The parties and amicus have now finished briefing in the appeal from Judge Crabb’s ruling that dismissed Apple’s action seeking a declaration of a FRAND royalty because Apple would not agree to be bound by that ruling. This post summarizes the parties most recent filings.
First, recall that last summer we posted about Apple’s opening brief in the Apple v. Motorola appeal of Judge Crabb’s dismissal of Apple’s declaratory judgment action. Motorola filed a cross-appeal arguing that the court should have dismissed Apple’s claims with prejudice to have more of a res judicata affect, rather than simply dismissing Apple’s action without prejudice.
Also, a few weeks ago, we summarized the amicus curaie briefs filed by Ericsson and Qualcomm. The remainder of the appellate briefing by the parties is now complete and summarized below.
Motorola’s Opening Brief
Background. In its response and cross-appeal opening brief, Motorola argues that “Apple fails to acknowledge the key fact at the core of [the] case—that Apple has long infringed Motorola’s standard-essential patents while refusing to take a license to those patents or even to engage in good faith negotiations toward such a license.” Apple’s antitrust and contract claims were filed before Judge Crabb in response to Motorola’s patent infringement actions against Apple in the International Trade Commission Trade Commission and the district courts. Motorola contends that it “was forced to file those actions by Apple’s incorrigible infringement and unwillingness to license.”
Apple’s Antitrust Claims. Motorola argues that Apple’s antitrust claims against Motorola were correctly dismissed as “barred by the Noerr-Pennington doctrine.” “While Apple attempts on appeal to reframe those claims as directed at Motorola’s actions before the standard-setting organizations (‘SSOs’) in 1999-2000, that effort is unavailing, for Apple’s sole theory of damages was that it incurred attorneys’ fees and costs in defending against Motorola’s patent actions, and any action against Motorola’s pre-litigation conduct would have been time-barred.”
Apple’s Contract Claims. Motorola also argues that the district court “properly dismissed Apple’s contract claims, finding them nonjusticiable because they requested an advisory opinion.” “Just as it was a persistent unwilling licensee before trial, Apple at trial sought specific performance as a remedy for Motorola’s supposed breach of its commitments to ETSI and IEEE and then refused to be bound by any adjudicated FRAND rate the court might set.” “The district court likewise properly dismissed Apple’s declaratory judgment claims for similar reasons.” The dismissal also should be affirmed “because Apple failed to show on the record here that it was entitled as a third-party beneficiary to enforce Motorola’s FRAND commitments to ETSI and IEEE.”
Cross-Appeal. In its cross-appeal, Motorola argues that the district court should have dismissed Apple’s claims with prejudice. “Apple had every opportunity to litigate these claims and they should have been resolved with finality.”
Apple’s Reply and Opposition Brief
FRAND. In its reply and opposition brief, Apple argues that it seeks “only what Motorola promised: an offer to license its patents on fair and nondiscriminatory terms” which Apple will then “assess . . . against the options.” “One option is to continue to fend off Motorola’s infringement allegations (which thus far have failed dismally)” while another “option is to accept the offer if it makes economic sense.” “In either case, Apple was entitled to a trial to prove that Motorola’s deceptive conduct violated antitrust laws and its contractual obligations, and to secure the offer that Motorola had promised.”
Antitrust Claims. On the dismissal of its antitrust claims, Apple argues “it has demonstrated that Motorola violated the Sherman Act by deceiving the SSOs—not by bringing infringement suits years later.” The Noerr-Penington doctrine and the “First Amendment do not protect conduct that attains, and then exploits, monopoly power through deceit.”
Contract Claims. On the dismissal of its breach of contract claims, “Motorola concedes that ‘the FRAND commitments made by Motorola are enforceable.’” Motorola also “does not contest that Apple presented ample evidence of the unreasonableness of Motorola’s royalty demands.” “Instead, Motorola’s primary defense of the district court’s last-minute decision to scuttle the trial substitutes ad hominem for analysis.” “Motorola repeatedly calls Apple an “unwilling licensee” but, this “moniker is both false and incoherent” because “Apple has been requesting a license for six years” and was forced to file this lawsuit “because Motorola is an unwilling licensor—or, at least, unwilling to license at a rate that is fair and nondiscriminatory.” Apple argues that the dismissal of its contract claims should be reversed because it is the fact finder’s job to determine which party “is the unreasonable one.”
Apple also argues that “neither law, contract, nor common sense required Apple to issue a blank check as a condition of forcing Motorola to do what it contractually committed to do: make a fair offer.”
Infringement Not In Issue. With respect to Motorola’s accusing Apple of infringing its SEPs, Apple argues that “[i]n fact, in the course of years of litigation asserting eight declared-essential patents in multiple U.S. jurisdictions, Motorola has never—not once—succeeded in proving that Apple has infringed a valid patent.” In any event, Apple argues that “[t]his is an appeal from the district court’s decision to dismiss, pretrial, Apple’s claims that Motorola’s actions violated the antitrust laws and contractual commitments that an entire industry relies upon.” “For purposes of this appeal, Apple is entitled to all factual inferences in its favor.” “The ‘key facts’ for purposes of this appeal are that Motorola deceived the SSOs and refused to offer Apple a FRAND rate.”
Motorola’s Reply Brief
Dismissal Should Have Been With Prejudice. Motorola contends in its reply brief that Apple incorrectly argues that dismissal without prejudice was proper “because the dismissals were not on the merits.” Rather, “Apple’s claims were dismissed after full discovery and after Apple had every chance to present claims to the district court that would justify a trial—and lost.” Motorola argues further that “[h]aving chosen to litigate its claims in a way that made them a nonjusticiable effort to obtain an advisory opinion on a FRAND royalty rate, Apple should be held to the consequences of that choice and its claims dismissed with prejudice.” “Allowing Apple to replead here would invite litigants in patent cases more generally to take strategic positions that lead to adverse results and then avoid the consequences—for example by advancing overbroad claim constructions.”
“At a minimum, Apple’s claims for injunctive relief to bar Motorola from asserting its standard-essential patents should be dismissed with prejudice because the merits of these claims were indisputably reached: the district court applied the eBay factors to the claims and found that Apple could not meet them.”