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US Court Says Motorola Can't Enforce Microsoft Injunction In Germany 175

Posted by timothy
from the was-meinst-du? dept.
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..."
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US Court Says Motorola Can't Enforce Microsoft Injunction In Germany

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  • by sg_oneill (159032) on Saturday September 29, 2012 @06:49AM (#41497813)

    It really doesnt matter if its a US corporation. If its operating in Germany, then its operations in germany are under German juristiction no ifs no buts.

    We've had a few instances here in australia where a US court "overrules" an australian one from having juristiction. The australian court, naturally, systematically ignores it. Those clauses of "All disagreements must be heard in x state" you see in american contracts have no validity here. To quote a lawyer friend, "Us lawyers dont actually get to invent laws or nullify them with our contracts, no matter how clever we think we are".

  • by Grumbleduke (789126) on Saturday September 29, 2012 @07:25AM (#41497889) Journal

    How can a court in one country overturn a ruling from another sovereign nation's court?

    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 [uscourts.gov]:

    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:

    [t]he German injunction is not self-enforcing. ... to enforce the German patent injunction, Motorola would have to post a security bond covering potential damages to Microsoft should the infringement ruling be reversed on appeal.

    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 Sique (173459) on Saturday September 29, 2012 @09:56AM (#41498457) Homepage

    So Motorola should go to the Mannheim court where it got the injunction and file a "contempt of court" motion against Microsoft for trying to circumvent the injunction without following proper procedure (filing a motion to lift the injunction in the proper courts in Germany). It won't help Motorola directly, but Microsoft might get some hefty fine for it.

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