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Apple Shoves Motorola Patent Suit Into Limbo

By Richard Adhikari MacNewsWorld ECT News Network
Feb 27, 2012 3:13 PM PT

Germany's Karlsruhe Higher Regional Court decided on Monday to temporarily suspend enforcement of a ban barring sales of Apple's iOS devices in that country.

Apple Shoves Motorola Patent Suit Into Limbo

The case at hand is a patent suit brought by Motorola Mobility against Apple. The suit came after Cupertino changed the terms of its offer to license Motorola's technology.

Motorola won't be able to enforce the ban, which was based on a lower court ruling, until both parties can present their arguments before a full-blown appellate proceeding before the Karlsruhe Higher Court, according to patents consultant Florian Mueller.

It might be a year before that happens.

What They Were Arguing About

Key questions in the case include whether or not Motorola should have to license a certain technology to competitors and under what conditions.

This technology is described as a method of performing a countdown function during a mobile-originated transfer for a packet radio system. It has been declared essential to the General Packet Radio Service (GPRS) standard.

The technology's been implemented in most iPhone models as well as all iPads capable of using 3G networks.

A regional court in Mannheim, Germany, ruled in favor of Motorola last month when hearing the case.

The trouble is, EU laws require companies that hold patents on technologies that are vital parts of industry standards to license those technologies out, and they must do so under fair, reasonable and non-discriminatory (FRAND) terms. Motorola's technology qualifies for FRAND licensing, but the Mannheim court had ruled that Apple's licensing offer for the technology didn't sufficiently address Motorola's legitimate interests.

Marching to the Top

Following the Mannheim hearing, Apple had changed the wording of its offer. It now includes a clause that would let Motorola rescind the agreement if there's a challenge to the validity of the patents involved.

The Karlsruhe court ruled Monday that this change would sufficiently address Motorola's legitimate interests.

"The most recent obstacle to the iPhone's march to market dominance in Europe has been cleared," Raymond Van Dyke, a Washington, D.C.-based technology and IP attorney, told MacNewsWorld.

Where We Go From Here

Theoretically, after the forthcoming appellate proceedings, the losing party could appeal to the Federal Court of Justice, which is also based in Karlsruhe, Florian said. That could take years.

If Motorola prevails at the higher regional court, "it would then be free to enforce the injunction, while any further appeal would only serve to resolve fundamental legal questions without delaying enforcement," Mueller told MacNewsWorld.

If the judges believe that Motorola should accept Apple's proposal in order to avoid violating antitrust law, Motorola "may at some point have to give Apple a license to all of its essential wireless patents," which would eliminate the opportunity for new legal action over these patents, Mueller said.

Things could still get sticky, however.

The Karlsruhe Higher Regional Court is an appeals court for just one legal circuit, Mueller said. Motorola is still involved in a lawsuit with Apple over the same patent, but this time against the company operating the German Apple stores. This is being held in Dusseldorf, and an appeal against that court's verdict would be made to a higher regional court in that town.

"They could also try other lawsuits in Munich, which is again a different circuit," Florian said. On the other hand, the likelihood of other circuit courts disagreeing with a ruling of the Karlsruhe Higher Regional Court "is limited."

WOPR Rules

Whether or not Apple wins the forthcoming hearing before the Karlsruhe Higher Regional Court, the battles in the smartphone market will continue.

"The wars will intensify as the players continue to jockey for position, winning here and there, overturning [verdicts] ... where they can," Van Dyke pointed out.

"With the EU hyper-concerned about whether competition laws are infringed, expect the various players to continue playing this game. With countless billions [of dollars] and smartphone market dominance at stake, all of the players are deadly earnest."

Indeed they are. Microsoft has filed a formal competition law complaint with the European Commission against Motorola Mobility and Google.

Motorola's filing lawsuits in a bid to force Microsoft to take its Windows PCs, Xboxes and other products that use WiFi connectivity off the market, Redmond alleges. [*Correction - Feb. 28, 2012]

Microsoft did not respond to our request for further details.

*ECT News Network editor's note - Feb. 28, 2012: In the original version of this article, Florian Mueller was misquoted as saying Motorola's lawsuits against Microsoft regarding WiFi connectivity involve patents that "aren't essential to any industry standard, so they can be worked around." In fact, Motorola is using standard-essential patents to a substantial degree against Microsoft, according to Mueller.

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