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Microsoft v. Motorola, Part 2, Will Be a Jury Trial, Aug. 26 ~pj
Tuesday, May 21 2013 @ 03:32 AM EDT

The next phase of the Microsoft v. Motorola litigation in Seattle will begin on August 26th. It will be a jury trial, as Motorola requested. I hope some of you are nearby and can attend. This will be the part about Microsoft's claims of breach of contract based on its assertion that Motorola violated a RAND contract by its opening bid being allegedly too high.

To describe it is to express the ridiculousness of what has been happening in Seattle. Why do I say that? I'll show you.

First, the latest docket:

Filed & Entered:   05/13/2013 - Notice of Filing of Official Transcript
Docket Text: NOTICE OF FILING OF OFFICIAL TRANSCRIPT of the telephone conference held on 5/7/2013 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 Nancy Bauer by telephone at 206-370-8506, or by e-mail at nancy_bauer@wawd.uscourts.gov. . Release of Transcript Restriction set for 8/12/2013, (NB)

691 - Filed & Entered: 05/20/2013
Order on Motion to Seal
Docket Text: ORDER granting [688] Stipulated Motion to Seal and striking [684] Motorola's Motion to Seal, by Judge James L. Robart.(MD)

692 - Filed & Entered: 05/20/2013
Order on Motion to Seal
Docket Text: ORDER striking [676] [677] Motion to Seal as Moot by Judge James L. Robart.(MD)

693 - Filed & Entered: 05/20/2013
Order on Motion for Miscellaneous Relief
Docket Text: ORDER denying [660] Microsoft's Motion Confirming Bench Trial. The trial on the breach of contract issues, scheduled for August 26, 2013, will be a jury trial, by Judge James L. Robart.(MD)

In the course of working on the judge's order, doing it as text, I noticed it cites numerous earlier filings, and I came across a filing [PDF] by Motorola that encapsulates its position, namely that this judge lacks the authority to create a contract or invent terms of a contract that doesn't exist. Judges, Motorola argues, have authority to interpret and enforce contracts, but not to *create* them. Any contract in this picture was between Motorola and standards bodies IEEE and ITU, and the terms expressly stated that a license between Motorola and any third party was to be based on negotiations between them.

Instead, the judge, at Microsoft's urging, has in effect, Motorola argues, established terms to benefit a third party potential licensee -- terms that the parties themselves never intended:

As this Court has stated, and as discussed in the Motion (Dkt. No. 362 at 7-8), the Motorola-SSO contracts explicitly envision that any RAND license agreements will be created by negotiations between the SEP holder and prospective licensees. (See, e.g., Dkt. No. 335 at 24 (“[T]he language of Motorola’s agreements with the IEEE and the ITU envisions a negotiation between the parties towards a resulting RAND license.”).) Indeed, as one of the ITU’s LOAs explains, “Negotiations of licenses are left to the parties concerned and are performed outside the ITU-T | ISO/IEC.” Ex. 5 at MOTM_WASH1823_0000039; see also id. at MOTM_WASH1823_0000036 (“Negotiations are left to the parties concerned and are performed outside the ITU-T, ITU-R, ISO, or IEC.”); 046 (same); 053 (same); 057 (same); 061 (same). Moreover, as the Common Patent Policy for ITU-T/ITU-R/ISO/IEC itself states, “[t]he detailed arrangements arising from patents (licensing, royalties, etc.) are left to the parties concerned, as these arrangements might differ from case to case.” Ex. 13 at MOTM_WASH1823_0092833.

“[T]hird-party beneficiaries cannot exercise rights that the parties did not intend them to have.” Lucas v. Bechtel Corp., 800 F.2d 839, 848-49 (9th Cir. 1986) (quoting Punikaia, 720 F.2d at 570). Here, given the explicit language and implications of the Motorola-SSO contracts regarding the negotiations that would take place between Motorola and any third-party prospective licensee, it is clear that Motorola and the SSOs did not intend for a third-party like Microsoft to have the right to impose non-negotiated licensing terms on Motorola. “Generally, courts function to enforce contracts as drafted by the parties and not to change the obligations of the contract the parties saw fit to make.” In re Estate of Bachmeier, 52 P.3d 22, 25 (Wash. 2002) (citing 11 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 31:4 (4th ed. 1999 & Supp. 2001)). Courts, moreover, “cannot rewrite a contract to force a bargain that the parties never made.” Denaxas v. Sandstone Court of Bellevue, L.L.C., 63 P.3d 125, 132-33 (Wash. 2003) (citing Childers v. Alexander, 571 P.2d 591, 594 (1977)). Microsoft’s position is at odds with these authorities because it would eliminate the need for the negotiations to which Motorola and the SSOs agreed.

It's a powerful argument, to me, and the fact that this judge didn't accept it and barreled ahead in no way determines what might happen on appeal. I'm pointing that out because I expect to see the issue raised on appeal. And I've done this document in full as text for you also.

I mean, imagine you are Motorola -- you donated your patents to a standards body on terms that decades later some judge decides to change, to your detriment, not because the standards bodies are complaining but because a third party licensee or would-be licensee wants to change them to make it cheaper for itself.

Anyway, to get back to the latest ruling by the judge, Microsoft wanted the judge to decide the contract claim as a bench trial, because he has strongly favored Microsoft from day one, so Microsoft came up with a strained argument that Motorola had waived a jury trial. But the judge has now denied [PDF] Microsoft's motion, and rightly so, since Motorola indeed asked for a jury trial and you only have to do that once, and so the trial will be a jury trial.

The key to understanding what happened is to remember that this litigation represents two cases that were spliced together. Motorola had filed a patent claim against Microsoft in Wisconsin, the day after Microsoft filed in Seattle, and Motorola's action got transferred to Seattle, at Microsoft's request, and consolidated with Microsoft's contract action against Motorola there. In the Wisconsin action, Motorola had asked for a jury trial and so had Microsoft in its Answer with counterclaims. Later, the judge in Seattle tossed out the Motorola patent claims and decided there should be a two-part trial, first a bench trial with the judge deciding a RAND range and then a jury trial on Microsoft's contract claims. But in joint status reports after the consolidation, Motorola and Microsoft both said that in the Wisconsin matter, both parties had asked for a jury trial and Motorola reserved its right to request a jury trial.

In the course of all that, or as the judge puts it, during "significant motion practice" by the parties, there was some discussion about whether the second part should be a jury trial after all, and that's when, Microsoft tried to allege, Motorola waived its right to a jury. We can't read that document, because it's sealed, but we can see Motorola's reponse, and in footnote 6 it responded to Microsoft's argument:

While (as Microsoft acknowledges) the issue is not before the Court as part of this Motion, contrary to Microsoft’s argument (Opp. at 3-4 n.3), Motorola is entitled to a jury on the breach of contract issues. Microsoft’s argument acknowledges only the breach of contract claim in original Case No. C10-1823 (“the 1823 case”). However, as part of Case No. C11-343 (“the 343 case”) Microsoft raised “identical breach of contract claims as” counterclaims. (Dkt. No. 66 at 3.) The trial on the breach of contract issues obviously implicates both the claim in the 1823 case and the “identical” counterclaim in the consolidated 343 case. Together with its counterclaims in the 343 case, Microsoft demanded a jury trial on all claims and issues triable by a jury. (Case No. 2:11-cv-00343-JLR, Dkt. No. 37 at 6.) Microsoft has not sought consent to withdraw its jury demand, nor has such consent been granted. See Fed. R. Civ. P. 38(d); Mid-Continent Cas. Co. v. Titan Const. Corp., No. C05-1240 MJP, 2008 WL 4837043, at *1 (W.D. Wash. Nov. 6, 2008). Even if the cases had not been consolidated, moreover, in light of the jury demand in the 343 case, the Court should defer to the factual findings of the jury so as not to deprive Motorola of its Seventh Amendment rights. Cf. Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11 (1959) (“Since the right to jury trial is a constitutional one . . . [the court’s] discretion is very narrowly limited and must, wherever possible, be exercised to preserve jury trial.”); Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988, 995 (Fed. Cir. 1995) (where the same facts are relevant to both a legal claim and an equitable claim, the judge cannot make judicial findings that are “independent of and contrary to the facts found by the jury”) (collecting cases); Fed. R. Civ. P. 42(b) (“When ordering a separate trial, the court must preserve any federal right to a jury trial.”).
And the judge now agrees, after seeing transcripts of the hearings, supplied by Motorola, where it's incredibly obvious that Motorola said it wanted a jury trial and everyone was expecting it to be one, including the judge.

For sure, a jury trial is Motorola's best hope for a more even playing field, but since it'll be in Seattle, who knows? After the Apple lynching of Samsung in Apple's backyard courtroom by that tilted jury, my faith in juries living and working in the shadow of a large corporation has been somewhat strained. But for sure a jury there is better than a judge in Microsoft's shadow.

Here's the judge's ruling, as text, and the only change I've made is to link to the documents cited to the degree that we have them available, as docket #374 is sealed and not available to the public. After the ruling, I've done Motorola's #377 as text, a reply in support of its motion for partial summary judgment that was earlier denied, because that is where Motorola tells the judge, as it has from day one, that he doesn't have authority to decide what the terms of a license between the parties should be. I do expect to see that issue in the inevitable appeal, so I thought you might like to read it:

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

MICROSOFT CORPORATION,

Plaintiff,

v.

MOTOROLA, INC., et al.,

Defendants.
____________
MOTOROLA MOBILITY, INC., et al.,

Plaintiffs,

v.

MICROSOFT CORPORATION,

Defendant.

________

CASE NO. C10-1823JLR

ORDER DENYING
MICROSOFT’S MOTION
CONFIRMING BENCH TRIAL

INTRODUCTION

This matter is before the court on Plaintiff Microsoft Corporation’s (“Microsoft”) motion styled “Microsoft Corporation’s Motion to Confirm Bench Trial of Breach of Contract Issues.”1 (Mot. (Dkt. # 660).) Through its motion, Microsoft contends that because neither Microsoft nor Defendants Motorola, Inc., Motorola Mobility, Inc., and General Instrument Corporation (collectively, “Motorola”) demanded a jury with respect to the breach of contract issues in this case, the breach of contract issues should be tried to the bench. (See generally Mot.) Having considered Microsoft’s motion, Motorola’s opposition to the motion (Resp. (Dkt. # 669)), and Microsoft’s reply (Reply (Dkt. # 671)), and considering itself fully advised, the court DENIES Microsoft’s motion (Dkt. # 660).

II. BACKGROUND

This matter has a complex procedural history.2 Originally, the parties were involved in two separate actions in two different districts. The litigation between the parties in this district began on November 9, 2010, when Microsoft filed its complaint for breach of contract, promissory estoppel, waiver, and declaratory judgment (the “Microsoft Action”) alleging that Motorola had failed to comply with its reasonable and

2

non-discriminatory licensing (“RAND”) obligations regarding Motorola’s patent portfolios related to two separate standards—the 802.11 Wi-Fi Standard and the H.264 video compression Standard. (See generally Compl. (Dkt. # 1).) Microsoft did not request a jury trial in its initial complaint in the Microsoft Action. (See generally id.)

On November 10, 2010—the day after Microsoft initiated the Microsoft Action— Motorola filed a complaint for patent infringement (the “Motorola Action”) in the Western District of Wisconsin, Civil Action No. 3:10-CV-699, and demanded a jury trial. (See C11-0343JLR, Motorola Compl. (Dkt. # 1) at 1.) Motorola filed an amended complaint in the Motorola Action the next day and again demanded a jury trial (See C11-0343JLR, Motorola Am. Compl. (Dkt. # 29) at 1.) Microsoft filed its answer in the Motorola Action on January 25, 2011, asserting, as counterclaims, the same causes of action and factual allegations it had asserted as direct claims in the Microsoft Action: breach of contract, promissory estoppel, waiver, and declaratory judgment for Motorola’s alleged failure to comply with its RAND obligations. (See C11-0343JLR, Microsoft Answer (Dkt. # 37).) The caption of Microsoft’s answer stated “Jury Trial Demanded,” and in the body of its answer, Microsoft stated that it “acknowledges and joins in Motorola’s demand for a trial by jury on all claims and all issues triable by jury in this action.” (Id. at 1, 6.) On February 18, 2012, the Western District of Wisconsin granted Microsoft’s motion to transfer the Motorola Action to this district. (See C11-0343JLR (Dkt. # 44).)

On February 7, 2011, the parties filed a joint status report in the Microsoft Action. Motorola stated that it had not yet answered Microsoft’s complaint and reserved its right

3

to request a jury trial. (2/7/11 JSR (Dkt. # 44).) Microsoft filed an amended complaint in the Microsoft Action on February 23, 2011, and again, did not request a jury trial. (See generally Am. Compl. (Dkt. # 53).)

On May 31, 2011, after the Motorola Action had been transferred to this district, the parties filed a joint status report, which stated that the parties in the Motorola Action had requested a jury trial. (C11-0343JLR (Dkt. # 86).) Also, on May 31, 2011, the court issued an order denying Motorola’s motion to dismiss Microsoft’s breach of contract claims in the Microsoft Action. (See 5/31/11 Order (Dkt. # 66).) In the same order, the court consolidated the Motorola Action and the Microsoft Action. (See id. at 10-11.) Thereafter, on June 15, 2011, Motorola filed its answer to Microsoft’s breach of contract counterclaims from the transferred Motorola Action, and an answer to Microsoft’s complaint in the Microsoft Action. (Ans. to Counterclaims in Motorola Action (Dkt. # 67); Ans. in Microsoft Action (Dkt. # 68).) Motorola did not include a jury demand in the latter, and in the former Motorola stated that “Motorola demands a jury trial on all issues arising under the Patent Laws of the United States that are triable to a jury.” (Ans. to Counterclaims in Motorola Action at 1-2.) On June 17, 2011, after consolidation of the two cases, the parties filed another joint status report and Motorola again stated that it demanded a jury “on the patent claims.” (6/17/11 JSR (Dkt. # 69).)

The parties then commenced significant motion practice. (See generally Dkt.) On July 18, 2012, Motorola moved for partial summary judgment that the court could not ab initio create a Motorola-Microsoft patent license as a remedy for Microsoft’s breach of contract claims. (Ab Initio Mot. (Dkt. # 362).) In its opposition to that motion, Microsoft

4

stated in a footnote that it believed that Motorola had waived its right to a jury trial for the breach of contract issues. (Resp. to Ab Initio Mot. (Dkt. # 374) at 7-8, n.3.) In its reply brief, Motorola responded to Microsoft’s footnoted statement and argued that it was entitled to a jury trial. (Reply to Ab Initio Mot. (Dkt. # 377) at 11-12, n.6.) On October 10, 2012, the court denied Motorola’s motion regarding relief of a court-created, ab initio license between Microsoft and Motorola and set forth a two-part approach to adjudicate the remaining issues in the case. (10/10/12 Order at 9-11.) The October 10, 2012, order, explained that the court would first determine a RAND royalty rate (and range), and second, with this determination as guidance, a jury would hear Microsoft’s breach of contract claim. (Id.) On November 13 through 20, 2012, the court held a trial to determine a RAND royalty rate and range and has since issued its findings of fact and conclusions of law determining the RAND rate and range. (See 4/25/13 Order (Dkt. # 681).) The next phase of this case is to adjudicate Microsoft’s breach of contract claims.

III. DISCUSSION

Federal Rule of Civil Procedure 38 provides: “On any issue triable of right by a jury, a party may demand a jury trial by: (1) serving the other parties with a written demand—which may be included in a pleading—no later than 14 days after the last pleading directed to the issue is served; and (2) filing the demand in accordance with Rule 5(d).” Fed. R. Civ. P. 38(b). Instead of demanding a jury on all issues so triable, a party may instead “specify the issues that it wishes to have tried to a jury.” Fed. R. Civ. P. 38(c). If a party does not so specify, “it is considered to have demanded a jury trial on all issues so triable.” Id. “A party waives a jury trial unless its demand is properly

5

served and filed.” Fed. R. Civ. P. 38(d). However, the court must “indulge in every reasonable presumption against the waiver of a jury trial.” United States v. Cal. Mobile Home Park Mmt., 107 F.3d 1374, 1378 (9th Cir. 1997).

Microsoft argues that Motorola has waived its right to a jury for the breach of contract claims by failing to make a timely jury demand as to those claims. (See generally Mot.) Specifically, Microsoft contends that Motorola waived its right to a jury by failing to demand one within 14 days of the final pleadings in this case—Motorola’s answer in the Microsoft Action and Motorola’s answer to the Microsoft counterclaims in the Motorola action, which were filed on June 15, 2011. On the facts before it, the court disagrees and cannot conclude that Motorola waived its right to a jury trial for Microsoft’s breach of contract claims.

First and foremost, Microsoft itself demanded a jury trial in its answer and counterclaims in the Motorola Action “on all claims and all issues triable by jury in this action.” (C11-0343JLR, Microsoft Answer (Dkt. # 37).) Microsoft’s counterclaims in the Motorola Action were the same causes of action—breach of contract, promissory estoppel, waiver, and declaratory judgment—as pled in Microsoft’s complaint in the Microsoft Action, which was filed in this district. The Microsoft Action and the Motorola Action have since been consolidated and Motorola may reasonably rely on Microsoft’s demand for a jury trial on all issues, including the breach of contract issues. Cal. Scents v. Surco Prods., Inc., 406 F.3d 1102, 1106-09 (9th Cir. 2005) (holding that if a party has filed a timely jury demand, other parties may rely on the demand “for the issues it covers, and need not file their own demands.”)

6

Microsoft further argues that its counterclaim of breach of contract in the Motorola Action (originally filed in the Western District of Wisconsin) was in the alternative, “‘subject to resolution’ of Microsoft’s motion to dismiss, stay, or transfer the patent case to Seattle.” (Mot. at 7, n.3.) However, Microsoft did not dismiss its counterclaims after the case was transferred to this district. Nor has Microsoft sought consent to withdraw its jury demand in the Motorola Action after consolidation. See Fed. R. Civ. P. 38(d) (“A proper demand may be withdrawn only if the parties consent.”). Thus, the court concludes that Microsoft made a jury demand on all claims triable by jury, including the breach of contract claims, and that demand has since been transferred to this court and consolidated into this case. Affording Motorola every reasonable presumption against the waiver of a jury trial, the court concludes that Motorola may reasonably rely on this demand and did not waive its jury trial right.

Second, Microsoft argues that Motorola specifically waived its jury trial right as to the breach of contract issues by requesting a jury trial only on the patent issues in the Motorola Action. (Mot. at 6.) Microsoft contends that by making a specific demand for a jury trial on only the “issues arising under the Patent Laws of the United States,” Motorola intended to waive its jury trial right on the breach of contract issues. In many ways, this argument resonates with the court. Indeed, it would seem that breach of contract issues would not be issues arising under the “Patent Laws of the United States.” Nevertheless, the court cannot find that by this statement Motorola waived its jury trial right.

7

This is a complicated case. The Motorola Action involved both patent infringement claims and breach of contract counterclaims. As explained above, Microsoft made a proper demand for a jury on all issues in the Motorola Action, which was then transferred to this district and consolidated with the Microsoft Action. Moreover, the parties proceeded with the apparent understanding that the breach of contract issues could be decided by a jury. (See, e.g., 10/10/12 Order at 9-11.) Indeed, during a series of hearings and telephone conferences, the parties and the court discussed whether or not adjudication of the breach of contract issues would be before the court or a jury. (See, e.g., 5/7/12 Tr. (Dkt. # 315) at 39 (court discussing possibility of jury trial); Excerpt of 6/14/12 Tr. (Dkt. # 670-1) (discussion of jury trial for breach of contract issues.) At a July 9, 2012, teleconference—over one year after consolidation of the Motorola Action and the Microsoft Action—Motorola advised the court that it sought a jury trial on the breach of contract claims. (7/9/12 Tr. at 5 (“In answer [to the court’s question], we have decided not to waive the jury trial on the breach of the duty of good faith, and with respect to that issue, we think—we do agree that that is a triable issue that the jury can determine.”).) It was not until after these hearings and conferences—in its response to Motorola’s motion for partial summary judgment regarding an ab initio licensing agreement—that Microsoft first stated that it believed that Motorola had waived its right to a jury on the breach of contract issues. In sum, although Motorola could have been more clear in its jury demand, based on the complexity of this case, the parties’ apparent understanding that Motorola had not waived its jury right as to the breach of contract issues for over a year after consolidation, and the fact that the court must give

8

Motorola all reasonable presumptions against waiver, the court cannot conclude that Motorola waived its right to a jury by making a jury demand only on the issues under the Patent Laws of the United States. Moreover, even were the court to determine that Motorola’s statement acted to waive its jury demand, it would not overcome the court’s earlier determination that Motorola may reasonably rely on Microsoft’s jury demand on the breach of contract issues in the Motorola Action which was transferred to this district and consolidated into this action.

IV. CONCLUSION

Based on the foregoing, the court DENIES Microsoft’s motion to confirm a bench trial on the breach of contract issues (Dkt. # 660). The trial on the breach of contract issues, scheduled for August 26, 2013, will be a jury trial.

Dated this 20th day of May, 2013.

[signature]
JAMES L. ROBART
United States District Judge

_____________
1 While the parties have both filed affirmative claims in this matter, the court names Microsoft as the “plaintiff” for purposes of this order because Microsoft filed the complaint initiating this action.

2 In this order, the court will provide the procedural history relevant to whether or not the breach of contract issues in this case should be tried to a jury or to the bench. A more complete history of this case can be found in a prior court order denying Motorola’s motion for partial summary judgment. (See 10/10/12 Order (Dkt. # 465).)

9

And here's Motorola's reply in support of its motion for partial summary judgment, #377, minus the header and table of contents, etc., just for time's sake. I think you'll see from reading it why I call the fact that this case ever got this far simply ridiculous:
I. INTRODUCTION

In its Opposition to Motorola’s Motion for Partial Summary Judgment (Dkt. No. 374) (“Opposition” or “Opp.”), Microsoft agrees that courts cannot create or rewrite contracts, but Microsoft urges this Court to do so anyway.

Critically, Microsoft concedes that no licensing contract exists between Microsoft and Motorola, and as such there are no ambiguous or missing terms in such a contract for the Court to interpret or supply. Microsoft is therefore relegated to arguing that, under the guise of “enforcing” Motorola’s commitments to the SSOs, this Court should create from scratch a new licensing contract with many terms that Microsoft admits would be material. Microsoft ignores that the parties to the Motorola-SSO contracts chose not to create licenses with open or missing RAND terms, but instead expressly contracted for those licenses (and their RAND terms) to be negotiated by the patent holder and third parties like Microsoft. Microsoft’s position now—that it can refuse to negotiate such a license, and then have a court create one instead—cannot be squared with the “elementary law, universally accepted,” that courts do not “have the right to make a contract for the parties.” Chaffee v. Chaffee, 145 P.2d 244, 252 (Wash. 1943); City of New Orleans v. New Orleans Waterworks Co., 142 U.S. 79, 91-92 (1891) (“Courts have no power to make new contracts . . . .”). This may explain why Microsoft waited until page 12 of its 15-page Opposition to make this argument and finally “address” the central point of Motorola’s Motion.

At bottom, Microsoft confuses what the fact finder can do, which is determine in a breach of contract trial whether Motorola’s offered terms were consistent with RAND, with what a court lacks subject matter jurisdiction to do, which is create the terms of a new license between Microsoft and Motorola.

5

There also is no merit—legal or factual—to Microsoft’s argument that Motorola’s subject matter jurisdiction challenge is barred by waiver or estoppel. Microsoft’s argument fails legally because “federal jurisdiction cannot be created by the parties through waiver or through estoppel, in cases in which jurisdiction otherwise does not exist.” United States v. Ceja-Prado, 333 F.3d 1046, 1049-50 (9th Cir. 2003); see also Commodity Futures Trading Comm’n v. Schor, 478 U.S. 833, 851 (1986). Microsoft’s waiver/estoppel argument also fails factually. Motorola’s cited statements do not meet key factors of the test for estoppel. Moreover, given (a) Microsoft’s ever- changing positions regarding the relief requested in this action, (b) Motorola’s acknowledgment that a fact finder could consider a RAND rate if needed in connection with a breach assessment, and (c) the absence of any precedent for a court creating a RAND license, the facts here would not sustain a finding of waiver or estoppel, even if those doctrines could be asserted to bar a subject matter jurisdiction challenge.

Accordingly, Motorola respectfully requests that the Court grant partial summary judgment denying Microsoft’s “claim” that the Court should create ab initio a Motorola/Microsoft license, or material terms of such a license, and instead proceed to trial on the question of whether Motorola’s October 2010 letters breached the implied covenant of good faith and fair dealing.

II. MICROSOFT AGREES THAT COURTS CANNOT CREATE OR REWRITE
CONTRACTS, BUT URGES THE COURT TO DO SO ANYWAY

Microsoft’s memorandum does not address the merits of Motorola’s Motion until page 12. There, Microsoft concedes that courts cannot create or rewrite contracts, yet it nonetheless urges the Court to do exactly that by creating from scratch a new licensing contract between Motorola and Microsoft. Even aside from the prohibition on courts creating or rewriting contracts, doing so here would be error for two additional, independent reasons. First, as Microsoft further concedes, there is no licensing contract between Motorola and Microsoft, and so there are no ambiguous or

6

omitted terms in such a contract (or for that matter in the Motorola-SSO agreements) for the Court to interpret or supply. Second, Motorola’s contracts with the IEEE and the ITU explain that the terms of any RAND license would be negotiated by the patent holder and any third-party beneficiary prospective licensee—i.e., there is no contract between Motorola and Microsoft until one is negotiated. Motorola remains ready and willing to so negotiate—indeed, it has been doing so throughout the pendency of this litigation. The Court’s creation of such a license, or material terms of such a license, would therefore undermine and contradict the express terms of the very contracts with the SSOs that Microsoft says it seeks to “enforce.”

A. Microsoft Concedes That There Is No Licensing Contract Between Motorola
and Microsoft, and So There Are No Ambiguous or Omitted Terms in Such a
Contract for the Court to Interpret or Supply

Microsoft effectively concedes Motorola’s point (Dkt. No. 362 at 13-14) that there is no existing licensing contract between Microsoft and Motorola by arguing instead that the Court can dictate a RAND rate or RAND terms by “enforcing” the separate contracts between Motorola and the SSOs. (See, e.g., Opp. at 12-14.) Microsoft’s concession correctly reflects the language of Motorola’s contracts with both the IEEE, which declare that “[n]o license is implied by submission of this letter of assurance,” (Dkt. No. 362 at 8 (quoting Ex. 71)), and the ITU, which similarly state that they do “not represent an implied license grant” or “an actual grant of a license” (id. (quoting Ex. 5)). In addition, Microsoft’s concession is obviously appropriate in light of Microsoft’s earlier admission that, until at least September 2011, it had not even committed to taking a license from Motorola on any terms. (See May 7, 2012 Hr’g Tr. at 70.)2

Microsoft nowhere disputes Motorola’s observation (Dkt. No. 362 at 2-3, 18) that it is “elementary law, universally accepted,” Chaffee, 145 P.2d at 252, that courts have no power to make new contracts between parties. See, e.g., City of New Orleans, 142 U.S. at 91 (“[Courts’]

______
1 Motion for Partial Summary Judgment. (Dkt. Nos. 363 and 364.) “Ex. ___” refers to the stated Exhibit to the Declaration of Kevin J. Post, submitted in support of Motorola’s Motion for Partial Summary Judgment. (Dkt. Nos. 363 and 364.)

2 This stands in stark contrast to Microsoft’s astonishing statement during the July 10 telephone conference that the terms of a contract between Motorola and Microsoft “are embodied in the patents themselves and in the standards, organizations, policies and procedures [sic].” (July 9, 2012 Tele. Conf. Tr. at 6.)

7

powers are exhausted in fixing the rights of parties to contracts already existing.”). In light of this elementary law, and because (as Microsoft concedes) there is no licensing contract between Microsoft and Motorola, there cannot be omitted or ambiguous terms in any such contract for the Court to supply or interpret. Microsoft does not, and indeed cannot, argue that the Court should “fill in” the gap in any such contract, because there is no such contract.3 Instead, as Microsoft implicitly acknowledges (see, e.g., Opp. at 12-14), its contract rights against Motorola must be limited to those explicitly provided to it as a third-party beneficiary of the Motorola-SSO contracts—namely, the right to participate in good faith negotiations to arrive at an essential patent license. See, e.g., Stratosphere Litig. L.L.C. v. Grand Casinos, Inc., 298 F.3d 1137, 1145-46 (9th Cir. 2002) (“The rights of a third-party beneficiary are limited by the contract between the promisor and the promisee.”)4 (quoting Punikaia v. Clark, 720 F.2d 564, 570 (9th Cir. 1983)).

B. Microsoft Urges Error by Asking the Court to Create a New
Microsoft/Motorola Contract, or Material Terms for Such a Contract, Under
the Guise of “Enforcing” Motorola’s Commitments to SSOs

Microsoft concedes that no licensing contract exists between Motorola and Microsoft, and does not dispute that courts lack the power to make contracts. Microsoft nonetheless urges the Court to do exactly that, because (in its view) Motorola “contractually committed itself to the creation of ‘new contracts’ (patent licenses) . . . .” (Opp. at 12.) Microsoft’s reading appears to be that the Motorola-SSO contracts constitute “agreements to agree”—which (unlike an agreement to negotiate, like Motorola’s RAND commitments) are unenforceable under Washington law. See Keystone Land & Dev. Co. v. Xerox Corp., 94 P.3d 945, 948 (Wash. 2004).

___________
3 Microsoft’s citation (Opp. at 12-13) to Restatement (Second) of Contracts § 204 is thus unavailing in this context. That section explicitly applies only when “the parties to a bargain sufficiently defined to be a contract have not agreed with respect to a term.” However, there is no contract between Motorola and Microsoft (and thus no bargain “sufficiently defined to be a contract”). The other case and the statute Microsoft cites are similarly unavailing in this context, because they address only instances in which there are existing contracts. See, e.g., Rutcosky v. Tracy, 574 P.2d 382, 385 (Wash. 1978) (en banc) (concluding that the trial court’s finding that a contract exists was binding); RCW 62A.2-305(2) (Washington State Uniform Commercial Code provision regarding an open term price in a concluded contract for sale).

4 All emphasis is added unless otherwise indicated.

8

1. There are no omitted or “implied” terms in the Motorola-SSO
contracts for the Court to “fill in” or supply

Microsoft’s primary contract argument is that, in “enforcing” the Motorola-SSO contracts, and in accordance with Restatement (Second) of Contracts § 204, the Court can supply the exact royalty rate as the omitted term of each of those Motorola-SSO contracts. (See Opp. at 12-13.) However, for a court to “fill in” or supply a term, some term in the contract must be open or omitted. After all, if a term has instead been agreed to by the parties to the contract, then a court cannot alter the meaning of that term, as courts “do not have the power, under the guise of interpretation, to rewrite contracts which the parties have deliberately made for themselves.” Chaffee, 145 P.2d at 252. The express language of the Restatement (Second) itself makes clear that a court can supply a term only when the parties “have not agreed” on the meaning. Restatement (Second) of Contracts § 204 (“Supplying An Omitted Essential Term”). The Restatement (Second) similarly explains that an omitted term to be supplied is one that was implied by the contract. See, e.g., id. at Comment a (“The supplying of an omitted term is not technically interpretation, but the two are closely related; courts often speak of an ‘implied’ term.”).

Here, the contracting parties (Motorola and the IEEE and ITU) did not “omit” or fail to agree on an “implied” term. To the contrary, the parties expressly agreed that the terms of licensing contracts with third-parties will be determined by negotiation, and thus expressly agreed to the meaning of the RAND commitments. See infra at II.B.2. There are therefore no omitted or implied terms in the Motorola-SSO contracts for the Court to “fill in” or supply.5

_________
5 The single Washington case that Microsoft cites (Opp. at 12) for its proposition, Rutcosky, 574 P.2d at 385, is thus inapposite, as it dealt with a formed contract in which “the exact amount of compensation was unspecified.” The Washington State UCC provision that Microsoft cites (Opp. at 12-13), RCW 62A.2-305(2), is similarly inapposite because it too addresses a situation in which an existing contract’s necessary term has not been agreed to. Moreover, as Microsoft and Motorola agree (Opp. at 7; Dkt. No. 362 at 9-11), RAND licenses include numerous material terms. Indeed, Motorola’s October 21, 2010 and October 29, 2010 letters to Microsoft referenced multiple “terms and conditions,” “including a reasonable royalty.” (Dkt. No. 230-1 at 6, 29.)

9

2. Motorola and the SSOs expressly contracted for patent holders and
third-party beneficiaries to negotiate RAND terms

As this Court has stated, and as discussed in the Motion (Dkt. No. 362 at 7-8), the Motorola-SSO contracts explicitly envision that any RAND license agreements will be created by negotiations between the SEP holder and prospective licensees. (See, e.g., Dkt. No. 335 at 24 (“[T]he language of Motorola’s agreements with the IEEE and the ITU envisions a negotiation between the parties towards a resulting RAND license.”).) Indeed, as one of the ITU’s LOAs explains, “Negotiations of licenses are left to the parties concerned and are performed outside the ITU-T | ISO/IEC.” Ex. 5 at MOTM_WASH1823_0000039; see also id. at MOTM_WASH1823_0000036 (“Negotiations are left to the parties concerned and are performed outside the ITU-T, ITU-R, ISO, or IEC.”); 046 (same); 053 (same); 057 (same); 061 (same). Moreover, as the Common Patent Policy for ITU-T/ITU-R/ISO/IEC itself states, “[t]he detailed arrangements arising from patents (licensing, royalties, etc.) are left to the parties concerned, as these arrangements might differ from case to case.” Ex. 13 at MOTM_WASH1823_0092833.

“[T]hird-party beneficiaries cannot exercise rights that the parties did not intend them to have.” Lucas v. Bechtel Corp., 800 F.2d 839, 848-49 (9th Cir. 1986) (quoting Punikaia, 720 F.2d at 570). Here, given the explicit language and implications of the Motorola-SSO contracts regarding the negotiations that would take place between Motorola and any third-party prospective licensee, it is clear that Motorola and the SSOs did not intend for a third-party like Microsoft to have the right to impose non-negotiated licensing terms on Motorola. “Generally, courts function to enforce contracts as drafted by the parties and not to change the obligations of the contract the parties saw fit to make.” In re Estate of Bachmeier, 52 P.3d 22, 25 (Wash. 2002) (citing 11 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 31:4 (4th ed. 1999 & Supp. 2001)). Courts, moreover, “cannot rewrite a contract to force a bargain that the parties never made.” Denaxas v. Sandstone Court of Bellevue, L.L.C., 63 P.3d 125, 132-33 (Wash. 2003)

10

(citing Childers v. Alexander, 571 P.2d 591, 594 (1977)). Microsoft’s position is at odds with these authorities because it would eliminate the need for the negotiations to which Motorola and the SSOs agreed.

III. MOTOROLA’S COMMITMENTS TO THE IEEE AND ITU CAN BE ENFORCED
IN THE TRIAL OF MICROSOFT’S BREACH CLAIM AND COUNTERCLAIM

Motorola’s Motion is based on the critical distinction between (1) the fact finder considering RAND terms (or a range of RAND terms) in the context of deciding whether Motorola breached its contracts with the SSOs (see Opp. at 8; Dkt. No. 335 at 25-26), which (though it need not do so if it decides the good-faith issue on other evidence) it has the power to do, and (2) the Court determining RAND terms to create the terms of a new license between Microsoft and Motorola (see Opp. at 6), which the Court lacks the power to do. Microsoft’s Opposition repeatedly confuses these two approaches. (Compare, e.g., Opp. at 3-4, 7-8 (discussing the consideration of RAND terms to determine whether Motorola breached the Motorola-SSO contracts); and Opp. at 14 (arguing that a RAND license on the terms set by the Court “will result solely as a consequence of” Motorola’s contractual commitments).) Microsoft is bootstrapping: it cites the permissibility of considering RAND terms in determining the breach of contract issues in an attempt to “prove” that the Court has authority that does not exist to create and dictate the terms of a new licensing contract between Motorola and Microsoft.

As Motorola has maintained, to the extent that Microsoft alleges that Motorola has breached its contracts with the SSOs, any such breach can be addressed through a breach of contract trial.6 The Court has jurisdiction over such a breach of contract trial. However, that is

__________
6 While (as Microsoft acknowledges) the issue is not before the Court as part of this Motion, contrary to Microsoft’s argument (Opp. at 3-4 n.3), Motorola is entitled to a jury on the breach of contract issues. Microsoft’s argument acknowledges only the breach of contract claim in original Case No. C10-1823 (“the 1823 case”). However, as part of Case No. C11-343 (“the 343 case”) Microsoft raised “identical breach of contract claims as” counterclaims. (Dkt. No. 66 at 3.) The trial on the breach of contract issues obviously implicates both the claim in the 1823 case and the “identical” counterclaim in the consolidated 343 case. Together with its counterclaims in the 343 case, Microsoft demanded a jury trial on all claims and issues triable by a jury. (Case No. 2:11-cv-00343-JLR, Dkt. No. 37 at 6.) Microsoft has not sought consent to withdraw its jury demand, nor has such consent been granted. See Fed. R. Civ. P. 38(d); Mid-Continent Cas. Co. v. Titan Const. Corp., No. C05-1240 MJP, 2008 WL 4837043, at *1 (W.D. Wash. Nov. 6, 2008). Even if the cases had not been consolidated, moreover, in light of the jury demand in the

11

not the same thing as saying that the Court has the power to craft new contracts.7 Because there is no licensing contract between Motorola and Microsoft, and no open or ambiguous term in any contract for the Court to supply or interpret, by dictating the terms or royalty rate of a prospective license between Motorola and Microsoft, the Court would be improperly issuing an advisory opinion, which it lacks the power and jurisdiction to do. See, e.g., Kittel v. Thomas, 620 F.3d 949, 951 (9th Cir. 2010) (“The Constitution limits the jurisdiction of the federal courts to live cases and controversies, and as such, federal courts may not issue advisory opinions.”) (citing U.S. Const., art. III; Flast v. Cohen, 392 U.S. 83, 96 (1968)).

IV. THERE IS NO MERIT—LEGAL OR FACTUAL—TO MICROSOFT’S
ASSERTIONS THAT WAIVER OR ESTOPPEL BARS MOTOROLA’S SUBJECT
MATTER JURISDICTION CHALLENGE

Motorola’s jurisdictional challenge cannot be judicially estopped or waived, both because Motorola’s statements do not rise to the level of judicial estoppel and, more importantly, because a party cannot waive or be estopped from raising a challenge to subject matter jurisdiction. Even apart from these legal arguments, Motorola’s quoted statements came in the context of proceedings that did not squarely present the question of whether the Court had jurisdiction to determine—and in fact should proceed to determine—the terms of a new license. Since the beginning of this litigation, moreover, Motorola has consistently argued that by setting a rate the Court would be improperly issuing an advisory opinion, and has agreed since the Court raised the

____________
343 case, the Court should defer to the factual findings of the jury so as not to deprive Motorola of its Seventh Amendment rights. Cf. Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 510-11 (1959) (“Since the right to jury trial is a constitutional one . . . [the court’s] discretion is very narrowly limited and must, wherever possible, be exercised to preserve jury trial.”); Therma-Tru Corp. v. Peachtree Doors Inc., 44 F.3d 988, 995 (Fed. Cir. 1995) (where the same facts are relevant to both a legal claim and an equitable claim, the judge cannot make judicial findings that are “independent of and contrary to the facts found by the jury”) (collecting cases); Fed. R. Civ. P. 42(b) (“When ordering a separate trial, the court must preserve any federal right to a jury trial.”).

7 The authorities Microsoft cites (Opp. at 13-14) in an effort to show that it would be appropriate for the Court to set the RAND rate of a new licensing contract are inapposite because they stand only for the undisputed principle that allegations of breach of the duty of good faith in the contract context should be resolved by the courts. These citations do nothing to support Microsoft’s argument that, by dint of Motorola’s RAND commitments to grant licenses on negotiated RAND terms in the Motorola-SSO contracts, the Court has the power to draft, create, and dictate the terms of a new contract between Microsoft and Motorola.

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prospect in February 2012 that the fact finder could consider RAND terms in connection with assessing the breach of contract issues.8

As an initial matter, far from urging this Court to create a RAND license, Motorola has urged it to reject Microsoft’s theory on multiple grounds. (See, e.g., Dkt. No. 362 at 6; Dkt. No. 36 at 2; Dkt. No. 57 at 3; Dkt. No. 62 at 11-12.) Even assuming, contrary to fact, that in opposing Microsoft’s anti-suit injunction Motorola had affirmatively urged the Court to create a RAND license, the Court should not apply judicial estoppel because the Court issued the injunction opposed by Motorola. (See Dkt. No. 318.) As the Supreme Court has explained, one of the three factors that “typically inform the decision whether to apply” judicial estoppel is “whether the party has succeeded in persuading a court to accept that party’s earlier position.” Zedner v. United States, 547 U.S. 489, 504 (2006); see also New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001) (“Absent success in a prior proceeding, a party’s later inconsistent position introduces no ‘risk of inconsistent court determinations,’ . . . and thus poses little threat to judicial integrity.”) (citations omitted). Even if the Court had not issued the injunction, there would be no “unfair advantage” to Motorola or “unfair detriment” to Microsoft in the absence of estoppel—another key factor in the judicial estoppel analysis. New Hampshire, 532 U.S. at 751.9

In any event, as a matter of law, Motorola’s challenge to the Court’s subject matter jurisdiction cannot be estopped or waived. As the Ninth Circuit has explained:

[F]ederal jurisdiction cannot be created by the parties through waiver or through estoppel, in cases in which jurisdiction otherwise does not exist. . . . [C]ourts have not allowed jurisdiction to depend on either malfeasance or well- intentioned agreement of the parties. See, e.g., Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 95 (1998) (“[E]very federal appellate court has a special obligation to satisfy itself not only of its own jurisdiction, but also that of the
___________
8 In addition to its substantive and estoppel arguments, Microsoft’s Opposition is replete with arguments about collateral issues (for example, policy arguments about whether an SEP holder that has made a RAND commitment can enjoin an infringing party or whether RAND terms are best viewed ex ante or ex post, a matter addressed at length in the expert reports), inaccurate speculation about Motorola’s supposed ulterior motives, and insinuations of bad faith. These arguments are both unproductive and irrelevant to Motorola’s Motion.

9 While Microsoft also quotes a statement from May 18, 2011, as discussed infra at 10 & n.11, at that time Microsoft had not even committed to taking a license, and had not asked the Court to set the terms of such a license.

13

lower courts in a cause under review, even though the parties are prepared to concede it.” (internal quotation marks and citations omitted)) . . . Hajek v. Burlington N. R.R. Co., 186 F.3d 1105, 1107–08 (9th Cir. 1999) (“Because[the plaintiff] did expressly consent to the magistrate judge’s exercise of authority up until the magistrate judge ruled against him, there would be some attractiveness to the notion of an estoppel, were that appropriate. But it is not. A party cannot estop itself into jurisdiction where none exists.”); Holman v. Laulo–Rowe Agency, 994 F.2d 666, 668 n.1 (9th Cir. 1993) (“The parties cannot ... create federal court subject matter jurisdiction by stipulation.”); Richardson v. United States, 943 F.2d 1107, 1113 (9th Cir. 1991) (“Subject matter jurisdiction cannot be conferred upon the courts by the actions of the parties and principles of waiver and estoppel do not apply.”).
Ceja-Prado, 333 F.3d at 1049-50; see also Commodity Futures, 478 U.S. at 851 (“[T]he parties by consent cannot confer on federal courts subject-matter jurisdiction beyond the limitations imposed by Article III, § 2.”); Diggs v. Dep’t of Housing and Urban Dev., 670 F.3d 1353, 1355 (Fed. Cir. 2011) (“Although neither party initially raised the issue, subject matter jurisdiction cannot be conferred by waiver, estoppel, or consent.”).

Regardless, there is no factual justification for Motorola’s challenge being barred by waiver or estoppel. Of the several statements by Motorola’s counsel to which Microsoft points (Opp. at 5), all but one were made on April 11, 2012, in the context of an argument about whether a German court’s actions would strip jurisdiction from the Court. (See, e.g., Dkt. No. 312-1 at 26- 28.)10 Another comment was made on May 18, 2011, in the context of Motorola’s discussion of how “part of the contract” between Motorola and the SSOs was that RAND terms would be set by bilateral negotiations (see May 18, 2011 Hr’g Tr. at 13:4-11), and how by “tr[ying] to determine what it is that ought to be considered in setting a RAND rate,” the Court would be doing something unprecedented, for which there is “no meaningful guidance” (id. at 14:5-24).11 As Motorola has explained (Dkt. No. 362 at 6), until recently Motorola did not fully appreciate and

___________
10 Moreover, as Motorola has pointed out (Dkt. No. 362 at 6), following this argument, Motorola expressed its concern about this issue of first impression in its April 20, 2012 Reply in Support of Its Motion for Partial Summary Judgment. (Dkt. No. 290 at 11-12 n.10.)

11 During the course of this litigation, Microsoft’s “litigation position” about what the Court can and should be deciding has shifted and “evolve[ed]” dramatically. (See, e.g., Dkt. No. 362 at 11-12) (citing May 7, 2012 Hr’g Tr. at 70).) Indeed, the May 18, 2011 comment came well before Microsoft had even committed to taking a license. (Id.)

14

focus on—let alone fully research the authority relevant to—the Court’s intent to determine the actual terms of a RAND contract in a separate trial, rather than (as the Court suggested on February 13, 201212 and in its June 6, 2012 Order13) to consider RAND terms in the context of determining the breach of contract issues.14

Motorola has, though, consistently maintained that by deciding RAND terms—at least outside the context of a fact finder determining whether there has been a breach of contract—the Court would be impermissibly issuing an advisory opinion. (See, e.g., Dkt. No. 36 at 2 (December 15, 2010) (“This premature lawsuit, if allowed, would require this Court to render an advisory opinion on complex RAND licensing terms . . . .”); Dkt. No. 57 at 3 (May 9, 2011) (“This action, if permitted to proceed, would require the Court to render an advisory opinion on complex RAND licensing terms—terms that the standards organizations actually stated should be determined through private negotiations.”); Dkt. No. 62 at 11-12 (April 1, 2011) (“[A] declaration merely advising Microsoft of a hypothetical RAND rate for a portion or even all of the portfolio, while not obligating Microsoft to pay a RAND rate for any of the patents in the two portfolios, ‘strains the concept of ‘case or controversy’ to its outer limit.’”).) Indeed, in denying Motorola’s April 1, 2011 Motion to Dismiss, the Court recognized that Motorola was arguing that the court was being asked to render an advisory opinion as to “what the terms of a RAND license would be”—and rejected that argument because Microsoft instead was seeking—at least at that time—“a

___________
12 During that telephone conference, the Court stated that it was being asked “to determine what the RAND terms and conditions . . . are so that I may then attempt to determine if Motorola’s offer to Microsoft was within that range.” (Feb. 13, 2012 Tele. Conf. Tr. at 5.) Motorola’s answer clarified that, even if the Court determined that offers needed to be on RAND terms (an argument the Court rejected (Dkt. No. 335 at 24)), “indeed it would require your Honor to figure out what RAND terms are, either for purposes of the offer or the final agreement.” (Id. at 6.)

13 In that Order, the Court explained that its “conundrum” is that it “must first determine the RAND terms” of a Microsoft-Motorola agreement “before it can determine whether Motorola breached its duty,” because “to determine whether Motorola’s offers were so blatantly unreasonable as to breach its duty of good faith, it is necessary in this instance to compare the offer against a true RAND royalty rate.” (Dkt. No. 335 at 25-26.)

14 Microsoft also points (Opp. at 7) to a statement in the February 7, 2011 Joint Status Report, in which Motorola explained that “determination of a RAND rate” would be a complex and fact-intensive task, should the Court undertake to do so. There, Motorola was referring to a determination by the fact finder considering RAND terms in assessing breach of contract, and was not endorsing any un-made argument that the Court actually should make a contract for the parties.

15

determination of whether the flat royalty rate on the price of the end product was unreasonable and discriminatory.” (Dkt. No. 66 at 5.) Even following this denial, Motorola has continued to argue that a determination by the Court of the RAND rate or terms would constitute an advisory opinion. (See, e.g., Feb. 13, 2012 Tele. Conf. Tr. at 23 (“Instead, they want your Honor to become the arbiter in the way of an advisory opinion as to what the rate is.”).)

Despite Microsoft’s shifting positions, Motorola has not sought and is not seeking delay of this proceeding. As explained in Motorola’s Motion (Dkt. No. 362 at 6), Motorola expects to proceed with trial in November, whether on the basis recommended in this Motion (the breach issue) or, if the Court rejects this Motion, on whatever issues the Court may set. Similarly, although Microsoft repeatedly complains in its Opposition that injunctions against infringement of SEPs create leverage, it is important to note that Microsoft could have—and still can—come to the negotiation table. Such negotiation could have—and still can—result in a license (with or without open terms) that would allow Microsoft to practice Motorola’s patents on terms established through the process required by the Motorola-SSO contracts. Regardless, as Motorola has explained (Dkt. No. 362 at 4-5, 5 n.7), the ruling sought by its Motion would expedite, not frustrate, the Court’s resolution of the parties’ claims.

V. CONCLUSION

For the foregoing reasons, and for the reasons stated in its opening memorandum, Motorola respectfully requests that the Court grant partial summary judgment denying Microsoft’s “claim” that the Court should create ab initio a Motorola/Microsoft license, or material terms of such a license, and instead proceed to trial on the question of whether Motorola’s October 2010 letters breached the implied covenant of good faith and fair dealing.

16

DATED this 10th day of August, 2012.

RESPECTFULLY SUBMITTED:

SUMMIT LAW GROUP PLLC
[signature, lawyers listed, emails] MOTOROLA MOBILITY, INC.
[signature, address, phone, fax] And by:
Ropes & Gray LLP
[lawyers listed, address, phone, email]

Attorneys for Motorola Solutions, Inc., Motorola
Mobility, Inc., and General Instrument
Corporation

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