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Now TomTom Sues Microsoft for Patent Infringement -- Guess Who Their Lawyers Are? MoFo!!! - Updated
Friday, March 20 2009 @ 02:38 AM EDT

Can you believe it? This is so great!! Morrison & Foerster are representing TomTom in a new patent infringement lawsuit TomTom has just filed against Microsoft! I love covering their cases. Patent law is usually soooo boring to me, but these guys will keep me awake, and no doubt if I pay attention, I'll learn a lot.

I'd already decided to cover the lawsuit Microsoft filed against TomTom in Seattle last month, and we'll cover this one too. Eventually one or both sides will probably file a motion to consolidate the two cases, either in Washington State, where Microsoft filed, or in Virginia, where TomTom has just filed its Complaint [PDF]. But they could also just lope along on two separate tracks. So far, Microsoft's statement, on both TechFlash, linked above, and in part on Bloomberg, indicates they want to stay on their home turf:

"We are reviewing TomTom's filing, which we have just received," said Horacio Gutierrez, Microsoft deputy general counsel, in a statement released by the company today. "As has been the case for more than a year, we remain committed to a licensing solution, although we will continue to press ahead with the complaints we initiated in the U.S. District Court for the Western District of Washington and the International Trade Commission."

[ Update: If, like me, you were wondering why Virginia, this article explains the advantages to filing in what was the first state to be called The Rocket Docket. I assume TomTom figures Microsoft might want to drag things out, since it can afford to do that and TomTom less so, and Virginia apparently handles patent cases very, very fast.]

What does it mean? It means TomTom intends to fight and fight hard. Microsoft always does that. So, it'll be a real dogfight. And we're probably going to get to see some fabulous lawyering on both sides. Not to make anybody nervous or anything, but it's exciting to see lawyers who really know what they are doing.

Sidley Austin represents Microsoft. That's the firm where Michelle and Barack Obama met, if you recall, when he was a summer associate there. She did antitrust law there. He turned down an offer to work there. We're going to be seeing some really good lawyering. That will be the fun part. The hard part will be that they'll know a lot more than we do, and some of what happens may fly over our heads, but I'll do my best to find legal commentary for us for those parts.

This dispute now has three fronts, actually, because Microsoft filed a complaint with the ITC, too. Here's a blog that specializes on ITC issues, the ITC Blog. Whew. Because I know very little about the ITC, except that I know it's not unusual to file there too when you file a patent infringement case. And I know you file there to ask that the ITC issue an order to ban importation of something that you allege infringes your patents, or for a cease and desist order.

One recent entry on the blog explains how the ITC interfaces with the district court, or in this case two of them. What happens, for example, if the ITC reaches a decision before Virginia or Washington State does? Here's the answer, "Did You Know . . . Determinations Of Patent Issues At The ITC Are For Purposes Of Section 337 Only And Do Not Have Res Judicata Effect?"

OK. Kidding. I just wanted to demonstrate that they go deeply into ITC stuff, in other words, and they are lawyers writing like lawyers. But we can peek inside, and I'll try to explain in our language here and there, as I can. In this case, I don't need to much, because here's how the entry explains what Section 337 means, etc.:

Patent owners often simultaneously file suits in both the ITC and district court on the same patent(s). If an ITC investigation is ongoing, an accused infringer can request, as a matter of right, a stay of the parallel district court action under 28 U.S.C. § 1659. Even if the accused infringer does not request a stay, the ITC investigation typically will conclude before (and sometimes well before) a trial in district court. After the ITC issues a final determination on infringement, validity, and/or enforceability of a U.S. patent, one might think this ruling would be binding on a district court. This is not the case, however, because the doctrine of res judicata does not apply to ITC determinations concerning patents.

The doctrine of res judicata, which is also referred to as claim preclusion, means “the thing has been decided.” The doctrine is rooted in the principle that once a competent court has rendered its final judgment on a matter, that judgment has a conclusive effect upon subsequent litigation between the parties regarding the same cause of action. However the Federal Circuit has held that “ITC findings neither purport to be, nor can they be, regarded as binding interpretations of the U.S. patent laws in particular factual contexts. Therefore, it seems clear that any disposition of a Commission action by a federal court should not have a res judicata or collateral estoppel effect in cases before such courts.” Tandon Corp. v. U.S.I.T.C., 831 F.2d 1017, 1018 (Fed. Cir. 1987). The reason often cited for lack of a preclusive effect for ITC holdings is that Congress intended the ITC to be primarily responsible for administrating the trade laws and not the patent laws which is specifically referenced in the legislative history of Section 337. Texas Instruments v. Cypress Semiconductor Corp., 90 F.3d 1558 (Fed. Cir. 1996).

I don't dare quote any more than that, since it's written by four lawyers and all. But if you hop on over there, you'll find that they go on to explain that while a judge may be influenced somewhat by an ITC finding, he or she doesn't have to follow the decision there. They say the winner at the ITC can use the decision as "persuasive evidence" in district court, meaning the judge there will find it useful to consider in a patent case. But it's not like a decision by the US Supreme Court, which all lower courts are supposed to follow. It also doesn't mean the ITC has no effect, since it can ban importation, for example, as a trade matter.

Here's the Texas Instruments ruling, where the court of appeals affirmed that there was no patent infringement by Cypress even though the ITC had earlier found that there was. It's a ruling you will like, because some of you worry about juries who may not grasp technical issues. The jury found for the plaintiff, but the judge threw out their verdict, and the appeals court reviewed and agreed with him:

In conclusion, this case has presented a fairly uncommon situation of a trial judge overriding a jury verdict in a patent case, following an earlier ITC decision on some of the same subject matter. Although we have been mindful of the deference accorded to a jury on fact findings, as the trial judge surely was, we have felt it necessary to affirm the district court's judgment. The trial judge did a careful and thorough job of analyzing the case. His factual and legal analyses fully support his decision. He observed the jury and believed that it lacked a grasp of the issues before it. The judge was convinced that the jury failed to meaningfully deliberate on the case.
So you'll be relieved to know that can happen. Here's another paragraph from the ruling, which will show you why I find patent cases so hard to follow sometimes:
TI asserts that even accepting the court's claim construction, it presented substantial evidence to support a finding of literal infringement. TI argues that during the encapsulation processes used by the defendants, the semiconductor device was supported by the "die pad," which acted like a "conductor." TI relies on evidence that allegedly demonstrates that, during encapsulation, the semiconductor device was mechanically attached to the die pad with an electrically conductive adhesive; in turn, the die pad was connected through the lead frame to an external ground, forming a conductive, continuous current path from the die to ground. According to TI, this current path protected the die from static electricity during assembly and encapsulation. TI contends that the testimony of its expert witnesses supports this theory.
Sigh. But I'm committed, and no matter what Microsoft writes or TomTom, I'll be reading the sentences as often as I must to get from the beginning of the sentences to the very end, without mind-wandering detours. No doubt you guys will help me, because you will understand the tech so much better, and your lips will curl if I nod off mid-sentence or write that there was no protection of the die from static electricity during assembly when there actually was.

So here goes. Section 337. I'll let the ITC explain what that is:

Section 337 investigations conducted by the U.S. International Trade Commission most often involve claims regarding intellectual property rights, including allegations of patent infringement and trademark infringement by imported goods. Both utility and design patents, as well as registered and common law trademarks, may be asserted in these investigations. Other forms of unfair competition involving imported products, such as infringement of registered copyrights, mask works or boat hull designs, misappropriation of trade secrets or trade dress, passing off, and false advertising, may also be asserted. Additionally, antitrust claims relating to imported goods may be asserted. The primary remedy available in Section 337 investigations is an exclusion order that directs Customs to stop infringing imports from entering the United States. In addition, the Commission may issue cease and desist orders against named importers and other persons engaged in unfair acts that violate Section 337. Expedited relief in the form of temporary exclusion orders and temporary cease and desist orders may also be available in certain exceptional circumstances. Section 337 investigations, which are conducted pursuant to 19 U.S.C. § 1337 and the Administrative Procedure Act, include trial proceedings before administrative law judges and review by the Commission.
So a 337 investigation relates to unfair practices, most often related to IP, I gather. Here's an example of an exclusion order, related to logic boards that the ITC said couldn't be imported to the US from France any more.

Hmm. I wonder what exactly happens if the ITC issues an exclusion order, based on finding patent infringement, and then a district court refuses to find patent infringement? Does the ITC back down? I presume so, following some sort of established procedure. Here are the ITC Rules. I notice the Rules on page 80 say the ITC can back down, modify, or change its mind based on new info brought to its attention. And the FAQ, on page 32 of the PDF, says that you can appeal a Commission order to the federal court of appeals, so that's the answer. I see the President has to sign off on any Commission orders too, and he can negate them if he thinks the order isn't good policy. That's on page 31 of the FAQ.

I guess that's why the defendants often ask for a stay of the ITC matter, to try to avoid intersection crashes between the ITC and the courts. But clearly when it comes to patent infringement, the courts are the main tent, not the ITC.

There's a page on ITC's website called Section 337 Publications, but they use that word in their own way, to mean their decisions in their investigations. They have names like "Certain NOR and NAND Flash Memory Devices and Products Containing the Same." Here's the law, 19 U.S.C. Section 1337 [PDF]. They have a list of recent complaints, including Microsoft's against TomTom, Docket No: 2654.

The status of the Microsoft letter requesting an investigation by the ITC says, "Status: Pending Institution". The Rules, on page 4, indicate that "institution" is a term of art at the ITC, and it means they agree to investigate, and you find out by means of a notice in the Federal Register. That hasn't happened yet. No doubt it will, though. My brain hurts. That's enough for now. But first, here's the other case the ITC Blog mentioned, Tandon Corp. v. U.S.I.T.C., which was a case where the decision of noninfringement by the ITC was appealed to the United States Court of Appeals for the Federal Circuit, the same folks that gave us In Re Bilski. Judge Pauline Newman wrote the decision.

So, what's the bottom line? TomTom is not going to just roll over and settle. Or beg.

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