A Frustrated Posner Has Spoken: Apple v. Motorola Dismissed With Prejudice
When I walked past legendary Judge Richard Posner’s courtroom in the Dirksen Federal Building as an intern last summer, I was caught by confused security personnel as I was respectfully peeping through the crack in his courtroom door and, then, reverently and repeatedly rattling the (locked) doors. When approached, I weighed my options: 1) explain to real people why it would have made my summer just to sun myself in the blessed glow I was sure would be emanating from his bench, or; 2) remember myself, avoid detainment, and walk away. I chose the latter, perhaps to attempt entrance another day. Apple will have no such opportunity after the federal judge dismissed its patent infringement case against Motorola with prejudice Friday afternoon.
The case, initially brought by Apple (with founder Steve Job’s enthusiastic blessing), challenged Google-owned Motorola’s use of four Apple patents within the Android cellphone. Motorola responded with a counterclaim that Apple was inappropriately using another standards-based Motorola patent subject to FRAND licensing. After tentatively dismissing the case on June 7, holding that neither party had established a right to relief or to the monetary sum that both parties had admitted would resolve the problem, the federal judge deigned to grant Apple another opportunity to argue its motion for injunctive relief on June 14.
During the hearing for an injunction, Posner pushed both parties on why this equitable remedy, within his judicial discretion, would be reasonable after the parties failed to establish actual harm. In an excerpt from this trial transcript, Apple’s counsel responded to the judge’s pressure to enumerate the harm it suffered from Motorola’s infringement with the hard-line argument that a patent holder maintains the right to exclude others from the use of its innovation absolutely, providing no number or alternative licensing structure to resolve the infringement. The judge was also unreceptive to Motorola’s attempt to enjoin Apple from using its patent, which derives its value from the fact that it is now an industry standard subject to licensing.
While Apple was correct in claiming that it has a property right in its patent, and is not required to know how to fix its opponent’s infringement in court to prove infringement, an annoyed Posner cited the fact that both parties are leaders in the mobile phone industry with the same access to alternative software technologies and the same ability to establish harms and costs for resolution. Posner himself proposed options for “inventing around” the patents in his June 22 decision. The violation of the patent property right, as the judge put it, was a trespass without established harm, thus only leading to nominal damages. Judge Posner’s decision after this hearing analogized the situation to explain his frustration with Apple’s litigation strategy: “You can’t go into federal court and say you had a contract with X and X broke it and you’re really annoyed even though you sustained no injury of any sort (in fact you made money because you’re contracted at a higher price) so please give me a judgment for $1 that I can pin on my wall. No more can Apple be permitted to force a trial in federal court the sole outcome of which would be an award of $1.”
This judgment is a formidable step toward separating the entitlement of patents owners’ to exclude others from their innovations absolutely and the limitations of the patent protection system. While this case may illustrate an instance of actual “ripping off” of patents, this decision encourages plaintiffs to do the economic homework necessary to show an actual harm if the party is seeking to enjoin sales of a product. It’s possible that Posner, famous for relying on economic incentive, wished to encourage the price of infringement to be established through good-faith negotiation instead of litigation not supported by sufficient evidence. Perhaps the judge, expressing his disdain for the volume of Apple litigation during the hearing (“That’s all we need, new suits. There aren’t enough lawsuits worldwide between Apple and all the Android manufacturers.”), hoped to send a message that an injunction based on abstract property rights and unsupported by evidence of actual harm cannot be reasonable when it would cause “catastrophic” damage to a competitor. Although Posner seemingly attempted to rid the courts of this behavior by barring future actions, a “thermonuclear war” against Android means that the possibility of appeal looms large.