Nokia is throwing quite a fit about the ITC approving Barnes & Noble's request that the ITC send a Letter of Request to Finland to ask the country to aid Barnes & Noble to depose five Nokia executives, including CEO Stephen Elop, and provide Barnes & Noble its list of requested Nokia documents.
Barnes & Noble, you may recall, is
asserting that Microsoft, partnering with Nokia
and MOSAID, is plotting "to use patents to drive open source software out of the market," saying it is threatening companies using Android with an anticompetitive choice: pay Microsoft exorbitant rates for patents -- trivial, invalid, or not infringed, according to Barnes & Noble -- or spend a fortune on litigation. It wants discovery to try to prove its claims.
Here's how Nokia took the news. In its Motion to Quash [PDF], Nokia tells the ITC that it immediately contacted Finland and filed objections, and it also contacted the Office of Unfair Import Investigations at the ITC to try to block. And now it asks the ITC to quash the Letter, or in the alternative wait to see what Finland does.
And in a second development, the ITC has denied Microsoft's November motion to force Google to hand over business information about Android, which Google opposed, the Commission saying the requests were unreasonable and not relevant. There was also a second Microsoft motion to depose Google, and the same order grants that motion, which Google had agreed to anyhow. All this means the schedule of discovery in the case has changed, but so far, the hearing is scheduled to be in February. Considering the way Nokia is fighting to quash discovery, threatening an interlocutory appeal if necessary, I'm guessing that date is not going to be the actual date.
Plucky Barnes & Noble is fighting for itself, but this ITC case has the potential to affect the entire Android ecosystem.
Barnes & Noble is shining a light on what it views as an anticompetitive plot, with patents just the latest Microsoft weapons of war, probably hoping that if the light is shining right on them, the plotters will be unable to fulfill their unholy scheme. Don't forget that Barnes & Noble has also
filed a complaint with the US Department of Justice's Antitrust Division, so it isn't just us chickens who are now watching this play out. That may explain Nokia's determination to avoid discovery. I mean, if there's no such plot, why fight this hard to avoid handing over the contracts?
Jump To Comments
Here are all the recent filings, and if you don't see a PDF, it means it's not being made available to the public:
In its motion to quash,
Nokia tells the ITC that Barnes & Noble's Letter of Request is abusive, untimely (only a month before the hearing on Feb. 6, 2012), violates the Hague Convention, no less, is nothing but a fishing expedition, wasn't filed on the five individuals as it should have been but only on Nokia the company (and one of the individuals, Nokia adds, is in the UK, not Finland, so there should have been another Letter of Request sent there), its service was incompatible with Finland's law that it should be served personally, etc. In short, it wants it quashed by any means necessary, any possible excuse.
12/21/2011- 467130 - Commission Investigative Staff's Response to
Respondents Barnes & Noble, Inc. and barnesandnoble.com Llc's Motion
for Summary Determination of No Infringement of U.S. Patent No. 6,957,233
12/21/2011 - 467131 - Commission affInvestigative Staff's Response to
Respondents Barnes & Noble, Inc. and barnesandnoble.com LLC's Motion
for Summary Determination of Invalidity of U.S. Patent No. 5,889,522
12/21/2011 - 467143 - Commission Investigative Staff's Unopposed Motion
for 350 Page Limit on Pre-Hearing Briefs
12/22/2011 - 467244 - Agreement to be Bound by the Protective Order of
Adam DiCola, Wayne A. Hock and Janis Jennings
12/23/2011 - 467334 - Respondents Barnes & Noble, Inc.’s,
barnesandnoble.com LLC’s and Inventec Corp.’s Motion for Leave to File a
Reply in Support of Their Motion for Summary Determination of Invalidity
of U.S. Patent 5,889,522
12/23/2011 - 467335 - Respondents Barnes & Noble, Inc.’s,
barnesandnoble.com LLC’s and Inventec Corporation’s Motion for Leave to
File a Reply in Support of Their Motion for Summary Determination of
Invalidity of U.S. Patent 6,597,233
12/27/2011 - 467345 - Agreement to be Bound by the Protective Order of
12/27/2011 - 467375 - Agreement to Be Bound by the Protective Order of
12/27/2011 - 467379 - Agreement to be Bound by the Protective Order of
A. Andersen, R. Attaway, L. Blair, J. Bonicelli, R. Cook, S. Crandall,
C. Grant, S. McKay, E. Niles, T. Reidt, R. Scott, C. Seaton, A.
Spangrud, C. Stow and H. Thuman
12/27/2011 - 467381 - Microsoft's Motion for Leave and Memorandum in
Support to Submit Reply in Further Support of Motion for Summary
Determination on the Economic Prong of the Domestic Industry Requirement
[Motion No. 769-046]
12/27/2011 - 467382 - Microsoft Corporation's Response to Barnes &
Noble's Rebuttal Statement of Undisputed Material Facts (Motion No. 769-046)
12/29/2011 - 467460
- Joint Motion to Amend the Procedural Schedule
12/29/2011 - 467478 - Barnes & Noble's Opposition to Microsoft's
Motion for Leave to Submit a Reply in Support of Its Motion for Summary
Determination on the Economic Prong of the Domestic Industry Requirement
(Motion No. 769-057)
12/30/2011 - 467517
- Amending the Procedural Schedule
12/30/2011 - 467516
- Issuing Amended Ground Rules
12/30/2011 - 467560 - Complainant's Motion for Leave to Reply and
Response to Respondent Barnes & Noble's Statement of Additional
Material Facts Filed in Response to Microsoft's Statement of Undisputed
Material Facts in Support of Its Motion for Summary Determination
12/30/2011 - 467561 - Complainant Microsoft Corporation's Responses to
Respondents Barnes & Noble, Inc. and barnesandnoble.com LLC's
Statement of Additional Material Facts in Opposing Complainant Microsoft
Corporation's Motion for Summary Determination
12/30/2011 - 467569 - Transmittal Letter and Exhibits to Motion for
Leave to File Reply
01/03/2012 - 467614
- Denying Microsoft's Motion to Certify to the Commission a Request for
Judicial Enforcement of Subpoenas Duces Tecum and Ad Testificandum; and
Granting Microsoft's Motion for Leave to Take the Deposition of Google,
Inc. After the Close of Fact Discovery
01/03/2012 - 467612 - Granting Unopposed Motion for a 350-Page Limit on
01/03/2012 - 467634
- Motion to Quash Barnes & Noble, Inc. and barnesandnoble.com's
Letter of Request to Third-Party Nokia Corporation and Request to Notify
the Central Authority of Finland of the Filing of the Motion to Quash
In the alternative it asks the ITC to wait until Finland responds to Nokia's objections that it wrote to Finland about as soon as it heard about the Letter of Request going to Finland. That's on page 5 of the motion.
If it ends up having to turn over the discovery, it reserves the right to ask for costs. "Counsel for Nokia Corporation has contacted Jeffry Hsu of the Office of Unfair Import Investigations ("OUII") to determine whether the OUII consents to this motion..."
On its claim that it's untimely, page 6 states that Barne & Noble failed to ask for an extension of fact discovery and the deadline has passed. The Letter of Request was served on Nokia on Dec. 21, and the schedule for "the already-extended fact discovery regarding patent misuse" closed on December 14, Nokia writes. I gather the issue is that patent misuse was a defense from day one, six months ago, but trying to get Nokia drawn in is the new part, judging from page 10, so Nokia's complaint could be precise math but sort of irrelevant.
Nokia, you'll remember, told the ITC this, to explain why it wanted help with discovery:
Specifically, as part of Barnes & Noble’s affirmative defense of patent misuse, Barnes & Noble seeks the evidence requested in order to prove that Microsoft is improperly expanding the scope of its patents in an attempt to dominate mobile operating systems such as the AndroidTM Operating System (“Android”) that threaten Microsoft’s monopoly in personal computer operating systems. On information and belief, to further that strategy, Microsoft and Nokia Corporation (“Nokia”) and MOSAID recently entered into a series of agreements transferring approximately 2,000 Nokia patents to MOSAID in exchange for MOSAID’s efforts to license those patents (or sue those that do not take a license) and promise to pay approximately two-thirds of any royalties back to Microsoft and Nokia. Microsoft had previously entered into partnership agreements with Nokia, whereby one of the stated motivations for this partnership was to combine the parties’ respective patent portfolios and to coordinate their offensive use of patents to drive out open source operating systems, including Android specifically. Such conduct constitutes patent misuse, which renders the patents at issue unenforceable. So it wants to see those contracts and talk to the relevant executives.
Page 12 of Nokia's filing is funny:
At best, Barnes & Noble has conjured up a conspiracy theory that accuses Complainant Microsoft Corporation and non-party Nokia Corporation of using Nokia patents (without providing any basis for asserting the alleged "misuse" is tied to the Microsoft patents-in-suit) to undermine the Android market for handsets in the United States. It's all in Barnes & Noble's head.
Nokia references some rulings by the Commission's staff that apparently were in Microsoft's favor, and claims that this too makes the Letter of Request inappropriate, since it claims that to date the evidence refutes Barnes & Noble's conspiracy theory. They are in quite a tempest about all this.
It ends, in a footnote, warning that if it loses its motion to quash, it will appeal ("seek interlocutory appeal of such Order under 19 C.F.R. Section 210.24(b)"). The question of whether a letter of request that "plainly violates both the Hague Convention and the local law of the Requested State" should be quashed involves a "controlling question of law or policy as to which there is substantial ground for difference of opinion and that either an immediate appeal from the ruling may materially advance the ultimate completion of the investigation or subsequent review will be an inadequate remedy," Nokia says.
Wow. I gather Elop reeeeeeally doesn't want to testify, or someone doesn't want him to. Footnote 9, for example, says that if any depositions are permitted, Nokia "should be allowed to select the individuals to testify regarding the Topics." As in, anyone but Elop, perchance?
Finally, they argue documents sought might not even exist. Heh heh. I'm guessing the contracts do. Or they are privileged, Nokia says. So having to collect them would be "burdensome". Burdensome to collect documents that don't exist.
Judging from the fight being put up, it might be burdensome but incredibly useful to Barnes & Noble and to Android vendors, period. And incredibly interesting for the rest of us. I don't think Barnes & Noble is alone in wondering about Nokia's partnership with Microsoft.
The order regarding Google is #467614, and it's the ITC ruling on Microsoft's motion asking for enforcement of a subpoena on Google on certain topics. We didn't earlier show you that motion, so here it is now, but fair warning -- with all the attachments, it's 190 pages long:
11/09/2011 - 463859
- Complainant Microsoft Corporation's Motion to Certify to the
Commission a Request for Judicial Enforcement of Subpoenas Duces Tecum
and Ad Testificandum Issued to Google Inc. and Request for Shortened
Time to Respond
Here's what Microsoft asked for in the attached Memorandum, on page 6:
Microsoft wanted business information about Android, as a defense against Barnes & Noble's patent misuse defense. Here's why Microsoft said it needed it:
- REQUEST FOR PRODUCTION NO.4: All documents reflecting or relating to business evaluations, assessments, strategy discussions, or analyses of the actual or potential impact, on Android distribution, of patents held by Microsoft,
Appie Inc., Oracle Corp., or any other entity.
REQUEST FOR PRODUCTION NO.5: All documents reflecting or relating to business evaluations, assessments, strategy discussions, or analyses of the impact on Android distribution of actual, potential, or threatened patent infringement lawsuits by Microsoft related to Android.
- REQUEST FOR PRODUCTION NO.6: All documents reflecting or relating to business evaluations, assessments, strategy discussions, or analyses of the impact on Android distribution of public claims by Microsoft or Microsoft executives or employees that Android infringes Microsoft patents.
- REQUEST FOR PRODUCTION NO. 15: All documents reflecting or relating to business evaluations, assessments, strategy discussions, or analyses of Android's capability (current or projected) as a personal computer operating system.
- REQUEST FOR PRODUCTION NO. 16: All documents reflecting or relating to business evaluations, assessments, strategy discussions, or analyses of competing mobile operating systems from Microsoft.
... evidence of the lack of anticompetitive effect on Android would dispose of the defense.
The motion was denied because:
The ALJ finds that Microsoft has failed to show how a third party's (Google's) opinions relating to Microsoft's patents are relevant to respondent Barnes and Nobles' patent misuse defense.
Microsoft had pointed out that when asked about the Microsoft patent attacks, Larry Page had said it hadn't been very successful, on page 5 of the Memorandum in Support:
Google also has refused to produce any documents generated after October 5, 2011, the date the subpoenas were served on Google. This refusal ignores the subpoena duces tecum's instructions and will exclude critical evidence that has been generated after the date of the subpoena's service. For example, Larry Page, Google's chief executive officer, reportedly was asked by an analyst in a quarterly earnings call on October 13,2011, about the patent litigation against Android that Barnes & Noble claims has an anticompetitive effect. Mr. Page responded, "[w]e're seeing no signs that that's effective ... If anything, our position is getting stronger." (See Ex. B, Jay Greene, Google's Page Says Android Attacks Have No Impact, CNET NEWS (Oct. 13, 2011), available at http://news.cnet.coml8301-1023_3-20120137-93/googles-page- says-android-attacks-have-no-impactl (last visited Nov. 7, 2011) (emphasis added».
Google's refusals deprive Microsoft of critical information necessary to fully defend against Barnes & Noble's baseless misuse claims, and prevent the Administrative Law Judge and the Commission from reviewing a full and complete record of the relevant facts.
But that leaves out that what Barnes & Noble is asking the court and Finland to help them dig out is a *future* plot, one that has yet to be fully implemented or in some respects even begun.
I get the impression that both Microsoft and Nokia are in a state of deep disturbance, so Barnes & Noble may be exactly right that blowing the whistle will hobble the plot. I don't think Microsoft or Nokia expected Barnes & Noble to connect the dots that this partnership was about the patents, or if it did that it could do anything about it, and they seem genuinely upset.
So, the big picture now is that clearly the patent misuse defense Barnes & Noble has raised is firmly on the table, smack dab in the middle of it now. They are doing additional discovery now just on that issue, as you can see in #467460. The new schedule is attached as Attachment A to #467517.
The rules of the road are in #467516. These are new rules [PDF] as of October 19, according to the website for the ITC,
where they are highlighted.
So, it's game on, not just for Barnes & Noble but for Android at large.
There is a lot at stake, thanks to this plucky little company. I hope you go and buy a book. Or a Nook. Something. Litigation is like bleeding money from an artery.
In response to some comments, I want to explain something important about legal cases. As you know, the US is a country that follows a system where prior case decisions can and do influence later decisions. They call that case law, and judges are pretty strict about following what went before, unless there is a mighty
good reason not to.
For that reason, you don't want to
decide who to support in any legal contest just
by who the parties are. That is almost never a factor.
People who are shilling or are ideologues do it that way,
but it's the wrong way.
Here's how you decide:
What is the legal issue? If Plaintiff wins, what
happens to FOSS? If Defendant wins?
That is the ONLY way to analyze a legal case, because
the outcome will affect everyone potentially.
In this case, B&N has opened the curtain to show us
what it says Microsoft has been doing to bully people. It is
the *only* intended victim to do so. Others have just
folded and paid.
For that reason alone, the case matters. It's only because
of B&N's revelations that an antitrust case is even
possible. And an antitrust case is the onlyl way I see
to block Microsoft from destroying Linux and Android with
its and its partners patents. B&N sees that too, and while
its interests may not be identical to the community's in
all respects, in the lawsuit they are one.
Executives in companies are rarely admirable in
their decisions, from a community standpoint, in that money is what they are
about, one way or another. Ignore that, except
to make sure they don't fold, if you have it
in the power of your hand to keep that from happening.
There is, in short, a big difference between
the company and the lawsuit. And what matters is
the lawsuit. If you have trouble with that concept,
look at the SCO v. Novell case. That outcome, Novell prevailing at trial,
was vital for Linux's interests, even though
the former executives at Novell had let the community down
in other ways horribly. But winning that case mattered to the
community, and so Groklaw continued to cover it regardless,
and it was important to do so.
Update 2: Barnes & Noble also filed a Motion for Issuance Letter
Rogatory [PDF] in United States District Court for the District of Columbia in early December, where the Microsoft v. Barnes & Noble patent infringement case was filed parallel to the ITC action. Not many of you may have accounts at the ITC, so I wanted to let you know that you can get this document from Pacer, since it's been filed there. I thought you'd find it of interest, because it explains very clearly why Barnes & Noble is interested in learning more from MOSAID and why it seeks help from Canada to get it. On page 5 of the motion, Barnes & Noble says this:
Respondents have raised several defenses against Microsoft's allegations of patent infringement, including an affirmative defense of patent misuse. As part of that affirmative defense, Barnes & Noble has alleged that Microsoft is using its licensing practices to broaden improperly the scope of its patent grant in an attempt to dominate open source mobile operating systems (like the one Barnes & Noble's handheld devices use) that threaten Microsoft's monopoly in personal computer operating systems. The Letter Rogatory is intended to obtain information material to the patent misuse defense.
In the latest series of tactics designed to further its anticompetitive strategy, Microsoft and Nokia Corporation ("Nokia") recently entered into a patent licensing agreement with MOSAID. Pursuant to that agreement, Nokia will transfer approximately 2,000 wireless communications patents and patent applications to MOSAID and will grant Microsoft a license to practice those patents. MOSAID will then license those patents or sue those that do not take a license and will turn over approximately two-thirds of any licensing revenue to Microsoft and Nokia. The arrangement effectively gives Microsoft greater power to assert patents against rival technologies.