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US Court Says Motorola Can't Enforce Microsoft Injunction In Germany
First time accepted submitter Chris453 writes "A U.S. appeals court on Friday ruled that Google Inc's Motorola Mobility unit cannot enforce a patent injunction that it obtained against Microsoft Corp in Germany, diminishing Google's leverage in the ongoing smartphone patent wars. Motorola won an injunction against Microsoft in May using their H.264 patents. Apparently the U.S. federal justices in California have worldwide jurisdiction over all court cases — Who knew? Maybe that is why Apple keeps winning lawsuits..."
You could try reading the article.
"At bottom, this case is a private dispute under Washington state contract law between two U.S. corporations," the court ruled.
Do you even lift?
These aren't the 'roids you're looking for.
tl;dr; they're not. Under German law, injunctions are enforced by the party, not the court. The US court has ordered that Motorola not enforce it until they've come to a conclusion in their case (which could affect the German court decision).
Long version, based on the CoA's judgment, available here:
Motorola claims to have patents in various jurisdictions covering vital steps of the H.264 video compression standard. When the ITU established H.264 as a standard, Motorola had to agree to license all relevant patents at RAND (reasonable and non-discriminatory) rates.
Back in 2010, Motorola asked Microsoft to licence its H.264 patents (for use in the various Windows and X-Box software) at what MS described as an unreasonable royalty rate. MS sued Motorola for breach of contract, on the grounds that Motorola's agreement with the ITU was a contract, which gave MS third-party benefits (and thus the right to sue to enforce it). [Third-party contract rights are an interesting area of law; some jurisdictions have them (e.g. the US), in some they are optional (e.g. England+Wales) and in others they don't exist (e.g. Germany).] Motorola responded by suing for patent infringement, and the cases were combined.
In 2011, while the US contract/patent case was going on, Motorola then filed a claim against MS for patent infringement in Germany, specifically for the two H.264 patents. As part of their claim, Motorola wanted an injunction banning the sale of Windows and X-Boxes in Germany. In May 2012, the German Court found in favour of Motorola and granted the injunction. However, as noted in the US CoA's judgment:
Under German law, if a party is given an injunction, they get to decide whether or not to enforce it, and if they do and it is subsequently overturned, they have to pay the other side damages to cover any losses.
So the question before the US CoA was whether or not the US courts could issue their own injunction ordering that Motorola not enforce the German injunction (Motorola, being a US-based company, is obviously within the court's jurisdiction). The District Court said they could, and the Court of Appeal have confirmed this. Their reasoning seems to be that *if* Motorola was in breach of contract by not licensing its patents to MS at RAND rates, then one remedy for MS would be a compulsory licence at such a rate. But such a licence would necessarily include *all* of Motorola's relevant patents, including the German ones. Thus MS would no longer be committing patent infringement in Germany, and the German injunction would be wrongly granted.
The US CoA's options were: allow Motorola to enforce the German injunction, and if the injunction were overturned (due to US rulings on the contract), Motorola would have to pay MS to compensate for any losses, *or* block Motorola from enforcing the German injunction and, if the injunction was not overturned (due to the US ruling), MS would have to pay Motorola to compensate for the losses.
The CoA seems to have sided with MS rather than Motorola, possibly because they felt Motorola had been a bit vexatious by suing in Germany while the US case was happening (it comes across as them trying to "forum shop" for the most friendly jurisdiction). So the CoA upheld the District Court's decision that, as the German injunction is sort of dependent on the US breach of contract case, Motorola shouldn't be allowed to enforce it until that case is over (some time in early 2013, possibly).
But IANAL, nor an expert in US or German patent
By this court's reasoning, if a family went on vacation in Germany for Octoberfest and dad gave his 14 yo son a beer to drink, then it's a Washington State parent giving alcohol to an underage Washington State child, and he would be subject to fines and jail under the drinking laws of Washington State.
No. It's more like father and mother get divorced in Washington state. As part of the custody agreement, the father agrees not to provide beer to their son. The father and son go to Germany and the father buys the son a beer. The Washington state divorce court declares him in violation of the Washington state custody agreement. It's not illegal; it's just a contract violation.
If Google and Microsoft have a contract in Washington state, then US courts will have jurisdiction over that contract. This isn't overturning the German decision. The German decision presumably says that Motorola Mobility has a patent and that Microsoft must license the patent from them. The US court decision apparently says that Google (which owns Motorola Mobility) has a licensing agreement with Microsoft. As a result of that licensing agreement, Microsoft has licensed this patent from Google. This is in fact a US contract dispute and should be decided under US law.
The confusing part here seems to be that there are two separate issues. One should be decided under German law. That's whether the patent applies and requires licensing. The other should be decided under US law. That's the question of whether the licensing agreement applies. Germany decided that the patent does apply and the US decided that the licensing agreement applies. This is confusing, but there's nothing wrong with it. Absent an international patent system, this is the way that these things will work.