It’s July (and brutally hot on the East Coast), so you’ll have to excuse us if we’re moving a little slower than normal catching up on all the SEP litigation going around. Earlier this month we posted about submissions by Microsoft and Motorola concerning the meaning of the “duty of good faith and fair dealing,” specifically as it applies in RAND-encumbered standard-essential patent licensing. Not surprisingly, the parties followed up these briefs with dueling summary judgment motions, seeking to narrow issues or even potentially completely eliminate the need for the breach of contract jury trial set to take place next month in Seattle. Last week, the parties also filed their respective oppositions to these motions. You can take a look at the parties’ motions and oppositions below — and after the jump, we’ll give a brief synopsis of the arguments that each is making.
Microsoft is not asking for Judge Robart to decide every issue in the case, instead moving for partial summary judgment — it wants a ruling that Motorola has breached its RAND commitments by demanding exorbitant royalties and seeking injunctive relief as a remedy for infringement of RAND-encumbered SEPs. (This would leave any damages assessment for the jury to decide.) Microsoft relies heavily on the total amount of royalties that it claims Motorola demanded in its initial license offers — over $4 billion — and argues that no reasonable juror could ever find that this demand complied with RAND licensing obligations. Microsoft argues that Motorola’s actions clearly violate the purposes beyond the RAND commitment, such as preventing hold-up and mitigating royalty stacking.
Microsoft also asks Judge Robart to rule on summary judgment that certain Motorola affirmative defenses (ripeness, repudiation, waiver, unclean hands, failure to mitigate damages, failure to satisfy a condition precedent) should fail, arguing that the bases for these defenses have already been rejected by the court.
Motorola actually agrees with Microsoft on some defenses (repudiation, waiver, condition precedent), indicating that it is not pursuing these defenses. But as to the others, Motorola contends that there is ample evidence to support them. For example, to support its unclean hands claim, Motorola argues that Microsoft was engaged in “reverse hold up” and was trying to play litigation tricks when it filed its declaratory judgment complaint (rather than negotiating) so soon after receiving Motorola’s offer.
But Motorola vigorously disagrees with Microsoft’s contention that there are no material facts in dispute about Motorola’s alleged breach of contract. Motorola argues that Microsoft is taking too narrow a view of the relevant evidence, noting that both objective AND subjective factors should be considered. For example, while Microsoft relies on the discrepancy between the court-determined RAND rate and Motorola’s offered rate, Motorola argues that it was not and could not be aware of this judicially-determined rate back in October 2010, when it made the original offers to Microsoft. Motorola wants the jury to be able to consider the totality of the circumstances (including the parties’ subsequent behavior), without an undue focus on the “2.25% of end product price” rate.
In its summary judgment motion, Motorola (again) seeks to obviate nearly the entire need for a trial, asking the court to grant summary judgment both on issues relating to liability and damages. Motorola argues that Microsoft has not proven viable theories of breach of contract relating to (1) Motorola seeking injunctive relief on SEPs; (2) Motorola failing to provide Marvell, Microsoft’s chip supplier, with a RAND license; and (3) Motorola failing to provide a “grant-back license” under Google’s MPEG LA AVC/H.264 patent pool agreement. Motorola also argues that Microsoft has failed to articulate a case for any damages flowing from any alleged breach of contract, because (1) Motorola was merely asserting its federal patent rights, which is protected by the Noerr-Pennington doctrine; and (2) under the relevant law, attorneys’ fees and litigation costs are not recoverable as damages for breach of contract.
Microsoft opposes Motorola’s motion in all facets, arguing that the court has already decided that the jury should hear issues relating to MPEG LA and Marvell, and that fact issues remain as to whether seeking injunctive relief can be a breach of RAND obligations. Microsoft also vehemently disagrees with Motorola’s claim that Noerr-Pennington insulates Motorola’s conduct, arguing that prior cases show that the doctrine has no applicability to contractual disputes. Finally, Microsoft argues that attorneys’ fees and litigation costs are in fact recoverable as damages here, because certain equitable exceptions apply.
The motions are noted for late July, and Judge Robart will certainly have his hands full with these and other motions (motions in limine, Daubert motions, etc.). Given the complicated issues in this cases, it wouldn’t be shocking to see the court ask the parties to narrow the issues (or do the narrowing itself) in advance of next month’s jury trial.