The presiding judge in the Motorola v. Apple case in Illionois, Richard Posner, has just handed down an order dismissing all claims of both parties in the case, just as it was set to go to trial on Monday. Posner's preliminary order (he'll be writing a full decision soon, which I can't wait to read) basically says neither party was able to show that the infringement of patents by the other resulted in the production of evidence that said infringement actually caused them any harm.
Posner goes even further, in fact, and declares that Apple (and Motorola's) requests for injunctive relief are simply not tenable in a case where the patents in question are such small parts of much larger products:
Because the parties believe that damages are an adequate remedy for the alleged infringements (though they failed to present evidence on damages strong enough to withstand summary judgment), and because injunctive relief would impose costs disproportionate to the harm to the patentee and the benefit of the alleged infringement to the alleged infringer and would be contrary to the public interest, I cannot find a basis for an award of injunctive relief.
It sounds like Posner is thinking what, frankly, a lot of us have: patents on small software elements and standards-essential technology should not be used as tools of convenience to get a competitor's product taken off the market. It's harmful to the companies, consumers, and to fair competition. Take this, a snippet from Posner's opinion on an expert testimony admissibility (Daubert) hearing last month:
Wagner [Apple's damages expert] interviewed Dr. Richard Cooper, one of Motorola’s technical experts in this litigation, who wrote a bit of code into the application window program [the persistent notification bar] that allowed it to be partially obstructed by other application windows. Apparently he was able to do this in a single afternoon. Wagner further asserts that consumers wouldn’t be put off by an occasional partial obstruction, which if true means that Motorola has obtained no revenue from its infringement and so owes Apple no royalty beyond the meager cost savings that it derived from not inventing around. Wagner rounded up to $100,000 out of an excess of generosity. (emphasis ours)
In fact, I suggest anyone interested in the case read the entire Daubert hearing opinion, because it is hilarious at times:
Now imagine how Mr. Napper [another Apple damage expert on the same patent] would have proceeded had he been hired by Motorola to determine the value to consumers of an unobstructed notification window. Suppose there were no question of infringement; Motorola just didn’t know whether it should bother with providing an unobstructed notification window rather than a window that provides notifications but sometimes is obstructed by other applications. It needed to get a sense of the value of such a window to consumers. Suppose Napper conducted the identical survey that he used in this litigation (that is, a Motorola survey) and reported back to Motorola that the average value to the consumer was $0.80. Motorola would say to him: “Dummy! You haven’t estimated the value of the non‐obstruction feature. You’ve just estimated the value of the notification window. What you need to do is find out how many consumers think it worthwhile to pay a higher price for a Motorola phone to avoid occasional partial obstruction of that window."
The result of the Daubert hearing was, in essence, the order we're seeing today. Posner found Apple's damages experts to have used utterly ridiculous, illogical methods and formulas in calculating the valuation of software features based on things like prices for apps with equivalent functionality or surveys that asked consumers how often they used their notification bar (as opposed to the value of a persistent one).
The real loser here is undoubtedly Apple. Richard Posner is one of the foremost legal scholars in the United States, and has written some truly excellent opinions, books, and articles. He is widely respected in the legal community. He's also just a really, really smart guy. And if the damages report makes it sound like he's being hard on the parties to prove exactly how the infringement of their patents have hurt them, it's because he is.
It's because Posner recognizes that just because you have a patent on something, it doesn't automatically mean it's worth millions of dollars in royalties. Or that it's even worth licensing at all. Too often, patents are treated as objects of intrinsic value. The reality? You can patent a relatively worthless software invention somebody came up with in a couple of hours so long as you've got a good patent prosecutor to take the time to write it up and make it sound important. That doesn't suddenly make a 0.5% reasonable royalty pop out of reasonably-thin air - you have to show your invention is actually worth something in the minds of consumers. So far, it seems Apple has failed to do that.
This case will, of course, be headed to appeal at the circuit court level.