Following a hearing in the morning, a federal judge in the Western
District of Wisconsin has canceled an Apple v. Motorola Mobility trial
that was scheduled to start today at 1 PM Central Time and has dismissed
the entire case with prejudice, meaning that the only way Apple can
salvage these claims is through an appeal (but not through refiling in
another U.S. district court). Here's the minute entry that states the
outcome (click on the image to enlarge):
The dismissal follows an eventful pre-trial week. On Tuesday,
wholly-owned Google subsidiary Motorola Mobility brought a "motion for
guidance" that essentially demanded that Apple commit to a license deal
on court-determined terms. Motorola Mobility generally opposed the idea
of the court setting a FRAND rate and ordering Motorola to make Apple an
offer on that basis, but at least it wanted to ensure that Apple would
also be bound by the court's determination, just like Microsoft had also
committed, in a different case in another district, to a license deal.
Until that initiative by Motorola, things were actually going very well
for Apple, with the court being originally quite inclined to consider
Apple's request for a court order that would have brought about a
license agreement for Apple with respect to Motorola's wireless
(cellular and WiFi) standard-essential patents. But when Apple took the
position, in response to Motorola's motion, that it would only accept to
be bound by the court's determination if the royalty doesn't exceed $1
per iPhone, Judge Barbara B. Crabb reacted negatively and started to
wonder whether there was any point in having the FRAND trial that the
court and the parties had already prepared for.
Yesterday, Motorola's lawyers sought to reinforce the court's skepticism
while Apple justified its $1 position with the fact that Motorola might
later refuse to pay a royalty to Apple, for its own wireless SEPs,
based on the same methodology. Apple made two alternative proposals for
the way forward: either Motorola could accept to be bound by the
principles the court would establish in this case or Apple proposed to
build an evidentiary record, over the next 6-9 months or so, and hold a
trial setting a rate for a wireless SEP cross-license.
Apparently, Judge Crabb was not persuaded by Apple's last-minute
proposal and determined that there was no case worth holding a trial.
I think Apple missed an opportunity to make important headway against
Motorola Mobility. I don't know Judge Crabb and I didn't attend any of
the hearings, but I read her orders and I really thought she was very
solution-oriented. In fact, I thought she would have been a great judge
to preside over a FRAND rate-setting trial -- a judge that I think an
implementer of FRAND standards could really have trusted to arrive at a
fair decision. As long as she considered Apple to be genuinely
interested in a solution, as opposed to protracted litigation, she was
definitely willing to help put an end to Motorola's wireless SEP
assertions against Apple. But when she started to doubt Apple's
intentions, the case fell apart.
Apple can and, I'm sure, will appeal this dismissal. In the meantime,
Google, which owns and totally controls Motorola Mobility (Google
employees sometimes appear at patent trials as Motorola corporate
representatives), may come under pressure from the Federal Trade
Commission, which may bring an antitrust lawsuit over the issue of SEP
abuse. Also, Apple apparently felt that it had a very strong position
because none of Motorola's SEP assertions in the U.S. has succeeded so
far. I still believe Apple should have seized this opportunity to have
an SEP license agreement put in place with Motorola Mobility.
This is already the second Apple v. Motorola Mobility U.S. trial to be
canceled this year. In June, Judge Richard Posner, sitting by
designation on the United States District Court for the Northern
District of Illinois, also canceled a trial shortly before it was
supposed to begin.
The Wisconsin situation has no bearing on the Microsoft v. Motorola
Mobility FRAND contract trial scheduled to start in the Western District
of Washington next week (on Tuesday, November 13, to be precise). While
Apple raised similar issues as Microsoft did, and asked for similiar
remedies, there are also some important differences concerning the
history of negotiations and the parties' willingness to enter into a
license agreement on court-determined terms. Microsoft really wants to
put Motorola's SEP assertions against it to rest, while Apple apparently
didn't believe that it needed a near-term solution. The Seattle trial
will take place unless there's a settlement. There won't be a dismissal
there.
http://www.fosspatents.com
