This frustration was on display Monday in a Seattle court room as Federal Judge James Robart accused both Microsoft and Motorola of "hubris" and "arrogance" in their ongoing patent dispute, and using the courts to gain the upper hand in licensing negotiations, according to GeekWire's Todd Bishop, who was on hand for the proceedings.
Motorola and Microsoft are enaged in a bitter battle over video and wireless patents owned by Motorola. Motorola demands royalties of 2.25 percent on a range of products Microsoft produces, including Windows 7 and the Xbox console, which amounts to a royalty payment of about $4 billion per year. Microsoft sued Motorola over this, claiming the device maker attempted to rake it over the coals on patents that were essential to industry standards, called FRAND -- "fair, reasonable, and non-discriminatory" licensing.
Sue First, Negotiate Later
Motorola won a judgement in Germany last week regarding two of the video patents it is asserting against Microsoft here, and won an injunction essentially blocking the sales of the Xbox and Windows PCs. That move was blocked by a restraining order here in the US though, with Robart (the same judge accusing Motorola and Microsoft of hubris and arrogance Monday) arguing it would put Microsoft in an unfair negotiating position with the threat of a crippling injunction over its head.
That's the key -- these companies use the courts to negotiate rather than sit down and hammer it out. Robart says it best with this comment during Monday's hearing: "The court is well aware that it is being played as a pawn in a global industry-wide business negotiation". These cases are being used as leverage, and the court of law has become a pawn.
Lawyers now run the process, and are aided by judges who have all but failed to stand up to these companies until now. That seems to be changing and another good example is another case, this time between Motorola and Apple. Both sides are filing motions to gum up the process, and the judge there finally said enough is enough. "I've had my fill of frivolous filings by Apple", US District Judge Richard Posner wrote in a recent ruling.
The way I see it, these continuous patent litigation cases are as good of an argument for judicial restraint that I have ever seen. No one says every single patent case in front of a judge needs to be ruled upon: that judge has the power to dismiss the frivolous cases, of which there seems to be a bunch of lately. The court system bears some responsibility for making this issue worse.
Stop Legitimizing The Strategy
Judges need to start dismissing some of these cases, and remand these folks to the boardroom where the real patent negotiations should happen. Since standard operating practice in defense of patent litigation is a motion to dismiss, that option is there. Allowing these cases to move forward gives the impression that it is a worthwhile effort to push any possible infringement case through the courts for leverage in negotiations. That is an abuse of the courts that cannot stand.
Am I arguing against all patent litigation? Of course not: in some cases these companies have legitimate claims. That said, for whatever reason the courts are taking on increasingly suspect cases and allowing the two sides to hammer out the settlement in court. These days, it's sue first, and negotiate later.
Here's hoping that these two fine federal judges are the start of a broader judicial trend: judges not afraid to question the legitimacy of these arguments, or the reasons behind them. Until the courts stand up and force the industry back to the table, the courtroom will continue to be the venue of choice to get the settlement terms you want, not what you deserve.
That's the sad state we're in now, and it should have never gotten like this. Maybe Shakespeare was right in Henry VI, when he suggests "the first thing we do, let's kill off the lawyers" after all.