Nov 4, 2011
From Florian Mueller/fosspatents.com
(Bolding is mine)
Apple knows what it's like to win injunctions against rivals. It won four of them against Samsung (two in Germany, one in the Netherlands and most recently one in Australia; all of them preliminary). Now it seems that Apple has just come out on the losing end of a patent infringement lawsuit. I have received a copy of what purports to be a default judgment by the Mannheim Regional Court barring Apple from selling in Germany -- the single largest market in Europe -- any mobile devices infringing on two Motorola Mobility patents and determining that Apple owes Motorola Mobility damages for past infringement since April 19, 2003.
I will explain further below the scope of the ruling and the tactical consideration on Apple's part that presumably led to this. We're not talking about a preliminary injunction, but this one is in effect now and it could be appealed and lifted. However, Apple appears to be playing a risky game here as I'll explain further below.
Should the document that I received be a hoax, it would be an incredibly sophisticated one. It's hard to imagine anyone with the skill to do this would incur the immense risks associated with the criminal prosecution of forgery of a court document. Also, I contacted both Apple and Motorola Mobility to verify this, and by the time of publishing this blog post, neither company responded. So they both had their opportunity to deny the authenticity of the document. Here's the document: (See source for hyper-link)
11-11-04 Default Judgment for MMI Against Apple
These are the two apparently-enforced patents:
1. EP (European Patent) 1010336 (B1) on a "method for performing a countdown function during a mobile-originated transfer for a packet radio system"; this is the European equivalent of U.S. Patent No. 6,359,898
2. EP (European Patent) 0847654 (B1) on a "multiple pager status synchronization system and method"; this is the European equivalent of U.S. Patent No. 5,754,119
The court ruling doesn't say which particular products Motorola Mobility accused of infringement, but since the U.S. equivalents of both patents-in-suit were also asserted by Motorola Mobility in federal lawsuits in the United States, it appears that the entire range of Apple mobile devices is affected by this decision.
With respect to the first patent, I have been able to find out that Apple raised a FRAND defense against it in the United States. A Wisconsin court decision of July 6, 2011 states that Motorola declared that patent essential to ETSI standards (GSM, UMTS, 3G). I have not been able to find out about the second patent. Based on its technical scope, it could also be standards-essential, but it need not be.
According to the document, this decision can be executed "preliminarily", which means under German law that Motorola Mobility can enforce this injunction against Apple from now on even if Apple appeals the ruling (which I'm pretty sure it will). That means Apple may temporarily -- until a second judgment is entered -- be barred from selling any mobile devices in Germany. Apple wouldn't be the first defendant in Germany to pursue a tactic called "Flucht in die Säumnis" ("resorting to a default judgment"). Many defendants play this game after they have failed (for their own fault) to meet a deadline for an answer to a complaint. In that case, the problem they face is that any arguments they'd have liked to present would no longer be admissible if presented only at the time of a hearing (on the grounds of being untimely). By simply letting the plaintiff win a default judgment, a defendant preserves his ability to present all of his arguments in the appeal. But this has cost implications (which are less than secondary in this case given what's at stake) and comes with the risk of a default judgment that is preliminarily enforceable.
In this case, the court declared the default judgment preliminarily enforceable. Motorola Mobility can now apparently bar Apple from selling any of its mobile devices in Germany (even without bail).
I don't know whether Apple thinks that resellers will source its products from other EU markets anyway. A default judgment doesn't mean that Motorola Mobility can easily shut down resellers since the merits of the case haven't really been adjudicated.
But whatever the "workaround" may ultimately look like, it's really strange that Apple plays this kind of game instead of presenting its arguments and evidence on a timely basis. I'd really like to know why they didn't do that instead of letting Motorola Mobility win an injunction. But I doubt they'll ever explain their rationale.
It will be interesting to see now how much of a disruptive business impact this will have on Apple's revenue production in Germany. This is a very strange episode in the ongoing mobile patent wars, and without a doubt, this does potentially strengthen Motorola Mobility vis-à-vis Apple. Google will be very happy about that.
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