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Frustrated judge takes issue with parties inability to agree, unwillingness to license

Both Apple, Inc. (AAPL) and Android operating system maker Google Inc. (GOOG) subsidiary Motorola Mobility saw a potentially precedent setting ruling, in which both parties cases were dismissed by an irate federal judge.

I. Dismissed With Prejudice

Judge Richard A. Posner, a Seventh Circuit Court of Appeals judge who moonlighted in the U.S. District Court, Northern District of Illinois (Chicago) for this critical case, seemed to imply that both companies were trying to abuse the legal system, wasting its time with unclear arguments.

Both companies agreed that money would fix the alleged wrongs caused by the other's infringement.  But Judge Posner was frustrated by the fact that neither company could reasonably justify the exorbitant sums they were claiming their patents were worth.

Judge Richard Posner
Judge Richard Posner was frustrated with what he viewed as ridiculous arguments from Motorola Mobility's and Apple's legion of lawyers. [Image Source: Abel Uribe, Chicago Tribune]

Also, Judge Posner complained about Apple's lawyers filing a mired myriad of motions.  In this regard, Apple's insistence at objecting to every ruling of Judge Posner's may have hurt it in court.  

Notably, Judge Posner had stated in a preliminary ruling that some features in Google/Motorola Mobility's Android operating system infringed on Apple's intellectual property.  Apple complained about its victory, with its legal team essentially bellyaching about the fact that the Judge didn't find in their favor for every single claim, even though he had found in their favor for most of them.

Judge Posner's decision to dismiss the case was quite resolute, in that he dismissed it "with prejudice", writing, "I have tentatively decided that the case should be dismissed with prejudice because neither party can establish a right to relief."

II. Appeal? Unlikely

Either company will have a tough road ahead appealing that decision as Judge Posner is a senior member of the Appeals court which would hear their case.  In short Apple versus Motorola is probably over in the U.S. with no damages awarded to either company, on account of their legal teams' inability to be reasonable (according to Judge Posner).

The only possible alternative route would be to file further complaints to the U.S. International Trade Commission.  But such complaints may not be taken seriously given the prestige Judge Posner holds among federal judges nationwide, in part thanks to his service for years as an esteemed faculty at the University of Chicago.

Apple gavel
Apple's options to appeal or complain to the ITC are scarce. [Image Source: ArsTechnica]

Other than the ITC or an appeal, both companies will likely be banned from filing lawsuits against each other until 2014.  It's important to note that Motorola Mobility was already found innocent by the ITC of Apple's accusations of infringement on several patents.

III. Good News for Customers; Bad News for Lawyers

Arguably this is a big win for consumers in that there will (likely) be no product bans, and the pair will be forced to compete on the market.  Of course some Apple and Android fans may fantasize about banning each other’s products, but to the average consumer, such bans would at best be an annoyance.

On the other hand, it's a blow to both companies' legal efforts.  For Google, it loses the ability to use Motorola Mobility as a club to beat Apple back from suing other Android handset makers, such as HTC Corp. (TPE:2498).  It was Motorola Mobility that filed the first lawsuit against Apple on Oct. 6, 2010.

For Apple, who filed countersuit against Motorola Mobility on Oct. 29, 2010, it is also a blow.  While Apple did not necessarily start this fight explicitly, its former CEO Steve Jobs long implied Motorola Mobility (and Google) were in infringement and that he would eventually "destroy" them with bans.

Indeed, bans could have destroyed Motorola or at least have forced its new owner Google to reach deep into its pockets, given that the smartphone maker is already struggling mightily with profitability.  Now Motorola's lawyers will be free to focus on their court battle with Microsoft Corp. (MSFT).

iPhone 4S
Apple and Motorola Mobility will be forced to begrudgingly compete on the market.
[Image Source: Obama Pacman]

A diluted market is a dangerous market for Apple, as it learned in the 1980s.  It is in Apple's best interest to keep the smartphone market a two-company race with Samsung Electronics Comp., Ltd. (KSC:005930), should its efforts to ban Samsung's product line fail.  Having a host of smaller alternatives like Motorola and HTC could eventually hurt Apple in the long run, as Apple would be fighting a one-man sales battle against a crowd of rivals.

Sources: U.S. District Court, Northern District of Illinois via SBNation [PDF], Bloomberg

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By amanojaku on 6/8/2012 12:16:06 PM , Rating: 4
I doubt it. With the death of Jobs, I thought Apple would become more friendly. Instead, Tim Cook appears to be Jobs 2.0. I guess the apple doesn't fall far from the tree.

By AssBall on 6/8/2012 1:33:46 PM , Rating: 3
To be fair, Jobs was still CEO when most of this BS litigation started.

By sprockkets on 6/9/2012 3:17:33 PM , Rating: 4
Judging by the new motions in the ITC cases against HTC and Samsung, Tim Cook's words about hating lawsuits are BS.

By Strunf on 6/11/2012 7:40:51 AM , Rating: 2
Why changing a strategy that works, I sure don't like how Apple is fighting it off in courts but hey if I was in their position I would also use any trick possible and available to hinder my adversaries, any company would do so. Blame the system not the players.

By bug77 on 6/11/2012 9:08:19 AM , Rating: 2
Oh this is a clear-cut case of "hate the player". The system definitely wasn't designed to be used like this, what we see here is a lot of abuse.

By ratbert1 on 6/8/2012 4:54:31 PM , Rating: 2
no damages awarded to either company, on account of their legal teams' inability to be reasonable (according to Judge Posner).

Imagine that! A legal team not being reasonable? This must me a first!

By robinthakur on 6/8/12, Rating: -1
By bodar on 6/8/2012 11:37:50 PM , Rating: 5
Oh, you mean Apple's design patent for a thin wedge with the thick end missing, since they omitted pretty much everything else from consideration for infringement? Think about that for a second and recall your elementary math class: they got a patent for an acute angle.

While I agree that Samsung's previous habit of trying really hard to make the Galaxy S and Tab look like Apple products was shameless, I think Apple is going too far to claim that a geometric shape is novel, when it was mostly made possible by things like SSDs and ultrathin displays, which Apple did not create.


By jms102285 on 6/8/2012 11:57:41 PM , Rating: 5
How else is Samsung innovating?

Transparent LCD screens?

Foldable, durable LCD screens?

Apple invents NOTHING of use to the technology, they poach, package, and then market it as if they were the first game in town.

All that being said... GO ASUS! =)

By jms102285 on 6/8/2012 11:59:28 PM , Rating: 2
By robinthakur on 6/9/12, Rating: -1
By Microsapper on 6/10/2012 1:23:02 PM , Rating: 2
Couldn't have said it better!!! Even Microsoft knew better than to use iSue against competition. Although "Embrace Extend Extinguish" is hardly a better tactic, at least it's not overt Anti-competitive actions that blast your anti-competitive behavior in the face of the court system.

I hold nothing against Motorola for preemptively going after Apple in the first place though. There is no question they were in the phone business well before Apple and that just emphasizes that point. But they will still no doubt press ahead on Apple's belligerent indifference to the Billions they've invested in Standards Based R&D to come up with the technology everyone who pays the license fees is afforded today. To try and escape paying after now 6yrs of having been given notice by Moto is outrageous. No doubt even not getting their due compensation here in this court, they'll get in a court somewhere, where Standards contributors are treated justly. Otherwise we'll have no one willing to invest in Standards based technology in the first place if Apple was allowed to get away with this!

The erroneously named FOSS Patents Blog of Florian Mueller blatantly misleads mass media with extreme mis-information about FRAND/RAND protection in the first place. FRAND Standards were not meant to protect just those buying a license w/o having the expense of developing those patented technologies in the first place. FRAND Standards Protections came about to protect Companies willing to spend the R&D and time to make technology available to all and make sure they got a return on their investment.

That's were Fair and Reasonable comes in. All a company has to do is show what they spent in making those patents and it would be proved time after time that they rarely recoup those investments in less than 10yrs of receiving license fees. That's why I believe Injunctive Relief in the face of Companies like Apple and Microsoft, who held few Standards Based Patents to begin with should be held accountable with injunctions.

By the same token, any company that merely bought Standards Based Patents like in the Nortel deal shouldn't be allowed Injunctions, because they didn't make those Billions of Dollars of expenditures to write them in the first place. Standards Based Patent Injunctions should be reserved for the original patent holder and thereby eliminate many Patent Trolls from who don't actually even use the technology in the first place. Original Patent Holders should always be afforded greater protection than assignees always!

"Google fired a shot heard 'round the world, and now a second American company has answered the call to defend the rights of the Chinese people." -- Rep. Christopher H. Smith (R-N.J.)

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