Not a Lexis Advance subscriber? Try it out for free.

Microsoft Corp. v. Motorola, Inc.

United States Court of Appeals for the Ninth Circuit

September 11, 2012, Argued and Submitted, San Francisco, California; September 28, 2012, Filed

No. 12-35352

Opinion

 [***2001]   [*875]  Opinion by Judge BERZON, Circuit Judge:

In this interlocutory appeal, Motorola appeals from the district court's preliminary injunction to enjoin Motorola temporarily from enforcing a patent injunction that it obtained against Microsoft in Germany. We review the district court's grant of a foreign anti-suit injunction under the deferential abuse-of-discretion standard,  [**2] and affirm.

I. BACKGROUND

The parties are involved in ongoing contract and patent litigation before the district court. We recite here only the factual and procedural history most relevant to this interlocutory appeal.

A. Standard-setting organizations and intellectual property law

The underlying case before the district court concerns how to interpret and enforce patent-holders' commitments to industry standard-setting organizations ("SSOs"),  [***2002]  which establish technical specifications to ensure that products from different manufacturers are compatible with each other. See generally Mark A. Lemley, Intellectual Property Rights and Standard-Setting Organizations, 90 Calif. L. Rev. 1889 (2002). Specifically, the case involves the H.264 video coding standard set by International Telecommunications Union ("ITU"), and the 802.11 wireless local area network standard set by the  [*876]  Institute of Electrical and Electronics Engineers ("IEEE"). This appeal implicates primarily the H.264 standard.

Standards provide many benefits for technology consumers, including not just interoperability but also lower product costs and increased price competition. See Apple, Inc. v. Motorola Mobility, Inc., 2011 U.S. Dist. LEXIS 72745, 2011 WL 7324582, at *1 (W.D. Wis. June 7, 2011).  [**3] The catch with standards "is that it may be necessary to use patented technology in order to practice them." Id. As a result, standards threaten to endow holders of standard-essential patents with disproportionate market power. In theory, once a standard has gained such widespread acceptance that compliance is effectively required to compete in a particular market, anyone holding a standard-essential patent could extract unreasonably high royalties from suppliers of standard-compliant products and services. This problem is a form of "patent holdup." See generally Mark A. Lemley, Ten Things to Do About Patent Holdup of Standards (And One Not To), 48 B.C. L. Rev. 149 (2007).

Many SSOs try to mitigate the threat of patent holdup by requiring members who hold IP rights in standard-essential patents to agree to license those patents to all comers on terms that are "reasonable and nondiscriminatory," or "RAND." See Lemley, Intellectual Property Rights, 90 Calif. L. Rev. at 1902, 1906. For example, consider the ITU, whose H.264 standard is implicated in this appeal. The ITU's Common Patent Policy (the "ITU Policy") provides that "a patent embodied fully or partly in a [standard] must be accessible  [**4] to everybody without undue constraints." Anyone who owns a patent declared essential to an ITU standard must submit a declaration to the ITU stating whether it is willing to "negotiate licenses with other parties on a non-discriminatory basis on reasonable terms and conditions." If a "patent holder is not willing to comply" with the requirement to negotiate licenses with all seekers, then the standard "shall not include provisions depending on the patent."

Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.

Full case includes Shepard's, Headnotes, Legal Analytics from Lex Machina, and more.

696 F.3d 872 *; 2012 U.S. App. LEXIS 20359 **; 104 U.S.P.Q.2D (BNA) 2000 ***; 2012 WL 4477215

MICROSOFT CORPORATION, a Washington corporation, Plaintiff - Appellee, v. MOTOROLA, INC.; MOTOROLA MOBILITY, INC.; GENERAL INSTRUMENT CORPORATION, Defendants - Appellants.

Subsequent History: Summary judgment granted, in part, summary judgment denied, in part by, Claim dismissed by, in part Microsoft Corp. v. Motorola, Inc., 2012 U.S. Dist. LEXIS 146517 (W.D. Wash., Oct. 10, 2012)

Prior History:  [**1] Appeal from the United States District Court for the Western District of Washington. D.C. No. 2:10-cv-01823-JLR. James L. Robart, District Judge, Presiding.

Microsoft Corp. v. Motorola, Inc., 871 F. Supp. 2d 1089, 2012 U.S. Dist. LEXIS 67079 (W.D. Wash., May 14, 2012)

CORE TERMS

patents, injunction, district court, license, anti-suit, comity, parties, enjoined, injunctive relief, standard-essential, contractual, infringement, royalty, courts, preliminary injunction, terms, declaration, implicated, enforcing, worldwide, factors, rights, forum-selection, arbitration, intolerable, adjudicate, vexatious, domestic, offering, software

Civil Procedure, Appeals, Appellate Jurisdiction, Interlocutory Orders, Patent Law, Jurisdiction & Review, Subject Matter Jurisdiction, Appeals, Standards of Review, Abuse of Discretion, International Law, Comity Doctrine, Comity Doctrine Procedures, Injunctions, Remedies, Injunctions, General Overview, Clearly Erroneous Review, De Novo Review, Governments, Courts, Judicial Comity, Grounds for Injunctions, Business & Corporate Compliance, Contracts Law, Contract Conditions & Provisions, Forum Selection Clauses, Contracts Law, Contract Interpretation, Preliminary Considerations, Equity, Judicial Officers, Judges, Discretionary Powers