Tech Law

Motorola Bests Apple in German Patent Fight

A regional court in Mannheim, Germany, has ruled in favor of Motorola Mobility in one of several patent infringement lawsuits the company has brought against Apple in the country, patent consultant Florian Mueller reported.

This relates to European Patent 1010336 (B1), which covers a technology that’s essential to wireless communications.

The court ruling notes that the iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPad 3G, and iPad 2 3G all implement the technology in question, although it doesn’t mention the iPhone 4S, which was launched after the litigation commenced in April.

The ruling states that Apple could modify its products by removing the patented feature, and it also includes an injunction that can be enforced against Ireland-based Apple Sales International.

Apple’s reportedly said Friday it would appeal the ruling.

“The issue here is that Apple doesn’t want to recognize the validity of the patent without a challenge as long as Motorola seeks damages above the FRAND rate for past infringement,” Mueller told TechNewsWorld. “The judge sided with Motorola.”

FRAND stands for fair, reasonable and non-discriminatory, and the owner of a FRAND patent must license out its technology to third parties because the invention has been declared to be essential to an industry standard.

What the Fuss Is All About

The technology in question is described as “a method of performing a countdown function during a mobile-originated transfer for a packet radio system.”

It was declared essential to the General Packet Radio Service (GPRS) standard.

GPRS is used for packet data transport over GSM networks. It enables always-on data connection for applications such as Web browsing and push-to-talk over cellular networks.

Apple offered to license the technology and other patents Motorola has that are covered by FRAND. However, Cupertino reserved the right to contest the validity of the patent-in-suit if Motorola sought damages for past infringement above the normal FRAND payment rates, and that’s where it stubbed its toe.

Motorola’s case was that, if the damages were limited to the FRAND royalty rate, infringers could ultimately get to use patents on more favorable terms than people who anted up from the start by getting a license. In other words, bad behavior would be rewarded.

FRANDS Killing Friends

There are various defenses against FRAND, according to a presentation by Patricia Cappuyns of Olswang titled “Patent, Standards and FRAND.”

The patentee can claim its patent is essential to the standard, which is what Motorola did. If the other party claims its product is standards-compliant, it is infringing the patent.

Alleged patent infringers can advance one of several arguments.

One is that the other party’s patent is not essential to the standard and the alleged infringer didn’t use it.

A second is that the patent is essential to the standard but the patent-holder failed to disclose it.

The third, which Apple used, is that the patent is essential and the alleged infringer did use it, but had offered to pay FRAND royalties and was turned down by the patent holder.

Wielding the Law Like a Club

Apple’s involved in other FRAND-type disputes with Motorola as well as with Samsung, which won a ruling in Australia that let it sell its devices in that country.

“A ruling like this can go worldwide, but each venue has different standards, so a win in one country doesn’t necessarily mean a win in another,” Rob Enderle, principal analyst at the Enderle Group, told TechNewsWorld.

“In the ongoing game of patent litigation poker, Motorola’s win in Germany represents just one hand of play,” technology and patent attorney Raymond Van Dyke remarked.

“Apple will seek to stay and otherwise further contest the ruling, particularly the institution of an injunction without the proper German FRAND protocols in place,” Van Dyke told TechNewsWorld.

The procedural standard for an award for past damages under FRAND “clouds the case, leaving liability wide open under differing interpretations,” Van Dyke explained.

The only way to avoid patent litigation is for companies to engage in cross-licensing and sharing technology through patent pools, Carl Howe, director of anywhere consumer research at the Yankee Group, told TechNewsWorld.

However, “such engagements tend to be commoditizing influences on the market, which runs counter to Apple’s differentiated product strategy,” Howe said. That could mean further lawsuits in the future, he opined.

Neither Apple nor Motorola Mobility responded to our request to comment for this story.

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