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Microsoft and Motorola Argue About Jury or Bench Trial on Contract Claims in Seattle ~pj Updated
Wednesday, April 24 2013 @ 08:07 PM EDT

Motorola has now filed its opposition [PDF] to Microsoft's "motion to confirm bench trial of breach of contract issues", and is asking the judge in the Microsoft v. Motorola trial in Microsoft's backyard courtroom in Seattle for a jury trial instead. Can you blame them, considering the history of the case so far, if they think they will have a better chance with a jury, any jury, than with this judge? I mean, Motorola doesn't believe the judge has the authority to decide the litigation in the first place. And that's likely why Microsoft is now insisting that there is supposed to be a bench trial. It claims Motorola waived a jury trial. I'll show you some exhibits that indicate otherwise.

Motorola's best option is an appeal down the road, from all I've seen. I'd call this a Teacher's Pet trial. And you know how it goes when you try to tell the teacher that its pet kicked you in the lunch room.

And you'll see in the docket that the judge, the Hon. James Robart, has decided the issue about how much Motorola's RAND rate should be, but we don't get to read it until the parties tell him if they want redactions. But personally, what are the odds he'll do anything but bonk Motorola on the head again? Still, if you noticed in the Apple v. Samsung litigation, post-trial action can be very effective, even when the trial itself is unfair and the result reflects mistakes or even favoritism, especially when Quinn Emanuel is representing you, because they never give up. It's not over 'til it's over. All of it.

The filings:

03/13/2013 - 661 - Parties' Joint Submission Regarding Trial Schedule BRIEF re Set/Reset Hearings by Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc., Plaintiff Microsoft Corporation. (Harrigan, Arthur) (Entered: 03/13/2013)

03/14/2013 - 662 - MINUTE ENTRY for proceedings held before Judge James L. Robart- Dep Clerk: Casey Condon; Pla Counsel: Arthur Harrigan, David Pritikin, Christopher Wion, Shane Cramer, Andy Culbert, David Killough; Def Counsel: Ralph Palumbo, Philip McCune, Brian Cannon; CR: Barry Fanning; Telephone Conference held on 3/14/2013. The court discusses scheduling with counsel. A minute order will follow setting deadlines. (CC) (Entered: 03/14/2013)

03/14/2013 - 663 - MINUTE ORDER - The Court sets schedule for the Breach of Contract Trial: Trial is set for 8/26/2013 at 09:00 AM before Judge James L. Robart. Motions in Limine due by 7/29/2013, Pretrial Conference set for 8/13/2013 at 02:00 PM before Judge James L. Robart, by Judge James L. Robart. (SEE ORDER FOR FURTHER DETAILS)(MD) (Entered: 03/14/2013)

03/18/2013 - 664 - APPLICATION OF ATTORNEY Andrea Pallios Roberts FOR LEAVE TO APPEAR PRO HAC VICE for Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc. (Fee Paid) Receipt No. 0981-3144405. (McCune, Philip) (Entered: 03/18/2013)

03/19/2013 - 665 - ORDER re (664 in 2:10-cv-01823-JLR) Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Andrea Pallios Roberts for General Instrument Corporation, Motorola Mobility LLC, and for Motorola, Inc., by William M. McCool. (No document associated with this docket entry, text only.)(DS) (Entered: 03/19/2013)

03/20/2013 - 666 - APPLICATION OF ATTORNEY Theodore W. Chandler FOR LEAVE TO APPEAR PRO HAC VICE for Plaintiff Microsoft Corporation, Defendant Microsoft Corporation (Fee Paid) Receipt No. 0981-3146760. (Cramer, Shane) (Entered: 03/20/2013)

03/20/2013 - 667 - ORDER re 666 Application for Leave to Appear Pro Hac Vice. The Court ADMITS Attorney Theodore W. Chandler for Microsoft Corporation by William M. McCool. (No document associated with this docket entry, text only.)(JEM) (Entered: 03/20/2013)

03/20/2013 - 668 - NOTICE OF WITHDRAWAL OF COUNSEL: Attorney Lynn M Engel for Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc.. (Engel, Lynn) (Entered: 03/20/2013)

03/25/2013 - 669 - RESPONSE, by Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc., to 660 MOTION Confirm Bench Trial of Breach of Contract Issues . (Attachments: # 1 Proposed Order)(Palumbo, Ralph) (Entered: 03/25/2013)

03/25/2013 - 670 - DECLARATION of Andrea Pallios Roberts filed by Defendants General Instrument Corporation, Motorola Mobility LLC, Motorola, Inc. re 660 MOTION Confirm Bench Trial of Breach of Contract Issues (Attachments: # 1 Exhibit A-D)(Palumbo, Ralph) (Entered: 03/25/2013)

03/27/2013 - 671 - REPLY, filed by Plaintiff Microsoft Corporation, Defendant Microsoft Corporation, TO RESPONSE to 660 MOTION Confirm Bench Trial of Breach of Contract Issues (Harrigan, Arthur) (Entered: 03/27/2013)

04/19/2013 - 672 - ORDER REGARDING FINDINGS OF FACT AND CONCLUSIONS OF LAW - The court ORDERS the parties, no later than 12:00 p.m. on April 25, 2013, to file (1) a proposed joint redacted version of the courts Findings and Conclusions; and (2) a proposed joint redacted version of the parties deposition designations. Telephone Conference set for 4/26/2013 at 09:00 AM before Judge James L. Robart, by Judge James L. Robart. (MD) (Entered: 04/19/2013)

04/19/2013 - 673 - SEALED ORDER - FINDINGS OF FACT AND CONCLUSIONS OF LAW by Judge James L. Robart.(MD, E-mailed copy of sealed order to all counsel of record) (Entered: 04/19/2013)

04/19/2013 - 674 - SEALED ORDER - Regarding Disclosure of Findings of Fact and Conclusions of Law re 673 Sealed Order by Judge James L. Robart.(MD, E-mailed copy of order to all counsel of record) (Entered: 04/19/2013)

04/22/2013 - 675 - NOTICE OF FILING OF OFFICIAL TRANSCRIPT of Phone Conference held on 3/14/2012 before Judge James L. Robart.

Parties have ten (10) calendar days to file with the court a Notice of Intent to Request Redaction of this transcript. If no such Notice is filed, the transcript may be made remotely electronically available to the public without redaction after 90 calendar days.
Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Information regarding the policy can be found on the court's website at www.wawd.uscourts.gov. To purchase a copy of the transcript contact court reporter Barry Fanning by telephone at 206-370-8507. or by e-mail at barry_fanning@wawd.uscourts.gov. Release of Transcript Restriction set for 7/22/2013, (BF) (Entered: 04/22/2013)

Here's the introduction of Motorola's opposition to Microsoft's motion for a bench trial:
I. PRELIMINARY STATEMENT

This Court should deny Microsoft’s motion to confirm a bench trial of the breach of contract issues in this case. Microsoft essentially seeks reconsideration of the two-phase approach set by this Court—after the first phase was completed. Throughout this action the parties and the Court had been operating under the assumption that there would be a jury trial following the November 2012 bench trial. Motorola and Microsoft both made jury demands in the pleadings. Motorola demanded a jury on “patent issues” that fairly encompassed RAND obligations attaching to patents, and both the parties and the Court understood Motorola’s demand at the time to be for a jury on all of the breach of contract issues arising under Motorola’s alleged RAND obligations. Indeed, this Court itself commented at a hearing that “you all have asked for a jury,” and Microsoft did not assert that this statement was incorrect. Notably, Microsoft also made a jury demand on its Counterclaims in the Wisconsin Action, which included claims of breach of contract. Those claims have not been dismissed, and Microsoft has never sought or obtained consent to withdraw its jury demand as required by Federal Rule of Civil Procedure 38(d). Now—after the bench trial— Microsoft has changed course from its original position and asserts belatedly that there should be a second bench trial based on a supposed waiver by Motorola.

Even if Motorola could have more explicitly demanded a jury trial, this Court should order one pursuant to Federal Rule of Civil Procedure 39(b). This is an appropriate case for such relief. Microsoft’s motion ignores the fact that the parties and the Court spent months discussing the appropriate approach to trial in this matter. During those discussions, Motorola, Microsoft, and the Court operated under the assumption that Motorola’s jury demand in the patent infringement suit it filed against Microsoft in Wisconsin carried over to the present case when it was transferred and consolidated with this case. Based on this understanding, the Court settled on a two-part approach, in which the Court would first determine the RAND rate or range, and then a jury would decide whether Motorola’s alleged conduct constitutes a breach of contract. The first part of the trial was tried to the Court in November 2012. Now, three and a half months later, Microsoft claims that Motorola waived its right to a jury trial and is asking the Court to establish a new approach for trial. Motorola should not be denied its constitutional right to a trial by jury on such a belated basis.

Finally, Microsoft’s present motion effectively asks the Court to reconsider its prior order establishing the two-part approach to trial. But, Microsoft’s improper motion for reconsideration is untimely. Microsoft also fails to meet the standard for reconsideration. Accordingly, Motorola respectfully requests that the Court deny Microsoft’s motion.

You'll notice that Exhibit A-D [PDF], attached to the declaration of Andreas Pallios Roberts, is made up of partial transcripts of various hearings before this judge, the Hon. James Robart. If you look at page 14 of Exhibit B, which is page 11 of the combined PDF, you find the judge telling the parties that it's not unusual for jury pools in that court to be made up of at least a couple of Microsoft employees, sometimes more than that, because "Microsoft has a very gracious policy in regards to jury service, which the court appreciates immensely."

Blech. There are reasons why Microsoft wanted this dispute handled in its home court. And there's no question that so far it's going just as Microsoft hoped for. But that is why the US legal system includes appeals. This happens sometimes, and there's no reason to get overworried when it does.

Here's how Microsoft responds [PDF] to Motorola's opposition:

I. INTRODUCTION

The Court’s decision to bifurcate the RAND determination from breach was plainly not contingent on any assumption that the breach phase would be a jury trial, as Motorola argues. After informing the parties of the Court’s phased plan, the Court asked for Motorola’s position as to whether it believed the breach phase “is a court trial or a jury trial.” (Dkt. No. 670 Ex. 1 at 3:17–18.) Motorola expressed an interest in a jury and, in subsequent briefing directed to other issues, the parties disputed whether Motorola had any such right. The Court proceeded to the RAND bench trial and has not been asked to rule before now on whether the subsequent breach trial would be to the Court or a jury. With the breach trial approaching, resolution of the parties’ dispute concerning Motorola’s jury rights is entirely appropriate.

Motorola’s response fails to identify any mistake or omission in Microsoft’s recitation of the operative pleadings in this case, which demonstrates that in the summer of 2011 Motorola waived—knowingly and intentionally—any right to a jury trial on breach of contract issues. Motorola’s argument that it “timely demanded a jury trial” (Dkt. No. 669, Motorola’s Opp. to Microsoft’s Mot. to Confirm Bench Trial of Breach of Contract Issues (“Opp.”) at 6) as to breach of contract has no factual basis. Motorola’s only jury demand even arguably made in this case was specifically limited to “the patent claims.” Motorola’s other arguments—that the Court should provide relief under Rule 39, or that Microsoft’s motion should be denied on laches grounds—misapply the law, and provide no basis to excuse Motorola’s waiver.

The exhibits Motorola provides that we just looked at, though, show Motorola repeatedly saying it wanted a jury trial. Nevertheless, don't pass out from surprise if the judge decides to take the decision on his own shoulders anyway.

Update: From Matt Rizzolo at The Essential Patent Blog, the public version of the ruling [PDF, 207 pages] is revealed, and guess whose math the judge followed?

That’s about 4 cents/unit total — and even at the upper bounds, it’s about 36 cents/unit. From a review of the parties’ post-trial briefs (Motorola, Microsoft), these RAND royalty rates are much closer to the ones urged by Microsoft than Motorola. And obviously, they are much lower than the 2.25% rates offered by Motorola in its initial licensing letters (which work out to about $4.50 on a $199 Xbox). Judge Robart apparently did not find Motorola’s prior licenses (many of which involved Motorola’s cellular SEP portfolios) to be good comparables for a license between Motorola and Microsoft involving 802.11 and H.264 patents. Instead, he appears to have based much of his determinations on rates offered by patent pools (the MPEG LA AVC/H.264 pool and the Via Licensing 802.11 pool), as well as license rates charged by chip designer ARM Holdings.
Surprise, surprise. However, Rizzolo adds this interesting detail:
One interesting thing about the findings is that while the ultimate RAND royalty appears to favor Microsoft, Judge Robart seems to have sided with Motorola as to the right approach to determine RAND royalties — simulating a hypothetical, bilateral negotiation between the parties (whereas Microsoft had suggested determining RAND on the basis of an ex ante, multilateral negotiation at the time of the standard’s adoption).

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