Judge Barbara B. Crabb of the Western District of Wisconsin granted a summary judgement request from Motorola to dismiss antitrust claims by Apple. The action was based not on the merits of Apple’s claim, but rather on the reality that Apple wasn’t able to prove damages caused by Motorola’s patent-related actions.
On the one hand, this summary judgement is important for Moto because it removes the threat of antitrust claims from the proceedings. On the other hand, such claims could be back on the table in the future if Apple could prove damages. Florian Mueller has more on the issue at FOSS Patents.
Apple’s victory, on the third hand, is very important on a meta level. Apple has accused Motorola of infringing on its design and user interface patents, while Moto has accused Apple of infringing standards-essential patents (SEPs).
There is little doubt that Apple is infringing those SEPs. These are technologies that make up WiFi and 3G networks, and no smartphones can do the job of being a smartphone without using these patented technologies.
What is at stake is how much Apple should be paying to use these technologies. Because Moto submitted their patents for inclusion in the various standards involved, the company was also committing to licensing them for a fair, reasonable, and non-discriminatory (FRAND) rate.
Motorola had demanded 2.5 percent of the retail price of Apple’s iOS devices to license the SEPs, a rate that Apple has argued is far higher than the rates paid by any other device maker. Apple refused to pay that rate, and the company has effectively asked the courts to force Motorola to honor its FRAND commitments.
The company is now a significant step closer to getting its wish. Judge Crabb’s effectively ruled that Motorola is bound by its FRAND commitments, and that those commitments are more than just empty terms to be cast aside when it’s convenient.
It seems decreasingly likely that Motorola, or Samsung by extension, will be able to get an injunction on Apple’s infringing devices based on SEPs. U.S. courts have been fairly consistent in resisting such actions.
Instead, Apple and Motorola will most likely be required by the courts to enter into licensing agreements that meet the same FRAND terms granted other licensees. This would be a reasonable action in keeping with both the point of SEP agreements and the normal course of FRAND licensing.
At the same time, Apple for the nonce remains free to pursue patent infringement claims against Motorola (the case against Samsung is being tried even now) for patent infringement on patents not covered by FRAND commitments, claims that could result in an import ban. To get around such a ban, Motorola would be forced to stop infringing on Apple’s patented inventions, which is what Apple has said it wants.
This has ramifications for Google, as well. The search giant bought Motorola Mobility for US$12.5 billion, a purchase that was recently finalized (Google announced mass layoffs at Motorola over the weekend). The purchase was seen largely as a defensive measure to boost Google’s own patent portfolio for the larger Apple iOS vs. Google Android patent battle of which the Motorola fight was always a proxy.
Most of Motorola’s patent portfolio relevant to smartphones involves SEPs, and if Google can’t use those patents to force Apple to a mutually-assured-destruction detente, the value of those patents could lessen considerably.
In the end, if Motorola is found to infringe Apple’s patents but is only able to get FRAND licensing for its own patents, Google could be forced to drop key functionality from all of Android or—heaven forfend—innovate its own solutions.