Another Key Motorola vs. Apple Patent Trial Tossed Out By A Judge Frustrated With Apple's Games

from the bye-bye dept

Tue, Nov 6th 2012 5:42am — Mike Masnick

Earlier this year, in a key patent fight between Apple and Motorola Mobility, Judge Richard Posner, who was "slumming" it down in the district courts for a bit, dismissed that case with prejudice while slamming Apple for its patent litigation strategy. Now, it appears that we have something of a surprise repeat situation, as a different judge in a different patent fight between the same parties has also dismissed the case with prejudice after angrily teeing off on Apple for its litigation strategy. Most of the reasoning can be found in an opinion the judge released late last week.

The key issue was that Apple was pushing the court to determine what the FRAND (Fair, Reasonable and Non-Discriminatory) rate was for the patents in question. Motorola wanted 2.25% of every iPhone sold. Apple was pushing for much lower. However, as the judge explored whether or not the court should determine a rate, Apple was asked if it would abide by whatever rate the court set -- leading it to say that it would only do so if the rate were under $1 per phone. This seriously ticked off the judge, who noted that it would take a ton of work for the court to come up with what it believed to be a FRAND rate -- and if it was only doing that so Apple could then use it as a bargaining chip in future litigation, that just didn't seem worth it.

Despite its position, Apple maintains that it is entitled to specific performance in the form of the court determining what a FRAND rate is for Motorola's patents. At the final pretrial conference, I asked Apple to explain why it believed the court should determine a FRAND rate even though the rate may not resolve the parties' licensing or infringement disputes. I questioned whether it was appropriate for a court to undertake the complex task of determining a FRAND rate if the end result would be simply a suggestion that could be used later as a bargaining chip between the parties. Apple responded that the rate would resolve the dispute in this particular case, namely, whether Motorola's license offer was FRAND and if not, what the rate should have been.

Apple's response was not satisfactory and did not assuage my concerns about determining a FRAND rate that may be used solely as a negotiating tool between the parties. After further consideration, I believe it would be inappropriate to grant Apple's clarified request for specific performance.

Apple made a last ditch to salvage the case -- and even to argue that if the case is dismissed, it should be dismissed without prejudice, so it can refile. However, the judge dumped the case entirely, with prejudice, meaning that Apple is out of luck here. It can, and almost certainly will, appeal the dismissal, but the judge is clearly not at all pleased with Apple's actions here. The judge also had some choice words for Apple concerning its argument that Motorola's actions have "irreparably" harmed the company.

Apple's allegations of "irreparable harm" have at least two problems. The first problem is that Apple's request for specific performance in the form of court declaration of a FRAND rate without any obligation by Apple to accept the rate would not prevent Motorola from suing Apple for patent infringement and requesting injunctive relief. In other words, if Apple refuses to be bound by the rate determined by the court, Motorola could continue to sue Apple for patent infringement and request injunctive relief.

The second problem is that Apple has provided no reason why its injuries would not be remedied by an award of money damages.

Basically, Apple's playing games here, and the judge (the second one in a row in such a case) is not at all happy about it. Apple may want to revisit its legal strategy.

Of course, just as this case is getting thrown out, it's been leaking that the FTC's main focus in its planned antitrust attack on Google will be... Motorola Mobility and the licensing rates for these patents. I do admit that I think it's a silly move for Google to try to continue this path of forcing other companies to pay high fees on patents (and seems to go very much against Google's stated position on patents historically), but taking that to the level of antitrust seems like an odd stance. We'll have to see when the actual complaint comes out, but seeing as one of the key cases related to this just got thrown out, it would seem to weaken the FTC's argument somewhat...

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Filed Under: frand, licensing, patents
Companies: apple, motorola

24 Comments

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Reader Comments

The First Word

“

Me too, please!

I wish my company could suffer "irreparable harm" and still carry a market cap of $553 billion.

—timlash

”

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Graham J (profile), 6 Nov 2012 @ 6:03am

umm no
The case being thrown out doesn't weaken the FTC's argument, the fact that the FTC has an argument shows that the case shouldn't have been thrown out.

Mike, it's a pity your bias against Apple prevents you from seeing things as they are.
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- Mike Dee, 6 Nov 2012 @ 6:20am
  
  Re: umm no
  Wait what? Because the FTC is bowing to its leaders and pushing against Google, the law should bow too?
  [ link to this | view in chronology ]
- Mike Dee, 6 Nov 2012 @ 6:20am
  
  Re: umm no
  Wait what? Because the FTC is bowing to its leaders and pushing against Google, the law should bow too?
  [ link to this | view in chronology ]
- The eejit (profile), 6 Nov 2012 @ 6:27am
  
  Re: umm no
  I think it's simply a case of Apple sayign flat out that they would not abide by the Court's judgement. That can easily be construed as Apple shopping around for a verdict in their favour.
  
  The FTC going after Google for antitrust over patents is an absurd notion at best.
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- That One Guy (profile), 6 Nov 2012 @ 6:54am
  
  Lemme esplain... no, there is too much, lemme sum up:
  -Disagreeing with the actions of a person or group does not automatically indicate non-evidence based bias against that group.
  
  -Automatically assuming that someone who disagrees with a person or group must be doing so due to bias against them, and not as an evidence based opinion on the other hand, is a fairly good indication of personal bias on the part of the accuser getting in the way.
  
  -Before accusing someone of bias regarding their comments, might want to make sure you're not suffering from it yourself.
  
  And on a personal note, I'm going to have to agree with Mike, Apple was acting incredibly arrogant here, telling the judge that they would only accept the verdict if it came out to be what they wanted anyway. And in case it's not clear, telling a judge ahead of time how you want him to rule in a case, and that you'll only abide by it if you like, generally leads to a well earned legal smack down, which the judge in this case rightly gave them.
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Zakida Paul (profile), 6 Nov 2012 @ 6:03am

The bubble is about to burst as judges are starting to get wise to the abuse of the patent system. Unless Apple get back to true innovation, they will be in serious trouble. These days the only thing Apple innovates is patent trolling.
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- Anonymous Coward, 6 Nov 2012 @ 9:20am
  
  Re:
  As someone who has used both Apple products and open source software over the past 10 years, even when Apple was considered an innovator, 90% of everything they came out with was merely a feature that had already been common in open source software several years prior.
  [ link to this | view in chronology ]
  - Mr. Applegate, 6 Nov 2012 @ 1:58pm
    
    Re: Re:
    Thank you!
    
    Those are my observations as well.
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- Anonymous Coward, 6 Nov 2012 @ 1:12pm
  
  Re:
  The bubble is about to burst as judges are starting to get wise to the abuse of the patent system.
  
  Not until the CAFC is dissolved.
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Anonymous Coward, 6 Nov 2012 @ 6:44am

innovate, don't litigate
1. sack some lawyers
2. hire more engineers
3. come up with tech that forces others to cough up 2.25% of their phone sales
-> problem solved
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- Anonymous Coward, 6 Nov 2012 @ 7:36am
  
  Re: innovate, don't litigate
  Apple doesn't even have to do that. They just have to stop being douches and cross-license their shit.
  [ link to this | view in chronology ]
- Anonymous Coward, 6 Nov 2012 @ 7:46am
  
  Re: innovate, don't litigate
  "1. sack some lawyers
  2. hire more engineers"
  but....
  1. Playing games ==> More angry People
  2. Angry Clients ==> More billable hours
  
  This is the basic reason why companies must NOT allow their legal teams a hand in their business strategy. Unfortunately it happens all the time.
  [ link to this | view in chronology ]
timlash (profile), 6 Nov 2012 @ 6:48am

Me too, please!
I wish my company could suffer "irreparable harm" and still carry a market cap of $553 billion.
[ link to this | view in chronology ]
- Michael, 6 Nov 2012 @ 7:48am
  
  Re: Me too, please!
  It would, if you had invented 'rounded corners'.
  [ link to this | view in chronology ]
  - Anonymous Coward, 6 Nov 2012 @ 8:22am
    
    Re: Re: Me too, please!
    That's only half the battle, you have to be willing to sue the entire world for using rounded corners on anything.
    [ link to this | view in chronology ]
    - Anonymous Coward, 6 Nov 2012 @ 10:22am
      
      Re: Re: Re: Me too, please!
      Next rounded corners battle: Safety scissors!
      [ link to this | view in chronology ]
      - lancehassan (profile), 6 Nov 2012 @ 11:42am
        
        Re: Re: Re: Re: Me too, please!
        wow apple has the patent on safety scissors too? Must have made a bundle on that one. I heard that they also own the patent on the wheel and are suing the auto manufacturers, tire, bicycle, cart, jitney, bus, truck, train, lift truck, Russian Tractor, circus wagon, paddle wheel, steam ship (retro for perceived damages) Grist mill, windmill, Don Quixote (for fencing with a windmill causing damages) and all medieval torture device manufactures using circular spinning, cranking or wracking devices...Now we know what a company run by lawyers looks like.
        [ link to this | view in chronology ]
Stephan (profile), 6 Nov 2012 @ 9:24am

Sick and tired
Am I the only one who is sick and tired of all these time- and money burning lawsuits? And especially of Apples' unbelievable hyprocrisy, when they're not ashamed of suing for basically "meanlingless" design patents but whining when they're supposed to pay for something that is really important (and most probably far more patent-worthy)?
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ECA (profile), 6 Nov 2012 @ 9:50am

Can we...?
Can we start charging these folks by the hour for Court costs??

REALLY!!

WINNER PAYS!!(not the loser as he has enough problems.)

If it isnt SHORT and Blatant...You gotta PAY..
If you cant PROVE it in a short time, Ya gotta PAY MORE..
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The Infamous Joe (profile), 6 Nov 2012 @ 10:09am

"That guy"
Of course, just as this case is getting thrown out, it's been leaking that the FTC's main focus in its planned antitrust attack on Google will be... Motorola Mobility and the licensing rates for these patents.

As the case is getting thrown out, the case is leaking the info?
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Anonymous Coward, 6 Nov 2012 @ 10:20am

Apples use Of Patents
The Apple strategy is clear, use the law and their own patents to force competitors out of the market, and the law to force other patent holders to license to apple at the price Apple wants to pay. The judge decide not to go along with this.
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Wally (profile), 6 Nov 2012 @ 2:41pm

Tragic
Some would say this is good Apple is getting the butt end if it. But what this ruling really has done is give Motorola Mobility the ammunition to charge whatever it pleases. Because it was ruled with prejudice, they are now allowed to openly violate FRAND agreements and charge whatever the hell they want on industry standard essential patents. This is because when ruled with prejudice, all Motorola Mobility had to do is cite the ruling against Apple. Congratulations, you just either banned the XBox 360 from sales in the US or significantly raised prices of all electronics using WiFi.
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- John Fenderson (profile), 6 Nov 2012 @ 3:46pm
  
  Re: Tragic
  I don't think so. The court did not rule that Motorola's fees were acceptable, but that Apple was abusing the court system. I don't see anything in this case that prevents someone else from challenging Motorola over the same issue.
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  - Mr. Applegate, 7 Nov 2012 @ 4:23am
    
    Re: Re: Tragic
    Exactly! Only Apple can't file suit on it again, others can.
    [ link to this | view in chronology ]