Apple, Motorola Patent Lawsuit Shut Down… Again

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Judge Richard Posner dismissed Apple and Motorola’s patent infringement lawsuit on Friday, ending both side’s attempts to impose injunctions on the sale of each other’s smartphones. The Judge dismissed the lawsuit with prejudice, meaning Apple and Motorola are barred from refiling their cases, although they can appeal the ruling.

Apple & Motorola injunction efforts get shot down againApple & Motorola injunction efforts get shot down again

Judge Posner told Apple and Motorola they failed to prove damages with their arguments and that it would be “ridiculous to dismiss a suit for failure to prove damages and allow the plaintiff to refile the suit so that he could have a second chance to prove damages.”

He also said that Motorola’s attempt to get an injunction blocking the sale of the iPhone based on a FRAND (fair, reasonable and nondiscriminatory) patent was unreasonable. Judge Posner said,

“By committing to license its patents on FRAND terms, Motorola committed to license the [patent] to anyone willing to pay a FRAND royalty and thus implicitly acknowledged that a royalty is adequate compensation for a license to use that patent. How could it do otherwise? How could it be permitted to enjoin Apple from using an invention that it contends Apple must use if it wants to make a cell phone with UMTS telecommunications capability — without which it would not be a cell phone.”

Judge Posner initially cancelled the patent infringement trial earlier in June only days before it was scheduled to start after telling both sides they failed to prove injury. Several days later he agreed to a hearing where Apple and Motorola could argue why they deserve injunctions blocking the sale of each other’s smartphones and tablets.

In the end, however, the companies failed at convincing Judge Posner to keep with their arguments.

So far there isn’t any word on whether or not either company plans to continue pursuing the case.

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Bosco (Brad Hutchings)

The interesting part in Posner telling Apple it wasn’t going to get injunctive relief is that he is steering them toward licensing, which is exactly how all of these patents on features should be handled. He also signalled that patent holders won’t be able to use excessive license demands to block products from the market, because if they go to court, they will have come up with reasonable damages, most likely in line with a market license price rather than theoretical lost market share.

There is an even higher level lesson for Apple and the Android OEMs here. If the cases go to court, nobody is going to win, so the status quo of potential unlicensed use of IP will remain. Except that there will be no recourse. So the threat of litigation will not put undue upward pressure on these licensing prices. And that means that the OEMs pretty much win.

My prediction: if Apple and the OEMs settle, Apple will net much less per phone than Microsoft did. Microsoft was able to negotiate with an implied threat of litigation, then lock the OEMs into licensing and WP7/8 commitments.

P.S. Thanks for not quoting the d?mlaut in this article!

John Dingler, artist

Bad news: A stalemate. Waiting for Apple to win one case decisively, unambiguously.

Shame that MS was able to prevail over Apple and people cheered but now they direct smug, suggestive remarks toward Apple.

And Posner exposes the flawed approval methods of the US Patent Office. Makes one wonder at the worth of patents to the litigants.

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