Interesting court transcript - Apple debating patent value with judge

Discussion in 'Apple, Inc and Tech Industry' started by kdarling, Feb 19, 2012.

  1. kdarling macrumors demi-god

    kdarling

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    #1
    From January 23, 2012... a quite fascinating section of a transcript of the Apple v Motorola case that started with the ITC, was remanded to Wisconsin, ended up in Illinois, and I believe is now moved to Southern California.

    This is during the Illinois pre-trial hearings before Judge Richard Posner, who is said to be "the most cited legal scholar of the 20th century."

    The topic is the Apple patent wherein swiping to scroll is locked to either horizontal or vertical movements, depending on your starting angle.

    The judge wants the later jury trial to be able to easily decide damages, if Motorola is found to infringe. So he's grilling the Apple lawyer about the patent's value as far as ultimate damages... if any.

    -- a few excerpts... (MR. POWERS is a Apple lawyer, THE COURT is Judge Posner, MR. SWEDLOW is a Motorola lawyer):

    MR. POWERS: That valueless is not defined by how many sales we did or did not lose.
    THE COURT: Well, of course, it is, because if it doesn't give you any sales, it has no value. You put something into a machine at some expense to yourself and it has zero value.
    MR. POWERS: Proof of our lost sales is not required for a reasonable royalty. The question is -- and your Honor is raising a fair issue. I suggest we brief it because there's a lot of law developed on this, and a lot of it is very recent.
    THE COURT: The law is in such chaos on patent damages. It's in chaos. Everybody knows that.
    MR. POWERS: Many people would agree with that.
    THE COURT: And I'm not going to submit chaos to the jury. If that's courting reversal, it's courting reversal.

    ---

    THE COURT: Well, I want your answer. If they swipe a finger on their smartphone and they're not infringing, that is, they're not using your 27-degree tolerance, what happens?
    MR. POWERS: That is -- there is no answer to that because we don't --
    THE COURT: What do you mean there's no answer to that?
    MR. POWERS: I mean there is no answer to that because that proceeds from a factual premise that we don't think exists.
    THE COURT: Oh, come on. Why are you fencing with me? I'm asking you a simple question. They have a smartphone. You put your finger on it.
    You move your finger up and down. What happens?
    MR. POWERS: If -- if you move it up and down on theirs --
    THE COURT: Don't say if. I just told you what my example is.
    MR. POWERS: Under that hypothetical, on their current smartphone, you would get the command.
    THE COURT: Not the current smartphone. The current -- the smartphone that doesn't infringe.
    MR. POWERS: Under that hypothetical smartphone, it depends on how it was programmed. I don't know.
    THE COURT: How it was what?
    MR. POWERS: How it was programmed. That is the point of the patent.
    THE COURT: I didn't hear your word, how it was what?
    MR. POWERS: Programmed. That's the point of the patent is that --
    THE COURT: Oh, come on.
    MR. POWERS: That is the point of the patent.
    THE COURT: What happens, what -- all right. What is the -- what is the plausible alternative? Suppose they didn't copy your patent. They're
    afraid, all right? They wanted to sell a touch screen that could swipe. Now, what would they have done?
    MR. POWERS: That is a -- that is a -- you're asking exactly the right question but to the wrong person. That's their burden of proof on that issue.
    THE COURT: You tell me.
    MR. POWERS: I haven't seen their proof on that yet.
    THE COURT: All right. I'll ask them. What happens if -- in this example?
    MR. SWEDLOW: Your Honor, just to make sure I'm answering the question that you want an answer to, so we have a device that doesn't infringe because we design around their patent. Let's say it's held to be valid and infringed. So now we have a device where we can't use, for example, a 27-degree heuristics where it would go diagonally as you point out.
    THE COURT: Right
    MR. SWEDLOW: Then we'd have a touch screen where we couldn't use that aspect of the smartphone, but we'd still have the smartphone where we designed around whatever was determined to be a valid part of their patent. So we still have the Motorola Droid. We just can't use whatever the metes and bounds are of the actual claim.

    ---

    THE COURT: Yeah, I'm not going to have competing experts talking about their marketing surveys. I regard that evidence as totally worthless.

    I want to see sales, I want to see evidence that Apple would have sold less or did sell less when all of a sudden Motorola started offering this -- I mean, maybe Motorola advertised and they said, "Wow, we're worried about your finger is not swiping a hundred percent vertical. Doesn't matter. We've cured that." THAT would certainly be probative evidence.

    But what I don't understand is if at the end of the day, a jury finds or I find that there is -- that there was no loss to Apple because this was -- I mean, it's a clever feature and so on, but it was useless, consumers don't care about it, I don't see how you get from that to saying but nevertheless, if it had known that it was infringing, Motorola would have paid a royalty.

    -- (Read the whole thing if you get a chance.)
     
  2. Rodimus Prime macrumors G4

    Rodimus Prime

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    #2
    That makes it sound like Apple's case is falling apart around them.
     
  3. ChazUK macrumors 603

    ChazUK

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    #3
    Fascinating read. Some hard hitting questions in that transcript.
     
  4. boss.king macrumors 68040

    boss.king

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    #4
    I'm glad to see someone calling Apple on their infantile patent cases.
     
  5. thejadedmonkey macrumors 604

    thejadedmonkey

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    #5
    It looks to me like this is going to end up being - not about a single patent - but about polish. Can you patent polish? That's what Apple is going to have to argue, I'll be interested in seeing what the court decides.
     
  6. eawmp1 macrumors 601

    eawmp1

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    #6
    I read more than opted above.

    This is reminiscent of the Windows lawsuit. They lost on the "look and feel" argument there also. With a finger and a touchscreen, there are only so many gestures you can do. Apple is going to lose this one.
     
  7. kdarling thread starter macrumors demi-god

    kdarling

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    #7
    Oh, I bet the judge grilled the Motorola lawyer as well.

    This transcript piece was all that was available. It was used as evidence in that Oracle lawsuit (thanks ChazUK for the pointer!). Otherwise we'd probably not have been able to see it.

    --

    Apparently the judge was making sure ahead of time, that a non-techie jury would be able to easily understand the issues and values at stake.

    His comments did echo what other judges have already said about Apple needing hard evidence to prove they lost sales as a result of infringement... and they'd better not use talking head "market experts" to say so.

    --

    Another repeated theme across these court cases is that of "Why would it matter to sales?" if customers aren't exposed ahead of time to something:

    E.g. if Apple never widely advertised multi-touch and an icon grid as big reasons to buy their product, then they cannot claim them as trade dress.

    Or if their competition never advertised swipe-direction-lock as a reason to buy their phone, then any infringement damages are hugely lessened... unless Apple can somehow prove that it affected some sales choices. (This is where magazine reviews can come into play.)
     
  8. *LTD* macrumors G4

    *LTD*

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    Canada
    #8
    The big picture says otherwise.

    This back-and-forth you read is just one of many.
     

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