Saturday, August 01, 2015

Microsoft wins in licensing case against Motorola (Google)

In the 9th Circuit case Microsoft v. Motorola (appellant; Google with interest), 2015 U.S. App. LEXIS 13275 , the legal issue, in a case ultimately about patents, was an allegation by Microsoft that Motorola breached FRAND agreements; from the decision:

The panel affirmed the district court's judgment in favor of Microsoft Corporation in an action brought by Microsoft, a third-party beneficiary to Motorola, Inc.'s reasonable and non-discriminatory ("RAND") commitments, alleging Motorola breached its obligation to offer RAND licenses to certain of its patents in good faith.

At issue in the appeal were two patent portfolios, formerly owned by Motorola, both of which were subject to RAND agreements. The court previously upheld, in an interlocutory appeal, an anti-suit injunction preventing Motorola from enforcing in a German action any injunction it might obtain against Microsoft's use of certain contested patents. Microsoft Corp. v. Motorola, Inc., 696 F.3d 872 (9th Cir. 2012). Following that prior decision, a jury determined that Motorola had breached its RAND good faith and fair dealing obligations in its dealings with Microsoft.


The panel held that this court had jurisdiction. The panel held that this court's exercise of jurisdiction over the case in the prior interlocutory appeal, and the Federal Circuit's decision to transfer the instant appeal to this court because this court had jurisdiction, were both law of the case. The panel further held that the earlier jurisdictional determinations were not clearly erroneous.

The panel rejected Motorola's two merits challenges to the RAND bench trial, specifically, that the district court lacked the legal authority to decide the RAND rate issue in a bench trial, and that the RAND rate analysis was contrary to Federal Circuit precedent. First, the panel did not consider whether, absent consent, a jury should have made the RAND determination, because Motorola was aware that the RAND determination was being made to set the stage for the breach of contract jury trial, nor did Motorola ever withdraw its affirmative stipulation to a bench trial for that purpose. Second, the panel held that the district court's RAND analysis did not violate Federal Circuit patent damages law because this was not a patent law action. The panel held, however, that the district court's analysis properly adapted the Federal Circuit's patent law methodology as guidance in this contract case concerning the questions of patent valuation. The panel concluded that the district court's RAND determination was not based on a legal error or on a clearly erroneous view of the facts in light of the evidence.

The bottom line: Motorola (Google) lost:

With the parties' consent, the district court conducted a lengthy, thorough bench trial on the RAND rate and range. The court analyzed that evidence in its exhaustive findings of fact and conclusions of law, in a manner consistent with the Federal Circuit's recent approach to establishing damages in the RAND context. The court's factual findings were properly admitted at the jury trial. The jury's verdict [*83] was supported by substantial evidence, and its damages award was proper.

The judgment of the district court is AFFIRMED.


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