Another Key Motorola vs. Apple Patent Trial Tossed Out By A Judge Frustrated With Apple's Games
from the bye-bye dept
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…