PublishedJuly 15, 2013

Customs Gets Embroiled in the Smartphone Patent Wars

Smart Phone Patent Wars, Microsoft v. MotorolaThere’s another front in the Smartphone Patent Wars that you may not have heard of, or may not know much about: a battle with U.S. Customs & Border Protection (CBP) over whether Motorola can import certain smartphones. The issue stems from an exclusion order issued by the International Trade Commission after Motorola lost a patent infringement investigation instigated by Microsoft. Microsoft is suing CBP to force it to exclude some Motorola smartphones that CBP believes are not infringing and therefore not covered by the exclusion order.

Florian Mueller, Microsoft’s paid consultant, weighed in on this last Friday. He seems to feel that Microsoft has suffered some kind of injustice.

Unlike Florian, I have litigated at the ITC; although I’m no expert, I do have some familiarity with the process. I can’t agree with his take.

First, some background. At the ITC, Microsoft accused Motorola of infringing 7 patents based on the calendar syncing in some of its Android phones. Microsoft lost on all but one of the patents. But Motorola’s smartphones were held to infringe one patent, U.S. Patent No. 6,370,566, which the Commission found was not invalid.

The ITC issued a limited exclusion order, which directed CBP to exclude all Motorola phones that infringed 3 particular claims of the ’566 patent. This is the standard way the ITC writes its exclusion orders in patent cases; rather than naming particular products (which could be renamed or repackaged), it identifies the products as those which infringe specific patent claims.

CBP got the order and started interacting with Motorola to identify which phones were covered. Motorola in the meantime bought a license (intended to resolve the infringement) from a third party, which would have allowed Motorola to keep importing. In response, Microsoft terminated the third party’s license.

Motorola then changed its phones to get rid of the full ActiveSync feature (ActiveSync is the protocol Microsoft provides to let users sync other products with their Outlook calendars). The CBP decided that this change was enough to make the phones no longer infringing, and announced that it would let Motorola import phones without ActiveSync in them into the U.S.

Microsoft is unhappy with that ruling, and has filed suit in the D.C. District Court to force CBP to reverse the ruling and exclude Motorola’s phones anyway. In its Complaint, Microsoft claims that the phones can still sync using Google calendar, and allege they therefore still infringe.

There is an institutional problem: the CBP doesn’t have the expertise or the resources to make technologically complicated decisions about patent infringement. It has to rely on knowledgeable parties (that is, the company that makes the excluded products) for information and the ITC to tell it what to do.

Apparently, early on, Microsoft did accuse both ActiveSync and Google calendar on Motorola’s smartphones of infringement. But at the hearing, Microsoft only presented evidence about ActiveSync. After the hearing, Motorola admitted that it infringed, and just argued about the validity of the ’566 patent (an argument Motorola lost). Microsoft is arguing that that Google calendar infringes, and the exclusion order isn’t specific; therefore, all Motorola phones with Google calendar should be excluded.

What should CBP do? The official record (including the hearing, and some briefs that both parties filed before and after the hearing), has nothing to say one way or the other about Google calendar. The Commission’s review says nothing about Google calendar. But the Commission did say that Motorola could certify that its products do not infringe, because “in this case where the alleged infringement is based upon the accused devices’ inclusion of ActiveSync protocol, and CBP cannot easily determine whether or not Motorola’s mobile devices implement the ActiveSync protocol by inspection.” (See pages 20–21 of the Commission decision.)

That’s pretty clear language. According to the Commission, it’s just ActiveSync that was the basis of Microsoft’s infringement allegations.

Microsoft is basically asking CBP to go beyond the Commission’s opinion, and decide on its own that Google calendar on Motorola’s phones also infringes the ’566 patent.

Some of the discussion about this case has unfortunately been misleading, especially comments by Florian and others which characterize typical, routine discussions between CBP and the interested parties as improper. It’s always done that way; CBP talks to the parties separately.

If Microsoft is correct in its substantive claim, that Motorola is lying in its certification, Microsoft can go back to the ITC for help. (For example, it can ask for a general exclusion order, which would just bar all Motorola smartphones with certain features.)

It’s disputes like this that President Obama was addressing in the Executive Actions he announced last month. Here’s the President’s announcement:

Strengthen Enforcement Process of Exclusion Orders. Once the U.S. International Trade Commission (ITC) finds a violation of Section 337 and issues an exclusion order barring the importation of infringing goods, Customs and Border Protection (CBP) and the ITC are responsible for determining whether imported articles fall within the scope of the exclusion order. Implementing these orders present unique challenges given these shared responsibilities and the complexity of making this determination, particularly in cases in which a technologically sophisticated product such as a smartphone has been successfully redesigned to not fall within the scope of the exclusion order. To address this concern, the U.S. Intellectual Property Enforcement Coordinator will launch an interagency review of existing procedures that CBP and the ITC use to evaluate the scope of exclusion orders and work to ensure the process and standards utilized during exclusion order enforcement activities are transparent, effective, and efficient.

It’s certainly clear that there need to be better procedures to help the CBP deal with situations like this, which is why the President’s action was needed. This suit highlights how the CBP is in an impossible position; CBP shouldn’t have to make a decision about whether or not a product infringes a patent.

It’s a shame that CBP has to deal with this. Doesn’t it have more important business, like protecting the border from terrorists?

Seems like it’s just more collateral damage from the Smartphone Patent Wars.

Matt Levy

Previously, Matt was patent counsel at the Computer & Communications Industry Association

More Posts

CCIA Senior Counsel Joshua Landau Testifies To Congress

In case you missed it, I testified to the House Judiciary Committee's IP Subcommittee last week about whether the output of AIs should receive patent and/or copyright protection. The hearing is avail...

Tackling Patent Trolls In Foxboro

A new lawsuit in Massachusetts proves that even NFL teams are not safe from baseless accusations from patent trolls. While the New England Patriots are usually concerned with defending their home turf...

The Judicial Conference Takes on “Judge Shopping”

On March 12th, the U.S. Judicial Conference announced policy recommendations aimed at putting an end to “judge shopping,” the much-exploited practice by which litigants choose the judges who hear ...

Subscribe to Patent Progress

No spam. Unsubscribe anytime.