Neither party has demanded a jury in this case, so all remaining issues, including Motorola’s breach of contract, should be tried to the bench. The Federal Rules require that any party seeking a jury make a timely demand, in writing and filed with the Court—and the failure to do so constitutes waiver. Motorola had two weeks from the filing of its Answer in June 2011 to make a jury demand, and it has never done so. Motorola noted in multiple status reports prior to its Answer that it was still considering a jury demand in this case, but decided not to make one. Motorola made a jury demand—explicitly limited to its H.264 patent infringement claims—in the consolidated patent case, in a pleading filed on the same day as its Answer in this case. Motorola was well aware of its jury right in the contract case, and deliberately waived it. The fact that Microsoft’s breach of contract action, in which neither party demanded a trial by jury, has been consolidated with Motorola’s patent case, in which Motorola demanded a jury trial only as to patent issues, does not cure Motorola’s jury trial waiver in the contract action. Motorola apparently would now prefer that this case be tried to a jury rather than the bench, but the Rules do not provide that option. Because Motorola has waived any jury right in this case, the liability phase of Microsoft’s breach of contract case, like the RAND determination phase, should be a bench trial.

03/08/2013 - Set/Reset Hearings: A Telephone Conference is scheduled Thursday, March 14, 2013 at 11:00 a.m. before Hon. James L. Robart. The parties shall initiate the call.(CC) (Entered: 03/08/2013)

03/08/2013 - 659 - NOTICE OF WITHDRAWAL OF COUNSEL: Attorney Matthew R Clements for Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc.. (Clements, Matthew) (Entered: 03/08/2013)

03/08/2013 - 660 - MOTION Confirm Bench Trial of Breach of Contract Issues by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation. Noting Date 3/29/2013, (Harrigan, Arthur) (Entered: 03/08/2013)

LINN: Yes. You have no control over whether you’re going to be lucky enough to be recognized by anybody, but what you do have control over is how you conduct yourself. I remember a conversation I had with one of my law clerks about the seeming paradox of being a zealous advocate for your client while acting as an officer of the Court -- presumably a more balanced position. His view was being a zealous advocate meant doing anything and everything you can for your client even if it means turning an adversary down when he calls at 5:00 o’clock on a Friday and asks for a three-day extension of time because he inadvertently overlooked a deadline date. My law clerk said to me, “Don’t I have an obligation to say that’s your tough luck, I’m sorry?” And I said to him, “There are all sorts of way you can play the game, but in my opinion there’s a right way and a wrong way.” And I said, “If you play it fast and loose like you are suggesting maybe you will win some cases that you might otherwise not win. And maybe you will score points with clients and maybe you will make a lot of money, but there will come a time at the end of your career when you’re going to reflect back on your life and you will ask yourself what do people think of me and what kind of a character do they think I have. And at that point it will be too late to change perceptions and you will realize that what you did was not right and was not in accord with the duty you have as an attorney to act with civility and professionalism.”

I’ve always conducted myself in a fair, balanced, and proper way. If somebody had asked me for an extension under the circumstances noted, I would feel perfectly comfortable saying fine, no problem, because I know that there will come a time, probably in the same lawsuit, where I might have to request the same thing, and what goes around comes around. You can win on the merits and you don’t have to win playing games with deadlines and things like that. So I’ve always conducted myself that way. I think that has made a difference in my career. In the course of practicing law you come across a lot of people either as clients or as adversaries or as simply colleagues, and people quickly learn who you are and what kind of a character you have and what kind of a person you are. And when luck comes you’re way it’s awfully nice to be recognized as a decent, upfront guy.

It wasn't Motorola that wanted to consolidate in Seattle. It filed in Wisconsin after Microsoft filed in Seattle, so it was hoping against hope not to end up with everything being decided there. Nobody wants to go against Microsoft in its own backyard, I think we may assume. And watching this case unfold, I think you can see why. You can read the judge's history of how it all happened in this order, #66 [PDF], which issued on May 31, 2011. In it, the judge notes that when Microsoft filed its answer to Motorola's patent infringement claims, it filed more or less the same breach of contract issues as in its own contract case, and that's why the judge in Wisconsin pushed them together into one case. And there they are.

Somewhere in that process of consolidation, Microsoft seems to think it has caught Motorola having dropped a stitch with respect to asking for a jury trial. Motorola wants a jury trial, and Microsoft doesn't and Microsoft thinks it's found a way to say it's too late to ask for it now.

Microsoft says that its breach of contract claims do not arise from patent law and that Motorola has conceded that point by appealing not to the Federal Circuit but to the Ninth:

The right to a jury trial “depends on the nature of the issue to be tried rather than the character of the overall action.” Ross v. Bernard, 396 U.S. 531, 538 (1970). As Motorola’s pleadings confirm, the “issues” tried in the breach trial would not overlap with Motorola’s 343 Patent Case. Even in answering Microsoft’s counterclaims in the 343 Patent Case, Motorola did not make a general jury demand, but requested a jury only on “claims arising under the Patent Laws of the United States”—explicitly leaving out Microsoft’s defenses sounding in contract. (Dkt. No. 67 at 2.) And Motorola concedes that Microsoft’s breach of contract claim is not one “arising under the Patent Laws,” having appealed the Court’s preliminary injunction to the Ninth Circuit (see Dkt. No. 303), and not the Federal Circuit. See 28 U.S.C. § 1295 (granting exclusive jurisdiction to the Federal Circuit “in any civil action arising under . . . any Act of Congress relating to patents”); see also Gunn v. Minton, _ U.S._, _ S. Ct._, 2013 U.S. Lexis 1612, at *19 (Feb. 20, 2013) (noting the “exclusive appellate jurisdiction” vested in the Federal Circuit over “actual patent cases”).

Me too. It says "Jury Demand."

It's true that on page 2 you find the language Microsoft references, "Motorola demands a jury trial on all issues arising under the Patent Laws of the United States that are triable to a jury." That's boiler plate language. At the time, I think it's obvious Motorola meant everything, because further down in the page, it adds:

4. Motorola admits that Microsoft has alleged its Counterclaims under the patent laws of the United States, 35 U.S.C. § 1, et seq., and the Declaratory Judgment Act, 28 U.S.C. §§ 2201-2202, denies, however, committing any infringement or other tortious or unlawful act, admits that this Court has subject matter jurisdiction pursuant to 28 U.S.C. §§ 1331 & 1338(a), and denies the remaining allegations of Paragraph 4.

Also, Microsoft's counterclaims included one assertion that Motorola's standards-essential patents were not essential. On page 4 of its answer [PDF], you can see Microsoft saying that. How could that aspect of the case not arise out of the patent laws, even if the rest didn't, in that it's about whether or not the patents claimed to be infringed were in fact essential, valid? There's a lot of overlap, in other words, between the patent and the contract claims. That's why they are being handled together.

In footnote 3, Microsoft says maybe Motorola thought and believed that it had asked for a jury for all the claims, but such belief would be a mistake of law on Motorola's part, and there's no reason to reward that, it states, quoting from a case that says exactly that, Pacific Fisheries, which says that the judge can grant a jury trial, even if untimely requested, unless the only reason it wasn't requested on time was "counsel's inadvertence". In that case, the lawyer misunderstood the statute and calculated the deadline wrong. If your lawyer goofs, the judge doesn't have to help you and him or her out. But surely this picture with Motorola isn't about inadvertence on Motorola's part. It's more a dispute as to whether its request was timely or not timely, not that the lawyers simply forgot to ask for a jury trial by the deadline. And as Microsoft correctly quotes, and Pacific Fisheries mentions in footnote 3, absent mistake of law or inadvertence, the judge can order a jury trial:

³ Issues not demanded for trial by jury as provided in Rule 38 shall be tried by the court; but, notwithstanding the failure of a party to demand a jury in an action in which such a demand might have been made of right, the court in its discretion upon motion may order a trial by a jury of any or all issues. Fed. R. Civ. P. 39(b).

You can read it for yourself and make up your own mind. Here it is as text. See what you think. Love the zealous title:

****************

THE HONORABLE JAMES L. ROBART

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

Plaintiff,

vs.

MOTOROLA, INC., et al.,

Defendants.

_____________

MOTOROLA MOBILITY LLC, et al.,

Plaintiffs,

vs.

MICROSOFT CORPORATION,

Defendants.

___________

Case No. C10-1823-JLR

MICROSOFT CORPORATION’S
MOTION TO CONFIRM BENCH
TRIAL OF BREACH OF CONTRACT
ISSUES

__________________

Pursuant to Fed. R. Civ. P. 38 and 39, Plaintiff Microsoft Corporation (“Microsoft”) respectfully brings this motion to confirm that the breach of contract issues in the above- captioned case will be tried to the Court.

I. INTRODUCTION

II. BACKGROUND

2

On November 10, 2010 -- the day after this case was filed -- Motorola filed two patent infringement suits in the Western District of Wisconsin, demanding a jury trial in each. (See Dkt. No. 1, Case. No. 2:11-cv-00343-JLR (W.D. Wash.), Original Case No. 3:10-cv-00699 (W.D. Wis.) (the “343 Patent Case”); Dkt. No. 1, Case No. 3:10-cv-00700-bbc (W.D. Wis.).) On February 18, 2011, Microsoft’s motion to transfer Motorola’s Western District of Wisconsin patent infringement case relating to its H.264 patents² was granted, and the case was docketed in this District. (See Dkt. No. 44, 343 Patent Case.) On May 31, 2011, the parties filed a Joint Status Report in the 343 Patent Case stating that “[t]he parties have requested a jury trial for this action.” (Dkt. No. 86, 343 Patent Case.)

Also on May 31, 2011, the Court ordered that the 343 Patent Case be consolidated with this case. (See Dkt. No. 66 at 10–11.) While noting the significant differences in factual and legal issues between the two cases, the Court observed that “there will be some factual overlap between the two cases” connected to the Court’s determination of a RAND rate that “could limit the damages available to Motorola.” (Id. at 10.) The Court explicitly found “that the essential facts are not so intertwined and logically connected that considerations of judicial economy and fairness dictate that the issues be resolved in one lawsuit,” but that consolidation was nonetheless appropriate due to interests of judicial economy. (Id. at 11.)

The Court’s May 31, 2011 Order also denied Motorola’s pending motion to dismiss Microsoft’s breach of contract claim. Accordingly, on June 15, 2011, Motorola answered Microsoft’s complaint in this case, and filed a separate answer to Microsoft’s counterclaims in

3

More than a year later, during a July 9, 2012 telephonic status conference, the Court requested clarification from Motorola as to whether it believed that the breach of contract issue would be tried to the bench or to a jury, and Motorola responded, “we have decided not to waive the jury trial on the breach of the duty of good faith issue.” (7/6/2012 Hearing Tr. 5:6– 8.) Motorola was granted leave to file an additional summary judgment motion challenging the grounds for the November 2012 RAND trial, and in an August 6, 2012 brief opposing that motion, Microsoft stated that “any jury right as to the breach issues has been waived, because Motorola failed to timely seek a jury,” citing Fed. R. Civ. P. 38 and Ninth Circuit authority holding that a jury demand made months after the last pleadings were filed was untimely. (Dkt. No. 374 at 3 n. 3.)

III. LEGAL STANDARD

4

“A party waives a jury trial unless its demand is properly served and filed.” Fed. R. Civ. P. 38(d). The right to a jury trial is waived by the failure to timely assert the right. See Wall v. Nat’l R.R. Passenger Corp., 718 F.2d 906, 909 (9th Cir. 1983) (where “jury demands were made almost a year after the last pleadings were filed, [party] failed to make a timely demand for a jury trial” under Rule 38(b)).

Federal Rule of Civil Procedure 39 states that “the court may, on motion, order a jury trial on any issue for which a jury might have been demanded.” Fed. R. Civ. P. 39(b). A district court’s discretion to grant Rule 39 motions “is narrow . . . and does not permit a court to grant relief when the failure to make a timely demand results from an oversight or inadvertence.” Pacific Fisheries Corp. v. H.I.H. Cas. & Gen. Ins., Ltd., 239 F.3d 1000, 1002 (9th Cir. 2001), quoting Lewis v. Time Inc., 710 F.2d 549, 556–57 (9th Cir. 1983). “An untimely request for a jury trial must be denied unless some cause beyond mere inadvertence is shown.” Id. (emphasis added). See also Newport Yacht Club v. City of Bellevue, No. C09– 0589–MJP, 2012 WL 254013, at *4 (W.D. Wash. Jan. 27, 2012); Meeco Mfg. Co., Inc. v. Imperial Mfg. Group, No. C03-3061-JLR, 2005 WL 1459685, at *3 (W.D. Wash. June 20, 2005) (noting near-uniform rejection of Rule 39(b) relief within the Ninth Circuit).

IV . ARGUMENT

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Motorola was keenly aware of its jury trial right as to the breach issues, but waived it nonetheless. The parties filed two joint status reports in this case in February 2011, and in each instance Motorola explicitly “reserve[d] its right to request a jury pursuant to Rule 38(b).” (Dkt. Nos. 44, 50 at ¶ 12.) Thereafter, Motorola decided not to exercise this right. In its simultaneously-filed answers to Microsoft’s breach of contract complaint and Microsoft’s counterclaims in the 343 Patent Case, Motorola explicitly requested a jury trial on the patent issues in the 343 Patent Case, but made no jury demand in Microsoft’s breach of contract case. (Compare Dkt. No. 68 with Dkt. No. 67.) Motorola made no written demand for a jury in the 14 days that followed the filing of its answer.

Motorola’s oral statement at the July 2012 hearing that it had “decided not to waive the jury trial on the breach of the duty of good faith issue” (7/9/2012 Hearing Tr. at 5:6–8) cannot cure its waiver. First, the statement on its face is not a jury demand. Motorola did not “demand a jury trial,” it only indicated a hope that the right it once had to make such a demand remained open—that is, it stated only that it had “decided not to waive” its right (presuming, erroneously, that it had not already done so), but not that it was actually attempting to exercise that right. Second, Rule 38 requires “serving the other parties with a written demand” for a jury trial and “filing the demand in accordance with Rule 5(d).” Fed. R. Civ. P. 38(b). Motorola has done neither at any point in this case, even to this day. Third, Motorola’s declaration of potential interest in a jury in July 2012, even if it were treated as a demand, would have been far too late to be a timely demand -- the Rule required that Motorola make this election more than a year earlier. Wall, 718 F.2d at 909 (where “jury demands were made almost a year after the last pleadings were filed, [party] failed to make a timely demand for a jury trial”).

6

7

Finally, even if the high bar for exercise of Rule 39 discretion could be met, the Court should decline to exercise that discretion. A large portion of the record generated in the November 2012 RAND bench trial will be relevant to the bifurcated breach phase of this case. The Court heard extensive testimony concerning the purposes of standard-setting organizations; the rationale for RAND commitments; industry concerns about hold-up and patent stacking; principles of RAND valuation; the relationship between the H.264 and 802.11 standards and Microsoft’s products; the relationship between Motorola’s H.264 and 802.11 patents and Microsoft’s products; and Motorola’s licensing history of its standard-essential patents, including its patent suits against standards-implementers. A jury trial for the breach phase of the case would require extensive, unnecessary, and inefficient duplication of that testimony from the RAND trial, at a significant cost of judicial resources. In contrast, a bench trial will permit the parties and the Court to cite and efficiently reference the entirety of the RAND trial record, and the proceedings can immediately focus on the issues remaining in the case.

B. The Breach Trial Presents No Issues on Which Motorola Has a Jury Right.

8

The issues in Microsoft’s breach of contract claim and Motorola’s patent claims are factually distinct, as reflected both in Motorola’s circumscribed jury demand and in its decision to appeal the breach of contract preliminary injunction to the Ninth Circuit. The Court recognized as much in its consolidation order. (See Dkt. No. 66 at 10–11.) While Motorola would have been entitled to a jury determination of damages in the 343 Patent Case (if that case were not mooted by the forthcoming RAND license, and if Motorola were to establish infringement of any remaining valid claims of its asserted H.264 patents), having acceded to the Court’s determination of RAND in the bench trial, nothing would remain for a jury to decide on damages. The remaining issue for the breach trial—whether Motorola breached the duty of good faith inherent in its RAND commitment—could have no impact on the 343 Patent case.

C. Consolidation Does Not Grant Motorola Any Jury Rights.

9

V. CONCLUSION

DATED this 8th day of March, 2013.

CALFO HARRIGAN LEYH & EAKES LLP

By _s/ Arthur W. Harrigan, Jr.
Arthur W. Harrigan, Jr., WSBA #1751

By s/ Christopher Wion
Christopher Wion, WSBA #33207

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By s/ T. Andrew Culbert
T. Andrew Culbert

By s/ David E. Killough
David E. Killough
MICROSOFT CORPORATION
[address, phone, fax]

David T. Pritikin
Richard A. Cederoth
Constantine L. Trela, Jr.
William H. Baumgartner, Jr.
Ellen S. Robbins
Douglas I. Lewis
David C. Giardina
John W. McBride
David Greenfield
Nathaniel C. Love

SIDLEY AUSTIN LLP
[address, phone, fax]O

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SIDLEY AUSTIN LLP
[addess, phone, fax]

Counsel for Microsoft Corp.

______________
¹ All references to docket entries are for Microsoft’s breach of contract case, No. 2:10-cv-01823-JLR, unless otherwise specified.

² Motorola’s other Western District of Wisconsin case alleged infringement of 802.11 standard-essential patents, and was stayed pending resolution of Motorola’s ITC action against Microsoft on those patents.

³ Even if Motorola believed—erroneously and inconsistently with its narrow jury demand on patent issues alone in the 343 Patent Case—that the parties’ jury demands in the 343 Patent Case would carry over to this case by virtue of consolidation or because of an overlap in jury-triable issues, see Section III.B, III.C, infra, that mistake of law would provide no basis for relief under Rule 39(b). See Pacific Fisheries, 239 F.3d at 1003 (“[A]n untimely jury demand due to legal mistake does not broaden the district court's narrow discretion to grant the demand.”). Further, while Microsoft’s original answer and counterclaims the 343 Patent Case—prior to transfer from the Western District of Wisconsin—repeated Motorola’s jury demand (as to “all issues triable by jury in this action”), Microsoft’s counterclaim concerning breach of contract was alleged in the alternative, “subject to resolution” of Microsoft’s motion to dismiss, stay, or transfer the patent case to Seattle. (Dkt No. 37, 343 Patent Case at ¶ 21.) Once Microsoft’s motion was granted, Microsoft’s breach counterclaim dropped out of the 343 Patent Case. Cf. Northwest Envtl. Advocates v. EPA, 855 F. Supp. 2d 1199, 1213 (D. Or. 2012) (where a party prevailed on a first claim, a second claim “plead as an alternative to the First” was moot); Constellation Power Source, Inc. v. Select Energy, Inc., 467 F. Supp. 2d 187, 219 (D. Conn. 2006) (same); Reliance Ins. Co. v. Doctors Co., 299 F. Supp. 2d 1131, 1152 (D. Haw. 2003) (same).

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