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What to do?

What's it about? Didn't they just have a case management hearing in April? Why yes. Yes, they did, but there have been "progress and changes" since, according to the parties' Joint Case Management Statement [PDF], which fills us in on the details. Both parties would like some changes since the last case management hearing. Here's the last joint case management statement, back in April. And the judge's order on April 30 was to go forward immediately with the damages trial, unless certain things happened in the USPTO reexaminations of Apple's patents at issue. Some of those things have almost happened, and there are other quirks, so some changes are being requested.

The real core issue is Samsung's '381 motion, asking for a new trial on Apple's '381 patent based on newly discovered evidence or for entry of judgment on liability. Apple Opposes with a capital O. It now wants another chance to file a sur-reply [PDF], which Samsung opposes [PDF], claiming that "Apple identifies no 'new' arguments Samsung raised in its reply that were not responsive to arguments in Apple’s opposition." The parties have been told that this motion wasn't on the calendar yet, but that they should be prepared to argue it on August 21. There is also the fact that the USPTO has found all relevant claims in the '915 patent invalid in a final office action. There can be more to come on that, but how does it impact the damages trial is the question?

And that is why we really should be there to hear it, if any of you can arrange your affairs to get there and be our eyes and ears. Samsung is telling the court that "Apple is attempting to 'sandbag' Samsung and obtain an unfair tactical advantage" by various proposals on how to go forward and by refusing to seriously meet and confer with Samsung. For example, Apple wants the judge to restrict the parties to the same exhibits used at the first trial. But that's not really fair in Samsung's eyes, because since that first trial, Apple has said things to the USPTO that conflict with what they said about the '381 and '915 patents at that trial:

Samsung does not believe the Court should limit the parties to the same exhibits disclosed prior to the first trial. For example, Apple has made numerous admissions to the USPTO subsequent to the first trial that directly contradict its arguments concerning the scope of the ’381 and ’915 patents. Apple should not be permitted to tell the Patent Office one thing and the new jury another. Samsung should be able to put this new evidence before the jury. Doing so would raise no issues concerning inconsistent appellate records because liability issues are not being retried and this damages trial will have its own separate record. Rather, the trial should be held based on an evidentiary record as it exists at the time of the new trial.

[Update: We still need a volunteer.]

He has ruled that seeking an injunction over a FRAND patent can be proper and is not necessarily a breach of the FRAND commitment:

Additionally, as explained above, material issues of fact exist regarding whether the October offer letters violated the duty of good faith. In addition to the rate contained in the offer letters, the jury will consider language of the letters, the circumstances surrounding the letters, the industry custom and practice, and Motorola’s intent in sending the letters. Motorola has presented evidence that the letters were sent in good faith, and the jury will make the final determination....

As discussed above, in certain circumstances seeking injunctive relief may constitute a breach of the RAND commitment, whereas in other circumstances such conduct may be proper. The timing of when a party seeks injunctive relief in a separate forum relative to a pending action is germane to whether that party acted in bad faith in seeking such relief. In other words, it may very well be the case that seeking injunctive relief absent a pending lawsuit is good faith, whereas seeking the same relief during the pendency of litigation over a RAND rate is bad faith.

Look at page 97. It's redacted so the identity of the woman is kept confidential, but it appears from the notation that a woman was in contact with authorities and informing them of conversations between her and Swartz.

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The German action was filed July 2011, MS didn't say they would accept a RAND offer until Sept 2011, and as such breach can't be a moving target. MS is stuck with the facts at the time of the complaint. Robart seemed skeptical of this, "Do you have authority for that?" answer about getting back with more briefing "I think you're wrong, but I'll be happy to read your brief." Sullivan says they have an ongoing duty, but a new breach action would be required, and the litigation in this case can't be included in this current breach action.

On Microsoft's side, it naturally immediately filed the USTR's letter [PDF] blocking the injunction against Apple by Samsung, although its cover letter is misleading as to what the USTR said. You knew they would do that. And they are in quite a tizzy [PDF] over the fact that Motorola continues to proceed in the German case, where it already got an injunction against Microsoft, which this Seattle judge purports to have the authority to block. However, Microsoft had already made a financial offer of royalties to Motorola in that case, and Motorola, to Microsoft's horror, accepted them. The rate is higher than what this Seattle judge set, so Microsoft has smoke coming out of its ears about how unfair it is that Motorola accepted its original offer. So Microsoft is asking [PDF] the court to "to renew and expand its anti-suit injunction to curtail Motorola’s ongoing efforts in Germany to undercut the jurisdiction of this Court and to attempt to procure inconsistent rulings."

As for the judge, he's maybe starting to realize that some of his assumptions about FRAND requirements conflict with what the experts are now telling him. He expresses a measure of confusion about it in an order [PDF] on what the experts for both sides can tell the jury. Here's what he won't allow Motorola's experts to tell them: that being willing to negotiate is sufficient to meet a FRAND obligation. That contradicts what this judge has already ruled in this crazy case, so he doesn't like that, I suppose. The "reason" they can't say that to the jury is, he says, because he gets to decide what is or isn't a fulfillment of a RAND obligation, in that he's Da Law on Microsoft's obligations under Washington state law which he believes the world must go along with, Germany included. Experts can't opine on legal conclusions. However, Motorola has now informed him via this route that he's been getting some things seriously wrong on what FRAND obligations are and what good faith requires. Perhaps it will influence him. He says that the Motorola experts can input how the jury instructions read. I wouldn't put much faith in that if I were Motorola, and I gather they don't. This German prong is getting interesting, I must say.

Apple appeals from the final decision of the International Trade Commission (ITC) that the asserted claims of U.S. Patent No. 7,663,607 (’607 patent) are invalid and that Motorola does not infringe the asserted claims of U.S. Patent No. 7,812,828 (’828 patent). Apple challenges the ITC’s claim construction and its determinations of obviousness, anticipation, and noninfringement. For the following reasons, we affirm-in-part, reverse-in-part, and vacate-in-part the ITC’s decision and remand for further proceedings.

We remand so the ITC can consider that evidence in conjunc- tion with the evidence of secondary considerations and determine in the first instance whether claim 10 would have been obvious to one of skill in the art at the time of the invention....

We thus vacate the ITC’s decision that Motorola does not infringe the ’828 patent claims and remand the case to allow the ITC to consider in the first instance whether the accused products infringe under the correct construction of “mathematically fitting an ellipse.”

The pardon, therefore, couldn't have been due to concern about patent hold-up, as was stated [PDF], since the ITC specifically found that Samsung had negotiated with Apple in good faith, had already licensed the '348 patent to over 30 companies, and that it was, in fact, Apple that illustrated the danger of reverse hold-up. Further, the opinion stated, Apple not only failed to prove that Samsung violated any FRAND obligation, it failed to establish even what they are. Further, Apple conceded in its ITC briefing that FRAND patent holders are not barred from seeking injunctions, and in fact since Apple argued to the ITC that the '348 patent was not really essential, this would mean that Samsung had no FRAND obligations, due to the wording of the ETSI terms.

So, it was a bit like the papal special dispensations of history, where the law said X, but you are let off the hook from having to keep it. That makes Apple's reported public response particularly offensive, when it said, "Samsung was wrong to abuse the patent system in this way." Samsung didn't abuse the patent system. It was, as you will see, exactly the opposite, according to the ITC Opinion. And while the President can do whatever he wishes regarding public policy, the ITC followed the statute, since it has no policy powers. In short, one unavoidably must conclude that if Samsung had been the US company and Apple the Korean one, there would have been no pardon. That's the bottom line, I'm afraid. As Jamie Love 永久免费加速器推荐苹果, "What Froman and USTR will now have to explain is why India and other countries can't also consider public interest in patent cases." As I'll show you, one of the things the ITC considered was public comments warning that changing the terms for FRAND patent owners would make sweeping changes to trade laws, and Korea has already 苹果网络加速器下载 its concerns. I'm all for reforming the patent system, as you know, but if you want to reform it, how about making it *more* fair, not less? Playing favorites based on country of origin doesn't aim for that noble goal. It's indisputable that this has harmed Samsung, and since the ITC, which examined the facts in detail, found it was the innocent party in this picture, what can be the justification for Apple's comment?

If the court upholds this decision, the burden of ensuring a safe and legal Internet ecosystem will shift almost exclusively onto the shoulders of authors, practically absolving other stakeholders from being in any way responsible for the activities that occur on their websites.

This group has learned nothing at all about the Internet. All they want is that they want it to stop being the way it is. The Internet is allegedly killing them. The DMCA is giving YouTube a free ride, to hear them tell it, and the lower court judge, they argue, misinterpreted it. Back in the '80s, it was Sony allegedly destroying copyright with their wicked anti-copyright VCRs that let home users video films and tv shows. Now it's the Internet and Google and YouTube allegedly stealing money out of the mouths of starving artists. The arguments are the same.

But do they suffer from amnesia? One amicus brief states clearly that the majority of money Hollywood makes from movies is from sales of things like DVDs after the theater release. The very thing they told the court back in the days of the Sony Betamax case would destroy them turned out to be what kept them in business. They lacked vision back then, and they still do. But can't they compare and notice how wrong they were back then and extrapolate?

It's actually worse. It's greed. They want to make the Internet the new goldmine, as you can see in this telling quote from the amicus brief [PDF] by the American Federation of Musicians et al:

The motion picture and television industry's financial models and well-being, and that of the employees represented by the Guilds and Unions, heavily rely on "downstream" revenue, or revenue from the exploitation of its products subsequent to the theatrical release or first television run.5This was never truer than it is today — 75% of a typical motion picture's revenues derive from exploitation after the initial theatrical release, as do more than 50% of a television program's revenues after the initial television run. Internet exhibition and distribution, in particular, is one area of potential downstream revenue that is continuing to develop, evolve and expand as technology advances.

This was the hearing on their RAND dispute building up to the second part of the trial in this litigation which is set to begin on August 26th, and, as is typical before a trial, both sides brought motions for summary judgment or partial summary judgment. There was a trial already, part one, with the judge only, no jury, and he 苹果网络加速器下载 Microsoft should pay to Motorola, a very low rate. But there is a second trial coming up in August, this time 永久免费加速器推荐苹果, on whether or not Motorola breached its RAND obligations, which is what Microsoft claims, and if so, whether Microsoft should receive damages and attorneys fees. Motorola filed a motion for partial summary judgment [PDF] on those issues. Here's Microsoft's opposition [PDF].

Microsoft also filed its motion [PDF] asking for partial summary judgment on breach of contract and summary judgment on Motorola's 3rd, 4th, 5th, 7th, 8th and 9th affirmative defenses and its second counterclaim. You can read about the affirmative defenses and counterclaim beginning on page 21. And this is Motorola's response in opposition to Microsoft's motion.

That's the long version of what was the subject matter at the hearing, or the starting point. But here's the simple overview. Microsoft is claiming Motorola asked for too high a royalty in its opening offer of its RAND patents and that seeking an injunction for a RAND patent is a breach of contract; and Motorola claims Microsoft sucker punched them by asking for an offer and when it got one, immediately suing instead of negotiating an agreed-upon price. The judge also asked the parties to brief a separate question on what are the proper responsibilities with respect to RAND patents. What do "good faith" and "fair dealing" mean in that context? Here's where you can find both sides' briefs as text, Microsoft's and Motorola's [PDFs], and many of the points in those briefs were touched on in the hearing today.