Patent wars: New ammunition

During the last months we have seen several movements that suggest several companies are very active obtaining new ammunition.

As we have previously reported (here), at the end of June Nortel announced that the wining bidder of its patent portfolio was a consortium consisting in Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony. That Consortium bided US$4.5 billion, while Google bided US$ 900 million.

Google didn’t wait much to react and on July 28 Bill Slawsky informed that “on July 11th and 12th, Google recorded the assignment of 1,030 granted patents from IBM covering a range of topics, from the fabrication and architecture of memory and microprocessing chips, to other areas of computer architecture including servers and routers as well” (here). Only one day latter, Bill Slawsky published the list of 1,029 patents involved (here).

A couple weeks latter, on August 15, Google announced the acquisition of Motorola Mobility for $40.00 per share in cash, or total of about $12.5 billion (here). This was announced a few weeks after the largest individual Shareholder of Motorola Mobility, Billionair Carl C. Icahn (11%) suggested Motorola to monetize its patent portfolio (here). As Spencer Ante (WSJ) explained, Mr Icahn considered that the value of Motorola’s patents would be around US$ 4.5 billion (video here). Casually or not, the same figure that the mentioned Consortium paid for Notel’s patents.

What was Google buying in August? Of course Google was obtaining ammunition to attack (Motorola's patents), but not only. We should also bear in mind that on October 6, 2010 Motorola Inc. “announced that its subsidiary, Motorola Mobility, Inc., has filed a complaint with the U.S. International Trade Commission (ITC) alleging that Apple’s iPhone, iPad, iTouch and certain Mac computers infringe Motorola patents. Motorola Mobility also filed patent infringement complaints against Apple (NASDAQ: AAPL) in the Northern District of Illinois and the Southern District of Florida” (here).

With this ammunition gathering, we could expect Google to sue Apple. Before jumping to the battle field, it has helped one of its close friends, providing HTC with new ammunition to use in the battle it is facing with Apple (here).


Should Apple fear? Maybe not much, since yesterday it obtained a nuclear weapon: The USPTO granted patent no. 8,046,721 for “a method of unlocking a hand-held electronic device”. As James Kendrick reports, "every Android device now infringes Apple patent".

When will they face the final battle in this war? (if ever)

By the way, I first posted in PatLit on October 25, 2010 (one year already!). I want to celebrate with all of you. Feel free to take a slice from this pie and drink some Cava with me. Cheers!

Nortel: And the winner is…

Last Thursday Nortel announced the Winning Bidder of its Patent Portfolio for a Purchase Price of US$4.5 Billion (here)


As Nortel informs, “After a multi-day auction, a consortium emerged as the winning bidder with a cash purchase price of US$4.5 billion. The consortium consists of Apple, EMC, Ericsson, Microsoft, Research In Motion and Sony”.

George Riedel, Nortel’s Chief Strategy Officer and President of Business Units, claims that "the size and dollar value for this transaction is unprecedented, as was the significant interest in the portfolio among major companies around the world."

Living the figures aside (even if hard), I’m surprised to see Microsoft among the winners. Two weeks ago, we read (here):

“Microsoft didn’t bid on the patents. It didn’t have to, company officials said, as Microsoft had “worldwide, perpetual, royalty-free license to all of Nortel’s patents that covers all Microsoft products and services, resulting from the patent cross-license signed with Nortel in 2006.”

If that information was correct, when and why has Microsoft joined the bid?

Apart from that, I wonder how bad is for Google the result of the bid.

On April 4, 2011, Kent Walker, Google’s Senior Vice President & General Counsel referred to Google’s US$ 900 million bid in the following terms:

“one of a company’s best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio, as this helps maintain your freedom to develop new products and services. Google is a relatively young company, and although we have a growing number of patents, many of our competitors have larger portfolios given their longer histories.” (here)

This means that Gogle has failed in obtaining a “formidable patent portfolio” to use against patent infringement claims. As we have seen, among those that will acquire Nortel’s Patent portfolio we find Microsoft who may then have more arguments in its “battle” against Google. Bear in mind that Microsoft filed action against Motorola for the use of Android (here).

More than ever, this Mobile wars seem like a chess game.

Oracle v Google (2)

Here's some interesting fresh news in this case. I read Wednesday in Groklaw:

“In the reexamination of U.S. Patent 6192476 the USPTO has issued an office action in which it rejects 17 of the patent's 21 claims. The specifics of the office action are set forth below in text form along with an updated reexamination history. While Oracle has asserted seven different patents in its claims against Google, if this reexamination is exemplary of what Oracle can expect in each of the other reexaminations, Oracle will have a hard time finding claims that it can successfully assert against Google, and there lies Oracles conundrum. Oracle either has to agree with the court's directive to limit the number of claims it will assert at trial, or it is likely the court will simply stay the trial until the reexaminations are complete.”

Early this month I made reference to the amount of damages that Oracle would be claiming in the action against Google (here). It seems to me that this reexamintaion could have an impact in the amount the Court will consider to grant (if any). What should Oracle do now?. Should Oracle modify their damages claim in order to show the impact and provide new figures?

Other questions may arise. 17 from 21 means 80% of the registered claims!. How many “void patent claims” are registered at the USPTO? How many court claims are in course based in “void patent claims”? How many injunctions have been granted based in “void patent claims”? How much money have plaintiffs obtained from “void patent claims” infringement? How much are defendants spending in “void court actions”?


I don’t know why but Nortel’s 6,000 patent portfolio immediately came to my mind. Google bided $ 900 million for that Portfolio. What if 80% of claims in these patents are also void?

Other questions regarding that bid may arise, reading:
Comments fro the AmeriKat on Google’s bid (here)
Reference in Reuters to Microsoft objection to Google’s bid
Yesterday's news regarding the US antitrust regulators giving Apple the green light to make a bid on Nortel’s portfolio (cnet)

Oracle v. Google: 50% royalty rate?

In Oracle America, Inc. v. Google Inc. (C 10-3561 WHA), the defendant has recently filed a writ requesting leave to file a Daubert or other motion directed at the damages report of Oracle’s expert Iain Cockburn.

Apparently, Oracle’s expert is not only fixing an unprecedented royalty rate, but also (i) fails to tie his royalty rate to the value of the patented technology actually at issue in the case (ii) argues that royalties would be owed even after expiration of Oracle’s patents and, believe it or not, (iii) would be including a portion of Google’s advertisement pie!

May Google be facing a sort of punitive damages in this case?

Arguments used by Google:

"First, Cockburn has no basis for including all of Google’s revenue from Android phones into the base of his royalty calculation. The accused product here is the Android software platform, which Google does not sell (and Google does not receive any payment, fee, royalty, or other remuneration for its contributions to Android). Cockburn seems to be arguing that Google’s advertising revenue from, e.g., mobile searches on Android devices should be included in the royalty base as a convoyed sale, though he never articulates or supports this justification and ignores the applicable principles under Uniloc and other cases. In fact, the value of the Android software and of Google’s ads are entirely separate: the software allows for phones to function, whether or not the user is viewing ads; and Google’s ads are viewable on any software and are not uniquely enabled by Android. Cockburn’s analysis effectively seeks disgorgement of Google’s profits even though “[t]he determination of a reasonable royalty . . . is based not on the infringer’s profit, but on the royalty to which a willing licensor and a willing licensee would have agreed at the time the infringement began.” ...

Second, Cockburn includes Oracle’s “lost profits and opportunities” in his purported royalty base. This is an obvious ploy to avoid the more demanding test for recovery of lost profits that Oracle cannot meet… Most audaciously, Cockburn tries to import into his royalty base the alleged harm Sun and Oracle would have suffered from so-called “fragmentation” of Java into myriad competing standards, opining that Oracle’s damages from the Android software includes theoretical downstream harm to a wholly different Oracle product. This is not a cognizable patent damages theory, and is unsupported by any precedent or analytical reasoning.

Third, after improperly inflating the base of his royalty calculation, Cockburn proceeds to apply an unprecedented fifty percent royalty rate to that base through use of improper short-cuts. In contravention of long-settled precedent, he fails to tie his royalty rate to the value of the patented technology actually at issue in this case. ... He treats the patents and copyrights at issue as a single, indivisible unit, casually dismissing critical differences in the patents (such as the technologies they embody and expiration dates over a decade apart) by deeming them all “essential” to Java, without pointing to any facts that could justify that conclusion. Instead of satisfying the Lucent standard, he adopts a presumption that is contrary to Lucent, stating that there is “no clear economic basis” for apportioning the total value of Android into value attributable to the patents and copyrights in suit and any additional value added by Google. Under the case law, however, damages must be tied to “the claimed invention’s footprint in the market place.” …

Cockburn similarly inflates his royalty rate by calculating Oracle’s loss based on the alleged value of Java as a whole, even though the patented features are only a small part of Java….

Fourth, Cockburn cavalierly asserts that infringement of a Single claim of a single patent would result in the same … award as infringement of all of the asserted claims. The ‘720 patent, for example, it expires nearly eight years after every other patent-in-suit. But according to Cockburn, even if Google does not infringe the ‘720 patent, the damages should still run throughout its life, which extends to 2025…”