Boy, the Federal Circuit's sure lowered the boom on Seventh Circuit Judge Richard Posner in Apple Inc. v. Motorola, Inc., No. 12-1548 (Fed. Cir. Apr. 25, 2014).
The appeal dealt with Judge Posner's rulings as a trial court judge in the Northern District of Illinois phase of the titanic smartphone struggle between Apple and Motorola, which Google now owns.
Judge Posner gave an unduly narrow reading of an Apple patent, the panel held, and that mistake led him to undervalue the reasonable royalty that the patent would fetch from a hypothetical licensee. He also erred in excluding damages testimony relating to another Apple patent. The expert could properly rely on another expert for an estimate of what a design-around would have cost Motorola, the court observed.
But he panel upheld Judge Posner's striking of a Motorola damages expert's testimony. It concluded that the expert failed to show that just one of the patents in Motorola's large portfolio accounted for 40 to 50 percent of the portfolio's value. The expert's "failure to tie the 40%-50% rate to the technological contribution of the patent to the standard-essential portfolio" made his opinion "inherently unreliable". Id. at 58.
Standard-essential patents can justify injunctive relief . . . but not in this case.
The court also held that the standard-essential nature of a patent — meaning that you can't comply with an industry standard without infringing the patent — does not per se prohibit granting an injunction against infringement. "[A]n injunction may be justified where an infringer unilaterally refuses a FRAND [which stands for fair, reasonable, and non-discriminatory] royalty or unreasonably delays negotiations to the same effect." Id. at 72. The court upheld the denial of an injunction on summary judgment against Motorola because Motorola failed to show that Apple had refused to make a FRAND deal.