Apr 162012

American University Washington College of Law professor Jorge Contreras was cited as “the leading authority on standard-setting patents” in a recent New York Times article on Microsoft’s lawsuit against Motorola mobility, “which accuses Motorola of breaching its obligation to offer standard-essential patents on fair and resonable licensing terms.” A recent bench ruling by Judge James Robart in the U.S. District Court for the Western District of Washington, which granted Microsoft a temporary restrianing order and preliminary injuction, in turn preventing Motorola Mobility from enforcing the pending German injuction that would bar Microsoft from Selling Windows and Xbox in Germany. Author Alison Frankel, a writer for Thomson Reuters News and Insight writes:

“…Robart granted the temporary restraining order under the Anti-Suit Act, which is intended to restrict forum-shopping and harassing litigation. That is how Microsoft and its counsel at Sidley Austin described Motorola’s German suit. According to Microsoft, Motorola first tried to extract exorbitant licensing fees for a portfolio of about 100 worldwide standard-essential patents. Then, after Microsoft filed a Seattle federal-court suit asserting that Motorola’s licensing demand was a breach of its contract with a European standard-setting body, Motorola sued Microsoft in Germany for infringing German patents that were part of the portfolio at issue in Seattle.

The judge agreed that Motorola appeared to have run to Germany to obtain an injunction there before he could decide the merits of Microsoft’s contract case. Microsoft’s U.S. suit, he said, included the same patents Motorola was asserting in Germany, because those German patents were part of the portfolio for which Motorola demanded allegedly improper licensing fees. Robart concluded that under the Anti-Suit Act, he has the power to block Motorola from enforcing whatever relief it wins in Germany until he rules on the larger question of reasonable licensing fees for standard-essential patents.

“The battleground in this … is whether the United States action, or resolution of it, would be dispositive of the foreign action to be enjoined,” the judge said at Wednesday’s hearing. “And I will add, for the edification of the Court of Appeals, so it knows where I’m coming from, that I consider the preservation of my ability to resolve this dispute to be something that needs to be carefully guarded, otherwise we run into the possibilities of conflicting resolutions, duplicative litigation, and unfortunate results that don’t follow appropriate law.”

Why is the ruling so significant? Injunctions are hard to obtain in U.S. patent litigation, so patent holders in the last five or so years have taken advantage of easier injunction standards in Germany and elsewhere to gain leverage in global patent disputes. The Robart ruling holds that, at least in cases involving worldwide standard-setting portfolios, U.S. litigation trumps cases elsewhere. That’s a potentially significant shift in the balance of power between patent holders and licensees.

Expect to see Apple, for instance, point to the ruling in its own standard-essential litigation with Motorola. Apple sued Motorola in San Diego federal court in February, making essentially the same argument as Microsoft. It claimed Motorola’s German assertion of standard-setting patents against Apple violates Motorola’s contract with the standard-setting body. The parallels with Microsoft’s case suggest that Apple will also be able to use the Robart ruling to block Motorola from enforcing any German injunction it obtains.

The leading authority on standard-setting patents, Jorge Contreras of American University’s Washington College of Law, told Reuters Robart’s ruling is “pretty astounding.” He said he has never before seen a contract case involving standard-essential patents serve as the basis of an Anti-Suit injunction — and said that the U.S. judge’s assertion of his authority to block foreign patent actions is “very surprising.” Motorola, he said, has to offer a worldwide portfolio of patents to licensees of standard-essential technology. So to say that conclude that such an offer precludes litigation over patents in the portfolio outside of the U.S. “seems like a significant reach….I can see this being a really important decision…”

To read the full article, please visit nytimes.com.