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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Mannheim court rejects the first one of Samsung's German lawsuits against Apple

Judge Andreas Voss of the Mannheim Regional Court just pronounced his ruling on the first one of Samsung's seven patent infringement claims against Apple in Germany. Samsung's complaint over a patent declared essential to the 3G/UMTS wireless telecommunications standard was rejected. Samsung has four other lawsuits going against Apple in Germany, involving six more patents. Apple is suing Samsung over six patents (also in Mannheim), with a hearing on one of Apple's lawsuits to take place today (at noon by local time).

The pronouncement did not include the reasoning. While a number of legal grounds are theoretically possible, doubts about the validity of the asserted patent would have resulted in a stay, not a rejection, due to Germany's bifurcated system under which validity issues are addressed in different fora than infringement lawsuits. There are two reasonably likely possibilities: either Apple's products weren't deemed to infringe on the patent in a technical sense or the court believes Samsung's rights are exhausted and Apple has, by extension, a license. If the reason for the rejection was technical non-infringement, Samsung's other assertions of 3G/UMTS patents in Germany could still succeed. However, if the reason was patent exhaustion, all but one of the four remaining Samsung lawsuits in Germany (one over two patents unrelated to 3G, including a smiley input patent) would likely be thrown out as well. While a finding of patent exhaustion can depend on technical details that vary from patent to patent, and from product to product, I haven't seen any indication that the related functionality is implemented by Apple itself as opposed to the baseband chips Apple incorporates into its products.

Given the Mannheim Regional Court's stance on standards-essential patents, it would be a major surprise if the ruling turned out to be based on FRAND issues.

I hope to be able to obtain some information on the specifics of the ruling, or ideally, a copy of the decision.

Without access to more information, I can't guarantee (though I strongly believe) that today's ruling related to EP1005726 on a "turbo encoding/decoding device and method for processing frame data according to QoS". That one was the first of two patents discussed at a mid-November hearing I watched, and based on my notes, today's ruling was going to adjudicate Samsung's claims concerning that patent. Otherwise this would be about EP1114528 on an "apparatus and method for controlling a demultiplexer and a multiplexer used for rate matching in a mobile communication system". Both patents were declared essential to 3G/UMTS. The patent claim that wasn't adjudicated today will come to judgment in a week from today.

The Mannheim Regional Court's rulings can be appealed to the Karlsruhe Higher Regional Court and, potentially, on to the Federal Court of Justice (which is also based in Karlsruhe).

So far, Apple's and Samsung's claims against each other have had a very high drop-out rate in multiple jurisdictions. That, however, does not appear to dissuade both parties from pursuing their claims. There's too much at stake, and as long as neither party has leverage, there's no pressure to settle. Apple and Samsung are currently the most profitable wireless device makers in the world. Neither legal fees nor the distraction that these lawsuits create pose a serious problem to their business.

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Google doesn't dignify Oracle's proposed priority on copyright with much of a response

In response to an order by Judge William Alsup, Oracle and Google filed documents on Tuesday to discuss the possibility of Oracle being allowed to make a third attempt to provide a damages report, after the court ordered an overhaul of the original report and again threw out essential parts of the revised one. On this occasion, Oracle made a proposal that is, for anyone who's been watching this case, quite surprising, if not revolutionary: Oracle said that it would rather see the copyright part of the case go to trial at the earliest opportunity than delay things by presenting a third damages calculation. Oracle proposed to put the patent part of the case on the back burner, though it had opposed on several occasions Google's proposals to stay its patent infringement claims pending reexamination of most of the patents-in-suit. But without an accelerated path to trial, Oracle said it would fight hard, including a possible appeal to the Federal Circuit, for its original damages claims.

Yesterday (Thursday, January 19, 2012), Oracle and Google replied to each other's pleading. The original deadline would have been today (Friday), but Judge Alsup told the parties that it would help the court to receive those answers a day earlier.

I'm somewhat disappointed that Google's reply doesn't really say much about Oracle's intriguing proposals. For the most part, Google focuses on why Oracle should not be allowed to present another damages report. Toward the end of the six-page document, Google then says Oracle's case management proposals were "unsolicited" and treats as if they were just a nuisance, a digression into off-topic territory, a waste of time.

It would obviously be difficult for Google to argue against a stay of the patent claims, since Google itself advocated it repeatedly, even very recently. And it wouldn't be necessary to reiterate its support of that idea. But Google could have said on which coniditions it supports Google's proposed path to a near-term trial. For example, I thought Google would argue that if Oracle's second proposal (dismissal of the patent claims) was adopted, it believes those claims should be adopted with, not (as Oracle proposes) without prejudice.

Instead, Google asserts that "the Court did not ask the parties for further comment on those issues" (relating to the trial plan). That statement displays the pettiness and narrow-mindedness of some (fortunately not all) low-grade accountants. The very order Oracle responded to on Tuesday linked to the overall scheduling issueds of the court both the possibility of a third damages report as well as the presentation of the Lindholm email. Judge Alsup has generally been connecting substantive, case management, and scheduling issues for quite some time.

While I've never supported the totality of Oracle's damages theories, my overall impression is that there is a genuine dispute between Oracle and Google, and a reasonable disagreement between Oracle and the judge, concerning the admissibility of certain types of damages claims. Oracle's proposals would make sure that the question of a third report, or of the admissibility of the second one, won't come up anytime soon, if ever. That's the bigger picture and, in my view, a pragmatic, results-oriented approach.

One can blame Oracle for having presented two damages reports that the judge didn't want to accept as filed. But again, there are issues on which I believe reasonable people can disagree. By contrast, Google made five unsuccessful attempts to have the district court throw out the Lindholm email, a sixth failed attempt in the form of a motion in limine (it would have precluded Oracle from using the Lindhom email), and it will very likely be turned down for a seventh time when the Federal Circuit rules on Google's mandamus petition. All of that effort was and is made for an email that every lawyer I talked to clearly viewed as business correspondence, not privileged attorney-client correspondence.

It will be interesting to see how the judge proceeds. I believe he wants an efficient way forward for the case, and the question of whether a solution was solicited or unsolicited may not matter as much to him as it appears to do to Google's lawyers.

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Microsoft asks ITC to take closer look at Motorola's 'wide-scale infringement of Microsoft patents'

Following a December 20, 2011 initial determination (i.e., preliminary ruling) that Motorola Mobility's Android devices infringe four claims of a Microsoft patent, both parties asked the Commission (the six-member decision-making body at the top of the ITC) to review, rather than adopt, the recommended decision. Motorola would like to do away with the infringement finding, while Microsoft would like to prevail on up to five additional ones of the seven patents the initial determination related to.

The parties filed their petitions for review on January 5, 2012, and replied to each other's petition last Friday (January 13, 2012). Today, a public redacted version of Microsoft's 108-page petition for review and a 13-page summary became available on the ITC document server.

I have read those documents. They reference many other documents that are not publicly available, but despite those access restrictions and even prior to having seen Motorola's response, it's already possible to discuss the issues that have been raised.

While some of the issues are very specific to the technical scope of the asserted patents and differences between the claimed inventions and prior art, it appears to me that Microsoft's petition is partly based on general issues transcending this particular investigation. Some of those issues can come up in ITC investigations relating to any field of technology, and some of them are particularly likely to resurface in other investigations of smartphones and tablet computers. With respect to the ITC's domestic industry requirement, the ID applies certain criteria that would affect all U.S. software companies, large ones and small ones, that might bring ITC complaints in the future. Given what's at stake way beyond this investigation, I would not be surprised if the Commission identified a number of issues that warrant further analysis and require clarification.

In the following sections, I will summarize some of the issues that I, from my personal vantage point, found worth reporting. Some of the issues I don't mention here may nevertheless be key to this particular investigation.

'Wide-scale infringement'

In the introductory section, Microsoft states its conviction that Motorola Mobility's Android devices infringe more patents than the one based on which the initial determination identified a violation. That's obvious to anyone looking at the overall Microsoft-Motorola dispute, which is far larger than this ITC investigation.

The first sentence of Microsoft's petition asserts "MMI's wide-scale infringement of Microsoft patents in its imported Android mobile devices". In the second paragraph, Microsoft recalls its "efforts to simplify the case by limiting its infringement contentions and dropping some originally-asserted patents". Microsoft dropped two of its nine originally-asserted patents prior to the initial determination, and its petition for review effectively drops another one by not asking for a review of any issues relating to that one.

Despite this streamlining, Microsoft concedes that "this is, even by the standards of the Commission, a complicated case" involving "sophisticated computer technology" and "multi-faceted MMI Android devices (which aggregate many features in a single imported device)". The complexity of the case and the alleged "scale of the infringement" resulted in what Microsoft calls "an unquestionably lengthy and complex record". Concerning the scope of the infringement, Microsoft alleges that "[i]nstead of developing its own operating system technology [and making similar investments as Microsoft], MMI has chosen to stand on the shoulders of Microsoft's patented inventions", a behavior also labeled as "wholesale copying".

In light of the foregoing, Microsoft's petition says that "a patent owner should not be penalized for acting broadly against multiple infringing aspects of multiple complex devices". The petition as a whole is full of examples in which the initial determination reflects confusions and errors that Microsoft attributes to the complexity of the case. But Microsoft essentially calls on the ITC to give patent holders a fair chance to enforce their rights:

"Indeed, any other conclusion would mean that the Commission would effectively limit itself to addressing unfair competition only in simple cases involving simple products, one or a few patents, and relatively small domestic investments. But limiting the scope and reach of the Commission's powers to small domestic industries is plainly inconsistent with the Commission's charter, and with the public interest."

In other words, Microsoft says the ITC has a broad mandate, and encourages it not to let large-scale infringers get away with their misconduct. Microsoft then expresses its disappointment over the fact that "the Initial Determination ('ID') has precisely this effect [of narrowing the ITC's mandate]". Microsoft then cites some examples of ways in which it believes the scope and complexity of the investigation provoked legal errors and factual confusion. One of the assertions in this context (just to provide an example) is that "the ID expressly found that the Accused Products operate contrary to the sworn testimony of MMI's designated technical witness".

Like I said, I have access only to some of the documents and other material, and I didn't attend the evidentiary hearing in August 2011, but many elements and aspects of the initial determination indeed struck me as being quite different from the way other Administrative Law Judges at the ITC and federal judges at district courts apply U.S. patent law. To the extent that general principles of claim construction are concerned, the initial determination also appeared to apply some of the chosen constructions much more narrowly than what I monitor in jurisdictions like Germany.

In general, it's a good thing if complainants face a reasonably high hurdle to prove a violation, but if the standard is that even the sworn testimony of the other party's technical witness doesn't do the job, then it becomes virtually impossible to meet regardless of the actual merit of a claim.

Issues surrounding the presentation and weighing of evidence and arguments

The initial determination repeatedly (mostly but not exclusively to Microsoft's detriment) dismissed claims by alleging, in other words, that something had not been pled with sufficient particularity, or not been presented at the right time. Interestingly, Microsoft's petition for review complains that the initial determination is based in part on representations made by Motorola after the evidentiary hearing, even though any evidence would have had to be provided before the hearing and legal argument cannot serve as a substitute for evidence.

The timeliness of contentions and evidence plays a role in many litigations, and frequently in ITC investigations, but the density of those types of issues appears to be extremely high in this case. The standards that the Commission may or may not affirm in its review could have implications for the decisions made with respect to several patents in this investigation, and many patents in other investigations.

Software companies and the domestic industry requirement

In order for the ITC to find a violation of a patent, it must be valid and infringed but there must furthermore be a "domestic industry" for it. The domestic industry requirement is unique to the ITC. There's no such thing at a district court.

The statute governing the ITC (Sec. 337) doesn't require that domestic industry to be a domestic manufacturing industry. There are different ways to satisfy the requirement, and an investment in product development is one possibility. But the initial determination denied the existence of a domestic industry with respect to four patents. To some extent, that's because of narrow claim construction, but the initial determination also arrived at a rather unusual finding with respect to Windows Mobile, suggesting that there wasn't enough evidence of actual devices having a certain kind of functionality.

The software industry is very important to the U.S. economy. That's why the Commission might be interested in looking more closely, as Microsoft requests, at the parts of the initial determination that relate to the existence of a domestic industry if the complainant makes software available to device makers. Microsoft is just one of many companies that license their software to OEMs. There are companies of all sizes, including some very innovative startups, that do business that way. From a policy point of view, the ability of software makers to enforce their intellectual property rights with the ITC's help is a high-priority question. The way I read the (current) statute, the ITC's mandate includes complaints brought by right holders of that profile.

Induced infringement

Even with respect to the one patent the initial determination deemed violated, there's a legal issue that Microsoft's petition addresses. Motorola was not held to induce the infringement of Microsoft's '566 patent (but only to infringe directly). Apparently, the initial determination applied the U.S. Supreme Court's "willful blindness" standard, which Microsoft says is only meant to be "a substitute for proving actual knowledge of the asserted patents", and not applicable here if one assumes that Motorola had knowledge of Microsoft's asserted patents (at least after it received the complaint). The simplest and clearest case of induced infringement is one in which knowledge of the patent is proven. Willful blindness is just an alternative concept to cover cases in which someone would have to know but makes an effort not to know.

Induced infringement results in additional liability, and Microsoft would like to prevail on that count as well.

Cease-and-desist order

The initial determination recommended an import ban but not a cease-and-desist order. The cease-and-desist order would additionally ensure that any infringing devices that were imported prior to the import ban taking effect (but are still, at the relevant time, in a Motorola warehouse) could no longer be sold.

If an import ban is ordered without a simultaneous cease-and-desist order, it may take quite a long time before an infringer has sold off all of the infringing inventory. But more recently, the ITC appears to be hesitant to issue cease-and-desist orders. For example, no cease-and-desist was ordered against HTC though it was found to infringe a valid Apple patent.

The public redacted version of the petition doesn't reveal some of the specifics of Motorola's logistics. Therefore, I don't know if there are differences between Motorola's and HTC's respective operations that suggest a different decision in Motorola's case. It's possible that Motorola keeps far larger quantities of its products in stock than HTC does in the U.S. market.

What's next?

I hope that a public redacted version of Motorola's response to Microsoft's petition will become available shortly. It's a given that Motorola will defend, except with respect to the '566 patent, the initial determination as best as it can. In February we'll find out which issues the Commission decides to review. Depending on the scope of the review, I may then go into some more technical detail. The petition for review contains some interesting technical arguments and explanations, but for the time being I wanted to focus on broad and general issues that were raised and that may also come up, in similar forms, in other ITC investigations that I'm monitoring.

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Oracle says each day's worth of Android activations generates $10 million in annual revenues for Google -- and strengthens Google+

In the previous blog post, I have just reported on Oracle's bold move to propose to the court that it stay (or dismiss without prejudice) its patent infringement claims against Google in favor of a near-term copyright trial. Oracle's pleading also contains a very interesting portrayal of Google's Android-related business model and the economic value Android represents to Google, which is pertinent to Oracle's argument that its infringement lawsuit must be adjudicated at the earliest opportunity. I decided to separate those business issues from the legal/procedural issues discussed in the previous post.

In the following, I will quote from (and comment on) Oracle's representations of Google's Android-related business opportunity:

"While this case awaits trial, more than 700,000 Android-based devices are activated every day, all fundamentally built around the copyrighted Java APIs and the enhanced performance enabled by Oracle's patents."

The number of daily activations was recently announced by Andy Rubin himself. Google wouldn't agree on the second part of the sentence, but there's no denying that Java is a key element of Android's success, given that most Android apps are written in that language.

"Each day's worth of activations likely generates approximately $10 million in annual mobile advertising revenue for Google."

Oracle doesn't provide any particular source for this estimate. It's based on the assumption of annual advertising revenues of $14 per Android user. This litigation has allowed Oracle to conduct some discovery of Google's business model, but Google might deny this per-user revenue level.

The sentence I just quoted refers to a footnote in which Oracle points out that Android is much more to Google, in a strategic sense, than merely a source of mobile advertising revenue. In that footnote, Oracle highlights that Google leverages Android to grow the user base for its Google+ social network, and notes that Android is not as open as Google would have everyone believe:

"This revenue does not even include all the other value Android generates for Google, ranging from Android Market revenue, to other Android-related services, to ensuring that Google will not be locked out of the mobile business, to lucrative relationships with manufacturers of myriad devices on which Android can and does run, to the inordinately valuable access Android provides to customers for its new social network service, Google+. Indeed, Android has enabled Google to wield such power with regard to search and other services that its Android distribution and licensing practices -- far from the 'open' practices Google has proclaimed it lives by -- are under investigation by competition law agencies in the United States, Europe and elsewhere."

The reference to antitrust investigations isn't off-topic in connection with Oracle's IP infringement lawsuit. In fact, the court agreed with Oracle that it would be entitled to damages based on network effects (a concept that's key to many antitrust cases) if it could prove a connection between Google's alleged infringement of Oracle's Java IPRs and an overall strengthening of its search engine and other services.

Getting back from the footnote to the body of the document, Oracle also tosses out this number:

"Analysts have predicted that the number of new Android devices will reach 2.5 million per day within twelve months."

There is no particular citation. I've meanwhile seen one example of an analyst having predicted this volume, and at the end of the year we'll know if he was right, or the extent to which he wasn't.

Oracle obviously doesn't have an antitrust agenda against Google. It simply wants to be paid for the use of Java in Android. But the competition issues that Oracle raises, such as Google's use of Android to strengthen Google+, are relevant way beyond this intellectual property lawsuit. One of the contexts in which these issues must be evaluated is Google's proposed acquisition of Motorola Mobility. Last month the European Commission stopped the clock in its investigation of the proposed transaction, and I'm not yet aware of the process having been resumed.

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In surprise move, Oracle asks court to stay its patent claims in favor of near-term copyright trial

Oracle just made the most surprising move in its Java lawsuit against Google. In reply to an order by Judge William Alsup, the federal judge presiding over this litigation, concerning the possibility of a new damages report, Oracle asked the court to sever and stay its patent claims for nine months -- and possibly even longer based on the status of the ongoing reexaminations at the end of that nine-month period. Thereby Oracle hopes to enable the court to take its copyright infringement claims to trial on "the first possible date in the winter or spring of 2012".

Oracle is willing to waive, for the copyright part of the case (but not for a future part relating to the patent infringement claims), its potential right to submit a new (third) damages report. However, Oracle insists on its right to present the Lindholm email, a key piece of evidence, to the jury. The judge had suggested that Oracle could accelerate things by waiving that right, but it won't. The question of the admissibility of the Lindholm email is currently before the Federal Circuit. Oracle believes a decision by the Court of Appeals for the Federal Circuit will come down "by March", judging by the speed at which other petitions for writ of mandamus have been adjudicated very recently. Oracle proposes that the United States District Court for the Northern District of California set a trial date at any rate since it can always postpone it in the event the Federal Circuit needs more time to decide on Google's petition.

If the court doesn't accept Oracle's preferred proposal, it encourages the judge to "dismiss the patent claims without prejudice and set a date certain for the trial of copyright liability and copyright damages for spring 2012, followed by a hearing on Oracle's request for a copyright injunction if Oracle prevails on liability". This is another clear sign that what was initially perceived as a patent infringement case with a secondary copyright component is now, in Oracle's eyes, increasingly a copyright case, at least for the short term.

Should the court neither stay nor dismiss (without prejudice) the patent claims, "Oracle requests that the Court set a winter or spring 2012 trial date on both the copyright and patent claims", and in that case, Oracle would waive its right to present a new damages report. Its expert would present to the jury only those parts that the court considered acceptable.

Oracle's priorities are clear: more than anything else, it wants an injunction. I have said all along that damages in this case could amount to billions of dollars, but the strategic value of an injunction far exceeds that of even the most aggressive damages award. Oracle wants that injunction as soon as possible, and it is willing to bet, in the near term, on the copyright part of its case.

Whether the patent claims get stayed (which the judge could do at any rate, just in light of the fact that the validity of most of Oracle's patents-in-suit has been called into question by the ongoing reexaminations) or dismissed without prejudice, they would go to trial long after the copyright infringement claims. In the event of a dismissal without prejudice, Oracle would have to start a whole new lawsuit to assert those claims again. It's possible that Oracle would select partly different patents in that case.

Oracle's proposal -- or set of prioritized proposals, to be precise -- is a bold move. For a long time, Oracle has opposed a stay of the patent claims, while Google consistently advocated it. Without a doubt, the enormous headway that Google's reexamination requests have made has created a situation in which Oracle believes its copyright infringement claims provide, at least in the near term, a better chance of winning an injunction.

But just like Google's reexamination requests have created doubts about Oracle's patent infringement claims, Google is also responsible for the fact that Oracle is so optimistic about its copyright case. In September, Judge Alsup threw out (for the largest part) a Google motion for summary judgment that was meant to do away with the copyright part of the case. While the judge made it clear that his denial of summary judgment wasn't automatically a finding that Oracle would prevail with its copyright claims, some of the reasons he provided clearly showed that Google would face a considerable hurdle if it wanted to convince a jury that Oracle's API-related files shouldn't be protected by copyright.

At a recent hearing, Judge Alsup expressed hopes that a copyright trial might be enough to resolve this dispute, whichever way it might go. The proposal Oracle submitted today would achieve just that, and it would do so with an even greater probability than the schedule envisioned by the judge.

It's hard to know what the judge will do. He has a tendency to surprise everyone, to a greater extent than Oracle, in fact. I think there's a real possibility that he may accept one of Oracle's first two proposals and stay or dismiss the patent infringement claims. If I were in his shoes, I would seize this opportunity to dismiss the patent infringement claims without prejudice.

Should the judge reject all of Oracle's proposals, the following sentence in Oracle's letter makes it clear that there would be a second petition to the Federal Circuit:

"Oracle believes the Court has taken an unduly strict and improperly narrow approach to the analysis of damages in this case, and reserves its right to appeal the Court’s Daubert and in limine orders."

Oracle is still ready to fight hard for its rights. But it's willing to make far-reaching concessions that streamline the case, in exchange for a very near-term copyright trial.

Oracle's response to the court also contains interesting passages on Google's Android business model. I will quote and discuss those passages in a subsequent blog post.

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Apple attacks 15 Samsung products with new German design lawsuits: will they ever settle this part of their dispute?

A spokesman for the Düsseldorf Regional Court confirmed to Bloomberg and German news agency dpa that Apple brought two new design lawsuits against Samsung in Germany: one accusing ten Samsung smartphones (including the Galaxy S II) and another one accusing five Samsung tablet computers.

Unlike last year, Apple apparently didn't ask for preliminary injunctions. At least some of the accused products have been on the market for too long to satisfy the sense-of-urgency requirement anyway. The two cases will go to trial in late August and, respectively, late September 2012, reports dpa.

Update: These are the two smartphone-related design rights Apple is asserting

I have found out which smartphone-related Community designs (EU-wide design rights) Apple is asserting in the complaint targeting 10 Samsung handsets. The Registered Community Design numbers are 000748280-0006 and 000888920-0018. Both were filed in the names of about a dozen inventors including (in both cases) Steve Jobs and Jony Ive. On August 9, 2011, Samsung filed nullity actions seeking to have both Community designs invalidated.

Community design no. 00748280-006 (click to enlarge):

Community design no. 000888920-0018 (click to enlarge):

Escalation and the possible end game

About a month ago, Samsung also chose to escalate the German part of the worldwide IP war that is raging between the companies in ten different countries on four continents. Samsung brought additional infringement claims relating to four patents, two of which are standards-related. One of the two patents that are not standards-related protects a method for entering emoticons (smileys) on a mobile device. By the latest count, Samsung is sserting seven technical patents against Apple in Mannheim, where Apple is suing Samsung over six technical patents, in addition to the Düsseldorf actions involving design-related rights.

I believe it will be much harder for the two litigants to settle their disagreements over product design than the ones over technical inventions. For technical patents, the end game could be a cross-license agreement, which would hardly be a simple royalty-for-unrestricted-patent-use kind of deal but more likely a complex arrangement with Samsung paying Apple for the use of some patents, Apple potentially having to pay for some Samsung patents, and, most importantly, Apple reserving some patents exclusively for itself and imposing field-of-use restrictions on the ways in which Samsung will be allowed to implement some other patents. But for those design rights issues, it may not be possible to structure a mutually acceptable settlement. The two companies may just need the courts to clarify the boundaries of Apple's exclusive design-related rights.

I find it hard to imagine how Apple and Samsung can strike an agreement that defines, in a reliable way that courts can apply consistently in the event of a dispute, which characteristics Samsung's products are allowed to have in the future and what Samsung needs to do to make its products more distinguishable from Apple's offerings.

If Samsung promised not to build flat rectangular devices with rounded corners, and not to use the colors black and white, Apple might be fine, but such a wide-ranging exclusion would go way beyond what the courts are going to expect Samsung to do. In two weeks, the Düsseldorf Higher Regional Court will pronounce a decision on Samsung's appeal against the preliminary injunction that banned the original Galaxy Tab 10.1 in Germany, and whether the preliminary injunction is affirmed or lifted, this ruling by an appeals court will certainly clarify the scope of Apple's asserted design right and, more or less directly, indicate what Samsung needs to do to steer clear of infringement. A few days later, the Düsseldorf Regional Court will decide on Apple's request for a preliminary injunction against the (slightly modified) Galaxy Tab 10.1N. If the 10.1N is considered non-infringing (which is reasonably likely to happen), that will be another indication of where Apple's exclusive rights end and Samsung's freedom to compete begins. Of course, Apple will have the same right to have any legal questions clarified by appeals courts.

One of the problems with those design rights is that these products evolve quickly and it's hard to predict what kind of design characteristics are going to be essential in, say, five years. Moving targets also complicate a settlement. Even if the parties philosophically wanted to work this out, they might just not be able to stipulate in an agreement what Samsung will and will not be allowed to do further down the road.

In light of that, Apple's new German lawsuits aren't necessarily a bad thing even for Samsung. Ultimately, the two companies may just need to take the time to present their different views to the courts, including one or even two appeals, in order to see where the judges draw the line. That, in turn, will provide both of them -- and everyone else in their industry -- with guidance.

Design rights issues relating to smartphones and tablet computers also need to take into consideration the technical parameters under which those products are designed and used. Past court rulings on design rights issues in connection with other types of products (even pre-iPhone mobile phones) are of limited use. The courts have to clarify which characteristics are dictated by technical needs (for example, no one should be allowed to have a monopoly on the idea of "flat" devices) and which ones are not.

Legal precedent doesn't have the same role in the German legal system as in Anglo-Saxon Common Law, except for "Leitsätze" ("guidelines") established by the Bundesgerichtshof (Federal Court of Justice). Nevertheless, decisions by appeals courts bear significant weight (especially but not only within the same circuit). In a few years, both Apple and Samsung will be a lot wiser as far as the scope of those smartphone and tablet design rights is concerned. Preliminary injunction motions aren't really useful in that regard, but regular, full-blown litigations, including appeals, can provide such clarification.

In light of the foregoing, I wouldn't characterize Apple's new German design rights lawsuits as hostilities. This is a commercial disagreement, and it needs to be resolved. I like the fact that Apple's new litigation strategy in Germany will lead to useful and necessary clarification, rather than temporary (but strategically useless) disruption.

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