Journalists Allowed to Argue at March 26 Hearing On Behalf of the Public's Right to Know in Apple, Samsung Appeal ~pj
After Steve Jobs died, I read an article that quoted his widow as saying something to the effect that just because someone is a genius in one area, it didn't mean he was a genius in all areas. I found that a charmingly honest statement that all wives for sure would understand, with all its overtones and undertones reverberating in the air. One thing that watching Jobs' plan to destroy Android play out in courtrooms has made obvious: he was not a genius at the law. Unquestionably, the Apple brand has been damaged by the litigation against Samsung.
And it may be about to get worse. Here's what is threatening to happen next: The parties were in agreement that the district court was unsealing too many company secrets and both are appealing to the Federal Circuit to keep things sealed. They agreed that they don't want to stand naked before the world, with all their trade secrets exposed. Unfortunately for them, they happened to draw two judges who believe litigants have to endure more of a spotlight than they might enjoy if they choose to litigate, because the public has rights too. Who knew that would happen? Clearly not Apple, a company that is known for its secretiveness. And the appeals court has just ruled that an eager band of journalists will be allowed to argue against sealing of the parties' relevant documents at the upcoming oral argument on the point on March 26.
Dow Jones & Company, Inc., The First Amendment Coalition, The Reporters Committee for Freedom of the Press, American Society of News Editors, Bloomberg L.P., Gannett Co., Inc., The New York Times Company, The Washington Post and Society of Professional Journalists will appear at oral argument, and a lawyer from The Reporters Committee for Freedom of the Press, Gregg R. Leslie, a staff attorney and legal defense director there, will share its allotted time with the attorney from the First Amendment Coalition. Together, they will argue that the parties are asking that too much be sealed in the Apple v. Samsung case, the first one, that the district court should be upheld, because the public has a right to know what is going on.
Mr. Kirtsaeng, for any here who are new, is from Thailand, and he came here to study at Cornell. To fund his education, he had his family buy books in Thailand published abroad, send them to him, and he then resold them in the US. He made about $100,000 that way, and the publisher took note. John Wiley & Sons sued him for copyright infringement, and at the district court level and at the appeals court, they prevailed. The Supreme Court, however, overturned, saying that once the publisher sold its books, that was the end of their control over them, thanks to the first sale doctrine. The court noted that there is no geographical language limiting it just to the US: Putting section numbers to the side, we ask whether the "first sale" doctrine applies to protect a buyer or other lawful owner of a copy (of a copyrighted work) lawfully manufactured abroad. Can that buyer bring that copy into the United States (and sell it or give it away) without obtaining permission to do so from the copyright owner? Can, for example, someone who purchases, say at a used bookstore, a book printed abroad subsequently resell it without the copyright owner's permission?
In our view, the answers to these questions are, yes. We hold that the "first sale" doctrine applies to copies of a copyrighted work lawfully made abroad. This was a case where amici briefs seem to have influenced the court.
A blanket denial of the right to seek injunctive relief, Motorola argues, violates patent law, contradicts eBay v. MercExchange [PDF], where the US Supreme Court held that it was error to come up with a categorical rule that "injunctive relief could not issue in a broad swath of cases", and violates the original expectations of donors of technology to standards bodies. In fact, it says any such rule would violate the US Constitution, which provides that Congress shall have power to secure exclusive rights for inventors, and in the Patent Act Congress came up with, it says every grant to a patentee includes the right to exclude others. Motorola asserts that it has never waived its rights to injunctive relief and states that there is no language in its ETSI agreements requiring it to do so. Motorola argues that there should continue to be a case-by-case analysis under eBay, with judges having discretion to make such decisions based on the particular facts of each case.
Fair warning, though: the PDF is 737 pages. The actual brief is one-tenth that, 73 pages, so I've done that part of it for you as text. The rest is a collection of patents at issue, judge's orders in this case, and one from a related Apple v. Motorola litigation in Wisconsin, which is where this case began, before being transferred to Illinois and Judge Posner.
The chairman of the hearing, US Representative Bob Goodlatte, opened with a statement, as did several members of the subcommittee with a little speechifying of their own, and then the invited witnesses of the day each told about their company's experiences with abusive litigation, except for one, a lawyer whose firm represents trolls and who opined that the patent system is working well overall. If you click each of the following names of the witnesses, you can download as a PDF the written testimony each provided in advance:
- Mr. Mark Chandler, Senior VP, General Counsel and Secretary, Cisco Systems, Inc.
- Ms. Janet L. Dhillon, Exec. VP, General Counsel and Secretary, J.C. Penney Company, Inc.
- Mr. John G. Boswell, Sr. VP, Chief Legal Officer and Corporate Secretary, SAS Institute, Inc.
- Mr. C. Graham Gerst, Partner, Global IP Law Group, LLC
- Mr. Philip S. Johnson, Sr. VP and Chief IP Counsel, Johnson & Johnson
- Mr. Dana Rao, VP and Assoc. General Counsel for Intellectual Property Litigation, Adobe Systems, Inc.
I think Congress is stuck in the 80s, when Microsoft ruled the world. They don't realize most of us moved on a long time ago, and if they want a lot of citizens to watch these hearings, they need to provide it in the formats that most of us now use. And that very much isn't .wvx. I haven't used Windows Media for almost a decade, and I'm not starting again now. There really is no excuse for any government to force its citizens to use a proprietary format from a private company in order to participate in civic life, and that's especially true when you consider that you have to pay for Windows Media.
And with that sad detail aside, here's Webster's account of the day.
Groklaw's Response to the USPTO's Request for Suggested Topics for Future Discussion and A Supplement ~pj
We are also publishing here on Groklaw a more detailed supplement on those four topics, explaining in depth why we propose them, with references, on the theme, "Using Semiotics to Identify Patent-Eligible Software". The supplement is referenced in the document sent, if they wish to read more in-depth arguments, based on interest level.
ITC Extends Deadline, Asks for Briefs On Remedy and Public Interest Re Apple And Infringing Samsung FRAND Patents ~pj Update
It has once again extended the deadline to announce its decision until May 31 as a result. It is asking for written submissions "from the parties and from the public" on the issues.
This is rather stunning. The Essential Patent Blog says this may "imply that the Commission could be leaning toward a finding that Apple infringes U.S. Patent No. 7,706,348 - a patent that Samsung has alleged is essential to the UMTS 3G cellular standard - and is now trying to decide what if any remedy it should order."
I know this interests many of you because of the Aaron Swartz case. So here's the video of the entire hearing, including the testimony of Orin Kerr, which begins at around the 52:11 mark. His written testimony is here [PDF]. He's been trying to get reforms of the CFAA for many years. And EFF has materials on what you can do, should you choose to, here.
Groklaw's Proposed Response to the USPTO's Request for Suggested Topics for Future Discussion - Care to Help? ~pj
We came up with four topics for future discussion. You may think of others. Because we have to file this on Friday, and that means if you want to contribute a thought, please do it by Wednesday.
We are also publishing a more detailed supplement on those four topics, explaining in depth why we propose those four topics, providing some foundation and providing resources. This we will not sent to the USPTO, but it is referenced in the document we will send, if they wish to read more. If you think my decision on that is flawed, let me know. But all they asked for is topics. If we overwhelm them with a lot of what they didn't ask for, I worry that it would be counterproductive. The USPTO will be publishing the comments they receive, and so both documents will be available to the world, and people can read it or not based on their interest level, which is part of the purpose. I would particularly appreciate your help with the supplement.
Virtually none isn't none, so Apple adds that the only reason there is any real overlap is because Samsung "chose to accuse some the the same products in both cases." Like that doesn't count. Samsung is the counterclaim-plaintiff here. Apple says Apple shouldn't have to wait on Apple's claims just because Samsung has its own claims. "The Apple patents at issue in this case are from completely different families, cover different technologies, and solve different problems than those in the 1846 Case. None of the 1846 Case appeals, therefore, will resolve any issue affecting claim construction, infringement, or validity of the patents asserted in this case."
Not the world's best argument, unless you think the judge is willing to split the cases up. And if we can safely say that there is a judge who has had enough of the demands of both Apple and Samsung, I think we may say it is Judge Lucy Koh. But Apple wants to stop Samsung's new products from infringing Apple's patents, as it sees it, not the old ones in Apple v. Samsung I (where it wants an injunction -- hence the pending appeal), because it wants to avoid "irreparable harm" to Apple. That's a magic phrase that might work. Samsung keeps launching new products -- Apple calls it a "relentless launch" of infringing devices causing harm to Apple. That's the same as saying Apple can't compete as things now stand.
Samsung counters that there is too an overlap, not only in products but in legal facts and theories. Why risk having a do-over, if the appeals court rules that the judge is making errors that implicate how discovery and the trials are being administered or everyone is following legal theories the appeals court knocks down?
Those reports, it turned out, were coming from Microsoft. "We trusted in the reports on the compliance [from Microsoft]," said Almunia. "We were not trying to explore Windows Service Pack 1. But maybe we should have tried to complement their reports."
He admitted the Commission may have made a mistake letting Microsoft police itself, rather than appointing an external overseer. "In 2009, we were even more naive than today," Almunia added. Could be. But that's not the only problem.
What about the fact that in effect Microsoft has been able to "buy" noncompliance? By that I mean, the browser screen was supposed to be made available for 5 years. It wasn't made available for 14 months. Is the browser screen going to be kept in effect 14 months longer than the original cutoff date, to make up for that breach? According to this New York Times article, the date is still 2014. If so, Microsoft makes out like a bandit, once again. I've written to the EU Commission asking them about this issue, and I'll post any reply I receive.
I showed you RIM's and CCIA's last time, two of the entities that don't think it's right to take away property rights from patent owners. And here are two more, the Washington Legal Foundation [PDF] and Qualcomm [PDF]. WLF argues that what the FTC proposes is in excess of its authority and its expertise, that it's a violation of the Noerr-Pennington doctrine and the First Amendment. Qualcomm says if the FTC makes this a template applicable to everyone else, it will result in more litigation, not less. I've done them both as text for you, and I have snippets from several more, who raise serious questions about the legality, including the Constitutionality, of what the FTC is proposing.
Does it cover Motorola as an affiliate of Google? Are all affiliates covered? Or only those specified by a licensee? And is the royalty cap provision in one section a stand-alone provision? Is there, in other words, a cap on how much Microsoft has to pay?
His request is related to his decision to reopen the trial that ended in November, now that Motorola has presented new evidence that didn't present at that trial. It didn't have to, by the way. The trial was to be held in parts, and November was part one. Now that the new arguments are on the table in connection with the next phase about exactly what the rate should be, however, the judge sees a need to go back and take another look, and I think you'll agree with him that what Motorola has presented changes the picture, and not in a way that favors Microsoft as much as before, which was trying for a low-ball figure. And that is now in question.
Judge Koh Reduces Apple Damages Award; Orders New Trial on Damages re Certain Products in Apple v. Samsung ~pj Updated
Because the Court has identified an impermissible legal theory on which the jury based its award, and cannot reasonably calculate the amount of excess while effectuating the intent of the jury, the Court hereby ORDERS a new trial on damages for the following products: Galaxy Prevail, Gem, Indulge, Infuse 4G, Galaxy SII AT&T, Captivate, Continuum, Droid Charge, Epic 4G, Exhibit 4G, Galaxy Tab, Nexus S 4G, Replenish, and Transform. This amounts to $450,514,650 being stricken from the jury's award. The parties are encouraged to seek appellate review of this Order before any new trial.
The jury's award stands for the Galaxy Ace, Galaxy S (i9000), Galaxy S II i9100, Galaxy Tab 10.1 WiFi, Galaxy Tab 10.1 4G LTE, Intercept, Fascinate, Galaxy S 4G, Galaxy S II Showcase, Mesmerize, Vibrant, Galaxy S II Skyrocket, Galaxy S II Epic 4G Touch, and Galaxy S II T-Mobile. The total award for these 14 products is $598,908,892. This jury goofed big time, more than Judge Koh has so far acknowledged, in my view, but this order absolutely states as clearly as words can achieve that their award was based on mistakes. I'll be curious to see what happens on appeal. And all the words spilled by Apple's lawyers and Apple supporters in the media on what a great job the jury did and how mean Groklaw was being to criticize the jury's verdict are now proven to be mistaken. And that's putting it nicely.
This jury goofed. The End. That's how it goes down in history. Because they did. And when you see something that you know is a mistake in a courtroom, you have a journalistic duty to call it like you see it, even if the whole world stands against you. That is what journalism is. And that is what Groklaw did. And now time has, once again, proven that Groklaw called it right.
I say sort of, because three times the brief, filed by Microsoft with EMC and NetApp, they say they take no position on whether or not Google infringed: Although amici do not take a position on the ultimate question of whether the software packages at issue in this case are copyrightable and whether any copyright has been infringed, amici urge this Court (1) to hold that the district court's copyright analysis was fundamentally flawed and (2) to decide this case in light of the settled copyright principles discussed below. The brief opens like this:This case tests the copyrightability of computer programs, specifically packages of source code that are part of the Java software platform used by third-party software developers to write applications for computers, tablets, smartphones, and other devices running Java. Wait just a minute. That's somewhat misleading. This is about 37 APIs, or more precisely their structure, sequence and order, not about software "programs" as most people understand that word. To understand that sentence, you need to know what APIs are. Because what Microsoft is asking for is a ruling that copyright protects nonliteral copying: Congress has determined that computer software is eligible for copyright protection. 17 U.S.C. § 101. Copyright protects computer software in several important respects. It covers the literal lines of code that comprise software, generally preventing their reproduction or distribution without permission from the rightsholder. But copyright also covers certain non-literal elements of the software as well. For example, the "structure, sequence, and organization" of a software product -- above and beyond the 1s and 0s that make up the program at its literal level or the exact words of the human-readable source code -- can, in some instances, be protected by the copyright in the work. As a result, copyright infringement in a software case can occur even when the defendant did not copy the underlying developers' code, where the defendant has copied some other, non-literal element of the software subject to copyright protection. That is, of course, exactly what SCO was asking for, before it flamed out and fell into oblivion. SCO used the same law firm as Oracle, Boies Schiller, so perhaps it's not astounding that they raised that same theory of copyright for SCO, an adventure Microsoft and Sun (now part of Oracle) funded, and here it is again, this time in Microsoft's mouth. I'd like to correct several misleading elements in this amicus brief. And we now have all the amicus briefs as PDFs.
Novell's arguments are clear and powerful. "A reasonable jury could find that Microsoft's conduct was anticompetitive because it harmed Novell, was not competition on the merits, and was reasonably capable of contributing significantly to maintaining Microsoft's monopoly power in the operating systems market," Novell writes. Nowhere, it says, does Microsoft defend Microsoft's conduct as competition on the merits. And Microsoft's brief neglected to mention to the appeals court, or respond to, the District Court's conclusion that a jury could have found Microsoft's justifications for its conduct "to be pretextual." Worse, Microsoft is asking the appeals court to confer immunity on it "for deception of competitors regardless of the effect on competition."
By withdrawing its support for namespace extension APIs, Microsoft destroyed Novell's economic viability, and it did it on purpose to harm a competitor. The Bill Gates email [PDF] proves it, they believe. The whole point of documenting APIs and releasing betas is to induce reliance, so Microsoft can't credibly argue that it didn't know this change on its part would impact Novell negatively.
And again, as in Novell's opening brief (p. 38, footnote 5), Novell references Microsoft using a "deceptive script" which it says is mentioned in the email thread in which a Microsoft employee reported to his company that WordPerfect appeared to be "OK" with the change. Novell says was used to justify the change and persuade companies like Novell that Microsoft had to make the change. (Cf. this Groklaw article and this email thread [PDF] for context.) I'm sure we'll hear more about this at oral argument. So if you attend the event, and I know some of you are trying to make arrangements to attend, please watch for this in particular.
And then Novell says Microsoft ignored a great deal of the evidence that favors Novell, and so did the District Court, but the applicable standard for summary judgment under Rule 50 is that the court was required to view the evidence in the light most favorable to Novell, which it failed to do. Microsoft also ignored evidence that its conduct harmed competition in the operating systems market, including evidence from binding Findings of Fact from the US v. Microsoft case, and the testimony and statements of Microsoft executives (cf. Groklaw). And finally, Microsoft disregarded applicable substantive law, Novell argues.
The CCIA and RIM Tell the FTC Banning Injunctions for FRAND Patents Can Make Smartphone Wars Worse~pj
Does the government come and tell you, "You have to move out and abandon the house. Sorry for the loss of the value of your house, but that's life. The public interest comes ahead of your individual property rights."
Is that how it works?
Of course not. The government may be able, under certain circumstances, to tell you to move in order to build the highway, but it has to *pay* you reasonable compensation. You don't have to just gulp and swallow such a loss. Why? Because no one, not the government or anyone, has the right to rob you of your property rights. It's your house. You paid money for it, and if they take it away to benefit the larger good, you should at least be paid compensation.
What about taking away certain property rights from FRAND patent holders? Why is that any different than taking away a man's house? Patents, they tell us, are property, and patents come with certain property rights, such as the right to seek injunctive relief against willful infringers and the possibility of treble damages. If you take that away, without compensation, where is the fairness in that?
Report from the Apple v. Samsung II Markman Hearing - Judge Koh Tells Them to Slim the Case Down ~pj
At the hearing, the presiding judge, the Hon. Lucy Koh, told the parties they have to narrow their cases against each other to 25 patent claims against 25 products, with more narrowing to come. And she asked if it would be wise to just table this case until the Federal Circuit rules on a pending appeal. Samsung told the judge it will, in fact, be offering a motion to do exactly that, but Apple piped up that it will oppose that motion.
I'm happy to tell you we had a volunteer in the courtroom again, the same Debra B. who told us about the February 14th hearing where the parties explained the technology of their various claims to her, and once again, we get more details about this hearing than we got from the media reports alone. For example, it's clear that Judge Koh has learned from the first Apple v. Samsung trial: Koh suggested that she would not follow the pattern of the Apple-Samsung case held last summer with the parties' superabundance of motions, filings, and efforts to expand the scope of the case. "This is going to be a streamlined case," she said. "As this case ... is currently framed, I'm refusing it to go on. I am willing to let it simmer for five years." That's a relief. Before I show you her full report, it might be good to explain a little bit about what a Markman hearing is and why it matters.
So now we know.
The royalty Microsoft offered to pay is so low, you'd think Microsoft would be thrilled Motorola said yes -- 2 pennies per unit up to 10 million units, and 1 penny afterward, figures that Motorola accepts while stating clearly that it's not a FRAND rate in Motorola's eyes. Motorola earlier refused the offer. Why the change? And why is Microsoft going ballistic and whining to the judge [PDF] and to the FTC [PDF], telling the FTC that Motorola is violating the FTC's January order? Here's the part in Motorola's letter to the judge that seems to be causing Microsoft so much anxiety, and where you see GI, it means General Instrument Corporation, of which Motorola is a subsidiary: Pursuant to German law, Microsoft owes GI the royalties specified in the license agreement as well as past damages to compensate GI for Microsoft's prior infringing use of GI's patents. See Exhibit B.
Past damages will be calculated in further proceedings in the German courts pursuant to German damages law.
Motorola recognizes that Microsoft appears to dispute that the Orange Book license is executed and enforceable in Germany. That issue-as well as past damages-will be decided by the German courts in due course. As you can see, this move by Motorola could, if it stands (which is by no means certain), remove certain issues away from Judge Robart and potentially increase the amount of money Microsoft has to pay Motorola for past damages in Germany. At least that is what Microsoft claims. I'll show you all the details. One thing is obvious. Microsoft never saw this coming, and it is very unhappy about it.