It would have been preferable to give the Apple v. Samsung design patent damages re-retrial jury in San Jose (Northern District of California) a chance to render a verdict before the weekend. In that case, jurors might have put an end to this disruption of their lives. But the way things worked out, they're now going to think about what position to take on Monday morning when official deliberations begin. In the meantime, they're not allowed to talk to anyone about the case or to take a look at any media reports (whether some jurors do so anyway is another question, but they're not supposed to).
As in the previous trials in this case, and as I mentioned a few days ago, Apple's lawyers portrayed Samsung as an intentional infringer, an unrepentant copyist, with Samsung being barred from presenting some evidence that could have shed a different kind of light on that question.
The holdings that (i) Samsung infringed those three design patents (a long time ago) and (ii) that those patents are valid are "law of the case" and the re-retrial jury must presume both to be the case. It is worth noting, however, that courts in other jurisdictions looked at international equivalents of those intellectual property rights (and at devices from the same generation of Android-based Samsung products) and reached rather different conclusions. But things are the way they are for the purposes of this U.S. case, so the focus is just on damages, and the single most important question in this regard is what "article of manufacture" a disgorgement of Samsung's profits should be based on: the entire device (which was considered a foregone conclusion in previous trials, but the Supreme Court and, previously, the United States Department of Justice disagreed with Judge Koh, the United States Court of Appeals for the Federal Circuit, and Judge Lucy H. Koh) or one or more components?
In that context, the most surprising tweet from the courtroom (thanks to Mike Swift, Joshua Sisco and Stephen Shankland for some excellent coverage!) indicated that Apple's lead counsel, Bill Lee, could live with a $370 million verdict:
Before the break, Apple's Lee in his Wagner cross tried to give the jury other damages options between Samsung's $28M and Apple's $1.067B - $370M if jury concludes the AOM is the full phone, but adopts Samsung's cost deductions. #appsung
Given that Apple's own damages demand is almost three times as high, the above observation suggests more than a crack in the shell. As I followed the trial on Twitter, I felt that Samsung's lawyers and experts drove some very important points home, though Apple also made some good points, considering that Apple's position is a very extreme one in this case. Is Apple now happy with getting a little bit less for those design patents than before? Or is it simply waving a white flag because it's afraid the jury might arrive at a much lower figure? W won't ever know.
If stakeholders could file amicus curiae briefs with this jury, Apple would really be in trouble and even the $370 million "compromise" proposal would be ambitious. Hardly anyone wanted to support Apple's "entire device" position in filings with the Supreme Court. Most of those who supported Apple said they just wanted to ensure that a disgorgement of infringer's profits under 35 U.S.C. § 289 would continue to be available in other cases (such as with respect to running shoes).
The world outside that San Jose courtroom overwhelmingly prefers a component-based damages determination. This InsideSources article on the problems that an excessive damages amount in the Apple v. Samsung case could cause tech and non-tech companies alike is a good example. But jurors won't have the benefit of such information on the wider ramifications of what they're required to decide.
The tech sector at large (with a few exceptions merely proving the rule) is also concerned about patents on screen designs. The D'305 patent covers a screen layout. That one is a software patent styled as a design patent because it wouldn't meet the patentability (including, but not limited to, patent-eligibility) standards for utility (i.e., technical) patents. While I can imagine Samsung saw the most immediate threat in this case in the original "it must be a complete device" standard for the determination of the relevant article of manufacture, it was very unfortunate that Samsung didn't additionally ask the Supreme Court to hold such subject matter ineligible for design patents. Now Samsung's lawyers say that a screen is the proper article of manufacture for a software user interface patent. That would mitigate the damage to Samsung, but it doesn't alleviate my concern, as an app developer, over patents like D'305 in the slightest.
Apple has some of the best lawyers in the world, and they dug up something that might have impressed the jury (this post continues below the YouTube video):
Homer Simpson with an iPhone! - YouTube
That video shows Homer Simpson with an iPhone, and what makes the iPhone particularly identifiable is the app menu matrix everyone knows. Actually, most non-iPhone devices have such a matrix as well. They still do, despite Apple's lawsuits against Samsung, Motorola, and HTC (the three leading Android device makers earlier this decade, i.e., when Apple's patent assertions against Google's ecosystem began). In other words, this is iconic and hard to protect at the same time. And the reason it's hard to protect is because it's just a very logical screen layout.
Should Apple get many hundreds of millions of dollars, or theoretically even a billion dollars, then Homer Simpson--or, in the real world, Homer's creator, Matt Groening--deserves a commission.
One of the questions that jurors will be asking themselves this weekend is likely whether (again, basing everything on the previous findings of infringement and validity, irrespectively of what courts in other countries concluded) Samsung should face the maximum penalty, a slap on the wrist, or something in between.
For more than one reason, there's no way I could ever have ended up on that jury. If--in a hypothetical alternative reality--I had to make a decision, I wouldn't agree with either party, but I'd sooner award Apple two or three times of what Samsung considers reasonable than half or a third of Apple's demand. The primary reason for this would be that such components are manufactured separately and can be bought as replacement parts--and there are hundreds of thousands of other potentially-patentable elements in a smartphone, not just three design patents.
The problem is just that, no matter whether a screen layout covered by a design patent appeared in a Simpsons episode, the kinds of products at issue in this Northern California case contain many technical components--hundreds of thousands of at least potentially patentable concepts--and so many visual designs (for instance, many other screen layouts than just the app matrix) that a damages award over a very few patents just shouldn't be excessive. Otherwise everything else in such a phone would be implicitly devalued, and that would neither be fair not would it be in the interest of consumers who expect an electronic device not only to look good but also to be fully functional.
When it's not about design patents, Apple itself is a proponent of the "smallest salable patent-practicing unit" (SSPPU) rule (damages or royalties should be determined based on the smallest component that is deemed to infringe or practice a patent) as opposed to complete products. I've supported Apple's related thinking in disputes with Google/Motorola, Ericsson, Qualcomm, and... Samsung. After all those years, I'm not going to be inconsistent. That's why I hope the jury will do precisely what Apple advocates when the shoe is on the other foot, and focus on the smallest salable patent-practicing unit(s).
Given the importance of this subject, I'll now republish an open letter that 77 former government officials and professors (of law, economics, and business) have sent Assistant Attorney General Makan Delrahim in order to remind him of long-standing and consistent U.S. policies on standard-essential patents (SEP) under both Republican and Democratic administrations. Mr. Delrahim's outlier positions are disconcerting indeed. Access to standard-essential patents on fair, reasonable and non-discriminatory (FRAND) terms is not a "left or right" question.
I'm not aware of any other patent blogger who would have declared himself a support of Donald Trump as early or as unequivocally as I did (January 2016), and there are several policy areas in which I really like it when the Trump Administration does away with Obama policies that I consider misguided and some of which clearly failed (especially in the foreign-policy context). However, if it ain't broke, don't fix it! When it comes to SEPs, consistency and continuity with prior administrations (including, but not limited to, the Obama Administration) are the best wway forward. The alternative would have the opposite effect of making America great again: SEP abuse poses a serious threat to many of America's (and the rest of the world's) most innovative companies. That's why I wish to express my support (as someone who wouldn't have been eligible to sign it) for the open letter by providing a link to its PDF version and, for your convenience, its full text below.
The order of the impressive list of signatories: first, the author of the letter (Professor Carrier); then, former high-ranking government officials; then, former mid-level government officials; finally, academics without former government positions.
May 17, 2018
BY OVERNIGHT MAIL AND E-MAIL
Assistant Attorney General Makan Delrahim U.S. Department of Justice Antitrust Division 950 Pennsylvania Ave., NW Washington, DC 20530
Re: Speeches on Patents and Holdup
Dear Assistant Attorney General Delrahim:
We, 77 former government enforcement officials and professors of law, economics, and business, write to express concern with recent speeches you have made that we do not believe are consistent with the broad bipartisan legal and economic consensus that has existed for over a decade regarding standard setting. We would like to raise eight issues in particular.
First, the anticompetitive harms from patent holdup have been consistently acknowledged by officials in Republican and Democratic administrations. The unanimously adopted 2007 joint agency Report, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition, explained the difference between a patentee's power ex ante (when "multiple technologies may compete to be incorporated into the standard") and ex post (when "the chosen technology may lack effective substitutes precisely because the SSO chose it as the standard"). This disparity can allow the patentee to "extract higher royalties or other licensing terms that reflect the absence of competitive alternatives." Id. at 35-36. The FTC also unanimously endorsed the 2011 Report, The Evolving IP Marketplace, which highlighted how "an entire industry" could be "susceptible" to the "particularly acute" concern of holdup, which can result in "higher prices" and "discourage standard setting activities and collaboration, which can delay innovation." Id. at 234. And the National Research Council of the National Academies concluded in its Report on Patent Challenges for Standard-Setting in the Global Economy that "a FRAND commitment limits a licensor's ability to seek injunctive relief." Id. at 9.
Second, the holdup problem has been recognized by courts and standard setting organizations hemselves. As one court stated, patent holdup is not a theoretical concern, but instead "is a substantial problem that [F]RAND [fair, reasonable, and nondiscriminatory licensing] is designed to prevent." In re Innovatio IP Ventures, 2013 WL 5593609, at *9 (N.D. Ill. Oct. 3, 2013). As former FTC Commissioner Terrell McSweeney recently pointed out, courts in two cases awarded patentees only 1/150 and 1/500 of the royalties the patentholder sought. Commissioner Terrell McSweeny, Holding the Line on Patent Holdup: Why Antitrust Enforcement Matters, Mar. 21, 2018. The fact that SSOs— those with the most knowledge of the issues—adopt FRAND policies is itself telling proof that holdup is a problem; otherwise, why would they adopt contractual practices to prevent holdup? In addition to higher royalties, expenditures can escalate as holdup increases the costs to SSOs and to those who oppose FRAND clarification. Timothy J. Muris, Bipartisan Patent Reform and Competition Policy, American Enterprise Institute Report 9 (2017).
Third, we agree that “"he hold-up and hold-out problems are not symmetric." Nov. 10, 2017 speech. But we believe that it is holdup that presents the more serious antitrust concern. As an initial matter, the risks faced by innovators are consistent with the "speculative investments" always made by technology and product developers; in contrast, implementers are vulnerable to paying supra-competitive royalties based on the entire value of the product, not on the value of the patented technology. A. Douglas Melamed & Carl Shapiro, How Antitrust Law Can Make FRAND Commitments More Effective, at 7-8, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3075970, 127 YALE L.J. __ (forthcoming 2018). While we agree that coordinated action can implicate antitrust, these concerns are not presented in licensing disputes at the core of holdout. The potential for holdout exists on both sides of contracts, occurring "when one side refuses to perform in good faith or negotiate reasonably." Muris, at 9. In contrast, the holdup problem and accompanying lock-in value exist only on one side of the exchange.
Fourth, patentees that obtain or maintain monopoly power as a result of breaching a FRAND commitment present a standard monopolization case. E.g., Broadcom v. Qualcomm, 501 F.3d 297, 314 (3d Cir. 2007); Microsoft Mobile v. Interdigital, 2016 WL 1464545, at *2 (D. Del. Apr. 13, 2016). FRAND breaches could satisfy the section 2 elements of exclusionary conduct by demonstrating an exclusion of competitors (the exclusion of rival competitive technologies not chosen by the SSO) that results in competitive injury (price increases and innovation harms from the breach) and acquisition or maintenance of monopoly power (obtained through the breach). Moreover, the conduct here is not protected under the "absolutist position" that Noerr-Pennington "immunizes every concerted effort that is genuinely intended to influence governmental action," as this would allow parties to violate the antitrust laws, for example by being "free to enter into horizontal price agreements." Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 U.S. 492, 503 (1988). Instead, a breach of a FRAND promise is "distinguish[able] from Noerr and its progeny" because it is "the type of commercial activity that has traditionally had its validity determined by the antitrust laws themselves." Id. at 505; see also FTC v. Superior Court Trial Lawyers Ass’n, 493 U.S. 411, 424-25 (1990).
Fifth, while we agree that patents are important for innovation and that injunctive relief often is appropriate, we do not agree that patents provide an unqualified "property right to exclude" that is accompanied by an injunction and a conclusion that "unilateral patent hold-up" is "per se legal." Mar. 16 speech. Hornbook law does not give property owners absolute rights to exclude. There are at least 50 doctrines (such as adverse possession, easements, eminent domain, nuisance, and zoning) that limit property owners' rights. Michael A. Carrier, Cabining Intellectual Property Through a Property Paradigm, 54 DUKE L.J. 1 (2004). Landowners, for example, cannot exclude others from entering their land to save lives or property or to avoid some other serious harm. Relatedly, in upholding the inter partes review process for administratively reconsidering patents, the Supreme Court recently held that "[p]atents convey only a specific form of property right—a public franchise." Oil States Energy Servs. v. Greene's Energy Group, 2018 WL 1914662, at *8 (U.S. Apr. 24, 2018).
Sixth, the position that patent infringement necessarily results in an injunction is, for good reason, no longer the law. More than a decade ago, the Supreme Court ruled unequivocally that courts must decide whether to grant injunctions "consistent with traditional principles of equity, in patent disputes no less than in other cases." eBay v. MercExchange, 547 U.S. 388, 394 (2006); see also 35 U.S.C. § 283 (patent statute provides that courts "may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable"). In fact, the Federal Circuit, not historically associated with insufficient protection of patent rights, has made clear that the eBay framework "provides ample strength and flexibility for addressing the unique aspect of FRAND committed patents and industry standards in general." Apple v. Motorola, 757 F.3d 1286, 1332 (Fed. Cir. 2015). Because there could be thousands of patents in a product today, it is not appropriate uniformly to apply standards from the 18th century.
Seventh, pointing to exclusive rights granted to patentees as a type of natural property right ignores the uncontroversial utilitarian framework for the patent grant. The Supreme Court has long made clear the primacy of the utilitarian justification. E.g., Graham v. John Deere, 383 U.S. 1, 9 (1966). Exclusive rights exist not to bestow upon patentees a moral right to a reward but to promote the best interests of society. That is why patents, like other forms of intellectual property, are subject to doctrines (like novelty, nonobviousness, the written-description and enablement disclosure requirements, and a limited 20-year term) that ensure that protections for market competition balance patents' incentive effects. Relatedly, it tells only half the story to focus on the incentives relevant to the initial invention while ignoring follow-on innovation, which is just as important and may be undermined significantly when patent owners abuse their FRAND obligations. Suggesting (without offering evidence) that any diminished return to patent holders reduces innovation and welfare "is inconsistent with both sound economic analysis and patent law," as "FRAND commitments that reduce excessive royalties further the policies of both the antitrust laws and the patent laws." Melamed & Shapiro, at 9. And it is also inconsistent with the Supreme Court's recent clear reminder (in a 7-2 ruling written by Justice Thomas) that patents "involv[e] public rights." Oil States, 2018 WL 1914662, at *6.
Eighth, we do not believe that holding patentees to their promise to license on FRAND terms "amount[s] to a troubling de facto compulsory licensing scheme." Mar. 16 speech. Compulsory licensing occurs when the government forces a patentee to license against its wishes. In contrast, here the holder of a standard essential patent voluntarily chooses to license on a FRAND basis, receiving in exchange the SSO's "seal of approval" and the potential for significantly increased volume that comes with that seal, which is well worth the FRAND promise. Unlike other patents, holders of standard essential patents are protected from competition and guaranteed to collect royalties.
We applaud the energy of your leadership of the Division and support the regular reexamination of key antitrust issues. But we do not believe that the case has been made for departing from the bipartisan consensus set out in this letter. Thank you for your consideration of these views.
Professor Michael A. Carrier[*] Rutgers Law School
Professor Timothy J. Muris Antonin Scalia Law School Former Chairman, Federal Trade Commission
Professor of the Practice of Law A. Douglas Melamed Stanford Law School Former Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Emeritus Professor of Economics Richard J. Gilbert University of California, Berkeley Former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Professor Fiona Scott Morton Yale University School of Management Former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Emeritus Professor of Economics Janusz A. Ordover New York University Former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Professor Daniel Rubinfeld New York University School of Law Professor of Law and Professor of Economics Emeritus, University of California, Berkeley Former Deputy Assistant Attorney General, Antitrust Division, U.S. Department of Justice
Professor Jonathan B. Baker American University Washington College of Law Former Director, Bureau of Economics, Federal Trade Commission
David Balto Former Policy Director, Bureau of Competition, Federal Trade Commission
Professor Stephen Calkins Wayne State University Law School Former General Counsel, Federal Trade Commission
Professor Colleen Chien Santa Clara University School of Law Former Senior Advisor to Chief Technology Officer (CTO) of United States, IP and Innovation, White House Office of Science and Technology Policy
Professor Andrew I. Gavil Howard University School of Law Former Director, Office of Policy Planning, Federal Trade Commission
Professor Marina Lao Seton Hall University School of Law Former Director, Office of Policy Planning, Federal Trade Commission
Professor Harry First New York University School of Law Former Antitrust Bureau Chief, New York Attorney General's Office
Jay Himes Former Antitrust Bureau Chief, New York Attorney General's Office
Kevin J. O’Connor Former Antitrust Chief, Wisconsin Attorney General’s Office Former Chair, Multistate Antitrust Task Force, NAAG
Professor John Allison McCombs Graduate School of Business University of Texas at Austin Professor Margo A. Bagley
Emory University School of Law
Professor Ann Bartow University of New Hampshire School of Law
Professor Joseph Bauer Notre Dame Law School
Professor Jeremy W. Bock The University of Memphis, Cecil C. Humphreys School of Law
Professor Dan L. Burk School of Law, University of California – Irvine
Professor Darren Bush University of Houston Law Center
Professor Michael Carroll American University Washington College of Law
Emeritus Professor Peter Carstensen University of Wisconsin Law School
Professor Bernard Chao University of Denver Sturm College of Law
Professor Andrew Chin UNC School of Law
Professor Ralph D. Clifford University of Massachusetts School of Law
Professor Jorge L. Contreras S.J. Quinney College of Law, University of Utah
Professor Christopher A. Cotropia University of Richmond School of Law
Professor Joshua Davis University of San Francisco School of Law
Professor Stacey L. Dogan Boston University School of Law
Professor Roger Allan Ford University of New Hampshire School of Law
Professor of Economics and Technology Management H. E. Frech III University of California, Santa Barbara
Professor Jim Gibson University of Richmond School of Law
Professor Emeritus Thomas L. Greaney Saint Louis University School of Law Visiting Professor, University of California Hastings College of Law
Professor of Economics Emerita Bronwyn H. Hall University of California, Berkeley
Professor Jeffrey L. Harrison College of Law, University of Florida
Professor Yaniv Heled Georgia State University College of Law
Professor Cynthia Ho Loyola University Chicago School of Law
Professor Tim Holbrook Emory University School of Law
Professor Michael J. Hutter Albany Law School
Professor Marie-Christine Janssens KU Leuven Centre for IT & IP Law
Professor Eileen M. Kane Penn State Law
Professor Ariel Katz Faculty of Law, University of Toronto
Professor John B. Kirkwood Seattle University School of Law
Professor Amy Landers Drexel University, Thomas R. Kline School of Law
Professor Mark A. Lemley Stanford Law School
Professor Christopher Leslie School of Law, University of California – Irvine
Professor Doug Lichtman UCLA School of Law
Professor Yvette Joy Liebesman Saint Louis University School of Law
Professor Daryl Lim The John Marshall Law School
Professor Lee Ann W. Lockridge Louisiana State University Law Center
Professor Brian J. Love Santa Clara University School of Law
Professor Phil Malone Stanford Law School
Professor Jonathan Masur University of Chicago Law School
Adjunct Emeritus Professor Stephen E. Maurer Goldman School of Public Policy, University of California, Berkeley
Professor Mark P. McKenna Notre Dame Law School
Professor Michael J. Meurer Boston University School of Law
Professor Joseph Scott Miller University of Georgia School of Law
Professor Ira Steven Nathenson St. Thomas University School of Law
Professor Emeritus of Economics Roger G. Noll Stanford University
Professor Srividhya Ragavan Texas A&M University School of Law
Professor Matthew Sag Loyola University Chicago School of Law
Professor Christopher Sagers Cleveland State University School of Law
Professor Sharon K. Sandeen Mitchell Hamline School of Law
Professor Catherine Sandoval Santa Clara University School of Law
Professor Joshua D. Sarnoff DePaul University College of Law
Professor Kurt M. Saunders California State University, Northridge
Professor Steven Semeraro Thomas Jefferson Law School
Professor Lea Bishop Shaver Indiana University School of Law
Professor Aram Sinnreich American University, School of Communication
Professor Avishalom Tor Notre Dame Law School
University of Haifa Faculty of Law
Professor Liza Vertinsky Emory Law School
Professor Spencer Weber Waller Loyola University Chicago School of Law
Daniel J. Weitzner Principal Research Scientist, MIT Computer Science and Artificial Intelligence Laboratory Founding Director, MIT Internet Policy Research Initiative
Professor Abraham L. Wickelgren University of Texas School of Law
1The Long Run: Maximizing Innovation Incentives Through Advocacy and Enforcement, Apr. 10, 2018; The "New Madison" Approach to Antitrust and Intellectual Property Law, Mar. 16, 2018; Good Times, Bad Times, Trust Will Take Us Far: Competition Enforcement and the Relationship Between Washington and Brussels, Feb. 21, 2018; Assistant Attorney General Makan Delrahim Delivers Remarks at the USC Gould School of Law's Center for Transnational Law and Business Conference, Nov. 10, 2017.
2 As you recognized in your March 16, 2018 speech, the decision to include a patent in a standard "gives the patent holder some bargaining power" and "would require the patent holder to live up to commitments as they would have bargained for it."
3 The studies cited to show the absence of holdup do not consider the counterfactual scenario: that prices could have fallen faster and output/diversity risen faster absent holdup. After all, few would argue that the Sherman Act was not necessary because, during the decade prior to enactment, "U.S. output of salt, petroleum, steel, and coal all increased significantly, and prices of steel, sugar, and lead all dropped significantly." Jorge L. Contreras, Much Ado About Hold-Up, at 22, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3123245.
4See also Microsoft v. Motorola, 2013 WL 5373179, at *7 (W.D. Wash. Sept. 24, 2013) (rejecting argument that "hold up does not exist in the real world" and finding that such an argument "does not trump the evidence presented by Microsoft that hold up took place in this case").
5 As Richard Epstein has recognized, "[t]he intellectual history of rate regulation beg[an] with the writings of Sir Matthew Hale in the late seventeenth century," and the "[F]RAND formula" is "the best, indeed the only, approach" for "mimic[king] the performance of competitive markets" while not "undercutting their operation," which is needed since a "monopolist knows that he can extract at least some concessions from higher demanders precisely because they have nowhere else to go." Richard A. Epstein, The History of Public Utility Rate Regulation in the United States Supreme Court: Of Reasonable and Nondiscriminatory Rates, 38 J. SUP. CT. HIST. 345, 346, 348, 366 (2013).
6 It also bears mention that one cannot conclude that the "winning technology" is inherently "better than its rivals" without considering the FRAND commitment that can be critical to the standard-selection decision and can avoid an industry being locked into a non-FRAND-restricted technology. MICHAEL A. CARRIER, INNOVATION FOR THE 21ST CENTURY: HARNESSING THE POWER OF INTELLECTUAL PROPERTY AND ANTITRUST LAW 328-29 (2009); Byeongwoo Kang & Rudi Bekkers, Just-in-Time Inventions and the Development of Standards: How Firms Use Opportunistic Strategies to Obtain Standard-Essential Patents (SEPs), Aug. 28, 2013, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2284024.
7 Relatedly, seeking an injunction against a licensee willing to pay a FRAND rate—such as where LSI sought an exclusion order in the U.S. International Trade Commission before proposing a FRAND license to Realtek, Realtek Semiconductor v. LSI, 946 F. Supp. 2d 998, 1007-08 (N.D. Cal. 2013)—can constitute monopolization. Challenging behavior like this is not "hubris" (Mar. 16 speech); it is an appropriate application of antitrust.
8 Analogously, specific performance, which has the same effect in contract law as injunctions do in patent law, is only available in limited, extraordinary, circumstances. See 12 Corbin on Contracts §§ 63.1, 63.20 (rev. ed. 2012).
9 A standards organization's rule restricting the owner of a standard essential patent that makes a FRAND commitment from seeking injunctions against willing licensees is an appropriate attempt to enforce the FRAND commitment, not a return to the "DOJ's enforcement policies in the 1970s" (Mar. 16 speech) that have rightly been criticized for punishing numerous forms of procompetitive or competitively neutral licensing conduct.
* The letter presents the views of the individual signers. Institutions are listed for identification purposes only.
While Apple is seeking north of $1 billion in damages from Samsung in the ongoing jury re-retrial in the Northern District of California, its earth-spanning dispute with Qualcomm continued today in the Munich I Regional Court with a first hearing (the primary objective of which is roughly comparable to that of a Markman hearing in a U.S. patent infringement case). Qualcomm alleges that the iPhone 7 and 7 Plus infringe its EP1199750 on a "post[-]passivation interconnection scheme on top of [an] IC chip."
I'll start with the most interesting piece of information I gleaned there. A Qualcomm employee--presumably an in-house lawyer, but I don't know his name and title--responded to Presiding Judge Dr. Zigann's question about the state of settlement discussions. According to Qualcomm, the parties had scheduled a meeting that would have taken place recently, but Apple canceled on short notice, and no new meeting has been agreed upon yet.
No information on the reasons for which Apple canceled was provided. Maybe there was a scheduling conflict. The parties' positions may also be too far apart at this stage for any such meeting to be productive. Time may tell. Apple usually does settle whenever possible. The long-running Samsung case is an exception for whatever reason (it's hard to see, without inside-baseball type of knowledge that I lack, why they can't just all sit down, perform a realistic probablistic analysis together, and agree on a payment based on a weighted average of different scenarios).
Other than what I just mentioned, today's hearing was not as informative as the two Qualcomm v. Apple hearings I attended in Munich in Februar and earlier this month. That's because the court was unable to take a preliminary position on the infringement allegations for two reasons:
Contrary to the Munich court's local patent rules, Qualcomm's complaint did not proffer a claim construction for the most critical claim limitation, "passivation layer." That term is so critical because there is no way that the patent can be infringed unless a certain interconnection between circuits takes place on top of that passivation layer.
Qualcomm's lead consel in the German Apple cases, Quinn Emanuel's Dr. Marcus Grosch, seemed rather contrite after hearing the court's related criticism. Judge Dr. Zigann ordered him to lay out his proposed claim construction at the outset of the hearing. While he stated the material the passivation layer is composed of in the preferred embodiment specified by the patent document, the court needs more clarity regarding the extent to which such a passivation layer needs to shield other components from water and ions.
Not only in this context did Dr. Grosch refer to the knowledge that a person of ordinary skill in the art (the parties did not disagree on what kinds of skills such as POSITA should have) has, as opposed to specific definitions that one could find in the patent document itself. Quite understandably, the three-judge panel cannot answer the related technical questions without help from an expert. Unlike in the U.S., where both parties hire expert witnesses and the court or a jury have to decide whom to trust and courts very rarely appoint their own experts, German courts must rely on a court-appointed expert unless the case can be adjudicated based on undisputed facts as well as facts that the court can easily establish itself.
The actual trial was scheduled for October 4. Meanwhile, either party will submit one more pleading. Apple, represented by Freshfields Bruckhaus Deringer's Prince Wolrad of Waldeck and Pyrmont (litigator) and Samson & Partner's Dr. Oswald Niederkofler (patent attorney), firmly denies the infringement accusations. Among other things, Apple argues that what is alleged to constitute a passivation lawyer in the A10 chip is only about one-eigth as thick as the layers described in the patent. And even if a potential or actual infringement was identified, the case might be stayed pending a nullity action brought before the Federal Patent Court by Apple and Intel. One remark by Judge Dr. Zigann suggested that Qualcomm would have to carefully avoid a claim construction so broad that the patent would be likely to be invalidated. However, the court did not comment on its assessment of the merits of Apple's nullity complaint. Validity is very rarely discussed at a first hearing in Munich. Come October, Apple and Intel's joint challenge to the patent will be front and center unless there is a finding of non-infringement, which no one can predict at this stage.
There we go again. For the fourth time in six years (minus a few months), Apple and Samsung will square off again, starting today, in the San Jose building of the United States District Court for the Northern District of California. It's the third trial in the first Apple v. Samsung case (the related complaint was filed in April 2011) and the fourth in total (if we add the 2014 trial in the second case, filed in 2012).
Via Twitter I provided the parties with a link to the Guinness Book of Records website. This might be a new record: four trials between the same two parties in one federal district court within less than six years.
In some ways, it's déjà vu all over again, or Groundhog Day, as Korean-American Judge Lucy H. Koh calls it. But not in all ways. Samsung scored a major victory in the Supreme Court in 2016 on what should be considered the appropriate article of manufacture for determining design patent damages in the form of a disgorgement of unapportioned infringer's profits under 35 U.S.C. § 289. Apple had been awarded huge amounts at two previous trials, based on a standard overthrown by the highest court in the land. Now it will be up to a jury whether the ultimate outcome will, or will not, be reflective of Samsung's SCOTUS victory.
There's the legal part, which is a test that the U.S. government laid out in an amicus curiae brief filed with the Supreme Court. That one is suboptimal, and people far more qualified than me to discuss design patent law find it wanting. There are various restrictions on the parties, especially on Samsung, as to what kind of evidence and testimony they're allowed to present and what kinds of argument they're allowed to raise. And what may ultimately decide is psychology: whether the jury will, or will not, buy Apple's portrayal of Samsung as a copyist.
It's impossible to go into full detail here on all these questions, but let's take a quick look at a few of them. My loyal readers know that I like both Apple and Samsung much better when they're defending themselves against patent infringement allegations and overreaching remedies than when they're playing the offensive part.
Over the years I've had a handful of different iPhones and Samsung Galaxy phones. It's true that the earliest Galaxy products looked much more similar to the iPhone than later ones do. That's why this re-retrial is about old products. A blast from the past.
Apple will argue that Samsung's phones had a rather different look prior to the iPhone launch than subsequently to it (and will point to that old "crisis of design" email):
On the left side one can see that those older phones usually had physical keyboards. While it's true that early Galaxy S phones looked more iPhone-like, what had happened in between was that Android came out, Samsung adopted it, and physical keyboards were history. But in none of those trials did Samsung get the chance to make its strongest defensive point--nor it will it get it this week. Even before the iPhone, Samsung's designers had created some touchscreen phone designs that had various visual elements that are now considered "iPhone-like":
Even if--just for the sake of the argument--one agreed with Apple that Samsung was a copyist, had a major benefit from it (relative to other Android device makers such as Motorola and HTC, not vis-à-vis Apple), and should pay the price, that still doesn't mean that a draconian remedy--disgorgement of entire profits--is a fair and just outcome.
Fairness would require new legislation. § 289 would have to be amended in order to allow apportionment. Then we could have a rational conversation about the extent to which a particular device maker's success depends on certain designs or, more accurately, certain design elements. But Congress hasn't touched that statute in ages, so the law of the land is what it is for the purposes of this trial. Faced with the choice between a devastating AoM definition that will encourage abusive litigation by others and a scenario in which Apple would get less than it deserves, but still an amount far closer to a reasonable apportionment than the "nuclear option," let's hope that jurors will mitigate the damage.
Judge Koh could have adopted a different test (set of rules) for determining the article of manufacture. The Department of Justice is part of the executive branch of government; its positions are neither law (unless Congress likes and adopts its ideas) nor precedent.
Professor Sarah Burstein, who studied design and the law, wrote a very interesting paper last fall, published by the Harvard Journal of Law & Technology, about the "Article of Manufacture" question and proposed going back to the original definition, which excluded machines. No machine would mean "no smartphone."
Carl Cecere, an appellate attorney, authored an article for law.com. He, too, considers the adopted test a threat to patent holders and their competitors alike. Like Professor Burstein, Mr. Cecere is concerned about lay jurors having to make a determination without sufficient guidance.
But the San Jose jury will have to hand down a verdict under the chosen test. It's free to do pretty much anything. Unfortunately, it won't have as much help as it could have been given:
With respect to the second AoM factor (relative prominence of design), the word "relative" would be given more meaning by highlighting other features and components not affected by the design. There's a whole lot of technology in those phones, and one would totally devalue it by finding that the entire device is the AoM for design patent damages purposes.
As for the third factor (whether the design is conceptually distinct from the product as a whole), the Department of Justice had said that "[i]f the product contains other components that embody conceptually distinct innovations, it may be appropriate to conclude that a component is the relevant article." This is just an example of how much more specific the instructions to the jury could have been.
Finally, a Samsung expert, Mr. Wagner, conducted a survey in order to show that design is only one of various factors influencing smartphone purchasing decisions. But the court did not allow him to employ that particular methodology.
Jury trials are unpredictable. Apart from how much the jury's thinking may be influenced by the "copying" allegations that Samsung can't fully counter because it's not allowed to present its independent pre-iPhone designs, a lot will depend on how much weight the jury will give to the fourth factor: whether one can purchase a separate component that embodies a design. In this regard, Samsung will be able to show some evidence such as replacement parts offered on Amazon.com.
While I'm not going to reiterate my positions on copyrightability and "fair use" in connection with Oracle v. Google (I fully stand by what I've written before and which the Federal Circuit has vindicated, but don't see a point in repeating what I've been saying for so many years), it does sometimes surprise me that there is so little interest in the proceedings. The latest example is that I haven't seen any media coverage of the fact that Google is preparing a petition for a rehearing en banc (a full-court review) of Oracle's recent appellate victory (this post continues below the image):
The regular deadline would have been in late April. In early April, Google asked for more time: until May, 2019. Oracle didn't oppose, and the Federal Circuit granted the petition.
An expert I talked to last month doubted that the Federal Circuit would take much interest in a matter of Ninth Circuit law. The Federal Circuit doesn't usually hear copyright cases, and here, even the Federal Circuit would only be bound to what it said in its Oracle v. Google "fair use" decision the next time a copyright matter, because of some patent claims being involved, is appealed from a district court within the Ninth Circuit. The circuit judges are more interested in the evolution of patent law (and other fields that must be--and aren't just coincidentally--appealed to the Federal Circuit).
Last time around, when the key legal question was copyrightability, Google even skipped this step and went straight to the Supreme Court (in vain). The fact that it's trying an en banc petition this time doesn't necessarily mean it's much more hopeful about its chances. Google may simply consider it safer to exhaust its options at this stage before trying another petition for writ of certiorari (request for Supreme Court review). It's like telling the Supreme Court: "We really tried everything to avoid having to file a second cert petition in the same case, but unfortunately we have to."
While I believe the Federal Circuit got both copyrightability and "fair use" perfectly right (for the reasons I stated in years past, over and over), I'd love the Supreme Court to accept to look at the matter--and, ultimately, to affirm. As an app developer I believe that would be a positive thing for the industry at large, with a few exceptions that merely prove the rule. An en banc review by the Federal Circuit--no matter the outcome--wouldn't be useful at all.
The above screenshot is from an automated notification email to those following the case, which is one of half a dozen cases on my N.D. Cal. watchlist. The text is the digital equivalent of a Freudian slip: it says "NOTICE OF APPEAL to the 9th Circuit Court of Appeals" (emphasis added)
Huawei's lawyers noticed this and, one hour and 15 minutes later, refiled the same document with a different description: "NOTICE OF APPEAL to the Federal Circuit"
Procedurally, this is an appeal to the Federal Circuit, based on the rule that any case involving at least one patent infringement claim must be appealed to the Federal Circuit, which, however, applies the law of the regional circuit in question if an issue is not about patent law in a strict sense (infringement, validity etc.). So in this case, the Federal Circuit will act as if it were the Ninth Circuit--or at least it will try to.
In my previous commentary on this antisuit injunction and the motion process leading to it I, just like Huawei's lawyers, mistakenly referred to how the Ninth Circuit would rule on it later, without stating more accurately that the Federal Circuit would have to wear the Ninth Circuit's hat.
The rule that the Federal Circuit rules on contract, copyright or whatever other law if a case involves at least one patent claim is applied very broadly. In Oracle v. Google, the patent infringement claims didn't get anywhere: Oracle didn't prevail on them at the first trial and focus exclusively on copyright (with tremendous success) thereafter. What the Federal Circuit applies equally broadly is the concept of ruling on non-patent legal questions under regional circuit rules. In fact, I'm aware of at least one case in which the Federal Circuit even applied a local rule, i.e., a procedural rule, in a similar context.
Huawei's notice clarifies that a motion asking Judge William H. Orrick to alter or amend the injunction decision remains pending with the district court regardless of this Ninth Circuit appeal to the Federal Circuit.
That motion focuses on two issues, and those are going to be the two pillars of Huawei's appeal:
Huawei argues that the U.S. case wasn't actually the earlier-filed one (by just the calendar date, but still) relative to the Chinese actions. Huawei says the U.S. case became dispositive of the injunctive-relief question in the Chinese case only after Samsung brought its counterclaims. Judge Orrick was obviously aware of the procedural history when he made his decision last month.
Judge Orrick has also disagreed with Huawei on its second appellate argument. It's about the Ninth Circuit's statement in a Microsoft v. Motorola opinion that the Gallo test for antisuit injunctions matters in this specific context, while Huawei says Samsung has to satisfy both the Supreme Court's Winter preliminary-injunction factors and the Gallo test for antisuit injunctions. Again, this is not new. It would be surprising if Judge Orrick changed mind on a legal question he's already resolved--and the Federal Circuit will, in this case, apply Ninth Circuit law, too, though Huawei will foreseeably urge it to do the opposite.
As Huawei's corrected filing shows, the "circuitry" of the procedures involved is tricky, but let's not lose sight on the overarching policy issue. The key policy issue is injunctive relief over standard-essential patents while the underlying contract and/or antitrust issues are being resolved. The Ninth Circuit has been very clear on this in Microsoft v. Motorola (even twice as it ruled on a preliminary injunction and, later, on a final judgment under which then-Google's Motorola was held to owe Microsoft damages). The Federal Circuit will decide Huawei v. Samsung in light of, and in deference to, Microsoft v. Motorola. As for the policy issue of SEP injunctions, the Federal Circuit largely agreed with Judge Posner in an Apple-Motorola case.
It would be extremely surprising if Judge Orrick altered his decision, given that he knew what he was doing when he took his first decision, and that he had heard and/or read the same arguments before. As for the Federal Circuit ruling on this case, Huawei would obviously prefer the Federal Circuit to make its own law, but here it will be an Acting Ninth Circuit. While anything can happen, Ninth Circuit precedent favors Samsung. Even if one agreed with the second pillar of Huawei's position, I can't see why even the traditional Winter preliminary-injunction wouldn't weigh in favor of the injunction that was granted.
As for political/diplomatic implications (also called "international comity"), it's actually a positive thing for Samsung in this case that it's not a U.S. company. In some other cases, such as Apple v. Samsung, it would benefit from it, but in this dispute with Huawei and in times of "trade war," it's a good thing that this is a dispute between foreign companies--and let's not forget that the Northern District of California was Huawei's venue choice when it brought its cross-jurisdictional complaints.
We're just days away from yet another Apple v. Samsung trial in the Northern District of California. IT's a re-retrial over damages, following a trial, a retrial, Samsung's successful appeal to the Supreme Court and various other procedural steps on the way back to where we are. By the way, the dispute started more than seven years ago (mid-April 2011).
Judge Koh's final jury instructions will inform the jury of the relevant factors for the article-of-manufacture determination. If the jury determines the relevant AoM is an entire smartphone, Apple gets a huge damages award. If the jury concludes the casing/screen is more reasonable, then the amount will be less extreme amount, but still a chunk of money.
This is what Judge Koh's tentative final jury instructions would say about the relevant factors and how to consider them:
"The scope of the design claimed in Apple's patent, including the drawing and written description;
2. The relative prominence of the design within the product as a whole;
3. Whether the design is conceptually distinct from the product as a whole; and
4. The physical relationship between the patented design and the rest of the product, including whether the design pertains to a component that a user or seller can physically separate from the product as a whole, and whether the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can be sold separately.
In weighing these factors, your objective should be to identify the articles of manufacture that most fairly can be said to embody Samsung's appropriation of Apple's patented designs."
The jury will be free to attach to each of these factors whatever weight it deems reasonable. Based on what jurors told the media after multifactorial "weighting exercises," some juries spent a lot of time evaluating each factor and even more time thinking about how much weight each of them should have, while other juries focused on what they felt would be a reasonable result.
In a pretrial order, Judge Lucy Koh ordered the parties to "develop a joint proposed limiting instruction related to the use of the phrase 'article of manufacture' in the claim constructions and patents" and to "specify when they would like the limiting instruction to be given." Apple will not be allowed to tell the jury that the design patent claims-in-suit resolve the article-of-manufacture question because of a determination by a patent examiner who decided to issue a patent. But Apple will obviously seek to convince the jury to attach tremendous weight to the claims. The message from Apple's lawyers is going to be the next best thing to "the name of the game is the claim." Therefore, Samsung proposes--in response to Judge Koh's order--the following limiting instruction:
"Neither the Court nor the Patent and Trademark Office has determined the relevant articles of manufacture in this case. The words in the design patents and in the Court’s claim constructions do not determine the relevant articles of manufacture. That is a question for you to decide."
Apple's lawyers disagree, particularly on the second sentence:
"It is extremely prejudicial to Apple and improperly suggests to the jury that the words in the design patents and the Court's claim constructions are not relevant to identifying the articles of manufacture."
Samsung's first footnote stresses that its proposed instruction "does not say that the words in the patents and constructions are 'not relevant.' It says only that those words are not determinative." (emphasis in original)
Apple's objection makes clear that Apple is not just concerned about the jury potentially misinterpreting "determinative," but about the jury potentially giving less weight to the claim language than Apple would like.
"Determinative" is not part of everyday language, but it isn't too uncommon either. Reasonably educated people should figure out what it does mean and what it doesn't. Numerous other passages of the preliminary and final jury instructions contain words that jurors may misunderstand in similar ways as Apple fears.
The parties couldn't agree, so Judge Koh will have to decide. Technically, "not determinative" is simply accurate. In colloquial language, one could add a few words like "in their own right," though one could also argue that any additional words could create confusion, too.
Today's Qualcomm v. Apple hearing in Munich (see my previous post on Apple and Intel's invalidation efforts and my tweet on the postponement of the hearing by 4.5 hours on short notice) started with a surprising move by Qualcomm: a withdrawal of several asserted claims. (Last month Qualcomm also withdrew several asserted claims from its first ITC complaint against Apple.)
Qualcomm's German lead counsel, Quinn Emanuel's Dr. Marcus Grosch, handed out the related motion to dismiss and explained that Qualcomm's intent was to narrow the (in)validity issues in the case, the obvious objective being to avoid a stay of the infringement case (or of the enforcement of a potential injunction) pending resolution of any Apple-Intel nullity actions or the opposition (to a recently-granted EPO patent) I blogged about earlier today.
The Munich I Regional Court has defined some local rules for patent infringement cases that are unique: as opposed to a single trial, an early first hearing is held. Usually it is so early that the parties have just filed, or announced an intent to file, their validity challenges in other fora (mostly the Federal Patent Court, sometimes the EPO, rarely with the German Patent and Trademark Office). Therefore, validity discussions are reserved for the second hearing, which is then--unless further court sessions turn out to be necessary--a trial followed by a ruling. But today's hearing was unusual in this regard. I had never before seen a first hearing in Munich at which validity would have been mentioned and alluded to. Not only did Qualcomm point to it as the rationale for its withdrawal of certain claims it believed to be jeopardized by a prior art reference from Korea but Judge Dr. Zigann also referred to validity in two contexts:
When Apple's lead counsel in today's hearing, Freshfields Bruckhaus Deringer's Prince Wolrad of Waldeck and Pyrmont, said an identified vagueness of the patents-in-suit shouldn't disadvantage Apple, Judge Dr. Zigann alerted him to the fact that a breadth of scope running counter to Apple's interests in the infringement context may actually serve it very well on the invalidation front.
As for vagueness: in a related context, Qualcomm's lead counsel acknowledge a "shortcoming of a definition" in the patent document. That kind of concession is rarely heard in court, but was inevitable in this context. The patent specification (not counting claims and figures) has only about 10 pages and indeed contains various unclear terms and expressions.
Judge Dr. Zigann indicated that, after looking at the prior art references cited by Apple and Intel, a stay pending resolution of the parallel challenges to the validity of the patents-in-suit is quite a possibility. And toward the end, he told Qualcomm directly: "Your withdrawal of claims shows that you know you have to do something to avoid a stay."
It obviously wasn't possible for the court to form an immediate opinion on the impact of Qualcomm's surprise dismissal of some claims. Under procedural rules, Apple's counsel could have asked for more time to formally respond, but consented to the motion to dismiss those claims (while reserving the right to seek a partial reimbursement of litigation expenses) and, when asked whether Apple would dispute the remaining infringement allegations without requiring time for further thought, Prince of Waldeck jokingly said: "We can overcome any related inhibitions."
The infringement allegations that Qualcomm dropped related to speed dial (where you can assign a speed-dial number to a contact). What Qualcomm is still claiming is that Apple's iOS devices--formally it's going against Spotlight, but Qualcomm's counsel said that Siri, as incorporated into iOS 11, is also infringing--violate those patents by finding a name, based on entry of a number or letter, and offering different communication channels.
As a former anti-software-patent campaigner it always frustrates me when courts and parties, despite the exclusion of software patents under the European Patent Convention, discuss infringement theories relating to the "user experience" and user-interface software--which is what today's infringement analysis was essentially about.
Things could still change between now and the final ruling, which will come down after a trial scheduled for September 20, but the most likely scenario is that Qualcomm will prevail on infringement, yet the case will be stayed because the validity of the asserted patent claims is too doubtful. In that case, Apple's equitable and antitrust defenses may become moot anyway, which is why the court may never reach them.
I can relate to the court's skepticism of some of Apple's non-infringement theories--with one exception: Citing the Federal Court of Justice's Rangierkatze ("shunting trolley") decision, Judge Dr. Zigann argued that Qualcomm's patents are infringed even if an inefficient way in which some end users presumably organize their phone directory (having a separate entry per each contact number of messenger or email account of a contact) is a prerequisite for achieving the result covered by the asserted patent(s). The Shunting Trolley decision just says that even an uncommon way in which an apparatus is used (and this case here is about apparatus claims) can give rise to an infringement finding because the fact that an apparatus may be used differently in most cases does not serve as a defense to infringement. That's a logical and important principle, but for my taste, looking at it in technical and policy terms, it's highly problematic to deem a search patent infringed if a certain search result and presentation thereof (in this case, it's also about icons) is brought about by a user's way to organize a directory, not a result of automation.
I don't read Shunting Trolley as saying that manual steps can simply substitute for automation when a patent is all about an apparatus that automates a process. If a user operates a device in an unusual way, that's one thing; but letting the user do the job that technology is supposed to do is irreconcilable with the concept of automation. An essential step--for example, the key inventive step of a patent--must not be performed manually. If one thinks it through, it would mean that a patent on a machinery cutting paper in certain ways would be deemed infringed by a less advanced machine, or even a simple knife, if the effect can be achieved by folding the paper accordingly before cutting along a certain line. Or, getting back to search, any search patent would then be infringed by any mobile device if a user could bring up Google and produce a certain type of result (I'm not sure whether that could be said for today's patents-in-suit, but it's possible, given that Google, when accessed from mobile devices, provides an icon for calling a phone number).
Apple's counsel argued that the patent claims say the device must be "configured to" present certain types of search results (and only those results) in a certain format, thus Apple's non-infringement theory isn't foreclosed by Shunting Trolley.
They have more qualified people than me to devise their strategy, but if anybody asked me how to state the issues for an appeals court after an infringement finding based on Shunting Trolley in this particular case, I would argue
that an essential step, especially the primary inventive step, of a technology patent must be performed automatically, not manually, also including manual preparation that, in connection with the claimed technology, brings about a certain result, and that such an automation requirement is distinct from the Shunting Trolley concept that even rare forms of use can infringe;
that, at a minimum, the proposed rule must apply to automated steps that an apparatus claim requires a device to be "configured to" perform (as opposed to broader terms than "configured to," such as the mere potential capability of achieving a result); and
that the patent claims at issue involve a search filter (i.e., only certain results--and not others--should be shown), and if filtering is essential to the inventive step, then the mere fact that the narrower set of results found in a patent claim is a true subset of the totality of results listed by the search technology does not constitute an infringement unless there is evidence that the related filter is actually applied in the process of identifying the results (this is then about the inner workings of the search technology, not just about what comes out at the end).
Judge Dr. Zigann noted that the Federal Court of Justice is patentee-friendly. Others say so, too, and it's plausible. It may very well be that today's United States Court of Appeals for the Federal Circuit is more balanced than the Federal Court of Justice of Germany. But there are serious issues when a patent involves search filters and is all about automation, yet an infringement is identified where a claimed filter doesn't appear to be in play and a result depends on users organizing their data in a way that comes down to them doing the index-building that a database or search engine should do.
All of this may never play a role if the patents-in-suit go down the tubes of invalidation. However, there are four patents-in-suit, asserted against different Apple entities in two different lawsuits per patent (one suit per patent targeting Apple Inc., the other one two European Apple companies), and while Apple and Intel may have pretty good chances of defeating all four patents, there is that remaining risk of maybe one claim from one patent surviving--and then an infringement finding would hurt.
The next Qualcomm v. Apple hearing in Munich will be held in two weeks. I don't know yet what the patent-in-suit in that case, or group of cases, is about.
In the previous post I mentioned today's Qualcomm v. Apple hearing (Munich I Regional Court). Just before going to the courthouse I checked on the EPO register and found something interesting: one of the four patents-in-suit was just granted last year, and a result, it was still possible for Apple and Intel to file a timely notice of opposition with the European Patent Office:
Apple filed its notice of opposition on March 2, 2018; Intel followed three days later, raising the same substantive issues. Both Apple and Intel are represented by Samson &Partner. On Qualcomm's behalf, Quinn Emanuel's Dr. Marcus Grosch is trying to defend the patent against those requests for revocation.
The other three patents-in-suit are from the same family. But they were granted before, making nullity actions in the Federal Patent Court the only option for invalidation. It would be extremely surprising if Apple hadn't filed nullity complaints, and if Apple and Intel are brothers-in-arms in the EPO, that is likely also the case in the Federal Patent Court. I'm tempted to file a request with the Federal Patent Court for access to the case files, as I did in other cases (including one in which I had to overcome Samsung's opposition to my petition).
At a February hearing in another Munich Qualcomm v. Apple case, it was mentioned that some additional infringement claims had been added in the form of an amended complaint. One of the public attachments to Apple and Intel's opposition filings is an excerpt (the first two pages and the last page) from the related amendment, and indeed, the case number is that of one of the two cases heard in February.
Dr. Grosch mentioned the word "spotlights" at the Febraury hearing. At first I thought this was going to be about photo editing, given that Qualcomm is asserting a related patent in a U.S. case. However, having looked at the patents-in-suit and also the opposition filing with the EPO, a connection with digital imaging can be ruled out. I asked a member of my app development team, who then told me that Spotlight is known to him as a search feature (for local documents) on the Mac. The Wikipedia article I just linked to explains that the same technology was added to iOS at some point. The scope of the patents-in-suit is more about mobile than desktops. Maybe Qualcomm is also going after macOS, but there can be no doubt that mobile devices (iPhone, maybe also iPad) are being accused. The opposition filing cites prior art that is all about personal digital assistants and other mobile communications devices.
If I understood this correctly from what I read on the Internet, a typical Spotlight feature that iPhone users would know is the completion of a phone number: you start typing, and if you've previously dialed a number starting with the same digits, it's offered as an autocomplete option. Those Qualcomm patents aren't exactly search patents, but they relate to the combination of some user interface where different options are presented and the selection of and switching between communications channels.
The claims appear extremely broad to me--like the worst Nokia patents-in-suit I've seen, but those Nokia patents at least tended to be much older.
Qualcomm has further narrowed its first USITC complaint (request for import ban) against Apple. It originally brought the complaint in early July 2017 and published a full-page infographic with the following headline: "Six inventions iPhones use everyday [sic]"
Less than ten months later, the number of asserted patents has gone down from six to three (this post continues below the image):
Withdrawals of patents and claims are expected by the ITC and necessary for the trade agency with quasijudicial powers to keep its ambitious schedules. Qualcomm's first withdrawal of a patent-in-suit came at an unusually early stage of proceedings: only a couple of weeks after the ITC had instituted the investigation. The day before yesterday, Qualcomm withdrew, besides claims from other patents, all asserted claims of U.S. Patent No. 8,838,949 and U.S. Patent No. U.S. Patent No. 9,608,675.
At a February hearing held by the Munich I Regional Court, Qualcomm's German counsel expressed an intent and offered a prediction: Quinn Emanuel's Dr. Marcus Grosch said he was expecting to secure a German patent injunction for his client by August or September of this year.
The next Munich hearing will take place next Thursday (May 3). First hearings in Munich serve the purpose of discussing the key issues the court has identified based on the complaint and the answer to the complaint. At that stage, validity usually isn't discussed yet. Next week's hearing will be about the German parts of four European patents from the same family, each covering a "method and device for communication channel selection": EP1956806, EP1955529, EP3054658, and EP3094067.