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Even if Germans side with Motorola enforcement using FRAND patent is illegal opines judge

Faced with licensing demands from Microsoft Corp. (MSFT) ($10-$15 per handset) and the threat of a ban from rival gadgetmaker Apple, Inc. (AAPL), Motorola Mobility has been pushing forward with its controversial approach of using its standards-heavy patent portfolio in lawsuits.  That approach currently has it under antitrust investigation in the European Union, but has not dissuaded Motorola from pursuing enforcement.

Motorola, a top Android phonemaker, continues to operate independently -- for now -- after Chinese regulators held up the approval of the company's acqusition by Google Inc. (GOOG).  China appears to be using the delay as a means of bargaining with the search engine provider who has opposed its censorship demands and hacking abuse.  That means that for now Motorola Mobility is forging its own way in court.

I. Judge Appears Skeptical of Motorola's FRAND Enforcement

Motorola's controversial lawsuits against Microsoft, which span several international courts, hit an unusual snag when the U.S. District Court for the Western District of Washington ruled in a special hearing that Motorola could not enforce a FRAND-based ban on Microsoft in Germany.

Microsoft has complained that Motorola is asking for thousands of times the typical "fair, reasonable, and non-discriminatory" (FRAND) rate (which typically is around 2 cents per device).  The patent in question is a Motorola patent on h.264 -- a commonly used video encoding standard.

Dusseldorf court
A Washington federal court has forbidden Motorola from banning Windows sales in Germany until a U.S. case advances.
[Image Source: All About Samsung]

The restraining order, put in place by presiding judge Judge James Robart, may be enforceable as Motorola Mobility is a U.S.-based firm.  However, it is unusual in that it is a case where a U.S. federal court is moving to essentially strip a top trade partner of its judicial authority in the short term.

In addition to the pending German case, Motorola and Microsoft are duking it out in a corresponding U.S. case that is currently being heard by Judge Robart.  Until a May 7 hearing in the U.S. case, Judge Robart says that any attempts to enforce a ban on Windows sales in Germany (via preliminary injunction) would be illegal.  He's forcing Motorola to post a $100M USD bond in the interest of compliance.

While the U.S. case has not been ruled on, the decision indicates the presiding Judge is skeptical of the validity of Motorola's FRAND based litigation.

II. What the Ban Might Have Meant to Motorola

Some believed Motorola might pull off a product ban in the Germany ruling, which was set to land on April 17.  Germany's legal system works a bit differently in that patent validity is run in a separate track, meaning that in most cases -- even where there's a strong possibility that a patent is bad or being unfairly enforced -- the German court still enforces a ban on the alleged infringed product for the duration of the trial.  Apple has achieved similar bans of Motorola and Samsung Electronics Comp., Ltd. (KS:005930) Android devices in Germany.

Microsoft said the temporary ban on the injunction was necessary, writing in its motion for a restraining order, "If Motorola's sharp tactics are allowed to unfold, Microsoft will be denied a meaningful remedy in this action. Microsoft seeks a preliminary injunction here to preserve the status quo, to preserve this Court's ability to grant Microsoft meaningful relief, and to prevent irreparable harm to Microsoft and the public in the meantime."

Motorola h.264
Motorola and Microsoft are fighting over 100 patents, but the German case focused on only two, involving the h.264 codec. [Image Source: Joker Blog]

Jess Jenner, a lawyer with Ropes and Gray -- the firm representing Motorola in the U.S. case -- argued that a ban would be acceptable given that Motorola could repay Microsoft if the U.S. court later ruled it to be unfair.  And she said the restraining order would be the equivalent of meddling in foreign justice, stating, "You are being asked to interfere with a German court.  It's an intolerable intrusion on another country's prerogative."

Judge Robart didn't buy that line of logic.

Microsoft claims that the German lawsuit -- which only involves 2 patents out of the 100 being disputed in the U.S. -- is a mere maneuver to gain leverage by Motorola, exploiting Germany's controversial ban-friendly IP enforcement.  As even a temporary ban on Windows sales in the large EU nation would be a financial blow to Microsoft, Motorola could use a ban to try to force a more favorable settlement in the U.S.

A jury trial is scheduled for November in the U.S., if the companies cannot settle their differences before then.

Source: ComputerWorld: TechWorld



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This is absurd
By ZorkZork on 4/12/2012 5:42:01 PM , Rating: 5
How can a judge in the US decide how these companies should act in Germany? I wonder what the response had been, if this had been a German judge deciding hows the laws of the US should be interpreted.

That aside, Motorola is clearly abusing their FRAND patents.




RE: This is absurd
By chrnochime on 4/12/2012 7:23:56 PM , Rating: 3
I thought Germany could care less about what this judge says. That's like a German judge telling the State of Washington to kick MS out. Not gonna happen.


RE: This is absurd
By GulWestfale on 4/12/2012 10:48:06 PM , Rating: 2
i think in german patent cases, the overriding EU laws apply. i have no idea why the title of this post implies that a US judge is banningthe state of germany from doing what it wants to on its territory, but hey, it's DT. anything for a pageview, right?


RE: This is absurd
By Theoz on 4/13/2012 1:38:20 PM , Rating: 2
This is wrong. Germany applies its own laws. There is no EU patent law, just an EU patent convention that governs the granting of patents. Once the patents are granted they must be enforced in each country wherein the individual country's law applies.


RE: This is absurd
By Lerianis on 4/15/2012 1:46:24 AM , Rating: 2
Unfortunately for you, totally wrong. The EU has directives stating when and how patents should be given AND how and when they are valid.

Some of the patents that have been used in (these were the right terms in the article) 'ban-friendly Germany' aren't valid by the EU standards, which override the standards of countries in the EU once they joined.


RE: This is absurd
By kittypuncher on 4/13/2012 5:33:41 AM , Rating: 3
It's not a US judge saying or forcing anything towards Germany itself. Both companies are US HQ'd, and the judge is essentially saying "Moto, you let this happen in Germany, you will be heavily fined in the US". German courts can do whatever they want, they are their own sovereignt nation. But Moto has the right to drop the case, or tell the German courts "we'll take the slow route, no preliminary injunctions".


RE: This is absurd
By someguy123 on 4/13/2012 6:10:36 AM , Rating: 3
They're two US based companies. Still, this isn't really barring Germany from doing what they want, but rather what their doing is illegal in the US. Since they're located in the US, US laws still apply.


RE: This is absurd
By Strunf on 4/13/2012 7:56:01 AM , Rating: 2
You're saying the US law applies in other countries too? Even if the companies are US companies I don't see that many of them being brought to court for not following the US law when operating elsewhere, for instance when a company operates in China "probably" many of the Chinese laws are incompatible with the US law, specially when it comes to workers.
Also if US citizen violates the US law in another country will he be prosecuted when returning to the US? I doubt of it.


RE: This is absurd
By kittypuncher on 4/13/2012 8:46:02 AM , Rating: 2
Actually that is EXACTLY the case. The US turns a blind eye to certain working conditions to maintain international relationships/trade agreements and all that crap. (not agreeing with it, just calling as I see it). But the US has legal right to punish US companies/people that behave badly abroad.

quote:
Also if US citizen violates the US law in another country will he be prosecuted when returning to the US? I doubt of it.

If I committed lude acts abroad that were legal in country X, but illegal in the US, as soon as I came back to the US I'd get popped - as long as the US knew about it.
There are countless documents on the US Embassy website to this affect (I'm an American living in the UK, and some of the stuff I've come across surprises me).
Keep in mind, there is an element of "the US has to find out to do anything" (such as, doing 120MPH in the middle of the desert, you might get away with it, though what you did was none the less illegal).


RE: This is absurd
By kittypuncher on 4/13/2012 8:49:53 AM , Rating: 2
Oh what I wouldn't do for an edit button...
Not that the US has jurisdiction in other countries, but US citizens and companies are held to US laws at all times .


RE: This is absurd
By foolsgambit11 on 4/15/2012 8:31:30 PM , Rating: 2
Reference?

I know you still have to file a tax return if you're abroad (although you may be exempt from paying taxes). But I'm not so sure all U.S. law applies abroad to U.S. citizens. Or could the US government actually arrest you for smoking weed in a cafe in Amsterdam? Doesn't sound right to me. What about U.S. States? If you are a citizen of one State, and do something in another State that is a crime in your home State, can they prosecute you? I think not.


RE: This is absurd
By Fritzr on 4/17/2012 8:58:12 PM , Rating: 2
US law applies to US citizens regardless of location. If it illegal to smoke weed in New York, that particular law is meaningless in Newark. However if the US simply states that it is illegal for a US citizen, then that law applies in Newark, Nuernberg and Hanoi.

An example is statutory rape. Americans are prosecuted each year for having sex with minors while in Thailand. US citizens are also prosecuted for drug deals executed outside the US. Murder someone in Kuwait and you may be subject to arrest and trial in US.

You would be wise when traveling to remember that US law applies to US citizens and there is no need for extradition if you are arrested at a US Port of Entry.

Smoking weed at an Amsterdam cafe is probably fine, going into business as a dealer shipping to a place where it is illegal might have the DEA waiting for you the next time you drop by.

You must realize that there are many things considered crimes in US that can be prosecuted even if the criminal is a non-citizen who has never been to the US. It is just a matter of a US legislature or the Congress declaring it illegal and then either waiting for the unsuspecting perp to visit or file an extradition order with the foreign government.


RE: This is absurd
By Schrag4 on 4/13/2012 9:06:33 AM , Rating: 2
I'm sorry, but this just doesn't pass the smell test for me. Let's take your "120 MPH in the desert" example. Sure, there aren't any places in the US where 120 MPH would be legal, but the max speed varies from location to location, so just how fast could you drive in another country without risk of prosecution on your return? There many, MANY laws that vary from state to state (think gambling, prostitution, and gun rights for starters). So if you do those things in other countries, which state's laws will they look at to decide whether or not to prosecute you?


RE: This is absurd
By kittypuncher on 4/13/2012 9:37:30 AM , Rating: 2
Applies at a federal level. So the speeding thing wouldn't be applicable (that's State governed). Gambling and prostitution, again, state level.

I'll try to dig up the state.gov pages where I found this...


RE: This is absurd
By theapparition on 4/13/2012 10:41:34 AM , Rating: 2
Apparently, I've a wanted man for my time on the Autobahn. :P

His examples were a bit off, but he did correct himself that the only laws that are applicable would be ones at the federal level.


RE: This is absurd
By Fritzr on 4/17/2012 9:09:22 PM , Rating: 2
Except where posted, 120mph on the autobahn is below the legal speed limit ... no laws broken at any level.

120mph in open desert is unlikely to break any laws other than illegal entry/trespassing...so yes that was a bad example.

US has no universal speed laws. All of our speed laws are location specific and for that reason are unlikely to trigger prosecution. Violate speed laws in Germany and the US Embassy will be happy to recommend a lawyer to represent you in German court, but unless the US declares it illegal for a US citizen overseas, the US will simply monitor the proceedings to ensure they are fair.

Bed a 12 yo sex worker in Thailand and you had better hope Uncle Sam never finds out, as that will put you in jail the moment you return to the US. Get involved in production or sale of illegal (in US) drugs without a proper license from the local government and you might be explaining why to some DEA agents. There are indeed laws that will put a US citizen in jail for crimes committed outside US territory. Sex crimes & drug dealing are simply examples, there are others.


RE: This is absurd
By ShaolinSoccer on 4/14/2012 12:03:37 AM , Rating: 2
You should be locked up just for punching kitties...


RE: This is absurd
By someguy123 on 4/13/2012 5:42:50 PM , Rating: 2
This are both US companies motorola is attempting something that will greatly damage another US company. It's a bit different from a corporation abusing low working standards of different territories. I'm not quite sure what the laws are regarding working conditions overseas from a local HQ'd business, but those types of issues don't cause direct damage to another US company.


RE: This is absurd
By Jeffk464 on 4/13/2012 11:15:18 PM , Rating: 2
Wow, are we going to have armies of international lawyers battling this stuff out all over the world. Sounds like crazy talk to me.


RE: This is absurd
By gunzac21 on 4/15/2012 8:05:39 PM , Rating: 2
trade treaties, thats why.


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