apple explicitly stated its willingness to take a FRAND license to Motorola's standard-essential patents:

"Over the last few years, Apple consistently maintained its willingness to enter into a [F]RAND license and has sought to persuade Motorola to accept a [sic] [F]RAND terms. That Apple has refused to accede to Motorola's unfair demands does not make Apple an 'unwilling licensee.' Apple has concluded cross-licenses with many companies in the wireless industry, and stands ready to execute an agreement with Motorola if Motorola were to comply with [F]RAND."

If Apple's Southern California action succeeds, its new 3G/4G products will be safe and Google may bring its royalty demands down to a FRAND level.

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Google's push for U.S. import ban against Apple targets only older iPhones than the 4S

Even if the top-level decision-makers of the ITC affirmed a preliminary ruling by an Administrative Law Judge against major public interest concerns on Capitol Hill and in the industry, and granted Google subsidiary Motorola Mobility an import ban against Apple over U.S. Patent No. 6,246,697 (a patent declared essential to 3G/UMTS), it appears that the iPhone 4S and the new iPad 4G would not be affected (at least not without a decision in a different or subsequent litigation).

I conclude this from the following passage that I found in a filing Apple recently made with the ITC (click on the image to enlarge or read the text below the image):

"Motorola has agreed that Apple's CDMA2000 cellular devices, which operate on Verizon's cellular network, are not accused in this Investigation. This is likely to avoid litigating a dispute over whether Apple's CDMA2000 baseband chip provider (Qualcomm) has a license to the '697 patent, an issue being litigated in another forum. See Apple Inc. v. Motorola Mobility, Inc., No.: 3:12-cv-00355-DMS-BLM (S.D. Cal. Filed Feb. 10, 2012)."

The lawsuit mentioned at the end of that passage is the one in which Apple argues that Motorola's patent rights are exhausted as far as Apple uses Qualcomm baseband chips that implement the relevant patents. The first iPhone to include a Qualcomm baseband chip is the iPhone 4S, and it's widely expected that the iPhone 5 will do so as well. It's also been said that the new iPad 4G comes with a Qualcomm baseband chip.

Motorola has a comprehensive patent license agreement in place with Qualcomm but sent a termination notice to Qualcomm in January 2011 in order to deprive Apple of any third-party benefits from that license. Apple disputes that this actually resulted in the intended termination.

Yesterday I reported that Judge Sabraw, the federal judge presiding over that patent exhaustion lawsuit in the Southern District of California, dismissed Apple's first amended complaint but allowed Apple to refile it and provided plenty of guidance. One of the arguments that Motorola made in its motion to strike or dismiss Apple's case was that there was no actual controversy in terms of Motorola targeting the iPhone 4S with patents that are implemented by Qualcomm baseband chips. The footnote from Apple's ITC filing that I quoted above makes a lot of sense in that light: Motorola Mobility was presumably more interested in getting the patent exhaustion lawsuit dismissed than in launching an immediate attack on the iPhone 4S and the new iPad 4G. That's why it confirmed that its ITC complaint didn't target CDMA2000 chips (even though the '697 patent has been declared to the CDMA2000 standard, not only its predecessor).

Whatever Google's (Motorola's) motivation for not targeting CDMA2000 devices (which in Apple's cases means devices with a Qualcomm baseband chip) may be, this limits the potential impact of an import ban based on the '697 patent.

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Judge tells Apple how to rework its Qualcomm-related patent exhaustion case against Motorola

Yesterday it became discoverable that Judge Dana M. Sabraw of the United States District Court for the Southern District of California had dismissed Apple's declaratory judgment and antisuit injunction lawsuit against Google subsidiary Motorola Mobility. A hearing on Motorola's motion to dismiss took place the week before last.

At first sight, this is a major disappointment for Apple, which had already amended its complaint (which it originally brought in February 2012) once in order to address flaws raised by an earlier Motorola motion. But Apple is allowed to refile this lawsuit until August 3, and Judge Sabraw provided enough guidance that Apple's lawyers know what they have to do in order to bulletproof their case against the next motion to strike or dismiss.

Since this dispute involves a contract between Motorola and Qualcomm, a lot of related information is and remains confidential. Still it's known that Apple brought this case in order to prevent Motorola from attacking the iPhone 4S and any future Apple products that come with a Qualcomm baseband chip with patents that are implemented by a Qualcomm baseband chip. In my previous posts on this case, I explained this in more detail.

Apple's first claim is breach of contract. Originally, Motorola's attempt to shut down the iPhone 4S in Germany was key to this claim, but when Apple amended its complaint, it left out Germany. The order says that the German dispute has been "resolved", but I don't see any indication that the German dispute over Motorola's wireless-essential patents is over. All that happened is that the Karlsruhe Higher Regional Court stayed an injunction for the duration of the appeal because Apple offered to take a license to Motorola's SEPs on terms that the court felt Motorola could not reject without committing an antitrust violation. I doubt that Motorola accepted Apple's offer (I think this would have become known). Should Motorola have accepted Apple's offer, they're now just talking about the FRAND royalty rate. Assuming that Motorola has not accepted it, Apple may have simply determined that it was better to pursue the German appeal, and by excluding Germany from its Qualcomm-related patent exhaustion lawsuit, Apple presumably wanted to avoid that Motorola uses the pending U.S. lawsuit as an argument in any German court for an immediate injunction. Under the German Orange-Book-Standard procedure, implementers of standards have to act in compliance with the contract they offer to enter into even before their offer is accepted (which is not necessarily fair in a context like this one, but Apple may have decided not to take any risk).

With Germany being excluded from the exhaustion case in California, Judge Sabraw didn't see that Apple still had a claim that is "ripe" in terms of a claim that relates to a real issue as opposed to just a potential future issue. But he notes that a Motorola letter sent in January 2011 to Qualcomm in an effort to terminate the Motorola-Qualcomm patent deal with respect to Apple as a third-party customer was not used by Apple as a basis for this claim. He then says that "it appears Apple can amend the Complaint to state a claim". This basically suggests that Apple should base its breach-of-contract claim in the next iteration of its complaint on that Motorola letter to Qualcomm.

After the breach-of-contract claim, Apple brought two declaratory judgment requests. It asked the court to find that it is authorized to use Qualcomm components including the baseband chips at issue and that Motorola's relevant patent rights are exhausted (with the exception of Germany, which Apple decided to exclude). In this context, Apple actually does refer to Motorola's "termination" letter. Apple also mentioned that Motorola said in Germany that it had not yet challenged the iPhone&4S in a certain United States action for "tactical" reasons. And Apple pointed to Motorola's unwillingness to stipulate that it will not sue Apple for infringement based on its use of Qualcomm components (again, excluding Germany at this stage).

Apple's declaratory judgment requests were simply too broad and vague in Judge Sabraw's opinion. He quotes an Apple statement that defines the scope of the declaratory judgment it seeks much more narrowly than the first amended complaint did. The narrower description is mostly redacted. It has something to do with that January 2011 letter from Motorola to Qualcomm. Judge Sabraw essentially suggests that Apple should phrase its declaratory judgment requests in accordance with its "much narrower formulation of the requested relief".

Since Motorola argued that the request for an injunction is an unripe claim for the same reasons the underlying claims are unripe, Apple's request for a permanent antisuit injunction can also be amended.

Short of attaching a proposal for an amended complaint to his order, Judge Sabraw has done what he could do to make it easy for Apple to meet the requirements for justiciable claims. If Apple heeds his advice, it will only have lost a limited amount of time, and its case will then go forward.

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Samsung won't get to attack the iPhone 4S at trial in California this summer

Yesterday evening, Judge Lucy Koh, the federal judge presiding over Apple's two lawsuits against Samsung in the Northern District of California, entered an order denying two Samsung motions:

1. Samsung won't get to amend its prior art contentions at this stage because it has known about all of those for several months and, in the court's opinion, didn't act diligently.

   The order quotes from the local patent rules in the Northern District of California, which "requir[e] both the plaintiff and the defendant in patent cases to provide early notice of their infringement and invalidity contentions, and to proceed with diligence in amending those contentions when new information comes to light in the course of discovery". the purpose of those requirements is to "seek to balance the right to develop new information in discovery with the need for certainty as to the legal theories".

   Samsung tried to work out an agreement with Apple concerning amended invalidity contentions but those efforts failed. However, the order says that trying to work out an agreement is not sufficient to establish diligence, and it also appears that the information Samsung provided to Apple was rather general instead of specifying any invalidity theories.

2. Samsung also sought to amend its infringement contentions by including the iPhone 4S, which went on sale in October, in the list of accused products. But the court is concerned about a disruption of the current case schedule and "has reservations about adding a new product at this late date, particularly given the difficulties the parties have had in reaching a negotiated agreement to add the additional device since the iPhone 4S was released five months ago".

   Apple's first lawsuit against Samsung, filed in April 2011, is scheduled to go to trial at the end of July 2012. Apple brought its second lawsuit against Samsung in the same district (after dozens of lawsuits the parties instigated against each other in other jurisdictions in between those two) in February. Judge Koh believes that the newer case, which she is also presiding over, is the appropriate context for Samsung to bring its infringement allegations agains the iPhone 4S. A schedule for that case has not yet been set (except for the fast-track procedure relating to Apple's motion for a preliminary injunction). This means considerable delay for Samsung's purposes.

   The iPhone 4S is particularly important here not only because it's the current generation of the iPhone but also because it comes with a Qualcomm chip, and some of the patents Samsung is asserting cover functionality that Apple claims to be entitled to implement as a third-party beneficiary of a Samsung-Qualcomm patent license agreement. Samsung would preferably have this question adjudicated in the United States, the world's largest market, sooner rather than later.

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Motorola's alleged double-dipping on iPhone 4S could be massive EU antitrust violation

Yesterday, the full text of the Karlsruhe Higher Regional Court's decision to suspend Motorola's enforcement of a standard-essential patent injunction against Apple was published.

There's nothing in the decision that surprises me or that would be inconsistent with what I've written about it in recent days. Instead, it definitely validates several of the things I said, such as the following points:

• Paragraph 29 of the ruling explicitly states that a suspension like this is not available just because of the harm a defendant suffers as an inherent consequence of enforcement. Instead, "a motion to suspend enforcement is only granted in such a case if the defendant's interests bear extraordinary weight". Paragraph 30 then clarifies that a "provisional suspension of enforcement can be appropriate in cases in which the appeals court's summary determination (the only determination the appeals court can make at this stage of the proceedings) shows that the appeal is more likely than not to succeed". The same paragraph says that Apple's appeal fulfills that requirement because, on the basis of a summary determination, Motorola "cannot refuse Apple's offer without committing a breach of its obligations under antitrust law".

• Apple did not offer a particular percentage. It only made a commitment to pay FRAND royalties. If Motorola accepts Apple's proposal (so far there is no indication that it has), the parties will be unable to agree (without judicial and/or regulatory help) on what the FRAND rate should be, and in that case, a court would have to make that determination at a later stage. See this recent blog post for further detail.

• This suspension is now going to be in effect for the entire duration of the appellate proceedings. In an effort not to overstate the reprieve Apple has won, I said that such an appeal could take a year or a year and a half. The court based its determination of the bond that Apple has to post to avert further enforcement on the assumption that the appeal could take two years. I still believe a year and a half is more realistic, but the court also wanted to be conservative, just from the opposite angle.

The amount of the bond is 90 million euros (no big deal for Apple, obviously). The court simply took Apple's annual sales of the accused products (all 3G-capable products), multiplied it by two (for the presumed duration of the appeal), and applied the 2.25% royalty Motorola demands. This does not mean in any way that Motorola's 2.25% demand is deemed to be in line with FRAND: the decision does not bless that royalty rate. Instead, the single most important part of that ruling is the fact that Apple will be free to raise any objections, without any restrictions, against Motorola's demands if and when a court will have to determine the appropriate FRAND royalty rate in the future.

The purpose of such a bond is only to provide a bank guarantee, given that theoretically (however hard to imagine it may be) even Apple could go bankrupt during the appeal, and then the bond should cover Motorola's royalties. I believe that the court simply didn't want to get into an argument over the FRAND rate since this is only a bond, not an actual payment. Also, Apple itself may already have applied, just to be on the totally safe side, Motorola's 2.25% rate to any bonds it proactively posted in recent months. Since Motorola's 2.25% demand is well-documented, it can't ask for more, so Apple doesn't have a risk of a 2.25% bond being considered insufficient, but the 2.25% amount (especially in light of the exceedingly wide-ranging royalty base MMI wants it to be applied against) is, in my opinion, not going to be considered FRAND by any German court in the future.

The redacted version of the ruling starts with two "Leitsätze" ("guiding rules"), which are meant to sum up the most important holdings of German appellate decisions with a view to other cases. Here's my (obviously unofficial) translation of those guidelines:

1. The proposal to take a license made by a defendant raising the compulsory license objection under antitrust law [against an injunction] must be worded in such a way as to deprive (in the event of the patent holder's acceptance of the offer) the defendant of such objections that serve to contest the cease-and-desist obligation or the obligation to pay damages [for past infringement].

2. However, the license-seeking defendant is not required to waive, at the stage of making a proposal, through his offer for the conclusion of a license agreement any objections relating to the amount that constitutes an appropriate royalty rate.

The first guideline relates to the way in which Apple's latest offer to Motorola was improved over the previous one. The second one dismisses objections Motorola raised against Apple's reservation of the right to raise, at the stage at which a court would have to determine the FRAND royalty rate, the argument that the iPhone 4S comes with a Qualcomm baseband chip and that, according to Apple, Motorola was not allowed to sue Apple over that product (in connection with a patent covered by the Qualcomm-Motorola patent agreement) in the first place.

But the court states in paragraphs 36 and 39 that Apple clarified that it would not raise this argument in order to have the FRAND royalty on to the iPhone 4S reduced to zero or a "symbolic" amount. The last sentence of paragraph 39 stresses that there will be no way out of this commitment for Apple.

Just to make this outrageous situation clear: even if a court determined that Motorola didn't even have the right to assert the patent-in-suit against the iPhone 4S in the first place (because of a Motorola-Qualcomm agreement), Apple would still have to pay a significant patent royalty to Motorola for patents that Qualcomm already paid for. Why? Because Apple had to address Motorola's concerns (to the extent the appeals court considered them legitimate) in order to prevent Motorola from enforcing its injunction. Otherwise, Motorola could have continued to refuse Apple's offer to take a license without being barred from enforcing the injunction.

The question of whether Motorola had the right to assert the patent-in-suit against the iPhone 4S will have to be analyzed by courts in the future. Apple already has an "antisuit lawsuit" going in the United States over this matter, in which it is seeking declaratory judgments, an injunction against further or continued litigation, and damages.

Motorola's argument for the right to sue Apple regardless of the covenant not to sue that it apparently entered into with respect to Qualcomm's customers is (primarily if not entirely) based on its claim that it was allowed to terminate its agreement with Qualcomm with respect to Apple as a third-party beneficiary. As I explained on a previous occasion, this behavior could be seen as a blatant violation of the ND (non-discriminatory) part of FRAND and Motorola's FRAND declaration to ETSI, a standards body based in France, according to which it has to grant an irrevocable license (a fact that a French court held against Samsung).

Assuming for the sake of the argument that it turns out that Motorola's termination of the Qualcomm agreement with respect to Apple was not allowed (either based on contract law alone, or on contract law in conjunction with antitrust law), the offer to take a license that Motorola's German litigation and enforcement activities -- combined with the very patent-holder-friendly stance of certain German judges -- forced Apple to make could result in Motorola "double-dipping" on the iPhone 4S, getting paid by Qualcomm on the one hand and Apple on the other hand, for the very same use of the very same patents.

On the basis of this assumption, Motorola would have used the huge leverage that the enforcement of an injunction represents for what would amount to downright extortion. Extortion is the use of illegitimate leverage in order to receive something one isn't actually entitled to.

Just this week, the EU's antitrust chief, European Commission Vice President Joaquín Almunia, told the European Parliament that "hold-up" by owners of standard-essential patents is not acceptable (there's a section on that speech in this Bloomberg article).

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Google authorized Motorola to seek an injunction against the iPhone 4S and iCloud

These days, you can probably hear a pin drop if Apple and Google are in the same room. Tensions are rising high as a direct legal clash increasingly appears to be inevitable. The latest hostility is a new lawsuit filed yesterday by Motorola Mobility, with green light from Google, in the Southern District of Florida, seeking an injunction against the iPhone 4S and the iCloud over a package of six patents previously asserted against older Apple products in the same court.

Google must have authorized this action because this complaint formally represents a new lawsuit (since it was too late to inject supplemental infringement contentions into the first Florida action) and Section 5.01(j) of the Google-Motorola merger agreement does not allow MMI to "assert any Intellectual Property Right in any new Action" without Google's consent (either under the agreement or in a separate document, which is what presumably happened in this case).

All six Motorola patents-in-suit are asserted against the iPhone 4S. All but two (the '987 and the '737 patents) are also asserted against the iCloud.

Here's a list of the patents:

• U.S. Patent No. 5,710,987 on a "receiver having concealed external antenna"

• U.S. Patent No. 5,754,119 on a "multiple pager status synchronization system and method"; Motorola is asserting the European equivalent of this patent against Apple in Mannheim, with a decision (that will likely be favorable for Motorola) scheduled for Friday of next week (February 3, 2012)

• U.S. Patent No. 5,958,006 on a "method and apparatus for communicating summarized data"

• U.S. Patent No. 6,101,531 on a "system for communicating user-selected criteria filter prepared at wireless client to communication server for filtering data transferred from host to said wireless client"

• U.S. Patent No. 6,008,737 on an "apparatus for controlling utilization of software added to a portable communication device"

• U.S. Patent No. 6,377,161 on a "method and apparatus in a wireless messaging system for facilitating an exchange of address information"

As I mentioned before, Motorola would have preferred to add the iPhone 4S and the iCloud to the list of technologies accused in an action that started in late 2010. However, that litigation is already far along, with a trial scheduled for this summer, and the judge rejected Motorola's supplemental infringement contentions as untimely but said that MMI would be free to accuse those technologies in a separate lawsuit.

It's unclear at this stage how long it will take for this second Florida lawsuit to go to trial. The Southern District of Florida moves relatively fast. The fact pattern will be largely consistent with that of the first Florida action, but there will be some differences. Also, with reexaminations of some of the patents-in-suit ongoing, there could be new information from the patent office that might affect the outcome. But the court will be able to recycle some of the work it did for the first action, such as on claim construction (unless any new evidence relevant to claim construction is presented in the course of this new litigation).

Since the product release cycles of tech companies are much shorter than the average time to trial of U.S. patent infringement lawsuits or ITC complaints, it's the normal course of business that companies look for ways to use previously-asserted patents against new products.

Another example is that Apple, at a recent Mannheim hearing, presented supplemental infringement contentions relating to the Samsung Galaxy Nexus smartphone, the official lead device for Android 4.0 (aka Ice Cream Sandwich). Today I saw that the Korea Herald quotes an unnamed Samsung spokesperson as saying that the Nexus was not on the list of accused products. In this case, I am absolutely convinced that I am right and the Korea Herald's source doesn't have up-to-date information. I attended the hearing and Apple's lead counsel in that action, Dr. Frank-Erich Hufnagel of Freshfields Bruckhaus Deringer, presented contentions and said that they are "new" and relate to "the Nexus" (he mentioned the same at least twice). In an Apple v. Samsung infringement lawsuit, what would "the Nexus" mean, if we talk about "new" contentions, if not the Samsung Galaxy Nexus? Certainly not an HTC phone. Samsung is a large organization and Apple's new contentions may not yet have been received and processed accordingly, but just to be clear, I don't make these things up. There were various other spectators at the hearing, not just me.

Getting back to this new Motorola lawsuit, it's certainly not the same kind of aggressive escalation as a lawsuit over a new set of patents would have been, but this shows that Motorola continues to fight hard.

The fact that Google signs off on an additional lawsuit at this stage -- as opposed to waiting for its purchase of MMI to close -- also says something. Two days ago I blogged about the possibility of Google ratcheting up patent enforcement after the closing of its proposed acquisition of Motorola Mobility.

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French court denies Samsung request for iPhone 4S ban -- UPDATED with copy and analysis of decision

Via Twitter I learned that the Tribunal de Grande Instance de Paris, the first-instance court for all French patent lawsuits, has denied Samsung's request for a preliminary injunction against the iPhone 4S.

Benjamin Ferran, a reporter for French newspaper Le Figaro, attended the pronouncement of the ruling and tweeted about the outcome ("rejected"), the main reason ("disproportionate"), and the reimbursement of legal fees Samsung now owes to Apple (100,000 euros, which is certainly just a very small fraction of what Apple actually spent on its defense but when courts award such reimbursements at all, the amounts they order are almost always below a party's actual costs in such high-stakes, complex cases as this one).

I attended large parts of the second court hearing, which took place on November 17 and was the final one prior to today's ruling, and predicted that Samsung was going to lose with this bid for a France-wide iPhone 4S ban. It became clear that the legal standard for a preliminary injunction is reasonably high in France, and Apple's lawyers made a number of points that I couldn't verify in their entirety but which appeared strong enough to dissuade the court from ordering a ban.

UPDATE: Copy of ruling and further analysis

Here's the 22-page ruling, which I uploaded to Scribd:

11-12-08 French TGI Ruling on Samsung PI Motion Against iPhone 4S

A significant part of the ruling summarizes the litigation history between those two parties. Most of it was known to me but I also found some new information in it. For example, Samsung filed a declaratory judgment action in Spain against the same Community design (the EU equivalent of a U.S. design patent) based on which Apple won a preliminary injunction in Germany. Not only is Samsung challenging the validity of that Community design (and four others) but it has also asked a Spanish court to declare that Samsung does not infringe it. Furthermore, while I knew that Apple is suing Motorola over some German patents, I wasn't previously aware of the fact that Apple filed lawsuits against Samsung in Mannheim over six patents. I will try to find out more about those litigations and attend some or all of the related hearings.

As far as the French case is concerned, Samsung's motion failed miserably. Compared to this defeat, Apple actually got a far more favorable result in California, even though it was also denied a preliminary injunction. The way in which Samsung lost shows that its strategy may be fundamentally flawed.

Some of what the French ruling says indicates that Samsung's use of 3G-essential patents is going to fail everywhere at least as far as the iPhone 4S is concerned, and even though the Mannheim Regional Court may formally hand Samsung an injunction (or two or three) against Apple next year, I now doubt that Samsung will be able to enforce any such ruling in Germany against the iPhone 4S. The baseband chip for the iPhone 4S is provided by Qualcomm, and the French ruling makes it clear that there's every indication that Samsung's patent rights are exhausted and Apple is, therefore, effectively licensed. The French court also doesn't attach any weight to Samsung's claim that it terminated its license agreement with Qualcomm as far as Apple is concerned, especially in light of the fact that Samsung's declared-essential patents are subject to the rules of ETSI, a standard-setting organization, and therefore the license it granted to Qualcomm (which by extension benefits Apple) was irrevocable (that's the third paragraph on page 20 of the ruling). ETSI's rules are subject to French law, which gives particular significance to today's decision in this context.

Because of this patent exhaustion issue, the court found that Apple contested on a serious basis the likelihood of Samsung's success on the merits and didn't even go into any technical details of those patents.

The court furthermore held that Samsung's request for an injunction was "disproportionate" and stated that this fact was apparent, without citing particular reasons for this finding. The court just made a general reference to the facts it discussed in its ruling.

FRAND licensing obligations were part of what the court discussed, but it appears that the patent exhaustion issue was so straightforward and clear to the court that there was no need to elaborate too much on Apple's other defenses. Also, the court denied Apple's request to hold that Samsung violated its FRAND licensing obligations simply because that kind of request for a declaratory judgment can and must be brought in a regular proceeding, not in a fast-track proceeding concerning a preliminary injunction motion. But the judge "underscores" in the bottommost paragraph on page 14 Samsung's FRAND obligations and that a holder of standards-essential patents is not allowed to capitalize on his "necessarily dominant position" in abusive ways against competitors.

Having read the ruling in detail, I have the impression that Samsung's French lawyers were on a "mission impossible". It appears that their case was far too weak to win a preliminary injunction, and in such a situation even the best lawyers are pretty much lost.

Both parties are largely unsuccessful with their requests for preliminary injunctions

Last Friday, Apple's motion for a US-wide preliminary injunction against four Samsung products was also rejected. Previously, Samsung failed with a request for an injunction in the Netherlands, where Apple prevailed primarily on the basis of a FRAND defense. The iPhone 4S wasn't specifically accused in the Dutch case.

On Friday next week (December 16, 2011), a court in Milan, Italy will hold a second hearing on another Samsung bid to ban the iPhone 4S. The outcome of the French case will likely be taken note of by the Italian court.

If the Italian bid also fails, the time may come for both Apple and Samsung to realize that you can't win a marathon with a sprint. The problem with those "sprints" -- in terms of requests for preliminary injunctions that courts can grant after a fast-track proceeding -- is that when they fail, they do nothing to enhance the credibility of the respective plaintiff.

I fully understand that time is of the essence. Both companies are embroiled in more than 30 lawsuits in a minimum of 12 courts in at least 9 countries on 4 continents, and either litigant is trying hard to win the race to the first court ruling that will have major business impact. That's the name of the game in those kinds of disputes. It's not just whether you prevail with a given claim, it's also a question of when (relative to your rival) you win favorable, impactful rulings. But patent cases are complex and don't lend themselves to requests for preliminary injunctions, and if FRAND issues and the concept of patent exhaustion (meaning that an alleged infringer has a license by virtue of buying a component from a licensed vendor) come into play, those cases become even more complex and, as a result, courts are even less comfortable to take decisions on the fast track.

Therefore, the way to go is to file lawsuits in jurisdictions that resolve cases reasonably fast in a main proceeding without having to ask for a fast track. The ITC in Washington, DC is a good example. There are some rocket dockets among U.S. district courts. The Mannheim Regional Court is Europe's rocket docket: all the cases there on which I report are regular main proceedings, not fast-track proceedings triggered by requests for preliminary injunctions.

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Judge rules AGAIN that Motorola can't attack iPhone 4S, iCloud and iTunes in Southern Florida litigation

There's been some back-and-forth in a Southern Florida lawsuit involving Apple and Motorola Mobility over the question of whether Motorola was still allowed to add, as it recently did, the iPhone 4S, iCloud and iTunes to its list of accused products, and to amend its infringement allegations with respect to other and older products. On November 29, 2011 (exactly one week ago), the court granted an Apple motion to strike Motorola's supplemental contentions, only to vacate the decision the next day in light of the fact that Motorola had replied in time but the court had ignored Motorola's reply because it was, mistakenly, considered to have been filed after the relevant deadline.

After Motorola's response to Apple's motion was accepted, Apple had until yesterday to reply to it. Apple defended its original motion and also opposed a Motorola request for an oral argument (a hearing in court or, which Motorola indicated it would consider sufficient, a conference call).

Today, Judge Ursula Ungaro has entered a new decision, once again granting Apple's motion to strike Motorola's supplemental infringement contentions. In other words, the iPhone 4S, iCloud and iTunes are once again outside the scope of this litigation, presumably on a definitive basis.

The judge found Motorola's arguments in opposition to Apple's motion "unpersuasive":

• Motorola argued that a deadline for filing those additional contentions, which was set in a Scheduling Order by the court, was never described as a "final" deadline. The court, however, tells Motorola that deadlines are deadlines with or without the word "final".

• Motorola also argued that "Apple’s conduct gave Motorola the
  impression that the infringement contentions could be supplemented after the June 1, 2011, deadline", but Apple denied this, and even if Apple had consented to a belated filing of those contentions, the parties would have had to file a motion to ask the court, for "good cause", to extend the deadline.

• Motorola also pointed to the way the United States District Court for the Western District of Wisconsin handled another litigation between the same two parties, and to a lawsuit involving other parties (Biax Corp. v. Nvidia Corp.) in the District of Colorado. However, the court found that those case were distinguishable from the Florida action.

• Motorola argued that there's still time for discovery until January 17, 2012, and apparently argued that as long as that deadline can be met (though new contentions result in new discovery requests), the deadline for supplemental infringement contentions shouldn't matter. The judge found "the logic of Motorola's argument [...] wanting" and doesn't want to open the door to unpredictable delays that could result from discovery issues arising from late supplemental infringement contentions.

• the court also tells Motorola that it isn't "prejudice" if Motorola needs "to file an entirely new case against Apple" to go after those additional products and services, given that "Motorola has already filed several cases against Apple" anyway and that the related filing fees are not substantial to such a large corporation.

If Motorola adopts the judge's advice, we may see yet another lawsuit between those two companies. They are already suing each other in multiple fora in the United States and in Germany.

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