Apple joins Google, Microsoft, Yahoo, Facebook, LinkedIn in opposing U.S. government 'gag orders'

I usually don't blog about data privacy issues, though I'm a native and resident of a country in which there's historically been a lot of interest in the topic. But I've just been able to obtain a copy of an interesting court filing by Apple that I wanted to share (before returning to my usual focus, patent litigation).

The problem is that the U.S. government does not allow companies like Apple to publish the aggregate number of national security demands they receive. This runs counter to the efforts by such companies to be transparent with their customers about how many instances there are in which customer data of certain kinds must be disclosed. This is not about whether national security agencies should be able to obtain such data under certain circumstances -- it's about whether companies can at least say how frequently this occurs in a given country.

To be clear, I'm very much for security, to a far greater extent than the majority of people who comment on data privacy issues. But transparency is also key. I agree with Apple, Google, Microsoft, Yahoo, Facebook and LinkedIn (I hold active online accounts with all of them) that the right balance between security and transparency is not struck if companies are not even allowed to publish aggregate numbers. Letting the public know those numbers would be reassuring. If you know that a company has hundreds of millions of accounts and you see a precise number of aggregate information requests that is rather limited, then you can figure how unlikely it is that any such request related to you (unless you've done something recently that makes you a very likely target of such requests).

Clearly, in the age of cloud computing, overreaching restrictions on transparency hurt the competitiveness of U.S. companies in global markets. I see calls over here in Europe to require U.S. Internet companies to keep European customer data only on local servers in Europe, and that's just one example of how the whole NSA/Snowden issue can adversely affect U.S. business interests in the rest of the world.

Apple today published a report on government information requests. There's a clear commitment to privacy and transparency right at the beginning:

"We believe that our customers have a right to understand how their personal information is handled, and we consider it our responsibility to provide them with the best privacy protections available."

This is what the section entitled "Advocating for Greater Transparency" says:

"At the time of this report, the U.S. government does not allow Apple to disclose, except in broad ranges, the number of national security orders, the number of accounts affected by the orders, or whether content, such as emails, was disclosed. We strongly oppose this gag order, and Apple has made the case for relief from these restrictions in meetings and discussions with the White House, the U.S. Attorney General, congressional leaders, and the courts. Despite our extensive efforts in this area, we do not yet have an agreement that we feel adequately addresses our customers' right to know how often and under what circumstances we provide data to law enforcement agencies.

We believe that dialogue and advocacy are the most productive way to bring about a change in these policies, rather than filing a lawsuit against the U.S. government. Concurrent with the release of this report, we have filed an Amicus brief at the Foreign Intelligence Surveillance Court (FISA Court) in support of a group of cases requesting greater transparency. Later this year, we will file a second Amicus brief at the Ninth Circuit in support of a case seeking greater transparency with respect to National Security Letters. We feel strongly that the government should lift the gag order and permit companies to disclose complete and accurate numbers regarding FISA requests and National Security Letters. We will continue to aggressively pursue our ability to be more transparent."

The above paragraph mentions an amicus brief filed with the Foreign Intelligence Surveillance Court (FISC, but often also referred to, like above, as the "FISA Court"). I've obtained a copy of that brief. Apple submitted it "in support of motions for declaratory judgment filed by Google Inc., Microsoft Corporation, Yahoo! Inc., Facebook, Inc., and LinkedIn Corporation seeking permission to publish the aggregate numbers of national security demands made on them and the number of users or accounts affected by those requests". Here's the amicus brief (this post continues below the document):

13-11-05 Apple Amicus Brief With FISA Court by Florian Mueller

The brief refers to a letter Apple received from the FBI, which is an example of the restrictions imposed on U.S. companies (this post continues below the document):

13-06-17 FBI Letter to Apple by Florian Mueller

In its amicus brief, to which the FBI letter is an exhibit, Apple mentions that it "sought permission from the FBI to disclose the aggregate number of national security requests that it received and the number of accounts affected by each applicable national security authority (e.g., NSL, FISA, and Section 702 of FISA)". But in mid-June 2013, "the General Counsel of the FBI refused the request" (by phone and by letter). Appple complains that "the FBI required [it] to group the receipt of national security requests with requests from police investigating robberies and other crimes, searching for missing children, or hoping to prevent a suicide". It also criticizes that it "must use ranges of 1,000 rather than disclose a precise number".

According to Apple's amicus brief, "the FBI did not identify anything in the law that authorizes the Government to prohibit disclosure of the aggregate number of national security requests received by Apple", but "portrayed its decision as an exercise of its discretion not to enforce the statute against Apple specifically". Apple complains that this is a "deliberate attempt to reduce public knowledge as to the activities of the Government".

Without a doubt, Apple's report and its amicus brief are important contributions to the privacy debate. Let's hope that a reasonable balance will be struck between security and transparency needs. As far as I can see, there is room for more transparency without compromising security, and there appears to be consensus on this among major industry players.

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Support, competent pushback for Goodlatte patent reform proposal at Congressional hearing

Yesterday I tweeted and retweeted numerous times during the three-hour hearing on the proposed "Innovation Act" (H.R. 3309: Improving the Patent System to Promote American Innovation and Competitiveness) held by the Judiciary Committee of the House of Representatives. Committee Chairman Bob Goodlatte (R-Va.) opened the hearing; last week he led a bipartisan group of Congressmen who jointly made this legislative proposal.

It was an interesting discussion with witnesses from EMC, Yahoo, a former head of the USPTO who is now a partner at IBM's primary law firm (Cravath), and a former general counsel of pharmaceutical giant Eli Lilly.

To me it became clear pretty quickly that the movement pushing for far-reaching reform faces a steep challenge. There are items on which it won't be too hard to build consensus, but apart from some low-hanging fruit, there are also some more ambitious plans that would affect patent litigation even more fundamentally but have drawn a lot of blowback from Members of Congress as well as industry players and intellectual property professionals.

Last month I reported on a letter that more than 100 innovators wrote to express their opposition to an expansion of the Covered Business Method Patents review program (often just referred to as the "CBM program"), and based on how yesterday's hearing went, this is the part of the Goodlatte proposal that is least likely to come to fruition anytime soon. The CBM part of the Goodlatte proposal may be in for an even rougher ride in the Senate, but it's hard to see how it could receive majority support in the House as a first step, so the Senate may not even have to look at it.

Two of the witnesses (from EMC and Yahoo) favor the Goodlatte proposal, and they did a great job advocating reform. EMC is the more credible innovator of the two companies. Web companies like Yahoo typically don't develop hardcore technology. The Web business is more about doing the right thing at the right time and building network effects and brand recognition. EMC is a hardcore innovator, but there aren't many companies like EMC who would support weakening patent enforcement.

Former USPTO chief David Kappos was undoubtedly the most competent witness and explained his views very well, and it's clear that his insights bear considerable weight with Members of Congress (even some of those advocating major reform).

Mr. Kappos also highlighted something that many of the participants in the hearing and the public debate may not have understood yet. The "customer-suit exception" in its drafted form may not be too helpful anyway because lawsuits between patent holders and manufacturers typically raise different issues from lawsuits against end users. (Apart from the fact that Mr. Kappos is right on this one, I generally think that technology makers must protect their customers, though there are probably some lawsuits targeting end users, such as patent royalty demands or infringement actions over WiFi or the use of scanners, in connection with which it's difficult to identify a particular vendor who should step in.)

Many Members of Congress asked questions. On balance, the ones cautioning against overcorrection of certain issues made a more competent impression. One of the politicians promoting major reform -- out of politeness I won't say which one -- asked questions that reflected his own confusion and lack of understanding of how patent law works. By contrast, IP-specialized politicians such as Representatives Conyers and Watt demonstrated their knowledge. Interestingly, the more time politicians spend on IP matters, the less they are in panic mode concerning patent trolls and other pretexts.

There was relatively little discussion of another important topic that I consider important and on which it may not be too hard to build a consensus: transparency. Congressman Deutch focused on it, and I hope he'll continue to push for more transparency in patent ownership.

A really good article on the U.S. patent reform debate was published ahead of the hearing, and one of the experts quoted in it says something that's absolutely correct: the reform proposals on the table don't really have much to do with trolls per se.

The one proposal that I think is most likely to have an impact on trolls is, however, also most likely to get broadbased support: fee-shifting. This appears to be a consensus item. There will never be a 100% consensus on a question like this, but it's apparently as close to 100% as it realistically gets in politics. The only Member of Congress who strongly spoke out against fee-shifting yesterday was someone from Texas whose electoral district includes parts of the Eastern District of Texas. He's not going to be able to stop fee-shifting from happening. And those who argue that the Supreme Court is in the process of dealing with this also won't be able to discourage lawmakers from doing what their job is: to pass good policy into law. In all fields, including patents, the Supreme Court has repeatedly indicated that certain decisions must be made by the legislature, not by judges.

I'll continue to follow the patent reform process. I guess the Goodlatte proposal in its complete, current form is not going to become law in the near term. Congress will ultimately agree on a common denominator, and it could end up being the lowest common denominator, which is basically fee-shifting and (hopefully) some transparency initiative, but not an expanded CBM program. Staged discovery could also work, depending on whether it's really focused on preventing abuse or hijacked by those who just seek to slow down and weaken IP enforcement.

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Smartphone patent foes, other tech firms jointly urge Europe to prevent rise of abusive litigation

An impressive, diverse coalition of technology companies (even including a couple of major European non-IT companies such as adidas and Deutsche Post DHL) has sent an open letter to European decision-makers expressing concern over two aspects of the latest draft of the rules of procedure for Europe's future Unified Patent Court (UPC) that could create "significant opportunities for abuse" -- not only, but also, by patent assertion entities (PAEs), often referred to as "patent trolls". These two aspects -- bifurcation coupled with easy access to injunctions -- are problematic characteristics of the current patent litigation reality in Germany (which the letter doesn't say, but it's a fact) that could affect the whole of Europe once the UPC begins its work and adjudicates patent infringement lawsuits seeking Europe-wide remedies (which German courts presently cannot do).

The letter to the governments of EU Member States, the European Parliament, the European Commission and the Preparatory Committee of the UPC was first published and reported on by the New York Times and warns that the envisioned framework would give PAEs "substantial bargaining power to force excessive settlements from companies", which "would, in all likelihood, lead to a rise of abusive litigation before the UPC". The letter notes that "PAEs have already begun to set up shop in several European countries, drawn by the potential for siphoning more revenue from European companies".

The tech coalition's letter comes a few days before an October 1 deadline for stakeholder submissions to the Preparatory Committee.

Not only do the signatories collectively represent a huge share of global IT innovation but it's even more remarkable that there is a consensus on these concerns even among companies that typically disagree on patent policy and have litigation pending against each other in the U.S. and Europe. The three most important ongoing smartphone patent disputes are Apple v. Samsung, Microsoft v. (Google's) Motorola, and Apple v. (Google's) Motorola (I'm not counting Oracle v. Google here because it's strictly a copyright case on appeal). Four of the parties to those disputes -- Apple, Google, Microsoft, and Samsung -- are among the signatories. While Apple and Microsoft generally promote strong IP protection except for combating the abuse of standard-essential patents (SEPs), Google and Samsung jointly oppose Apple's pursuit of injunctive relief over non-SEPs in the U.S. but aggressively leverage their SEPs. In the U.S. patent reform debate, Microsoft's focus is on transparency in ownership and the recovery of legal fees, while Google pursues a broader anti-software-patent agenda. But in the context of the UPC's rules of procedure, they all agree and have united to urge Europe to prevent major damage to innovation and the economy at large. They are joined by other tech players like BlackBerry, Bull, Cisco, the European Semiconductor Industry Association (ESIA), HP, Intel, SFIB (a French IT industry association), Yahoo, and major carriers (Deutsche Telekom, Telecom Italia) and -- didn't I just mention the economy at large? -- two companies that are primarily users, not makers, of IT: adidas (which has been sued by numerous patent trolls including Lodsys in the U.S.) and Deutsche Post DHL.

As a Europe-based litigation watcher with a cross-jurisdictional perspective and a former activist in EU patent policy, I totally agree with these companies. Almost five months ago I already highlighted "the risk of Europe becoming the new Eldorado for NPEs/PAEs/trolls" and warned against focusing the whole patent reform debate exclusively on the U.S. while there also what I described as "the European threat". It would be a mistake of enormous proportions to think that patent trolls are and will remain exclusively a U.S. problem. The way litigation in general works in the U.S. (such as the "American Rule" of no recovery of legal fees except under narrow circumstances) creates some opportunities for trolls, but with respect to the two concerns of this coalition of tech companies over the UPC, the German framework -- which, again, would affect the whole of Europe based on the proposed rules of procedure -- has terrible shortcomings in areas in which defendants in U.S. patent cases are actually in better shape. In the U.S., there is a full invalidity defense in all patent infringement proceedings -- not so over here, where bifurcation, a concept I've blogged about and criticized before, typically results in infringement rulings long before adjudication of parallel nullity (invalidation) complaints, creating an opening for the enforcement of improperly-issued patents, potentially for several years (way too long for most defendants to refuse to settle). And those infringement rulings -- which makes bifurcation so bad, but also constitutes a major problem in its own right -- almost always represent injunctions, i.e., sales bans.

Good patent policy has to take into consideration the practical implications for businesses and the tactical situation that defendants face at different junctures. It's not enough to just put procedures in place that theoretically result in a correct result after four or five years (when all appeals have been exhausted) because most lawsuits don't reach that point. It's of the utmost importance to prevent holders of dubious patents from having undue leverage at the stages at which a vast majority of patent infringement cases are settled. Uncertainty is a recipe for undue leverage. Europe's decision-makers have to ensure that there is enough legal certainty along the way that defendants won't be forced to settle on unreasonable terms.

The stakes are high for Europe and for the officials who ultimately have to ratify the UPC's rules of procedure. If they adopt a framework now -- at a point at which far-reaching patent reforms are being debated in the U.S. -- that invites abusive patent litigants (trolls and others) to capitalize on the shortcomings of these rules, they won't be able to say that they didn't know, much less after today's remarkable letter. Frankly, it's not that hard to increase legal certainty in the areas highlighted by this tech industry coalition. If you want to have bifurcation at all, you can at least ensure that stays of infringement cases pending separate invalidation actions are reasonably available -- more widely than in Germany. And for injunctive relief you can also provide the judges of the future UPC with some guidance as to which factors to take into consideration at the remedies stage (it would even be possible to indicate the weight certain factors should have).

I'm going to talk more about the UPC subject in the months ahead. In the final part of this initial reaction to the open letter I just want to show an example of how the combination of bifurcation (with an exceedingly high standard for stays) and automatic access to injunctive relief can hurt consumers. In February 2012 Motorola Mobility (a few months before the closing of its acquisition by Google) won a German injunction against Apple over a push notification patent. It enforced immediately, resulting in Apple's forced deactivation of the feature (for Germany-based users) in late February 2012. That was 19 months ago -- that's a year and half plus one month. And according to Apple's tech support website, the feature is still unavailable, though I expect it to be re-enabled rather shortly since an appeals court, finally, lifted this injunction earlier this month (in order for enforcement to actually end, Apple must firstly post a bond and do some paperwork, which can take a few weeks) because a preliminary ruling by Germany's Federal Patent Court (which will in a few hours hold a hearing on a multi-touch patent Apple enforced against Motorola) indicated that this patent is dead in the water. In the meantime, a UK court had held its key claim invalid for four (!) independent reasons, the Mannheim court that originally granted the injunction had stayed a case in which Microsoft had to defend itself against it, and the appeals court had already stayed the appellate proceedings back in April, also over doubts concerning the validity of the patent. The appellate hearing took place almost six months ago, and the court made clear that it has serious doubts about whether this patent should ever have been granted -- but as of the time of publishing this post, German Apple users are still deprived of this feature. Why? Because the German approach is that a patent right is vitiated pretty much entirely if its owner can't enforce an injunction (in other words, there's an underlying assumption of irreparable harm to the patentee), while premature enforcement of an improperly-granted injunction can always be addressed in a subsequent lawsuit over enforcement damages (so there's an underlying assumption that monetary compensation is almost always adequate to make the victims of illegitimate enforcement whole) -- but it would be much better policy to consider sales bans to cause irreparable harm in many cases and then to weigh such harm against other considerations.

I have harshly criticized Google for its trollish enforcement of Motorola's push notification patent. This undermines Google's credibility in the U.S. patent reform debate where it (directly and through lobbying fronts) uses "trolls" as a pretext for its push for a general weakening of IP enforcement while its own behavior shows that operating companies can behave trollishly as well. But I applaud Google for promoting in the EU context a reasonable balance. The fact that it urges policy makers here to prevent all patent holders, including Google itself, from doing in the future on a Europe-wide basis what Google has been doing recently in Germany is really positive and enhances the credibility of this tech coalition.

Now it's up to policy-makers to heed these concerns and act accordingly.

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Facebook exposes Yahoo allegation of fraudulent patent application as bogus

I normally don't report on Yahoo v. Facebook on this blog, with only one exception so far. This post is a second exception because something that just happened in that case is nothing short of astonishing from the point of view of a patent litigation watcher and represents a major embarrassment not only for Yahoo but to an even greater extent for Quinn Emanuel, a top-notch law firm that Google and leading Android device makers (Samsung, Motorola, HTC) rely on all the time. I have repeatedly expressed my admiration for the work QE does for the Android camp in the United States and in Germany, though I disagree with its approach to standard-essential patents (which has already resulted in formal EU antitrust investigations of two of its clients). But what I just learned about looks like a big-time blunder.

Yahoo claimed that two of the ten patents over which Facebook brought counterclaims against Yahoo were unenforceable due to "inequitable conduct" (i.e., fraud) in connection with a patent application from which those two patents were derived.

The short version, in one paragraph, is this: Yahoo alleged that the inventor and his patent attorney deceived the patent office by saying they provided, without ever actually providing, a sworn declaration by someone who should either have been named as another inventor or have declared under oath that he wasn't an inventor, even though he was erroneously listed as one at an early stage of the application process. But the fact of the matter is that this declaration was provided, and it had been in the record all the time -- Yahoo's lawyers alleged deception when they simply failed to do their job. Facebook obtained the record and provided it to the court, and in the process found out that nobody had even accessed (!) the record before.

Here are the details:

The relevant patents-in-suit are U.S. Patent No. 8,005,896 and U.S. Patent No. 8,150,913. Both cover a "system for controlled distribution of user profiles over a network and are continuations of U.S. Patent No. 7,003,546 on a "method and system for controlled distribution of contact information over a network". Facebook acquired the '896 and '913 patents as per an agreement dated February 1, 2012 (according to the assignment records).

The first of two elements of Yahoo's fraud theory is that the named inventor of those patents, Chris Chea, and/or his patent attorney, C. Douglass Thomas, intentionally failed to disclose a second inventor, Joseph Liauw. Yahoo's lawyers found out that Mr. Liauw was named as a second "independent inventor" in U.S. Provisional Patent Application No. 60/104311, but not in the subsequent patent application that resulted in in the grant of the '546 patent, from which the '896 and '913 patents were derived.

Yahoo's April 27 counter-counterclaims (counterclaims to Facebook's counterclaims) cite applicable statutory law, according to which an inventor's name can be dropped only on the basis of an affidavit (a sworn statement in writing, which in this case basically has to say that someone was originally named as an inventor due to an error), and state that "without an affidavit from Mr. Liauw, the '456 application could not have issued as a United States Patent". That's right -- but they did file that affidavit. It was in the record all the time. Yahoo notes that the inventor and his patent attorney had told the patent office that the required declaration was submitted in a copy from a prior application, and then alleges that "[t]his was false and deceptive, because no Oath or Declaration by Mr. Liauw was ever submitted". But Facebook has now shown that this declaration had been in the record all the time.

Here's the relevant passage from Yahoo's counter-counterclaims (red underlinings are mine; click on the image to enlarge it):

Facebook now brought a motion to strike (available here) the inequitable conduct claim, and as an exhibit to that motion, provided the complete "United States Patent File History", which includes, on page 123 of that PDF, the following document (click on the image to enlarge):

The affidavit was signed on June 1, 2001, and received by the USPTO on July 9, 2001. It was discoverable for a decade before Yahoo claimed "deceptive" conduct.

Why didn't Yahoo's lawyers find it? Because they apparently jumped the gun, accusing Facebook of fraud instead of requesting the relevant file history. Here's an interesting passage from a declaration filed in support of Facebook's motion by Cooley partner Heidi L. Keefe (red underlining is mine; click on the image to enlarge):

Nobody even requested the file history before Facebook's lawyers did so after Yahoo brought its allegation of "inequitable conduct"...

Oddly, Yahoo accused Facebook of not acting in good faith when it brought its own counterclaims:

"On information and belief, Facebook failed to perform a good faith investigation into its counterclaims prior to asserting them in retaliation against Yahoo! For example, as described more fully below, Facebook purchased and asserted patents tainted by inequitable conduct. Furthermore, Facebook asserted its newly-acquired patents against aspects of Yahoo!'s products for which there is little to no publicly-available information. Unless Facebook has unlawfully acquired Yahoo! confidential business information, Facebook could not have developed a good-faith basis for many of the infringement allegations in its counterclaims."

It now appears that Yahoo, not Facebook, "failed to perform a good faith investigation". And while Facebook may have had "little to no publicly-available information" to rely on in connection with how Yahoo's servers operate (a separate issue I'm not going to digress into here), the patent file history that Yahoo failed to look up was publicly-available (on request).

This is astonishing.

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Ten things Oracle v. Google tells us about the judge presiding over Yahoo v. Facebook -- UPDATE: 10 hours later, the case was reassigned to a different judge

[Update] Approximately ten hours after this post went live, Yahoo v. Facebook was reassigned to Judge Jeffrey White. I will leave this post online because it is, for the most part, a recap of Judge Alsup's handling of Oracle v. Google, a priority case for this blog. [/Update]

On Google+ I recently said that I don't consider Yahoo v. Facebook, however interesting it may be for the Internet community at large, to be sufficiently wireless-related for the FOSS Patents blog to cover. That said, I felt that this particular post would be of interest to at least parts of the FOSS Patents readership since it is all about an overlap between that case and Oracle v. Google, a case I have been (and still am) monitoring: Judge William Alsup is now also presiding over Yahoo v. Facebook, the highest-profile web patent lawsuit in the history of the industry.

Oracle v. Google will finally go to trial on April 16. Judge Alsup discouraged and subsequently (haven't mentioned this here yet) denied a Google motion for continuance (postponement). This is simultaneously a retrospective on how Judge Alsup handled Oracle v. Google and a sort of forecast of his management of his next high-profile Silicon Valley patent spat. Of course, there's no guarantee that his style will be the same as in Oracle v. Google. But in many respects it probably will be.

Before I discuss the ten take-away items, let me answer the question many would presumably like to raise upfront: for whom is Judge Alsup better news, Yahoo or Facebook? My opinion is this: The Northern District of California is generally not a bad location for defendants, compared to some other places, but Yahoo didn't have much of a venue choice because both parties and probably almost all of the witnesses are based in that region, so it would have been easy for Facebook to have the case transferred to San Francisco. If Yahoo ended up prevailing with only a couple of patent claims of average quality, there are many judges (in other districts) who would give it a much more leverage (in terms of damages and a possible injunction) than Judge Alsup likely would in such a scenario. However, he is in favor of reasonably strong intellectual property enforcement, so if Yahoo's case proved to be much stronger than the average patent infringement lawsuit, and especially if discovery resulted in evidence capable of buttressing the rather aggressive allegations of free-riding contained in the complaint, then Judge Alsup would let Yahoo win big-time.

Judge Alsup isn't the only member of the smartphone patent cast of characters to reappear in Yahoo v. Facebook. The first thing I noticed in Yahoo's complaint is that it's represented by Quinn Emanuel, an amazing litigation firm, and even by the same lead counsel (Charles Verhoeven) who also represents Samsung and HTC against Apple, and Motorola against Apple and Microsoft. It's not known yet who represents Facebook; the choice may not have been made yet. But Facebook won't be able to have an advantage in this regard. At the most, it can find a match for QE.

QE's involvement also makes it anything but unlikely that we'll see some Yahoo lawsuits against Facebook in Mannheim (where QE is counsel for Motorola and co-counsel for Samsung), depending on whether any of Yahoo's European patents appear powerful enough. Yahoo holds quite a number of European patents in the relevant fields, but not as many as in the United States. If it finds a couple of strong ones, it will most likely try to benefit from the fact that Mannheim is about three times as fast as the Northern District of California, and that infringement automatically results in injunctions under German law.

Getting back to Judge Alsup, here are my ten points:

1. He's a character

Based on the electronic filings I saw and reports from hearings I read, Judge Alsup became my favorite U.S. judge to watch. I have seen people describe him as "grouchy", but that's not the way I see him. I think he's a character and probably a very nice person. He's concerned about using the court's scarce resources wisely and seeks to minimize the burden on the jury. There were a couple of situation in which the pursuit of those cae management goals went too far for my taste, but all in all I think the decisions he took in Oracle v. Google didn't disadvantage either party.

With Judge Alsup's assignment, a lawsuit that is of great interest to many people in its own right is now going to become even more interesting to watch.

2. Primacy of courts over corporations

He said and wrote a number of things during the course of Oracle v. Google that I thought were brilliant and memorable. A strong contender for the number one spot is his remark to one of Oracle's (external) lawyers that "this [court] is not a wholly-owned subsidiary of Oracle Corporation". He wants the big players to realize that, to the greatest extent possible under the circumstances, we are all equal under the law. Also, Judge Alsup feels it's fairer to have large, deep-pocketed organizations pick up certain costs, or make certain efforts (that have cost implications) if it helps to prepare the case for an efficient jury trial.

Yahoo and Facebook will have to deal with this.

3. Yahoo will have to substantially narrow its claims

The judge can't prevent Yahoo from insisting on a trial involving each of its patents-in-suit, but unless Yahoo narrows its claims substantially during the course of the litigation, it's probably going to have to be very patient. It's very, very hard to imagine that Judge Alsup would allow a ten-patent trial. In Oracle's case, the judge at some proposed a narrowing from 132 down to only three (!) patent claims. Yahoo, too, will have to pick its best bets at some point.

4. Reexaminations will represent a major opportunity for Facebook

If Facebook identifies some really good prior art that renders some of Yahoo's patent claims non-novel or obvious, which is what Google achieved against Oracle, then Yahoo's case may take some serious hits. Judge Alsup will look at what preliminary results any reexaminations yield, and if there are signs of serious validity issues for Yahoo's patents (which appear pretty broad, which is often -- but not always -- an indicator of validity issues), he would most likely delay trial until there's greater clarity. In Oracle's case, delays were attributed to an unrelated circumstance (a gang murder trial), but I believe that reexaminations played a key role as well.

Judge Alsup would allow a jury to be informed of at least the USPTO's "final" rejections of patent claims (final but appealable), and in cases in which it's relevant, even some information from non-final decisions could be admitted as evidence. Preliminary results also give an indication to the judge whether this case is going to be narrowed by the passage of time. Facebook would be well-advised to spend a large amount of money on the quest for prior art and the reexamination effort at large. Google did a tremendous job against Oracle in this area.

5. High degree of transparency

Based on the cases I monitor, I can't think of any U.S. judge who would be more committed to transparency than Judge Alsup. He once stressed that litigation is "public proceeding", and he doesn't like the argument at public court hearings to be restricted by requirements to protect confidential business information. Transparency relates not only to what the general public can find out about the case but also to what the jury will get to see (provided that it's not misleading, of course).

So far, Yahoo was quite interested in transparency and publicity. It told the New York Times about a discussion with Facebook that preceded the lawsuit, and its formal complaint (of March 12, 2012) was given to journalists almost two days before it showed up in public court records. But at a later stage, transparency could also benefit Facebook (for example, if Yahoo's claims turned out to be totally overreaching or if Yahoo behaved unfairly in the eyes of the Internet community).

6. Excessive damages claims are a no-go

Anyone who watched even just a part of the damages debate in Oracle v. Google knows that Judge Alsup is an opponent of excessive damages claims. In particular, he will insist that Yahoo apportion its total damages to the particular patents-in-suit, so any patent infringement claims that fail will reduce the maximum damages amount.

As I said before, Judge Alsup will ensure that Yahoo's demands are commensurate with any patent infringement it can actually prove. He won't be misled by the fact that many of the patents-in-suit are directly linked to revenue sources: I'm sure he'll understand that those revenues can only be generated thanks to a lot of other intellectual property than whatever Yahoo claims is being infringed.

7. Significant hurdle for injunction

Judge Alsup once warned Google that evidence of willful infringement would have "profound implications for a permanent injunction". While this doesn't conversely mean that willfulness is an indispensable requirement for an injunction in Judge Alsup's eyes, I think Yahoo will need to prove something outrageous about Facebook's conduct (and not just the fact that it was first to patent concepts that Facebook later implemented independently) to get an injunction.

But if the facts that are on the table suggest that an injunction is the only appropriate response to an ongoing infringement, Judge Alsup won't hesitate to order one. One of his better-known rulings was an injunction against UC Berkeley (but not a patent injunction).

8. Sometimes he's generous (and patient with the parties)

I said further above that I don't think he's "grouchy", even if he sometimes appears to be. He tries to manage his cases well, but he can also be generous. For example, after Oracle's first damages report was thrown out, a second one still contained passages that Judge Alsup didn't want to let Oracle's expert present to the jury, but he gave Oracle a third chance to submit such a report. It would have been relatively easy for him to say that two attempts are all that Oracle gets, and to claim that his first order wasn't complied with, but he decided to allow yet another attempt.

Also, while he got Oracle to substantially narrow its claims, he does allow the "James Gosling patent" to be asserted at trial, even though the track record of the other reexaminations would suggest that it's going to be invalidated by the USPTO later this year.

9. Experienced in patent cases but not a "captive" of the patent system

At a hearing, Judge Alsup mentioned his 37 years in the legal profession (he was a lawyer before he became a judge). He's definitely very experienced, not only in general but also as far as patent cases are concerned. He's done many of them. But he doesn't spend 100% of his time on patent cases. For example, he was also assigned to the "MS-13" gang prosecution that involved four trials (he mentioned this fact in an order).

There are exceptions to this rule, but on average, judges who focus 100% on patent cases tend to be more patent holder-friendly. The U.S. Supreme Court once even expressed concerns about a patent-focused court being a "captive court" (a captive of the patent system). That's not an issue with Judge Alsup.

10. Better understanding of business than technical issues

I found Judge Alsup's work on the damages issue very impressive. Oracle and Google presented certain theories that I didn't subscribe to because I have a software industry background, but I felt that the judge might buy them because the parties' lawyers presented them very skillfully. Judge Alsup figured out all of the key issues relating to Google's revenue strategy.

Technology is not his strength, and he admitted it. Last year he explained that one of his clerks had analyzed the technical issues (Java, virtual machines etc.) for him and was going to leave the court in November 2011 and that's why he wanted the case to go to trial last fall. In recent weeks Judge Alsup ordered the parties to answer some basic technical questions that were quite surprising given the advanced stage of the litigation. Those questions also appeared to reflect quite a struggle with the basic concepts of programming languages and virtual machines.

On average, the technical issues in Yahoo v. Facebook are somewhat less esoteric than the ones in Oracle v. Google, but the judge will need a tutorial and even after that one he may still ask questions that will surprise those of us who have programming knowledge. But I am sure he will try very hard to understand the asserted patents, and the parties will have to help him understand.

[Update] Approximately ten hours after this post went live, Yahoo v. Facebook was reassigned to Judge Jeffrey White. I will leave this post online because it is, for the most part, a recap of Judge Alsup's handling of Oracle v. Google, a priority case for this blog. [/Update]

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