#25: New Munich Court Rulings

The Oberlandesgericht München (Munich Higher Regional Court) has made 3 important decisions regarding smartphone patents:

1. The court rejected Google’s attempt remove the injunction Microsoft won last year over a text-messaging-related patent. Google’s acquired IP from Motorola turns out again to not benefit Google in another lawsuit.
2. The court decided to postpone its decision on the cross-appeal of Apple’s photo gallery injunction against Motorola to May 16^th. Google obviously wants to remove this injunction but some predict that Apple may be able to get an even broader ruling on its current injunction.
3. The court sided with Google to remove the injunction over Apples slide-to-unlock patent because the Bundespatentgericht (Federal Patent Court) ruled that the patent was invalid on April 4^th. Apple will have a chance to revisit this case if it is able to appeal successfully and nullify the courts ruling. The decision will probably be made in 2014.

Florian Müller said there is nothing very special about these rulings except for that they continue trends we have seen and that it is important to note the decisions to stay on top of what is going on in the patent war.

Video # 24 Paterns Display Improving Patent System

Video #23: Designing Around Patents

Video #22: Reduced Royalty Demand for SEPs

#24: More Google Setbacks

As we have read about in many previous blog posts from students in our class, Google has not gained much if any actual leverage from its $12.5 billion spent on acquiring Motorola’s patents as they are constantly unsuccessful in proving patent infringement by other companies such as Apple, Microsoft, and Nokia. Google was wrong to think that owning many patents would enable the settlement of any infringement issues no matter what the scale. So it is clear that this has not worked, however, licensing has been successful.

In Mannheim, Germany, Google lost again when the regional court announced that Motorola is not entitled to an injunction against Microsoft over its push notification patent because “Google owes Microsoft a license under an AciveSync license agreement.” This result is not that surprising considering Judge Richard Arnold and Wales High Court of Justice declared the suit invalid for multiple reasons. In addition, Google was about to loose its right to that particular patent anyway because the patent was going to expire in two years. Considering the costs and time involved in most patent litigation this law suit doesn’t even seem logical for Google to waist its time an money on especially if many Justices also argue the suit to be invalid!

“Google cannot currently enforce, and isn't going to be able to enforce anytime soon, an injunction against Microsoft. But Microsoft has already won a U.S. import ban and three German injunctions against Motorola's Android-based devices (1, 2, 3), and is likely to win a fourth one, relating to Google Maps, on June 3. In November Google's lawyers told an appeals court that their client lost four months of German sales as a result of Microsoft's patent enforcement (and, which they didn't say, Google's unwillingness to join the likes of Samsung, HTC, LG and Acer in taking a royalty-bearing Android patent license).”

What we can see here is that licensing is supported and for good cause. Licensing is key to open innovation.

#23: Federal Judge set FRAND rate for Microsoft's license to Google's SEP

Today Judge James Robart, the federal judge that ruled over the Microsoft v. Motorola FRAND contract case in the Western District of Washington determined a FRAND license fee for a case that was brought to the courts attention in November of last year.

The actual fee has not yet been published, Florian Mueller just noticed an order after which the court "issue[d] its Findings of Fact and Conclusions of Law (the 'Findings and Conclusions') determining a reasonable and non-discriminatory royalty rate and range for Motorola's standard essential patents". The decision will be filed under seal and were emailed to the council of record. The parties have until April 25^th at noon to propose redactions of confidential business information. On April 26 the court will hold a telephone conference with the parties to determine what information will be made public. So stay posted!

On August 26^th Judge Robart scheduled a second trial, “a breach-of-contract trial that may be another bench trial or could be (if Google gets its way) a jury trial.” This trial will discuss whether Motorola’s initial royalty demand, of about $4 billion per year. Was blatantly unreasonable and constituted a breach of Motorola’s FRAND pledge (which is apparently an enforceable contract). “Microsoft won a summary judgment decision against Motorola’s pursuit of injunctive relief” after the first trial.

Microsoft one its case against Motorola in November 2010 because Motorola was said to have failed adhering to its FRAND licensing commitment. Motorola’s conduct was judged to be so bad that the United States as well as the European Union conducted antitrust investigations. Based on these previous rulings it will be interesting to see whether Motorola will face similar consequences in the current cases.

#22: Samsung Reduces 2.4% Royalty Demand for SEPs

The USITC postponed its decision on Samsung’s complaint against Apple until May due to raised issues regarding FRAND licensing obligations and an excision order. There is now an interesting development that has come about in the Apple-Samsung dispute: in December 2012, “Samsung abandoned the 2.4% royalty demand for its wireless standard-essential patents (SEPs) it had been adamant about for well over a year.”
This issue arose in the Netherlands in 2011 when a Dutch court denied Samsung’s injunction request as its 2.4% royalty demand was considered to be outside the FRAND terms. In December, however, Samsung decided to withdrawal all of its European SEP-based injunction requests. The filing does not specify what the new demand is or weather that complies with the FRAND terms.


Samsung behaved similarly with Ericsson. It reduced its demands on Apple a week after it reduced its royalty demands with Ericsson. Samsung realized that its tactics were not working and had to shift gears. However, it still has to defend itself against Apple and Ericsson’s claims as well as the European Commission and countersuing. Apparently, the European Commission is still investigating Samsung to determine if it violated the European antitrust law in use of declared-essential patents against Apple.

Apple wants FRAND rates to be set in a district court and highlighted Samsungs track record of overdeclaring patents (where Samsung said certain patents were essential to standards when they were not) twice as much as the average industry rate. Apple has used Samsungs statements against them. Samsung and Nokia and others agreed licensing cost of a wireless standard should not exceed 5-7%, and Samsung would then get a fraction of this. There is still one SEP that remains on the table but apparently is quite trivial as far as functionality goes and accounts for less than 0.01% of the code in the accused device. In addition, this small amount is a relatively unimportant portion of the UMTS standard. All in all, there should be a standardized license so everyone pays the same amount, claims Dr. Nils Rydbeck, former Chief Technical Officer at Ericsson.

Just as Samsung, Google’s Motorola Mobility might agree to a 100-125 million annual royalty cap after Microsoft had dealt with years of 2.25% royalty for its Motorola patent use. SEP licensing is not something companies are able to hold over others heads any longer.