updated 09:00 pm EDT, Fri May 3, 2013
Motorola blocked from having appeal dismissed outright
In the ever-more-complicated legal wrangles between Apple and Google (through its subsidiary Motorola), Apple has won the right to proceed with an attempt to appeal a case between Apple and Motorola in which the iPhone maker was suing Motorola for failing to adhere to FRAND guidelines, while Motorola was suing Apple for alleged infringement of standards-essential patents (SEPs) it holds. Rather than rule on the merits of each company's argument, US District Court Judge Barbara Crabb surprisingly dismissed both complaints outright.
In fact, both Apple and Motorola filed appeals over Crabb's decision, though each argued that an appeal should go forward for different reasons. In this latest action, Motorola was seeking to have Apple's complaint (that Motorola was not licensing the disputed patents under Fair, Reasonable And Non-Discriminatory -- FRAND -- terms) dropped as not having merit, or at least moved to the court of Judge Richard Posner, who previously handled complaints between the two companies.
The Court of Appeals sided entirely with Apple in dismissing Motorola's motion, pointing out that should Motorola's arguments advance to an appeal, it would be seeking sales injunctions against the allegedly infringing Apple products -- a direct violation of the consent decree it signed with the Federal Trade Commission.
The court noted that Motorola deliberately omitted the FTC agreement from its arguments in its request for a dismissal, and also dismissed Motorola's contention that a sales ban of "infringing" products was the only solution. Even just the continued effort of Google (through Motorola) to continue asking for sales injunctions is a breach of the FTC document, though the agency has as yet done nothing to try and enforce its recently-forged agreement.
The appeals court says it will now examine the jurisdictional issues of the case (where an appeal, if granted, should be heard) and the scope of the courts' power to order remedies if Apple is found to be infringing. Apple's long-held position on the issue is that standards-essential patents cannot be subject to sales injunctions or any legal action until all good-faith efforts at FRAND licensing or arbitration have been exhausted. So far, Motorola has not made any effort to license the disputed patents to Apple -- and in other cases has made royalty demands that far exceed industry standards.
An appeal of portions of Judge Crabb's ruling is the only avenue available to Apple if it wants the courts to force Motorola to adhere to FRAND licensing guidelines. Should an appeal be granted, Apple may have a strong case: subsequent legal action in other cases -- some of which don't involve Apple -- have continued to chip away both at Google's assertion that SEP infringements should be dealt with by the courts, and the 2.25 percent of retail price royalty Motorola has advocated for its SEP licenses. Microsoft recently won a dispute in which the cost of the license for some video standard patents went from the multiple billions per year Moto had asked for to under $20 million per year, very close to the amount Microsoft said was in line with industry standards.