Dutch court declines to rule inconsistently with UK courts on Galaxy Tab design patent case

The Netherlands is one of almost a dozen countries in which Apple and Samsung are suing each other. Today the Rechtbank 's-Gravenhage (The Hague District Court) ruled on an Apple-Samsung case (which was technically brought by Samsung, but Apple was a counterclaimant in addition to a defendant) concerning Community design no. 181607-0001, a tablet computer design right (comparable to a U.S. design patent), and cleared Samsung's Galaxy Tab 7.7, Galaxy Tab 8.9 and Galaxy Tab 10.1 products of infringement.

The full text of the ruling (in Dutch) is here. The decision comes down to saying that a UK appeals court's opinion affirming a UK High Court ruling in Samsung's favor has resolved the underlying issues on an EU-wide basis. The court notes that Apple disagrees with the UK outcome and that Apple points to differences in the commercial functions performed by the allegedly-infringing parties, but the conclusion is that none of that is enough of a reason for the Dutch court to rule on the dispute in the Netherlands in a manner that would be inconsistent with the UK decision. It furthermore declined to rule on a fourth product, the Galaxy Tab 10.1v (a slightly modified version), for lack of actionable claims (the court thought the infringement contentions were not brought in a sufficiently substantiated form on a timely basis).

What's absolutely key to understand the logic of the decision is that we're not talking about a case in which a foreign court's decision would have had merely persuasive impact. This is a decision based on the concept of res judicata (this Latin term for "adjudged matter", which is commonly used in U.S. and German law, is not mentioned in the Dutch ruling): the UK decision was deemed dispositive of the issue on an EU-wide basis, including the Netherlands, which is another EU member state. It would have taken some exceptional circumstances for the Dutch court to disagree with the UK court.

At this stage, a ruling by a single court having EU-wide effect could not have issued in a utility (technical) patent case. A Community design is an intellectual property right that is administered by a European Union institution, the Office for Harmonization for the Internal Market (OHIM). While there are "European patents", those are granted by the European Patent Office, which is not an EU institution contrary to widespread misbelief, and they are not subject to EU law with the exception of patents on biotechnological inventions. Community designs are subject to an EU-level law. For the time being (though reform is underway), European patents (i.e., technical patents) must be adjudicated on a country-by-country basis.

The substance of this case -- whether the accused tablet computers infringe Apple's relevant Community design -- has already been adjudged in Germany in a preliminary injunction proceeding (including an appeal, but still on the fast preliminary-injunction track) and in the UK (also including an appeal, but the UK case was not on the fast track; instead, it was a full-blown case with a trial the parties had plenty of time to prepare for, as opposed to only an injunction hearing ordered on short notice). Apple is still pursuing a full-blown German case, but it was stayed because the Düsseldorf Regional Court, which originally ordered a preliminary injunction in Apple's favor, believes that Samsung has in the meantime dug up prior art that calls into question the validity of the asserted Community design. Apple's European assertions of this Community design could flare up again if the OHIM ultimately upholds it, but this could take a long time, especially since the decision can be appealed.

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ITC judge wants Samsung to post a bond of 88% of its U.S. smartphone sales due to Apple patent case

An October 24, 2012 preliminary ruling that held Samsung to infringe four Apple patents could have more drastic consequences for Samsung's U.S. business than previously known. Late on Friday, a public redacted version of the full-length version of Judge Pender's initial determination and recommendation on remedy and bond entered the ITC's electronic document system. If the U.S. trade agency affirms the judge's findings of violations (which the ITC staff supports across the board) and adopts his recommended remedies, Samsung faces the following draconian combination of sanctions:

• a U.S. import ban that would enter into effect after the 60-day Presidential review period following a final ITC decision,

• a simultaneous cease-and-desist order that would prohibit the sale of any commercially significant quantities of the imported infringing accused products in the United States (this remedy was denied against HTC), and

• the requirement to post a bond of 88% of the value of all mobile phones, 32.5% of the value of all media players, and 37.6% of the value of all tablet computers found to infringe Apple's patents-in-suit during the Presidential review period.

By comparison, Samsung argued that a 4.9% royalty rate was a more appropriate bond amount. Judge Pender adopted Apple's proposed methodology and rates, based on a "price differential analysis". The ITC staff supports that approach in principle and is fine with the bond rates for tablets and media players, but says that the 88% rate for mobile phones is based on too high a price differential between the two companies' products because Samsung sells significant quantities of phones at a much lower price point, such as $200 (compared to a $600 non-subsidized iPhone), and the ITC staff believes that those lower-cost phones don't really compete with Apple's offerings and shouldn't be taken into account for the purpose of a price differential analysis. But Judge Pender points to an internal Samsung presentation according to which the U.S. mobile phone market was "becoming a Two Horse Race Between Apple & Samsung" and which suggested a strategy of undercutting Apple.

Judge Pender notes that Samsung claimed a price differential analysis is not adequate and warns Samsung that if it "continues to press" this argument, he would recommend to raise the bond rate to 100% for all infringing products sold during the 60-day Presidential review period.

The judge's recommendations are all subject to a review by the Commission, the six-member decision-making body at the top of the ITC.

While all of this looks like a potential worst-case scenario for Samsung, the picture is not that bleak. Judge Pender cleared various Samsung designarounds, and if those designarounds are not only legally safe but also technically adequate and commercially viable, Samsung can keep importing and selling. Even the initial determination does not explain why the designaround products don't infringe: it appears that Samsung presented them and Apple did not dispute Samsung's non-infringement claims on the merits but just opposed the adjudication of the designarounds on procedural grounds. Reexaminations are another opportunity for Samsung. While they take time (a lot more time than ITC investigations), Apple's winning patents are under pressure. A first Office action by the USPTO tentatively rejected all claims of the "Steve Jobs" touchscreen heuristics patent, which is at issue in this ITC investigation, and recently an anonymous reexamination request against another patent-in-suit (one that covers translucent images) became known.

If those mysterious designarounds enable Samsung to continue to do well in the U.S. market, an ITC order based on Judge Pender's recommendations could still create logistical complications for its U.S. business. For example, during the short Presidential review period, it might have to post a bond even on products that already have been designed around the patents-in-suit. Also, customs officers may hold up shipments of designaround products until they are certain that an exclusion order doesn't apply to them. And Samsung is worried that this could also affect other electronic media devices, including televisions, laptops, non-smartphone mobile phons, cameras and camcorders, or standalone components, even though Apple did not accuse any of those kinds of products of infringement. It wants some "special guidance" to be given to customs, but Judge Pender is against that proposal.

On a related note, Reuters' Dan Levine yesterday reported on Apple's decision to drop, for the time being, any charges against the Samsung Galaxy S III mini in the parties' second California litigation (a case that is scheduled to go to trial in 2014), based on Samsung's representation that it does not sell the device in the U.S. and only for as long as Apple believes that this representation is still accurate. Apple's lawyers bought various units of the S III mini from U.S. retailers such as Amazon, but it appears that Samsung is not actively selling and marketing it in the United States, so whoever sells it has to take the initiative to source it from other countries. I don't know if Samsung had a particular market-specific reason for which it thought U.S. consumers would not be interested in the S III mini, or whether this strategy of saying "we make the product but sell it only in other countries" is, possibly in no small part, a response to Samsung's patent infringement issues in the dispute with Apple. Theoretically Apple could sue resellers over that device, but those are also customers of Apple's own products and it may not be worth the hassle for only one particular device.

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After series of German wins over Google, Microsoft signs up two local Android patent licensees

Microsoft just announced two royalty-bearing Android patent license deals with device makers operating in the German market: one with Swedish company EINS SE, which "manufactures Android tablets under the Cat brand in Germany" (here's an example on the German Amazon site), and another one with Hanover-based Hoeft & Wessel AG ("Höft & Wessel" in German; click here for the corporate website). Hanover ("Hannover" in German) is known in the computer industry for hosting the CeBIT trade show. According to the press release, Hoeft & Wessel "manufactures handheld devices and terminals for the public transportation, logistics and retail industries in Europe".

In accordance with industry customs, the announcements don't specify financial terms, but they do state explicitly that Microsoft will receive royalties for Android's use of its intellectual property.

Android device makers around the globe increasingly recognize that Google's mobile operating system makes extensive use of third-party intellectual property. Microsoft's license arrangements with Hoeft & Wessel and EINS SE are already the 16th and 17th Android-related patent license deal. I recently listed 15 other license deals, most of which were signed by Microsoft but the most recent one of which was Apple's settlement with HTC (which I described as a "lopsided" deal, with HTC being on the paying end, based on a review of a largely-unredacted copy of the agreement).

When I listed the 15 previous announcements I predicted that "there certainly will be lots of Android patent license deals in 2013". I actually believe that in 2013 alone there will be more royalty-bearing Android patent license deals than during the last three years (2010-2012). Not only will Microsoft continue to sign up licensees but Apple will also expect companies to respect its IP, and Nokia only started its related patent enforcement in May and will likely have a deal in place with HTC, ViewSonic and many others within about a year. And those three companies aren't the only ones looking for solutions to Android's infringement: even Ericsson's recent lawsuits against Samsung target "software and user interface technology" used by other Android OEMs as well.

The Android patent license agreements Microsoft announced before were signed with U.S. and Asian companies. Today's announcements show that Europe, which is a huge market for Android, is also included in Microsoft's technology-sharing program. Germany is the largest European market, and it's also a key patent litigation venue. Microsoft didn't actually choose to litigate in this country but was forced to countersue after Motorola was trying to take advantage of this jurisdiction's patentee-friendly (and not particularly FRAND-friendly) legal framework. Microsoft's countersuits in Germany have already resulted in injunctions against the now-Google-subsidiary over three patents: the first one over a multi-part text message layer patent in May, the second one over a file system patent in July, and the third one over an operating system-level soft input patent in September. Microsoft is slowly but surely continuing its German patent enforcement against Google.

Google's Motorola is the only major Android device maker not to have taken a license to Microsoft's numerous patents that read on its products. Samsung, HTC, LG and others have been paying Microsoft for some time, and chances are that Motorola would also have agreed to address Android's IP issues through a license agreement if it had not been acquired by Google, which now micromanages Motorola's litigations and negotiates settlements on its behalf. At a recent hearing held by an appeals court, Google's (Motorola's) lawyers said that their client lost four months of sales in Germany because of the need to work around Microsoft patents. If Motorola had simply licensed those patents, it would not have lost one day of market presence. And the four months that it lost won't have been the last period of absence from the marketplace if this dispute continues and Microsoft wins and enforces additional injunctions.

For Android device makers who unlike Google can't afford to stay out of the German market for an extended period of time, Microsoft's court victories over Google's own Motorola Mobility prove that litigation is not an advisable choice, while licensing is a viable way forward for large and small companies alike. I am absolutely convinced that it's only a matter of time that Google's Motorola Mobility will also enter into an Android patent license agreement with Microsoft. How much time? That will depend on Google's leadership.

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Apple asks Federal Circuit to deny Samsung's request for remand of Galaxy Tab 10.1 injunction

Today Apple filed its opposition to Samsung's motion for a swift remand of the Galaxy Tab 10.1 preliminary injunction to the district court, following Judge Koh's indicative ruling that the jury verdict, which did not hold Samsung to infringe the D'889 tablet design patent on which the sales ban is based, raised a substantial question. Apple points to a recent criminal case in which a circuit court (in that case, the United States of Appeals for the Eighth Circuit) "denied a similar request for remand despite an indicative ruling that the criminal defendant's motion to adjust his sentence raised a 'substantial issue,' and that the district court would apply a new sentencing approach if the case was remanded".

In order to have the Galaxy Tab 10.1 ban lifted, Samsung needs a remand, and it needs a quick one since Judge Koh indicated that the longer it takes, the more she'll be inclined to firstly decide on Apple's Rule 50 ("overrule-the-jury") motion. (I looked at both parties' Rule 50 motions and commented on them in this recent post; click here to go directly to the part on design patent infringement).

When Judge Koh denied Samsung's request to stay the injunction a few months ago, she referred to Samsung's statements on the absence of major harm, for example, "that 'sales of the accused Galaxy Tab 10.1 will soon fall to zero' because it is near 'the end of its product lifecycle,' and that the injunction would not have 'a significant impact' on its business since 'the successor model to the Galaxy Tab 10.1 is already on the market.'" Apple's brief today notes that Samsung wanted to have those passages redacted, but Judge Koh decided that these should be in the public record.

On July 1 I already pointed to Samsung's public statements and how they contradicted its motion for a stay. Those statements are now held against Samsung once again, and if Apple can dissuade the Federal Circuit from a quick remand of the case to Judge Koh, Samsung's position of there being no serious harm would likely be a key factor.

I continue to be underwhelmed by Apple's argument that the jury found the Galaxy Tab 10.1 to infringe three software patents, so it may have to be banned one way or the other. Injunctions don't declare entire products illegal -- the question is always how much it takes to work around them. While those software patents (especially collectively) are strategically more important than the tablet design patent, Samsung and Google have had a lot of time since the filing of the lawsuit to develop a workaround, and changing the software is easier than modifying the casing of the product.

Apple argues that it's fighting for a judgment as a matter of law (JMOL) not only with respect to the D'889 patent but also with respect to its tablet trade dress. While it's never easy to get a part of a jury verdict overruled, I actually think this is a stronger point than the one concerning the three software patents (with respect to which Samsung faces the Rule 50 hurdle). That's because an effort to design around the D'889 design patent would be comparable to, and overlap in important parts with, what is needed to work around the related trade dress.

I have said before that I believe the Rule 50 stuff should be resolved, and in my view, the Rule 50 briefing concerning the D'889 patent should simply have been put on a faster schedule in light of the existing preliminary injunction. But since that wasn't done, the question is now whether the Federal Circuit will remand the case and, in Apple's words, "give Samsung a windfall of over two months of infringing sales that this Court and the district court have already held will cause Apple irreparable harm".

Interestingly, the situation in the U.S. proceeding has some striking parallels with the one in Germany, where Apple also won a preliminary injunction (originally based on a European equivalent of this design patent, and later on the basis of unfair competition law) but is on the losing track after today's trial. In Germany, like in the United States, the preliminary injunction remains in force for now. I would expect Samsung to move once again for a stay in Germany, but since Samsung has been selling the modified and court-approved Galaxy Tab 10.1N for some time, there's even less of a commercial need to have the German injunction stayed than in the United States. In both jurisdictions, it doesn't really matter too much whether this relatively old product can still be sold in the months ahead. It's all about who will be in a stronger position with a view to the next steps.

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Google's new Nexus 7 tablet apparently infringes Nokia's patents and faces other IP risks

This week Google demoed its new Nexus 7 tablet computer, which is set to compete with the iPad as well as other Android-based devices such as the Kindle Fire. The $199 price appears aggressive, and the jury is out on whether Google will be able to sustain that price or have to raise it once it has cleared all of the necessary patent rights.

The number of small (mostly non-practicing) entities asserting patents against Android is large, but with all that's going on between major industry players, I've even lost track of the "trolls". However, it appears that Google has yet to work out license agreements with at least two of the three largest companies claiming that Android devices infringe their rights:

• They certainly don't have a license from Apple. Given that Google is using its newly-acquired subsidiary Motorola Mobility to pursue import bans and other forms of injunctive relief against Apple, and considering that Apple requested a preliminary injunction against a device co-developed by Google, the Galaxy Nexus smartphone (Judge Koh's decision could come down anytime now), there's no reason why Apple would have to treat the Nexus 7 differently than, for example, the Galaxy Tab 10.1 (against which it just won a preliminary injunction).

• At this point I don't know whether the Nexus 7 is licensed by Microsoft. There certainly isn't a direct license agreement between Microsoft and Google -- otherwise there wouldn't be litigation between Microsoft and Google subsidiary Motorola Mobility. But Microsoft has deals with several major ODMs (Original Device Manufacturers) in place, such as Pegatron, whose shareholders include ASUS, Google's partner for the Nexus 7. If Microsoft's license agreement with Pegatron covers the Nexus 7, then we already have the third instance in which Google recognizes the need to pay patent royalties to Microsoft on Android-based devices (the other two instances are the Galaxy Nexus, given that Samsung signed a license agreement with Microsoft, and Motorola's recent PR stunt of a "settlement" proposal). If the Nexus 7 is not licensed through Pegasus or another ODM, then I believe it's in Google's best interest to negotiate a license sooner rather than later.

• The third major player to assert patents against Android devices in court is Nokia. It's suing HTC and ViewSonic. In a recent reaction to a Google EU antitrust complaint, Nokia said that it "has an active licensing program with more than 40 licensees". Nokia is particularly interesting in the Nexus 7 context because it's known to hold, besides a huge number of other (mostly non-standard-essential) patents, some patents essential to the IEEE 802.11 (WiFi, or WLAN) standard. I know because it's asserting a couple of such patents against ViewSonic in Germany.

  I asked Nokia whether Google or ASUS are licensed and got the following official response from a company spokesman:

  "Neither Asus [n]or Google is licensed under our patent portfolio."

  Through its recent lawsuits against HTC, ViewSonic and RIM, Nokia has shown that it means business when it comes to patent licensing. Nokia is such a large patent holder in this industry that even Apple took a royalty-bearing license. But Google and ASUS are not among the "more than 40 licensees" Nokia referred to in a recent press release.

  I don't know how much Nokia asks for, but since Nokia has so many licensees, there's every indication that its royalty demands are reasonably acceptable. Another thing I don't know is whether Nokia has previously contacted ASUS about patent licensing, but companies with a significant outbound licensing business, such as Nokia, routinely approach significant infringers and propose to negotiate a license agreement. I venture to guess that ASUS is more than large enough to be on Nokia's radar.

It looks like Google and ASUS still have some homework to do.

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Apple posts bond and wins battle over expert reports, Samsung moves to stay injunction

These days there's a flurry of Apple v. Samsung activity. Late on Tuesday by local time, Judge Koh granted Apple a preliminary injunction against the Galaxy Tab 10.1, and Samsung filed a notice of appeal only about five hours later. In the late afternoon of the following day, Wednesday, three more things happened:

1. Apple posted its $2.6 million bond right away;

2. Samsung filed a motion to stay the injunction pending its appeal; and

3. Apple won, by an extraordinarily wide margin, a battle with Samsung over the exclusion of portions of each other's expert reports.

$2.6 million bond already posted

Apple didn't hesitate to post its $2.6 million bond to protect Samsung againt the possibility of a successful appeal, in which case the preliminary injunction would be found to have been improperly granted. Here's the key part of the bond document (click on the image to enlarge):

On this basis, the injunction has taken effect and Samsung must abide by it. Otherwise Apple could ask the court to sanction Samsung for contempt.

Samsung asks to stay enforcement for the duration of its appeal to the Federal Circuit

Samsung later filed a motion to stay the injunction pending its appeal to the Federal Circuit. Samsung also asked the court for an expedited schedule to adjudicate its motion to stay. According to Samsung's proposal, Apple would have to file its opposition brief tomorrow, Friday, by noon local time. Apple actually would have been willing to agree on an expedited schedule but wanted to have until Monday for its filing. I frankly don't understand why Samsung didn't just accept Apple's proposal, given the difference of only one business day.

Samsung's motion to stay argues that it's likely to succeed on appeal because the court "erred by issuing a preliminary injunction based on a stale and incomplete record" and the injunction "is improper based on the current evidence" (which Judge Koh did not allow Samsung to present at this stage).

Samsung discusses the harm that it and "the public" would allegedly suffer from enforcement of the injunction and mentions again its relationships with wireless carriers.

Ideally, Samsung wants a stay pending its entire appeal, but it alternatively (and more realistically) asks for a stay pending the CAFC's decision on its motion to stay (knowing that Judge Koh is certain to deny a stay pending the entire appeal).

I don't want to overstate the merits of Samsung's appeal and its request for a stay. It's going to be difficult for Samsung at this stage. But I reiterate my belief that Samsung's arguments aren't entirely implausible. Just like I wrote yesterday, Samsung also notes that the CAFC actually wanted Judge Koh to perform another equitable analysis, but her order instead relied on the opinion of Circuit Judge O'Malley. It's possible that none of Samsung's "new" arguments have merit and that none of its new proposed pieces of evidence makes a difference. But if there's only one item that should have been and wasn't considered, then Judge Koh's decision to grant a preliminary injunction is less than waterproof. Since Judge O'Malley's position (that there was no need for a new equitable analysis as the record was supposedly clear) wasn't adopted by the majority of the CAFC, it can't necessarily be relied on. The safer alternative would have been to set a tight schedule and let Samsung produce its new evidence, to hear the parties, and to perform a new equitable analysis based on the latest record.

[Update]

Judge Koh granted Samsung's motion to shorten time for the briefing process concerning its motion, but gives Apple 21 hours of additional time to file its opposition brief. The filing deadline is Saturday (June 30), 9:00 AM, while Samsung proposed Friday 12:00 noon. There will be no reply brief (Samsung also proposed not to file one), and no hearing. I believe Judge Koh will adjudicate the motion during the weekend, or on Monday morning at the latest. [/Update]

Apple gets many portions of Samsung's expert reports excluded but defeats most of Samsung's motions

In another battle that is relevant with a view to the trial that will start in about a month, Apple won by a wide margin a battle with Samsung over the parties' motions to exclude portion of each other's expert reports. In the greater scheme of things, this is just one of many steps in a litigation, but whether certain theories are allowed to be presented at a jury trial can make a difference.

Magistrate Judge Grewal explains in his order that "expert trial testimony in patent cases is often far from perfect" and "[t]his case is no exception", but the court can't strike everything someone criticizes. In this particular case, "many of the expert reports offer theories or rely on evidence never previously disclosed as required", and that's the basis on which a number of motions to strike succeeded.

The margin by which Apple won this battle is extraordinarily wide. Apple succeeded with motions to strike portions of

• four Samsung expert reports arguing that the D'889, D'667 and D'087 patents are invalid for indefiniteness;

• two Samsung expert reports denying the infringement of certain design patents;

• a Samsung expert report arguing that the '915 patent is invalid (Apple's motion was granted with respect to seven of 10 references);

• a Samsung expert's opinion that Apple's relevant design patents should be narrowly construed in light of subsequently issued design patents

• a Samsung expert report arguing tha the D'334 and D'305 patents are invalid;

• two Samsung expert reports opining that Apple's asserted trade dress lacks distinctiveness;

• a Samsung expert report arguing that the '381 ("rubber-banding") patent is invalid;

• a Samsung expert report arguing that the '607 patent is invalid (one of the the three portions stricken alleged inequitable conduct); and

• a Samsung expert report arguing that Apple infringes the '516 patent.

Apple did not succeed with respect to portions of Samsung expert reports on the claimed non-infringement by Samsung of the '915, '381 and '607 patents and on Apple's alleged infringement of the '460 patent as well as a supplemental damages report and a rebuttal damages report. But some of the denials came with an authorization of additional expert testimony. Apple won a total of five hours of additional depositions, while Samsung won only two additional hours of testimony.

Samsung's own motions to strike portions of Apple's expert reports were much less successful than Apple's motions. Magistrate Judge Grewal denied certain Samsung motions related to Apple expert reports on the alleged infringement of the '381 patent, tbe alleged invalidity of the '711 patent, the alleged non-infringement of the '711 patent, an expert report on damages, an expert report on the importance of design to consumers (a cornerstone of Apple's argument in this case), and certain trade dress claims. Samsung succeeded only with a motion to strike portions of an Apple expert reports opining on alternatives to Apple's design patents and only with parts of such motions targeting Apple expert reports on the state of the art surrounding Apple's design patents (Samsung got certain references to devices stricken but Apple defended its references to reviews, comparisons and design elements) and the alleged infringement of the '607 patent (Samsung lost with respect to references to laboratory results but won with respect to "an infringement theory and evidence").

I have previously stated my belief that Apple goes into this summer's trial with a fundamentally stronger case than Samsung. That belief is mostly based on the strength of the asserted intellectual property rights and the fact that Samsung mostly relies on FRAND-pledged standard-essential patents (SEPs). Both parties have great lawyers, but no lawyer can change the fact that Samsung is in a strategically weaker position here. Apple won't be able to prevail on each and every intellectual property right it asserts, but I think Apple will at least win parts of its case while Samsung will at best win a FRAND royalty but no injunction over SEPs. Samsung's non-standard-essential patents don't appear frightening so far.

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Galaxy Tab 10.1 banned in the U.S. over design patent, Friday hearing surprisingly canceled

The United States District Court for the Northern District of California just became the third court to order a preliminary injunction against the Samsung Galaxy Tab 10.1, and the second, after the Düsseldorf Regional Court, to do so over an iPad design patent (an Australian injunction, which was subsequently lifted, was based on two technical patents).

Judge Lucy Koh entered the injunction at close of business on Tuesday. Only a day earlier she had scheduled a hearing for Friday. Her order explains that "further briefing and argument from the parties on the issue of the preliminary injunction is unnecessary". Given the Federal Circuit's appellate ruling and her original decision to deny an injunction (which was based on the assumption, overturned on appeal, that the design patent was likely invalid, but nevertheless stated that there was an infringement and irreparable harm), she felt that "any further delay of the injunction is not justified". The injunction will enter into effect as soon as Apple posts a $2.6 million bond.

[Update] In record time, only about five hours after the order, Samsung just filed its notice of appeal:

NOTICE IS HEREBY GIVEN that Defendants Samsung Electronics Co. Ltd., Samsung Electronics America, Inc., and Samsung Telecommunications America, LLC appeal to the United States Court of Appeals for the Federal Circuit from the June 26, 2012 Order Granting Preliminary Injunction entered in the above-captioned action, Docket No. 1135, and each and every part thereof.

Given that the majority of the Court of Appeals for the Federal Circuit -- all but one judge -- did not want to tell the district court to enter a preliminary injunction right away, it's not entirely impossible that Samsung can raise issues concerning Judge Koh's equitable analysis. As you can read further below, Samsung asked for the admission of additional evidence, and Judge Koh's denial of that motion will be part of Samsung's appellate argument. Even if Samsung's appeal failed, Samsung simply cannot let this preliminary injunction stand without an appeal since it will want to argue some of the same issues at the upcoming trial. [/Update]

The decision strengthens Apple's "copycat" allegations against Samsung. The ruling notes that Judge Koh's court "previously found the Galaxy Tab 10.1 to be substantially similar 'in the eyes of the ordinary observer' to the D'889" and that "the Galaxy Tab 10.1 is 'virtually indistinguishable' from Apple's iPad and iPad 2". In fact, Samsung's counsel couldn't distinguish those products when Judge Koh showed them in the courtroom at a limited distance.

If Apple also prevails on this infringement issue at the upcoming trial (which is scheduled to begin on July 30), Samsung may be liable for a substantial amount of damages. Design patent infringement can be very costly.

Samsung is still going to be able to sell 10.1-inch tablet computers in the United States. The scope of a design patent is relatively narrow (which makes it all the more embarrassing for Samsung that it infringed one at all), so Samsung can design around it, as it did in Germany, where a motion for a preliminary injunction against the Galaxy Tab 10.1N (the redesigned version) was denied. At this stage of the lifecycle of the Galaxy Tab 10.1, it's possible that Samsung decides to just take it from the market and focus on new product launches. But if it wanted to continue to sell it in the United States for some more time, it would simply redesign. A redesign might lead to another push by Apple for an injunction, but that's the best way for both parties to get clarity on the scope of Apple's design patent.

Disputes over design patents are usually not settled by way of a long-term license agreement. Patent cross-license agreements typically exclude design patents, just like companies wouldn't cross-license all of their trademarks. Design patent disputes can just be settled case by case (for example, with the alleged infringer agreeing to make certain modifications).

Apple's enforcement of U.S. design patents and equivalent design rights in other jurisdictions already appears to have resulted in different design decisions on Samsung's parts. Its newer products, such as the Galaxy S III smartphone, are clearly more distinguishable from Apple's offerings. Samsung saw that it was just going to suffer all sorts of disruptions of its business, and negative publicity, by continuing to copy Apple's designs. And the commercial impact of injunctions is much greater if they come down shortly after the launch of a product.

Judge Koh will soon adjudicate another motion for a preliminary injunction against Samsung: the one targeting the Galaxy Nexus smartphone with four technical patents. A hearing on that motion was held earlier this month. That decision will be much more important since the software patents at issue in that case are potentially much broader than the iPad design patent and allegedly cover techniques that are found in many other products (other Samsung products as well as third-party products).

Samsung failed to stall

A few hours prior to the Galaxy Tab 10.1 decision, Samsung's hard-working and imaginative lawyers made a last-ditch attempt to cause a delay. They brought a motion (already the second one in as many months) to introduce new evidence. They argued that the factual record on which Judge Koh originally denied a preliminary injunction in December 2011 was outdated by now, and tried to inject new prior art and arguments related to an iPad 2 prototype Apple presented to the patent office. Judge Koh denied this 11th-hour motion in a footnote.

Interestingly, the ruling also says this:

"This Court is persuaded by Judge O'Malley's concurrence that the public interest favors an injunction here 'because the record at this stage shows that the D'889 Patent is likely valid and infringed, and there are no other relevant concerns, the public interest is best served by granting a preliminary injunction.'"

Circuit Judge O'Malley concurred with her colleagues in all respects but wanted the Federal Circuit to go one step further and order an immediate entry of a preliminary injunction. Her colleagues, however, believed that the first-line court, the district court, should perform the equitable analysis and said that this could happen quickly. Samsung's multiple efforts to delay the district court's decision on remand show that Judge O'Malley's concern about potential delay was not unfounded.

Getting a denial of a preliminary injunction overturned, even if only to a limited degree, was a significant achievement for Apple's lawyers at the Federal Circuit. It's easier to succeed with appeals of final rulings. More and more smartphone patent cases are appealed to the Federal Circuit, and if statistics are any indication, we will see more cases in which district court and ITC decisions clearing Android devices of certain infringements will be modified. This was just the first case in which it produced a result that impacts the market, but it won't be the last.

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Galaxy Tab 10.1 injunction moves closer after Federal Circuit denies Samsung a rehearing

Two weeks ago, Judge Lucy Koh denied, just for the time being, Apple's motion for a preliminary injunction against the Galaxy Tab 10.1 following a partially-successful appeal to the Court of Appeals for the Federal Circuit (CAFC). A hearing on that motion had been scheduled for June 7 but was canceled. Samsung had already filed its opposition to Apple's motion, advancing what was for the most part a 4G-specific argument.

Samsung's counsel convinced Judge Koh that it was too early for her court (the United States District Court for the Northern District of California) to order a preliminary injunction prior to receiving the formal mandate from the Federal Circuit. Samsung had announced its intent to ask for a rehearing, which could have caused considerable delay. On May 18, Apple had asked the CAFC "to Issue the Mandate Forthwith or Shorten the Time to File a Petition for Panel Rehearing or Rehearing En Banc", but a week later, the CAFC said this:

"In light of Appellees' [i.e., Samsung's] representation that they will file a petition for rehearing on May 29, 2012, the court will defer ruling for now on Appellant's [i.e., Apple's] motion to issue the mandate forthwith."

This morning the CAFC denied Samsung's petition for a rehearing (click on the image to enlarge):

As a result, the CAFC will presumably issue the mandate to the district court very shortly, and Apple will get to refile its motion. Given that Samsung had (as I said above) already filed its opposition brief, Judge Koh could set a very tight schedule since Samsung would just have to refile the brief it's already written -- the legal parameters and the facts haven't changed during those past few weeks.

Judge Koh and the parties are going to meet on Thursday for a summary judgment hearing.

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Judge says Apple jumped the gun on Galaxy Tab 10.1 ban, denies motion for the time being

Late on Monday, Judge Lucy Koh of the United States District for the Northern District of California denied, for the time being, Apple's post-appeal push for an injunction against the Samsung Galaxy Tab 10.1 over an iPad-related design patent. This is unrelated to the merits of the motion. Apple is invited, and definitely won't decline the invitation, to renew its motion after the United States Court of Appeals for the Federal Circuit (CAFC), which published its opinion on Apple's appeal in mid-May, has issued a formal mandate to the district court.

Apple asked the CAFC for issuance of the mandate on the same day on which it brought its motion for a preliminary injunction (May 18, four days after the opinion came down), but on May 29, Samsung filed a pre-announced petition for rehearing and rehearing en banc of the panel decision. As a result, Judge Koh agrees with Samsung that her court doesn't have jurisdiction over this matter until the process at the CAFC is formally concluded. For now, there's still a possibility that the CAFC "may rehear the matter, alter or amend the opinion, or otherwise change the scope of issues that must be addressed on remand" by Judge Koh's court, in which case she says a preliminary injunction entered prior to the final CAFC decision "would create confusion".

Apple had argued that Judge Koh could enter an injunction in accordance under Rule 62(c) in accordance with the United States v. El-O-Pathic Pharmacy decision, a 1951 case in which a district court acted prior to a formal mandate in order to protect the public from harmful, misbranded drugs. Obviously, the Galaxy Tab 10.1 is not a threat to consumers. Apple argued that the "status quo" should be preserved, but Apple's definition of "status quo" was the market situation prior to the launch of the Galaxy Tab 10.1, while Samsung argued that the status quo was the situation that after Judge Koh's December 2011 denial of Apple's first preliminary injunction motion.

A hearing on Apple's Galaxy Tab 10.1-related motion had been scheduled for Thursday, June 7, but the court session will now be focused on a preliminary injunction motion Apple brought against the Galaxy Nexus smartphone in February 2012.

At first sight, it may appear to be an about-face on Judge Koh's part that she now agrees with Samsung on her lack of jurisdiction while her first reaction to Apple's motion was to set a tight briefing schedule, pursuant to which Samsung filed an opposition brief on May 25, which Apple replied to on May 31 (see the first bullet point in this recent post). But she saw the sense of urgency and apparently wanted to set a schedule that would enable the parties to discuss this motion at the June 7 hearing. In the meantime, she has concluded that Apple's motion was premature. But things could now fall into place very quickly after the CAFC issues a mandate. If the mandate is absolutely consistent with the May 14 CAFC opinion, there will presumably be a tight schedule for the parties to refile their pleadings. If the mandate differs from the May 14 CAFc opinion, the parties will need sufficient time to adjust their argument to the new situation.

In the meantime, Samsung benefits from further delay.

Galaxy S III: the obvious next target

On a related note, Samsung's launch of the Galaxy S III, which all major U.S. carriers will resell, could also result in a new motion for a preliminary injunction. But it appears that the design of the S III is much more distinguishable from Apple's products than that of its predecessors, so Apple would have to assert utility (technical) rather than design patents. Getting the S III banned (or forcing Samsung to modify it significantly in order to work around a ban) would be a very significant victory for Apple. What Apple needs to find are some suitable technical patents. If those patents are older, then Apple can still argue that the Galaxy S III is a new competitive challenge, but Samsung would argue that Apple's infringement allegations could already have been brought (or have indeed been brought) against older Samsung products. One possibility that Apple might consider is to use largely the same patents as in its motion against the Galaxy Nexus. In that case, there would be a risk of the court deciding to adjudicate both motions together, but with the hearing already scheduled for this week, it would be a bit late for this. It's possible that Apple will now wait and see what perspective on its Nexus motion Judge Koh indicates at the Thursday hearing, and then decide on its course of action for the S III.

Apple is still in the process of finding a "winning team" of patents that it can assert against Android-based products. That quest is strategically more important than Apple's ability to win a decision against the S III. In the United States, courts have been slow to adjudicate Apple's claims against Android, but Apple may make some significant progress with the California trial against Samsung, which is scheduled to commence at the end of next month. It's possible that Apple now focuses on the summer trial rather than start a new process relating to the S III.

In Germany, most of Apple's lawsuits against Samsung have been stayed pending clarification of the validity of the asserted intellectual property rights. If and when some of those patents and utility models are upheld, they may become pretty powerful weapons. Apple still has many more (including some rather new) European patents that it can assert here, and I'm sure any future Apple patent action against Samsung will list the S III among the accused products.

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Google's EU antitrust allegations against Microsoft and Nokia were dismissed by the ITC

The latest news on the smartphone patents front is old wine in new bottles: Google filed an EU antitrust complaint against Microsoft and Nokia, blaming the two companies for collusion involving a non-practicing entity, Mosaid, which acquired 2,000 patents from Nokia in September 2011. It's not just "old wine" but actually a concoction that failed to pass even the low hurdle of a basic plausibility test by the United States International Trade Commission. It failed that test at the ITC no less than three times: the Office of Unfair Import Investigations (which defends the public interest in ITC investigations), Judge Theodore Essex (in a summary determination) and the six-member decision-making body at the top of the ITC all agreed that there was no antitrust-related or other kind of patent misuse claim against Microsoft and Nokia. An entire set of "patent misuse" theories including the Mosaid story was considered so frivolous that the ITC didn't even want to waste time on this at a trial at which an all-star team of antitrust lawyers wanted to square off with Microsoft.

Interestingly, Barnes & Noble, the company that formally hired those lawyers (though Google may have contributed to the effort), has meanwhile entered into a strategic partnership with Microsoft, something that B&N certainly wouldn't ever have considered if it had truly believed that Microsoft was evil. On a related note, Google itself did a patent deal with Mosaid (at about the same time as the Nokia-Mosaid deal).

The ITC is a trade agency with quasi-judicial authority, not a court, but it does look at antitrust defenses, provided that they're remotely plausible. The chairman of the United States Federal Trade Commission, a competition authority, indicated at a conference this week that the FTC may formally file its concerns about the pursuit of injunctive relief over standard-essential patents (SEPs) with the ITC. Google subsidiary Motorola Mobility is trying to win import bans and cease-and-desist orders against Apple and Microsoft over SEPs. But the ITC already has Google/Motorola figured out: in an initial determination, Judge David Shaw concluded that "Motorola was not interested in good faith negotiations and in extending a [F]RAND license" to Microsoft and made demands that no reasonable company could have accepted in Microsoft's position.

That flagrantly unFRANDly behavior on Motorola's part -- which Google endorsed and apparently intends to continue (if not to ratchet up) -- is the reason for which the European Commission launched two formal antitrust investigations against the now-Google subsidiary in April.

Now that it's bought into Motorola's antitrust problems, Google as a corporate group has a greater diversity of antitrust problems than any company in the history of this industry has ever had on its plate. IBM had mainframe-related antitrust problems for decades. Microsoft was fined by the European Commission on two counts (Media Player and file server interfaces). But Google faces a host of antitrust issues. Europe's top competition enforcer, European Commission Vice President Joaquín Almunia, just gave Google an ultimatum to come up with proposals relating to several claims of abuse of its dominant market position in search (article, statement as Word document). And there are the two Motorola investigations. Also, South Korea's Fair Trade Commission just raided Google's Seoul office again over Android-related abuse suspicions.

Being suspected of abuse is not the same as being convicted. However, where there's so much smoke, it's hard to imagine that there's no fire. Vice President Almunia wouldn't have given Google an ultimatum in public if the hard investigate work of his Directorate-General for Competition (DG COMP) had not uncovered some serious evidence.

By contrast, the ITC didn't have any such thing as evidence against Microsoft, Nokia and Mosaid in its files after about a year.

Google's complaint comes down to transparent diversionary tactics. Instead of addressing the European Commission's concerns, especially the ones concerning Motorola (which the ITC and FTC apparently share), Google makes the proverbial Hail Mary pass and attempts to conflate the serious issues surrounding its own conduct with a conspiracy theory that the ITC already threw out.

As a European taxpayer, I think companies from all over the world should have access to our world-renowned EU antitrust regulators, but they shouldn't waste the scarce resources of those agencies with conspiracy theories that were already found wanting by governmental agencies in their own countries. So far I don't see why Mosaid is a particularly European issue. I've eyewitnessed at European courts what Motorola and Samsung are doing with their patents over here, but I'm not aware of any wrongdoing by Mosaid at this stage (all I read about is that they filed a U.S. lawsuit against Apple over some of those former Nokia patents). I'm against patent abuse by anyone, but Google doesn't appear to have any factual basis. For now, it just cries "conspiracy!"

Unless Google provides some serious evidence, the European Commission can reject this complaint without any risk of appearing biased. The hurdle for such evidence must be reasonably high given the ITC's consistently negative conclusions.

[Update] Nokia calls Google's complaint "frivolous" and a waste of time and resources. [/Update]

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Federal Circuit grants only a small, Galaxy-Tab-specific part of Apple's appeal of denial of preliminary injunction

In early December, Judge Lucy Koh of the United States District Court for the Northern District of California denied, in its entirety, an Apple motion for a preliminary injunction against four Samsung products over four intellectual property rights (three design patents and one software patent). Apple immediately appealed that denial to the Court of Appeals for the Federal Circuit.

Today the CAFC issued its opinion. Apple's appeal succeeded in part, but only to a rather limited extent. A preliminary injunction against the Galaxy Tab 10.1 in the United States based on a design patent (U.S. Patent No. D504,889) is now reasonably likely. That question is remanded to the appeals court, which now has to assume, contrary to its previous assessment, that this design patent is valid, which doesn't necessarily mean that it will issue a preliminary injunction, but makes it fairly likely. However, Samsung will likely be able to work around any such ruling by modifying its design, like it did in Germany, where it launched a modified version named Galaxy Tab 10.1N. That doesn't mean that enforcement is useless: anything that Apple can force Samsung to do to make its products more distinguishable from Apple's products is a good thing for Cupertino. But it's important to understand that this here won't give Apple the leverage it needs to get Samsung to settle the wider dispute on Apple's preferred terms.

The appeals court affirmed Judge Koh's analysis with respect to two iPhone-related design patents and a software patent.

Apple's appeal raised a fundamental issue that would have been far more meaningful than the questio nof whether or not the tablet design patent must be presumed valid. The far more important issue was that Judge Koh said Apple failed to show a "nexus" between the alleged infringements and the irreparable harm it claims to suffer from the presence of those products on the market. I thought Judge Koh was exceedingly demanding on Apple in that respect. If the CAFC had lowered the bar for Apple in this regard, it would now be in a good position to win a preliminary injunction over more than just one intellectual property right -- and, quite importantly, that would also help Apple with a view to its second U.S. preliminary injunction motion against Samsung (filed in February and scheduled to be discussed at a hearing next month). In that motion, Apple already made a lot of effort to show the required nexus -- and based on today's CAFC ruling, that's what Apple will have to do. Also, Apple tries to get mileage out of the fact that Samsung has become the worldwide number one smartphone maker.

The companies' CEOs and chief lawyers will meet next week in San Francisco for court-moderated settlement talks. Today's CAFC opinion provides both of them with additional information ahead of those talks, but I don't think it puts them closer to a settlement. This is only about a design patent, and it's doubtful whether they will ever really settle design-related claims: companies typically exclude those even from otherwise rather comprehensive cross-license agreements (just like they wouldn't include trademarks in patent cross-license agreements). While Apple's appeal has succeeded in part, this is a victory of rather limited scope and doesn't create any urgency on Samsung's part to settle. I still believe next week's talks will fail to yield a breakthrough.

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ITC judge postpones Microsoft-Barnes&Noble decision by more than a month

There are two ongoing ITC investigations of complaints by Microsoft against Android device maker: one against Motorola, which just got delayed for the third time in as many months, and another, lower-profile one against Nook maker Barnes & Noble.

Now the resolution of the Barnes & Noble case has also been pushed back. The trial took place in early February, and the initial determination of the Administrative Law Judge (ALJ) in charge of this investigation was due on April 27, 2012 -- in two and a half weeks from now. Yesterday, the ALJ decided to push back the remaining deadlines in this case by well over a month. The final ruling, originally scheduled for August 27, 2012, will be due on October 1, 2012, and accordingly, the initial determination will be due on June 1, 2012.

Theoretically, this postponement can be reviewed by the Commission, the six-member decision-making body at the top of the ITC, but in all of the investigations I watch, such decisions were not reviewed.

The ALJ explained that he has evidentiary hearings coming up in two other investigations, and for some time he had hoped that at least one of the two would be settled along the way.

As always, it may be tempting but isn't really possible to read anything into such scheduling decisions with a view to the outcome.

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ITC staff presently unconvinced that Barnes & Noble violates three Microsoft patents

Bloomberg reports that the ITC staff believes Barnes & Noble should not be held to violate any of three Microsoft patents at issue in an investigation that could otherwise lead to an import ban against the Android-based Nook and Nook Color e-book readers.

Four weeks ago, Microsoft streamlined the case by dropping various patent claims, leaving claims from four different patents (out of the original five) on the agenda. Last week, Microsoft dropped the sole remaining claim of the '522 patent, thereby narrowing the case to three different patents. Such streamlining is common and expected during the course of ITC investigations.

An even more important kind of streamlining occurred last week when the Administrative Law Judge (ALJ) in charge of this investigation tossed out Barnes & Noble's "patent misuse" defense, which was for the most part based on antitrust allegations. B&N had claimed that Microsoft was exerting control over Android with its patents and presented conspiracy theories (involving Nokia and others) that the ALJ did not consider worthwhile exploring further.

As Microsoft pointed out in a statement quoted by ZDNet's Mary Jo Foley, the ITC staff may change its opinion after the evidentiary hearing that commenced today. After the trial, the parties as well as the Office of Unfair Import Investigations (OUII, commonly referred to as "the ITC staff") file their post-hearing briefs. Those are always sealed, so we won't be able to find out if the staff position changes. By the way, the OUII doesn't even participate in all ITC investigations these days due to resource constraints. For example, the ITC staff resigned from both investigations pitting Microsoft and Motorola against each other. It can also opt to follow an investigation only with respect to one or more patents at issue in a given investigation, instead of looking at all of them. That's what the OUII is doing in an investigation involving Apple and HTC.

Even after the OUII files its post-hearing brief, the ALJ forms his own opinion. The staff recommendation is not a preliminary ruling. The staff participates as a third party.

An initial determination by an ALJ isn't the final ruling either unless the Commission, the six-member decision-making body at the top of the ITC, adopts it in its entirety. Recently the Commission has modified a number of ALJ determinations. And even the Commission isn't the final judge: its decisions can still be appealed to the Federal Circuit.

The case history of Apple's first ITC complaint against HTC is a good example. In April 2011, the ITC staff advocated (also at the beginning of the trial) the dismissal of Apple's claims against HTC (and Nokia, but Apple and Nokia settled two months later anyway, before any further decision was made). But in mid-July, the ALJ found HTC in infringement of two Apple patents. The Commission agreed with the ALJ on one of those patents, ordering an import ban against infringing HTC Android devices. Meanwhile, Apple is appealing the Commission's negative findings with respect to one or more other patents to the Federal Circuit.

The ITC has generally proven to be tough terrain for patent assertions against smartphones and tablet computers, with a very high drop-out rate across the claims of all plaintiffs.

Microsoft holds far more Android-related patents than the ones it is presently asserting against Barnes & Noble. For example, it has more than two dozen patents in action against Motorola. Since B&N is unlikely to be able to revive its "patent misuse" defense, which it hoped might provide some leverage, I believe a settlement could happen anytime, but patent litigation in the United States is a slow process compared to how swiftly other jurisdictions adjudicate these cases. If B&N continues to refuse to take a license, there's always the possibility of Microsoft bringing additional ITC complaints and federal lawsuits. Absent a settlement, the ultimate outcome of this dispute certainly won't hinge on only three patents.

As the ITC trial unfolds, Microsoft also has a series of four trials in Mannheim coming up tomorrow. Motorola Mobility and its wholly-owned subsidiary General Instrument Corporation brought claims against Microsoft over four patents that will be discussed tomorrow afternoon.

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Microsoft-LG agreement shows Android (and Chrome) patent licensing is still en vogue

2012 has had a reasonably busy start on the patent litigation front, but license deals continue to be struck: Microsoft and LG just announced a patent license agreement covering LG's products running Android and Chrome OS.

The terms of the agreement are confidential, but it's safe to assume that this agreement is like the others Microsoft has signed with the industry in regards to royalties, i.e., it will be royalty-bearing.

The announcement indicates that the two companies have "built upon [their] longstanding relationship". Back in 2007, before Android and Chrome OS were relevant, Microsoft and LG already reached a patent license agreement relating to other technologies "including Linux-based embedded devices". Basically, Android is a Linux fork, and Android phones and tablets are, by extension, Linux-based embedded devices, so the new license agreement is in the tradition of the previous one.

Microsoft says more than 70 percent of all Android smartphones sold in the U.S. now have a license to its patent portfolio. Even though litigation is often very spectacular (which is why I blog about it so much), the commercial reality is that patent licensing is still the prevalent way to resolve intellectual property issues. Only a minority of all disputes ever go to court, even though the percentage of cases that require litigation may be, temporarily, a bit higher in the current situation, in which different industries are converging and sorting out who owns what types of innovation.

Prior to LG, Samsung already signed a license deal with Microsoft covering the same Google platforms. Just like LG, Samsung also has a commercial partnership with Microsoft in place. It says something that those two Korean companies prefer to resolve any Android- and Chrome-related IP problems amicably with Microsoft, given that both of them have proven to be great fighters. Samsung is clearly giving Apple a run for the money in ten different countries (see my latest post on that particular dispute, published last night), and less than a year ago, LG achieved the (temporary) seizure of roughly 300,000 PlayStations in the Netherlands over the alleged infringement of Blu-ray-related patents. Both these companies hold large numbers of patents on a worldwide basis. In the Dutch PlayStation complaint, LG claimed to own approximately 90,000 patents, and Samsung owns more than 100,000 (on a worldwide basis in each case, with many inventions being patented in a numnber -- sometimes in dozens -- of jurisdictions). These are companies that definitely understand the patent business and know how to defend themselves in court if they have to or want to -- but with Microsoft, they both reached an agreement at the negotiating table.

Motorola Mobility appears to be the last major Android vendor to refuse to take a license from Microsoft. Others either have a direct license agreement in place or they are licensed because of arrangements between Microsoft and their ODMs (Original Device Manufacturers).

Besides Motorola, Microsoft is also suing Barnes & Noble, but that company isn't quite comparable to the big international players that have taken a license. The first major Android device maker to receive such a license was HTC (almost two years ago).

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Spanish tablet computer maker NT-K brings indictment against Apple for alleged extortion

In early November 2011 I reported on the acquittal of a small Spanish tablet computer maker, Nuevas Tecnologías y Energías Catalá (doing business as "NT-K"), after Apple had alleged "counterfeiting", and translated the relevant court order. Today, NT-K issued a Spanish-language press release announcing the filing of an indictment against Apple for the alleged act of extortion. NT-K's owners filed those charges with the office of the district attorney (public prosecutor) for the Valencia region.

I have only seen the press release and the front page of the indictment. NT-K plans to publish some of the accompanying documentation on its corporate blog, starting next week.

Back in November I already pointed out that I believe NT-K's Android-based tablet computers didn't represent an act of counterfeiting in the narrow sense of the word: NT-K wasn't building iPad clones. At the most, they may have infringed a Community design, an EU-wide design-related right (comparable to a U.S. design patent), that belongs to Apple. In my view, any dispute over that type of infringement should be resolved under civil law without raising, directly or indirectly, issues under criminal law.

But this goes both ways. I understand that NT-K was offended by having to defend itself in a criminal proceeding that was more or less directly triggered by Apple asking customs authorities for help against an alleged counterfeiter. However, that doesn't make Apple's aggressive enforcement activities a crime. For now I don't see evidentiary support for the claim that Apple sought to "extort" NT-K and possibly other small companies.

I have looked up (on Wikipedia) the definition of extortion according to Spanish criminal law. It comes down to someone with the intent to enrich himself forcing, through violence or intimidation, his victim to commit or desist from an act or transaction to the economic detriment of the victim or a third party. NT-K argues that Apple sought to enrich itself to NT-K's detriment by intimidating NT-K, with the force ot its legal machinery, into the destruction of its products, the discontinuation of their commercialization, a waiver of its legal rights and the surrender of its customer list. In the alternative, Apple was going to -- and did -- shut down NT-K's importation of allegedly infringing products for at least a certain period of time.

While NT-K's representation of the events appears to match the aforementioned definition on the surface, aggressive enforcement of rights -- in this case, intellectual property rights -- is not necessarily a crime. Apple's lawyers threatened with legal action that may have been based on a very far-reaching definition of "counterfeiting" and probably also on the assumption of a very broad scope of the asserted Community design, but so far I don't see any signs of a criminal act. Since Apple's allegations of counterfeiting were dismissed, NT-K can try to recover damages and pursue other legal action, but it appears to me that Apple's conduct was above board. What NT-K has described so far looks to me like a case of bullying and I don't support it, but there was most probably a genuine legal dispute. In such a dispute, each party is allowed to assert its rights, state its views, and threaten with further legal action in the event of continued non-compliance with its requests.

NT-K's press release mentions that its lawyers sent Apple's counsel a letter that "dismantled, item by item, Apple's allegations" of counterfeiting, but subsequently, Apple reported NT-K's tablet to the Spanish customs authorities regardless. While I don't rule out that it might have been more appropriate for Apple in this case to engage in a constructive dialog with NT-K's counsel, it's nothing unusual for a right holder to take the next step if the recipient of a cease-and-desist order or notice of infringement disagrees.

I don't want to speculate about NT-K's intentions here. I believe that NT-K is probably entitled to the recovery of a reasonable amount of damages, but if I were Apple, I wouldn't pay more, or more quickly, just because of an indictment that may be no less overreaching than Apple's original "counterfeiting" claim was.

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