For Microsoft, the last two weeks have brought bad news in its
patent war with Motorola Mobility. On April 24, an
administrative law judge at the U.S. International Trade
Commission issued an initial determination that Microsoft's Xbox infringes four Motorola patents -- rejecting Microsoft's defense
that three of the patents were essential to standard wireless
device technology and that Motorola had breached an agreement to
license the IP on reasonable terms. Then, on Wednesday, a judge
in Mannheim, Germany ruled that the Xbox and certain versions of Windows infringe Motorola patents. He ordered the products
removed from sale in Germany.
But Microsoft believes that if it wins its
breach-of-contract case against Motorola in federal district
court in Seattle, neither the ITC nor Mannheim rulings will have
much significance. That's why Monday's hearing before U.S.
District Judge James Robart is so critical. Robart will hear
arguments on two summary judgment motions by Microsoft and one
by Motorola. If he ends up agreeing with Microsoft that Motorola
was obligated under its contracts with standard-setting bodies
to license essential patents to Microsoft on fair and reasonable
terms -- and that Motorola breached its obligation by demanding
unreasonable fees of $4 billion a year from Microsoft -- the
practical effect will be that Motorola must license the patents
to Microsoft. That would spell the end of Motorola's ITC and
German infringement claims on standard-essential patents. (One
of the patents in the ITC case isn't in that category.)
Motorola, meanwhile, has moved for a summary judgment that
Microsoft repudiated its licensing rights when it sued Motorola
in Seattle in 2010. If Motorola wins, that's the end of
Microsoft's case. If it loses, however, Robart's prior rulings
would likely lead him to conclude, as a matter of law, that
Microsoft is entitled to license the Motorola technology.
That would tee up Microsoft's two summary judgment motions.
In one, Microsoft asserts that Motorola's licensing demand was
so unreasonable that it represents a breach of Motorola's
obligations to standard-setting bodies. Microsoft argues under
this theory that Motorola's patent infringement suits were
improperly filed, and so it asserts that it's entitled not only
to license Motorola patents on reasonable terms but also to
damages. Microsoft is also asking Robart to rule that Motorola
may not seek an injunction based on any patent it is obliged to
license to Microsoft on reasonable terms.
Robart has already indicated that he's very receptive to
Microsoft's arguments. Last month, as I've reported, he issued a
shocker of a temporary restraining order, ruling that Motorola
must not act to enforce whatever relief it might win in Germany.
Microsoft said after the Mannheim ruling Wednesday that the
Robart injunction will insulate it from any immediate
consequences of the ruling.
The Seattle judge said that his temporary restraining order
will remain in effect until he rules on the summary judgment
motions he will hear Monday. Motorola has appealed the TRO,
which it regards as a preliminary injunction. That raises an
interesting question of whether Robart or the 9th Circuit Court
of Appeals has jurisdiction over the injunction if the trial
judge reaches summary judgment rulings before the 9th Circuit
decides the appeal.
Robart's summary judgment decisions will also have a big
impact on Apple's parallel breach-of-contract suit against
Motorola in California. The Seattle judge's rulings won't be
considered binding in Apple's case, since the parties aren't the
same. But you can be sure that Robart's opinions will show up on
the Apple docket as soon as they're entered in Seattle.
Motorola's lead counsel at Monday's hearing is expected to
be Jesse Jenner of Ropes & Gray. Arthur Harrigan of Danielson
Harrigan Leyh & Tollefson and David Pritikin of Sidley Austin
will argue for Microsoft.
(Reporting by Alison Frankel)
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