After the dismissal of two of its cases against Motorola - one in Wisconsin, one in Illinois - Apple hasn't exactly been on a roll when it comes to Google's newly-purchased hardware arm. Motorola, too, hasn't done very well, with its own counterclaims in the same Illinois case also being dismissed, and by making an unexplained last-minute withdrawal of a major ITC case it was filing against Cupertino.
At the time, my first instinct when Motorola withdrew its software patent case against Apple was "settlement talks are on the table." While today's news still doesn't shed too much light on that particular event, it comes with its own bright spots of hope. According to filings that happened during the lead up to the now-dismissed Wisconsin case, Apple and Google's legal counsels were hammering out an arbitration agreement. So, what in the heck is arbitration?
Arbitration is one part court case, one part private settlement negotiation, and has become rather popular in the US in recent decades. The massive civil case load affecting most federal courts has made arbitration an extremely appealing option for judges looking to send parties away from the courtroom, and toward reconciliation. Arbitration is faster, the result usually more mutually agreeable, and the cost generally lower to the parties involved.
While I won't get into the niceties of American arbitration, suffice to say, it has all of its own intricacies, complexities, and rules that make judgments (known as "awards") issued in arbitration hearings binding in most courts. Much like a settlement, an arbitration award can be legally enforced (if the arbitration is "binding arbitration") should one party break their end of the deal down the line. The difference between arbitration and a lawsuit, however, is that both parties must agree to arbitrate the dispute - whether as a contractual obligation, or through mutual consent.
So, why would Google (Motorola) and Apple want to arbitrate their dispute over patents? That's actually a pretty good question, one to which the answer isn't clear. Typically, when two parties seriously consider the possibility of engaging in binding arbitration, they're at a point in their disagreement where it's not so much a matter of the merit of the claims, but how much one party or another should be paying at the end of the day.
Motorola's standards-essential patents are undoubtedly strong legal tools. Apple has yet to convincingly discredit Motorola's assertion that it infringes those patents, and while it has offered up tiny amounts of royalties for them, Apple was continuing to pursue a finding of non-infringement in its now-dismissed Wisconsin case. So, what exactly have the parties said? First, in a filing earlier this week, Google's General Counsel Kent Walker said:
“We have long sought a path to resolving patent issues and we welcome the chance to build on the constructive dialogue between our companies ... While we prefer to seek a framework for a global (rather than piecemeal) resolution that addresses all of our patent disputes, we are committed to reaching agreement on a license for our respective standard-essential patents."
Apple's counsel then said this in a filing just yesterday:
“Apple is also interested in resolving its dispute with Motorola completely and agrees that arbitration may be the best vehicle to resolve the parties’ dispute."
Holy cow - did you just read what I did? Apple is also interested in resolving its dispute with Google completely. This is good news. And let's not forget, Apple just settled with HTC on Saturday, so they're in the settling mood, if you will.
A broad licensing agreement with Googlerola (MotoGoog?) would have significantly wider implications than a settlement with HTC, and that's entirely because Google's name is now in the mix. By settling with Apple through Motorola, Google would signal to the last major holdout - Samsung - that settlement is indeed an option.
While Google has made a few amicus (supporting) filings as a part of the upcoming Samsung v. Apple case in California, scheduled for trial in 2014, it rather carefully avoided commenting on or getting involved in the first spat between the two that ended in a billion-dollar verdict. That lawsuit was far more about Samsung's aesthetic choices in regard to its software and hardware than it was about features or functionality. The next lawsuit is focused squarely on software, with patents on universal search, "data tapping," and others coming into play.
Were Moto-Google to settle disagreements over similar patents (possibly some of the same exact ones) with Apple, sympathy for Samsung would almost certainly wane. As something of a dark horse when Apple filed its original lawsuit back in 2010, many people were willing to cheer for Samsung as "standing up" to Cupertino's bullying. But if HTC and Motorola both end up settling out with Apple, Samsung's position as a "defender of innovation" will become increasingly difficult to defend as anything but obstinance in the face of a bitter rival. And let's not forget, smaller manufacturers like LG, Sony, and ZTE have managed to avoid such entanglements entirely.
I, for one, look forward to the day we can put these patent wars firmly behind us.