13-08-02 Google's Opposition To Microsoft's Motion For Preliminary Injunction

Case 1:13-cv-01063-RWR Document 23 Filed 08/02/13 Page 1 of 48
IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA MICROSOFT CORPORATION Plaintiff, v. UNITED STATES, U.S. DEPARTMENT OF HOMELAND SECURITY, et al. Defendants, and MOTOROLA MOBILITY LLC Proposed Intervenor-Defendant. Case No. 1:13-cv-01063-RWR
OPPOSITION OF MOTOROLA MOBILITY LLC TO MICROSOFTS MOTION FOR A PRELIMINARY INJUNCTION
August 2, 2013
TABLE OF CONTENTS page I. II. III. INTRODUCTION ...............................................................................................................1 FACTUAL BACKGROUND ..............................................................................................3 ARGUMENT .......................................................................................................................9 A. Microsoft Has No Likelihood of Success ..............................................................10 1. Microsofts Claims Should Be Dismissed at the Threshold ......................11 (a) (b) 2. Microsoft Has Other Remedies ......................................................11 Microsofts Claims Are Not Ripe for Adjudication ......................15
Microsofts Claims Are Also Doomed On Their Substantive Merits........16 (a) Customs Decision That Microsoft Abandoned Its Infringement Allegations Against The Use Of Googles Synchronization Protocol Is Not Arbitrary And Capricious ..........17 Microsofts Specific Indictments of Customs Decisionmaking Are Off Base .......................................................21 (i) (ii) (iii) (iv) ITC Infringement Evidence ...............................................21 Burden of Proof..................................................................24 Notice to Microsoft ............................................................25 The Transition Period ........................................................26
(b)
B.
Microsoft Faces No Prospect Of Irreparable Harm ...............................................28 1. 2. 3. 4. There Is No Presumption of Irreparable Harm, Conclusive or Otherwise ...................................................................................................29 Microsoft Remains Free to Seek Patent Infringement Damages From Motorola ...........................................................................................32 An Injunction Is Not Necessary to Prevent Harm Because Microsoft Can Seek Interim Relief from the ITC ......................................34 Microsofts Delay Rebuts Any Claim of Irreparable Harm.......................35
C.
The Balance of Harms and Public Interest Favor Denying an Injunction .............36 i
IV.
CONCLUSION ..................................................................................................................39
ii
TABLE OF AUTHORITIES Page Cases Am. Beverage Corp. v. Diageo N. Am., Inc., No. 12-601, 2013 WL 1314598 (W.D. Pa. Mar. 28, 2013) .....................................................30 Am. Petroleum Inst. v. E.P.A., 683 F.3d 382 (D.C. Cir. 2012) .................................................................................................15 Am. Road & Transp. Builders Assn v. E.P.A., 865 F. Supp. 2d 72 (D.D.C. 2012) ...........................................................................................13 Ammex, Inc. v. United States, 62 F. Supp. 2d 1148 (Ct. Intl Trade 1999) .............................................................................26 Amoco Production Co. v. Village of Gambell, AK, 480 U.S. 531 (1987) .................................................................................................................30 Apple, Inc. v. Motorola, Inc., 869 F. Supp. 2d 901 (N.D. Ill. 2012) .......................................................................................36 Apple, Inc. v. Samsung Elecs. Co., Ltd., 678 F.3d 1314 (Fed. Cir. 2012)..........................................................................................33, 35 Apple Inc. v. Samsung Elecs. Co., Ltd., 695 F.3d 1370 (Fed. Cir. 2012)................................................................................................33 Beamon v. Brown, 125 F.3d 995 (6th Cir. 1997) ...................................................................................................14 Biovail Corp. v. FDA, 519 F. Supp. 2d 39 (D.D.C. 2007) ...........................................................................................28 Block v. SEC, 50 F.3d 1078 (D.C. Cir. 1995) .................................................................................................15 Bowen v. Massachusetts, 487 U.S. 879 (1988) .................................................................................................................13 Brown v. Dist. of Columbia, 888 F. Supp. 2d 28 (D.D.C. 2012) ...........................................................................................29 Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290 (D.C. Cir. 2006) .....................................................................................28, 29, 34 City of Houston, Tex. v. Dept of Hous. & Urban Dev., 24 F.3d 1421 (D.C. Cir. 1994) .................................................................................................15 Dist. Hosp. Partners, L.P. v. Sebelius, No. 11-1717(GK), 2013 U.S. Dist. LEXIS 42186 (D.D.C. Mar. 23, 2013) ................17, 19, 21 iii
Drake v. FAA, 291 F.3d 59 (D.C. Cir. 2002) ...................................................................................................15 Dresser v. Meba Med. & Benefits Plan, 628 F.3d 705 (5th Cir. 2010) ...................................................................................................14 Eaton Corp. v. United States, 395 F. Supp. 2d 1314 (Ct. Intl Trade 2005) ...........................................................................30 eBay Inc. v. Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006) .................................................................................................................30 Elk Associates Funding Corp. v. U.S. Small Business Admin., 858 F. Supp. 2d 1 (D.D.C. 2012) .............................................................................................31 Feinerman v. Bernardi, 558 F. Supp. 2d 36 (D.D.C. 2008) ...............................................................................33, 34, 35 Fomaro v. James, 416 F.3d 63 (D.C. Cir. 2005) ...................................................................................................14 Friends of the Earth v. U.S. E.P.A., No. 12-363, 2013 WL 1226822, -- . Supp. 2d -- (D.D.C. Mar. 27, 2013) ...............................13 Garcia v. Vilsack, 563 F.3d 519 (D.C. Cir. 2009) .................................................................................................13 Gen. Textile Printing v. Expromtorg Intl, 862 F. Supp. 1070 (S.D.N.Y. 1994).........................................................................................29 Hecht Co. v. Bowles, 321 U.S. 321 (1944) ...........................................................................................................30, 31 High Tech Med. Instrumentation, Inc. v. New Image Indus., Inc., 49 F.3d 1551 (Fed. Cir. 1995)............................................................................................32, 35 Himmelman v. MCI Communications Corp., 104 F. Supp. 2d 1 (D.D.C. 2000) .............................................................................................15 Implicit Networks Inc. v. F5 Networks Inc., Nos. C10-3365 SI, C 10-4234 SI, 2013 WL 1007250 (N.D. Cal. Mar. 13, 2013) ..................23 K-V Pharm. Co. v. U.S. Food & Drug Admin., 889 F. Supp. 2d 119 (D.D.C. 2012) .........................................................................................14 Kisser v. Cisneros, 14 F.3d 615 (D.C. Cir. 1994) ...................................................................................................15 LG Elecs. U.S.A., Inc. v. Dept. of Energy, 679 F. Supp. 2d 18 (D.D.C. 2010) ...........................................................................................38 L & W, Inc. v. Shertech, Inc., 471 F.3d 1311 (Fed. Cir. 2006)................................................................................................22 iv
Mazurek v. Armstrong, 520 U.S. 968 (1997) ...................................................................................................................9 Miniter v. Moon, 684 F. Supp. 2d 13 (D.D.C. 2010) .............................................................................................9 Mississippi Valley Gas Co. v. F.E.R.C., 68 F.3d 503 (D.C. Cir. 1995) ...................................................................................................16 Mylan Pharms., Inc. v. Shalala, 81 F. Supp. 2d 30 (D.D.C. 2000) .............................................................................................10 Nevada v. Dept of Energy, 457 F.3d 78 (D.C. Cir. 2006) ...................................................................................................16 Northern Air Cargo v. U.S. Postal Service, 756 F. Supp. 2d 116 (D.D.C. 2010) .........................................................................................34 Rambus Inc. v. Hynix Semiconductor Inc., 642 F. Supp. 2d 970 (N.D. Cal. 2008) .....................................................................................22 Roberts v. Napolitano, 792 F. Supp. 2d 67 (D.D.C. 2011) ...........................................................................................14 Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089 (Fed. Cir. 1997)................................................................................................22 In re Russell, 155 F.3d 1012 (8th Cir. 1998) .................................................................................................14 Secy of Labor v. Twentymile Coal Co., 456 F.3d 151 (D.C. Cir. 2006) .................................................................................................15 Sherley v. Sebelius, 644 F.3d 388 (D.C. Cir. 2011) .............................................................................................9, 10 Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476 (D.C. Cir. 1995) .................................................................................................15 Sweis v. U.S. Foreign Claims Settlement Commn, No. 13-366(GK), 2013 WL 2986252 (D.D.C. June 15, 2013) ......................................9, 10, 31 T.J. Smith & Nephew Ltd. v. Consol. Med. Equip., Inc., 821 F.2d 646 (Fed. Cir. 1987)..................................................................................................33 Tindal v. McHugh, No. 10-237 (BAH) 2013 U.S. Dist. LEXIS 73106 (D.D.C. May 23, 2013) ............................17 Total Telecomms. Servs., Inc. v. AT&T, 919 F. Supp. 472 (D.D.C. 1996) ..............................................................................................15 United States v. Mead Corp., 533 U.S. 218 (2001) .................................................................................................................26 v
Univ. of Tex. v. Camenisch, 451 U.S. 390 (1981) ...................................................................................................................9 Veitch v. Danzig, 135 F. Supp. 2d 32 ...................................................................................................................10 ViroPharma, Inc. v. Hamburg, 898 F. Supp. 2d 1 (D.D.C. 2012) ...........................................................................28, 29, 31, 34 Wagner v. Fed. Election Commn, 854 F. Supp. 2d 83 (D.D.C. 2012) .............................................................................................9 Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7 (2008) .................................................................................................................9, 29 Statutes 5 U.S.C. 554 ................................................................................................................................26 5 U.S.C. 557 ................................................................................................................................26 5 U.S.C. 704 ...................................................................................................................11, 12, 13 5 U.S.C. 706 ..........................................................................................................................16, 25 28 U.S.C. 1254 ............................................................................................................................13 28 U.S.C. 1295 ............................................................................................................................13 19 C.F.R. 210.75 .............................................................................................................11, 12, 38 19 C.F.R. 210.76 ...................................................................................................................11, 12 19 C.F.R. 210.77 .........................................................................................................................12
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Proposed Intervenor-Defendant Motorola Mobility, LLC (Motorola) hereby respectfully opposes Microsoft Corporations (Microsoft) motion for preliminary injunction (Dkt. 7). Microsoft is urging this Court to grant preliminary relief that would interfere with an administrative process already in place between Customs and Border Protection (Customs) and the International Trade Commission (ITC). Specifically, Microsoft would have this Court direct Customs to enforce instanter an exclusion order from the ITC, as interpreted by Microsoft (but not by Customs or by the ITC), such that certain of Motorolas smartphones must be turned back at the borders and recalled from store shelves. I. INTRODUCTION Microsofts motion is unprecedented before any federal court; it asks this Court to countermand Customs best judgment about how an ITC exclusion order should be enforced in accordance with its proper scope, and for this Court to intercede without benefit of further proceedings otherwise available before the ITC. What is more, Microsoft is urging this Court to issue a preliminary injunction on behalf of Microsoft before the merits have been fully heard and considered. The underlying merits, if they are reached, tip overwhelmingly against Microsoft. Important procedural obstacles block Microsofts suit at the threshold; simply put, the instant challenge does not belong before this Court in its present posture. Even setting those obstacles aside, this Court can see for itself that Customs decision at issue despite Microsofts caricature of it as lawless and unreasoned was in fact careful, conscientious and altogether beyond reproach under the Administrative Procedures Act (APA). Over the course of a well-reasoned and detailed letter, Customs set out and analyzed Microsofts request for exclusion relative to the ITC exclusion order Microsoft was invoking, analyzing the relevant facts and law at considerable
length in explaining why Microsofts exclusion request ventures beyond the issues actually advanced and resolved before the ITC. (See Dkt. 7-2.) To be clear, this is not a case in which Customs refused to enforce an exclusion order from the ITC; quite the contrary, Customs had been enforcing an exclusion order from the ITC against the Motorola products that Microsoft had accused before the ITC, per the infringement allegations that Microsoft had advanced before the ITC. When Microsoft (after waiting a year before complaining) then urged Customs to adopt an expanded view of the ITCs exclusion order, Customs pointed to multiple aspects of the record of the ITC proceedings (including testimony by Motorola, testimony by Microsofts expert, Microsofts own briefing, and the ITCs actual opinion) that contradicted Microsofts after-thefact account of the supposed reach of the ITCs exclusion order. (See id. at 10.) In an abundance of caution, Customs even went so far as to consult the ITC itself and confirmed that the ITC took no position on the matter beyond suggest[ing] an approach for additional consideration, which would be for Microsoft to return to the ITC for the expanded exclusion it seeks. (Id. at 11.) On the strength of that examination and reasoning, Customs found that the administrative record does not support a finding that Microsoft specifically accused the ability in the legacy Motorola devices of using Googles servers and Googles synchronization protocols of infringing, and noted that there is no dispute that these features were present on the devices before the ITC during the investigation. Customs accordingly denied Microsofts request on the specific facts set forth herein, while still leaving the door open for Microsoft to return seeking additional guidance from the ITC. (Id.) No matter how hard Microsoft tries to second guess Customs decision, it has no prospect of transforming this case into one involving the sort of arbitrary and capricious agency action that might be suspect under the APA.
Moreover, in submitting its extraordinary request, Microsoft makes no attempt at showing irreparable harm beyond claiming such harm ought to be conclusively presumed. (Dkt. 7-1 at 29.) For that reason, too, Microsofts request for preliminary injunctive relief comes up short. This Court should therefore deny Microsofts request on the distinct but related grounds that Microsofts case is doomed on the merits (both because it does not belong here and also because it targets Customs decision and Motorola devices that are beyond reproach); that Microsoft faces no prospect of irreparable harm; and that the interests of Motorola, third parties, and the public generally in maintaining status quo importation of Motorolas smartphones at issue would far outweigh the limited interests Microsoft raises. II. FACTUAL BACKGROUND1 The preliminary injunction Microsoft seeks would command the United States Department of Homeland Security, the Bureau of Customs and Border Protection, the Secretary of the Department of Homeland Security, and the Deputy Commissioner of the Bureau of Customs and Border Protection to adopt Microsofts preferred interpretation of an exclusion order issued by the ITC and to upset the status quo by enforcing that order against all Motorola smartphones. As matters presently stand, Customs has determined, in consultation with the ITC, that Motorolas re-designed products are not covered by the ITCs exclusion order at issue and can continue entering the United States and its stream of commerce. (Dkt. 1. 1.) Microsoft has indicated that it intends to supplement its submissions to this Court with aspects of the ITC record that have been designated as confidential before the ITC. (Dkt. 7-1 at 7 nn.4&5.) Although Motorola does not believe that this Court needs to delve so deep into the administrative record in order to dispose of Microsofts instant submissions, Motorola is prepared, in response to any such submissions by Microsoft, to promptly supplement the record for the sake of completeness. Toward that end, Motorola and Microsoft have submitted a joint stipulation that would permit both parties to use confidential materials from the ITC proceedings for purposes of this proceeding pursuant to entry of an appropriate protective order by this Court. At present, Motorola is limiting its instant submissions to material that has not itself been designated as confidential. 3
1
The ITCs exclusion order arose out of a complaint pursuant to Section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (Section 337) that Microsoft filed in the ITC against Motorola in October, 2010. In its complaint to the ITC, Microsoft alleged that certain smartphones and tablet computers that Motorola was importing infringed nine Microsoft patents. (Dkt. 1. 4.) After Microsoft dropped its allegations with respect to two of the asserted patents, presiding Administrative Law Judge Theodore R. Essex held a ten-day evidentiary hearing. Following that hearing, Judge Essex issued a 220-page opinion concluding that Motorolas accused smartphones infringed one of Microsofts seven asserted patents and recommending that the ITC issue an exclusion order barring importation of infringing Motorola products. (Dkt. 73.) After reviewing Judge Essexs initial determination, the full Commission issued its own 36page opinion affirming the ALJs finding that Motorola infringed a single Microsoft patent. (Dkt. 7-8.) Based upon its infringement finding, the ITC issued an exclusion order instructing Customs to exclude Motorola products that infringe Microsofts patent from entry into the United States (Dkt 7-9.) The scope of the ITCs order, however, does not extend to noninfringing or licensed products. (Id.) The relevant patent, U.S. Patent No. 6,370,566 (the 566 patent), relates to a mobile device, typically a smartphone, that includes a calendar application on the mobile device that can generate both meeting objects (calendar events) and electronic mail scheduling request objects (meeting requests). The 566 patent requires a synchronization component that allows calendar events stored on the mobile device to be synchronized with calendar events stored on a server or desktop computer. From at least the filing date of Microsofts complaint through the present, Motorolas smartphones have been capable of synchronizing their calendar applications with either of two distinct types of remote calendar applications: Microsoft Outlook and Google
Calendar. (See Dkt. 7-2 at 7.) When synchronizing with a Microsoft Outlook account (typically used in a corporate or business setting), Motorolas phones communicate with a Microsoft Exchange server using Microsoft Exchange ActiveSync protocols. When synchronizing with a Google Calendar account, Motorolas phones communicate with Googles servers using Googles proprietary synchronization protocol which operates in a manner that fundamentally differentiates it from both the 566 patent claims and the Exchange ActiveSync protocol. (See Dkt. 7-2 at 7.) Although Microsoft initially accused Motorolas products of infringement based upon their use of both the Exchange ActiveSync protocols and the Google Calendar synchronization protocols, Microsoft subsequently abandoned its allegations against the use of Googles synchronization protocols during the ITCs investigation. Specifically, after the June 29, 2011 close of discovery, Microsoft submitted its Pre-Hearing Brief and the written witness statement of its infringement expert, Dr. Hugh Smith. (See Dkt. 7-2 ). In both of these documents, Microsofts infringement allegations related solely to the use of the Exchange ActiveSync protocols.2 Because the ALJs Ground Rule 8(f) mandates that [a]ny contentions not set forth in [the pre-hearing brief] shall be deemed abandoned, or withdrawn, Microsofts infringement allegations against the use of the Google Calendar synchronization protocol were waived as of the August 8, 2011 filing date of Microsofts Pre-Hearing Brief. (Ex. 1, Ground Rules, at 18.)3
Notably, in Motorolas appeal to the Federal Circuit with respect to the 566 patent, Microsoft concedes that, [i]n fact, Dr. Smiths original element-by-element analysis of MMIs infringement relied on the ActiveSync protocol itself. Brief for Intervenor Microsoft Corporation at 54, Motorola Mobility, LLC v. ITC and Microsoft Corp., No. 2012-1535 (Fed. Cir. Feb. 27, 2013), ECF No. 53. Ex. __ refers to the exhibits attached to the Declaration of Edward J. DeFranco, submitted in support of this Memorandum. 5
3
Microsofts decision to abandon its infringement contentions against the Google Calendar synchronization protocols was no mere happenstance. Discovery that Microsoft obtained from Google conclusively demonstrated that, when using the Google Calendar synchronization protocol, Motorolas phones do not infringe for the fundamental reason that the phones do not generate an electronic mail scheduling request object as required by asserted claim 1 of the 566 patent. (566 Patent (Dkt. 7-4) at 23:47-48.) As with many other aspects of todays cloud computing the electronic mail scheduling request object is not generated on the phone, as required by the asserted patent, but is instead generated by Googles servers under Googles Calendar synchronization protocols.4 (Dkt. 7-2 at 7, 10.) Following issuance of the ITCs exclusion order, Motorola promptly took steps to comply with the exclusion order. For certain phones, Motorola changed the accused functionality to avoid infringing Microsofts patent. (See Dkt. 7-14 at 6-9.) Specifically, Motorola re-designed its smartphones so that they could no longer generate an email meeting request when using the ActiveSync protocol. (Dkt. 7-14 at 6-7.) Consistent with the ITCs limited infringing findings, Motorola made no changes to the way its phones operate when using Googles synchronization protocols. Motorola presented its re-designed phones to Customs in a request pursuant to 19 C.F.R. Part 177 in a letter dated May 25, 2012. (See Dkt. 7-14 at 1.) Motorola has continued to import phones that use the Google Calendar synchronization protocol. For the phones that did not include the re-design, Motorola instead entered into a supply agreement with a third party, Emtrace Technologies USA, Inc. (Emtrace), to provide Microsoft-licensed software to Motorola. In 2009, Emtrace entered into an ActiveSync license Thus, contrary to Microsofts assertions (Dkt. 7-1, at 23-25), neither Motorola nor Customs switched the disputed limitations at issue. For both the ActiveSync protocols and the Google Calendar synchronization protocols, Motorolas re-designed phones do not generate an electronic mail scheduling request object, as required by element (f). 6
4
agreement with Microsoft.5 (See Ex. 2.) Under the terms of the Emtrace/Microsoft agreement, Emtrace is authorized to provide ActiveSync implementations to third-parties, including Motorola. (Id. at 3.) Accordingly, Motorola removed the accused ActiveSync software from its phones and replaced that software with licensed Emtrace ActiveSync software. Under the terms of the Emtrace/Microsoft agreement, Microsoft received its standard ActiveSync royalty for each Motorola phone that contained the licensed Emtrace software. On April 25, 2013, Customs issued a formal response to Motorolas May 25, 2012 ruling request. In its ruling, Customs found that Motorola had established that its re-designed products no longer infringed the 566 patent and therefore were not within the scope of the ITCs exclusion order. (Dkt. 7-14.) Unhappy with the result of Customs ruling, Microsoft sought revocation on two grounds. First, Microsoft alleged that the use of Googles synchronization protocol was specifically accused of infringement and formed part of the ITCs infringement finding, such that the devices at issue in the ruling letter must be refused entry.6 (Dkt. 7-2 at 2.) Second, Microsoft alleged that, the redesigned mobile devices, as modified, have not successfully avoided the relevant claims of the 566 patent and therefore are still infringing. (Id.) Customs issued two rulings, Headquarters Ruling Letters H242025 and H242026, both dated June 24, 2013, separately addressing each of Microsofts arguments. Microsoft here challenges only the first Customs ruling relating to the Google Calendar synchronization Microsofts ActiveSync licensing program is the result of an antitrust investigation by the European Commission (EC). Because Microsoft has monopoly power in the market for corporate servers, Microsoft agreed to make the protocols used to communicate with its Exchange servers (including the ActiveSync protocols) available on reasonable, nondiscriminatory terms. Because Microsoft did not submit a copy of its ruling request with its complaint or motion for preliminary injunction, Motorola herein necessarily relies upon Customs characterization of Microsofts ruling request. 7
6 5
protocol (H24025); Microsoft has not challenged the second Customs ruling relating to Motorolas ActiveSync redesign (H242026). In Headquarters Ruling H242025 (consisting of the twelve-page, single-spaced letter Microsoft now takes issue with), Customs stated, first, that it would not refuse entry based on features that were present in the accused products during the ITC investigation but were not specifically accused by Microsoft and found to be infringing by the ITC. (Dkt. 7-2 at 9.) Customs observed, second, that Motorolas products used the Google Calendar synchronization protocol during the ITC investigation. (Dkt. 7-2 at 10-11.) And, finally, after reviewing the record of the ITC investigation and consulting with the ITC, Customs determined that the record is insufficient to support a finding that the legacy Motorola devices at the ITC were specifically accused and proven to infringe based on their ability to use Googles servers and Googles synchronization protocol. (Dkt. 7-2 at 10.) Indeed, when viewed in its entirety, Customs found the testimony cited by Microsoft seems to counter Microsofts position more than support its claim that Googles synchronization protocol was specifically accused. (Dkt. 72 at 10). Accordingly, Customs declined to take enforcement action against Motorolas products on that basis absent additional guidance from the ITC. (Dkt. 1 at 71-78; Dkt. 7-2 at 11.) Thus, far from foreclosing Microsofts requested administrative relief, Customs implicitly invited Microsoft to take its request to the ITC for consideration and ruling in the first instance as to whether the scope of the exclusion order should encompass Motorolas products use of Googles synchronization protocol in addition to their use of the ActiveSync protocol. (Id.) Instead of accepting that invitation to return promptly to the ITC, Microsoft waited more than two weeks (from June 24 through July 12) and then filed its instant suit with this Court,
requesting a preliminary injunction forcing Customs to do as Microsoft bids without resort to further administrative proceedings. III. ARGUMENT The preliminary injunction Microsoft seeks is an extraordinary remedy that is to be granted only sparingly, upon a clear showing. Miniter v. Moon, 684 F. Supp. 2d 13, 15-16 (D.D.C. 2010) (quoting Mazurek v. Armstrong, 520 U.S. 968, 972 (1997)); see Winter v. Natural Res. Def. Council, Inc., 555 U.S. 7, 22 (2008) (preliminary injunction is an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief); see also Sweis v. U.S. Foreign Claims Settlement Commn, Civil Action No. 13366(GK), 2013 WL 2986252, at *3 (D.D.C. June 15, 2013). A plaintiff seeking a preliminary injunction must establish [1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest. Wagner v. Fed. Election Commn, 854 F. Supp. 2d 83, 87 (D.D.C. 2012) (quoting Winter, 555 U.S. at 374). The D.C. Circuit has suggested, without deciding, that Winter should be read to abandon the sliding-scale analysis in favor of a more demanding burden that requires movants to demonstrate independently both a likelihood of success on the merits and irreparable harm. Id. (quoting Sherley v. Sebelius, 644 F.3d 388, 392 (D.C. Cir. 2011). Regardless whether the critical factors are viewed on a sliding scale or essayed one by one, Microsofts case for a preliminary injunction, far from being exceptionally strong, is fatally weak. Indeed, Microsofts legal theory, at its very foundation, builds from a false premise. The purpose of a preliminary injunction is merely to preserve the relative positions of the parties until a trial on the merits can be held. Univ. of Tex. v. Camenisch, 451 U.S. 390, 395
(1981). Far from preserving the status quo, Microsofts requested injunction would upend the status quo. Microsoft requests an affirmative injunction ordering Customs to exclude Motorolas products from entry into the United States, to recall Motorola products already imported, and to revoke its April 25 and June 24 rulings. (Dkt. 7-18 at 2.) This remedy does not preserve the status quo. Instead it would require Customs to take affirmative action contrary to its current, prevailing, well considered views. Cf. Sherley, 644 F.3d at 398 (reversing preliminary injunction that would in fact upend the status quo). This Court reviews a request for mandatory, affirmative preliminary injunction that would alter the status quo, such as this, with even greater circumspection than usual, Mylan Pharms., Inc. v. Shalala, 81 F. Supp. 2d 30, 36 (D.D.C. 2000), insisting that the movant meet a higher standard than were the injunction he sought merely prohibitory. Veitch v. Danzig, 135 F. Supp. 2d 32. 35 (D.D.C. 2001). That standard requires Microsoft to show clearly that it is entitled to relief or that extreme or very serious damage will result from the denial of an injunction. Sweis v. U.S. Foreign Claims Settlement Commn, No. 13-366, 2013 WL 2986252, at * 5 (D.D.C. June 15, 2013). Because Microsoft cannot meet the traditional standard, it follows a fortiori that it cannot meet the substantially higher standard operative here. Notably, Microsoft comes up short under each essential factor. A. Microsoft Has No Likelihood of Success
For the same reasons that Microsofts claims are due to be dismissed (Motorola Mobility, LLCs Motion to Dismiss Pursuant to Rules 12(b)(6) and 12(b)(1) filed concurrently with the instant motion), they are procedurally doomed. Nor can Microsofts claims withstand substantive review even if the Court is inclined to reach their substance.
10
1.
Microsofts Claims Should Be Dismissed at the Threshold
Microsofts attempt to hijack, under the auspices of the Administrative Procedure Act (APA), an administrative process that is still underway should be dismissed at the threshold. The APA allows for review only of final agency action and only where the plaintiff has no other adequate remedy in court. 5 U.S.C. 704. That standard is not met because Microsofts own initial papers taking issue with Customs decision to refrain from enforcement pending guidance from the ITC make plain that Microsoft should be turning to the ITC and then, if aggrieved, to the Federal Circuit. Microsoft has an established administrative mechanism for seeking administrative relief in the ITC. See 19 C.F.R. 210.75; 19 C.F.R. 210.76. In no event does Microsofts complaint belong before this Court in its present posture. (a) Microsoft Has Other Remedies
Customs noted that the ITC has yet to consider, much less resolve, the issue Microsoft asks this Court to decide: whether Motorolas use of the Google Calendar synchronization protocol infringes Microsofts patent. (Dkt. 1 at 25.) Further, once the ITC does consider and resolve the issue, Microsoft will have an adequate and appropriate remedy from Congress. Microsoft can petition the ITC for enforcement or modification of the exclusion order and then seek review in the Federal Circuit in the event its request is denied. As noted by Customs, it is the ITC that should weigh in on the exclusion order issued by the ITC. (See Dkt. 7-2 at 10 (stating that further guidance from the ITC was required).) Customs found, after consulting the ITC, that there has been no determination by the ITC specifically as to whether the Google Calendar synchronization protocol functionality infringes. (Dkt. 7-2 at 10.) Microsoft has established administrative mechanisms for seeking from the ITC, through a proceeding to enforce the exclusion order, the very interpretation it urges. Specifically, 19 C.F.R. 210.75(b) allows the ITC to institute an enforcement proceeding for alleged 11
violations of any exclusion order. And 19 C.F.R. 210.75(a) authorizes the ITC to issue such orders as it deems appropriate to implement and insure compliance with the terms of an exclusion order. Upon conclusion of the enforcement proceeding, the ITC may [m]odify a cease and desist order . . . in any manner necessary to prevent the unfair practices that were originally the basis for issuing such order. 19 C.F.R. 210.75(b)(4)(i). Microsoft could also petition for expansion of the exclusion order pursuant to 19 C.F.R. 210.76 so that it encompasses Motorolas redesigned devices.7 Indeed, the ITC is the tribunal best positioned to interpret its own orders and apply its own procedural rule. Microsoft knows this full well which perhaps led to its forum shopping here. Customs finding that the issue had not been determined by the ITC, combined with Customs suggestion that Microsoft seek additional guidance from the ITC (Dkt. 7-2 at 11), after which any adverse decision would be directly appealable to the Federal Circuit, hardly presents an instance in which Microsoft has no other adequate remedy in court. 5 U.S.C. 704. Notably, the ITC can even provide the very sort of interim relief that Microsoft is requesting from this Court in the form of a preliminary injunction. Specifically, 19 C.F.R. 210.77, titled Temporary emergency action, allows the ITC to immediately and without hearing or notice modify an exclusion order or issue an appropriate exclusion order to prevent a violation of an exclusion order. Thus, if Microsoft is correct that the existing exclusion order Microsoft itself has recently explained why the decision of whether a re-designed product falls within the scope of an exclusion order should be decided by the ITC. In a July 20, 2013 submission in response to a Request for Public Comments by the Office of U.S. Intellectual Property Enforcement Coordinator, Microsoft stated, [t]he ITC is best positioned to decide an importers ruling request on whether a redesigned product falls within an exclusion orders scope. (Ex. 4 at 3 (Comments of Microsoft Corporation on the Interagency Review of the Exclusion Order Enforcement Process).) According to Microsoft, [t]he ITC is the ultimate arbiter and most experienced decision maker. (Id.) On these points, Motorola agrees. All the more reason, therefore, why this Court should dismiss this suit and leave these matters to the ITC. 12
7
clearly covers the products and functionality it now accuses, the ITC can grant all the relief that Microsoft seeks (and that Customs has indicated it would enforce) on an expedited basis. Section 704 of the APA makes it clear that Congress did not intend the general grant of review in the APA to duplicate existing procedures for review of agency action. Bowen v. Massachusetts, 487 U.S. 879, 903 (1988). In particular, Congress did not intend that general grant of jurisdiction [in the APA] to duplicate the previously established special statutory procedures relating to specific agencies. Id. An alternative judicial remedy that forecloses resort to the APA need not provide relief identical to relief under the APA, so long as it offers relief of the same genre. Garcia v. Vilsack, 563 F.3d 519, 522 (D.C. Cir. 2009). If the statutory scheme for review of the agency action channels review to the courts of appeals, it eliminates the federal question jurisdiction that the district courts would otherwise enjoy under the APA. Friends of the Earth v. U.S. E.P.A., No. 12-363, 2013 WL 1226822, -- F. Supp. 2d -- (D.D.C. Mar. 27, 2013) (quoting Am. Road & Transp. Builders Assn v. E.P.A., 865 F. Supp. 2d 72, 81 (D.D.C. 2012)). Microsoft has an adequate remedy in court. After it obtains a ruling from the ITC on whether devices that use Google sync infringe the patent and are included in the exclusion order, Microsoft can appeal that decision to the United States Court of Appeals for the Federal Circuit. See 28 U.S.C. 1295(a)(6) (conferring upon the Federal Circuit jurisdiction over appeals from ITC proceedings relating to unfair practices in import trade). Following a decision by the Federal Circuit, Microsoft could also petition for a writ of certiorari in the Supreme Court. See 28 U.S.C. 1254. In addition to this Courts decisions in Friends of the Earth and American Road & Transportation Builders, numerous courts have held that appellate review of agency decisions in
13
an Article III court of appeals is quintessentially an adequate remedy in court.8 Because Microsoft can seek appellate review of ITC decisions, an original action has no place in district court and this Court should dismiss for lack of jurisdiction. Indeed, permitting Microsoft to proceed on this complaint would provide other aggrieved parties a roadmap for circumventing the ITC and the statutory pathway up to the Federal Circuit that Congress has prescribed. This is the very specter the D.C. Circuit stands vigilant against, safeguarding comparable administrative processes and statutory schemes for orderly judicial review. See Fomaro v. James, 416 F.3d 63, 68 (D.C. Cir. 2005) (Allowing district court actions challenging how OPM calculates civil service benefits for particular classes of beneficiaries would plainly undermine the whole point of channeling review of benefits determinations to the MSPB and from there to the Federal Circuit.) To the extent that Microsoft would claim that it has no other recourse specifically for challenging the decision by Customs not to enforce the exclusion order, as requested by Microsoft, for the time being as final in and of itself, such recourse should be altogether foreclosed, including here. The agencys decision to refrain from enforcing a particular order, after consulting the tribunal that issued that order and confirming the need for clarification from the issuing tribunal, would constitute an irreproachable exercise of enforcement discretion by Customs. Thus, Heckler v. Chaney [470 U.S. at 126] is controlling here, and . . . the challenged agency action is not subject to judicial review because it is committed to agency discretion. K-V Pharm. Co. v. U.S. Food & Drug Admin., 889 F. Supp. 2d 119, 132 (D.D.C. 2012) (dismissing APA challenge against FDA for failure to enforce); see Roberts v. Napolitano, 792 F. Supp. 2d 67 (D.D.C. 2011), See, e.g., Dresser v. Meba Med. & Benefits Plan, 628 F.3d 705, 710-11 (5th Cir. 2010) (review in the court of appeals of decision of National Transportation Safety Board precluded challenge in district court under APA); In re Russell, 155 F.3d 1012 (8th Cir. 1998) (review of Department of Veterans Affairs decision in Board of Veterans Affairs and subsequent review of Board of Veterans Affairs decision in Federal Circuit precluded jurisdiction in district court under APA); Beamon v. Brown, 125 F.3d 995 (6th Cir. 1997) (same). 14
8
(Customs selective enforcement of the TSA Global Entry program was not reviewable under Chaney); see also Secy of Labor v. Twentymile Coal Co., 456 F.3d 151, 157 (D.C. Cir. 2006); Drake v. FAA, 291 F.3d 59, 70-71 (D.C. Cir. 2002); Shoshone-Bannock Tribes v. Reno, 56 F.3d 1476, 1481-82 (D.C. Cir. 1995); Block v. SEC, 50 F.3d 1078, 1081-82 (D.C. Cir. 1995); Kisser v. Cisneros, 14 F.3d 615, 620-21 (D.C. Cir. 1994).9 (b) Microsofts Claims Are Not Ripe for Adjudication
Another problem fatal to Microsofts case is lack of ripeness. Thus, assuming arguendo that Microsofts complaint could ever come before this Court, it still would not be ripe for adjudication at this time. In insisting upon prudential ripeness, this Court asks whether fitness of the issue for judicial decision and the hardship to the parties of withholding court consideration make an issue fit for present adjudication, thereby balancing a petitioners interest in prompt consideration of allegedly unlawful agency action against the agencys interest in crystallizing its policy before that policy is subject to review and the courts interest in avoiding unnecessary adjudication and in deciding issues in a concrete setting. City of Houston, Tex. v. Dept of Hous. & Urban Dev., 24 F.3d 1421, 1430 (D.C. Cir. 1994); see also Am. Petroleum Inst. v. E.P.A., 683 F.3d 382, 386-87 (D.C. Cir. 2012) (Letting the administrative process run its course before binding parties to a judicial decision prevents courts from
The same concern sounds in terms of the doctrine of primary jurisdiction so as to foreclose Microsofts complaint and requested relief. Simply put, Microsoft is seeking resolution of issues which, under a regulatory scheme, have been placed in the hands of an administrative body, particularly Customs and the ITC. Total Telecomms Servs., Inc. v. AT&T, 919 F. Supp. 472, 478 (D.D.C. 1996). Applying the traditional[] four factors, the determination of how a particular ITC order should be enforced on the ground relative to certain products: (1) is not within the conventional expertise of judges; (2) instead lies particularly within the agencys discretion [and] requires the exercise of agency expertise; (3) poses a substantial danger of inconsistent rulings relative to what the ITC might say; and (4) implicates a prior application to the agency. Himmelman v. MCI Communications Corp., 104 F. Supp. 2d 1, 3-4 (D.D.C. 2000). 15
entangling themselves in abstract disagreements over administrative policies, and ... protect[s] the agencies from judicial interference in an ongoing decision-making process.) (quoting Abbott Labs. v. Gardner, 387 U.S. 136, 148 (1967)). Per the D.C. Circuits instruction, this Court asks specifically 1) whether delayed review would cause hardship to the plaintiffs; 2) whether judicial intervention would inappropriately interfere with further administrative action; and 3) whether the courts would benefit from further factual development of the issues presented. Nevada v. Dept of Energy, 457 F.3d 78, 84 (D.C. Cir. 2006). The answers in this case are easy, and point uniformly towards dismissal for lack of ripeness, if for no other reason. As to (1) hardship, Microsoft cites no specific facts, much less proof, indicating any particular hardship. As to (2) further administrative action, Customs has made clear that it is looking to the ITC even as Microsoft rushes headlong to circumvent the ITC. And, as to (3) benefiting from further factual development, this Court would surely benefit from a record that includes, e.g., the ITCs own views of the ITCs exclusion order and the history of its own proceedings that Microsoft would put before this Court to interpret. In sum, there is still more to be done in connection with the matters now before the Court, rendering the case not fit for review at this time. Mississippi Valley Gas Co. v. F.E.R.C., 68 F.3d 503, 508-09 (D.C. Cir. 1995). 2. Microsofts Claims Are Also Doomed On Their Substantive Merits
Besides being procedurally improper, Microsofts claims also ring substantively false they fail because Customs June 24th Ruling is well supported by both the facts and the law. Under the APA, this Court cannot overturn Customs decision unless it is arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. 5 U.S.C. 706(2)(A). Likewise, Customs factual determination cannot be overturned unless they are unsupported by substantial evidence. 5 U.S.C. 706(2)(E). Review of agency actions under the arbitrary and 16
capricious standard is highly deferential and presumes the agencys action to be valid. Tindal v. McHugh, No. 10-237 (BAH) 2013 U.S. Dist. LEXIS 73106, at *23 (D.D.C. May 23, 2013) (citation omitted). If the agency has rationally set forth the grounds on which it acted, . . . this court may not substitute its judgment for that of the agency. Dist. Hosp. Partners, L.P. v. Sebelius, No. 11-1717(GK), 2013 U.S. Dist. LEXIS 42186, at *15-*16 (D.D.C. Mar. 23, 2013) (citations omitted). When reviewing an agencys factual determination, weighing the evidence is not the courts function. Instead, the question is whether there is such relevant evidence as a reasonable mind might accept as adequate to support the agencys finding. Id. at *16 (citations omitted). Especially given the heavy standard of deference that is operative, Microsofts claims have no hope of succeeding. (a) Customs Decision That Microsoft Abandoned Its Infringement Allegations Against The Use Of Googles Synchronization Protocol Is Not Arbitrary And Capricious
Three determinations underlie Customs decision. First, Customs determined that, as a matter of policy, it will not refuse entry based on features that were present in accused devices during the ITC investigations but not accused of infringement: CBPs enforcement responsibility in the exclusion order context is to apply the infringement findings from the ITC record to determine whether imported articles exhibit those elements of the adjudged infringing products that the ITC complainant previously contended and proved satisfy the specific limitations of the asserted claims. In light of the above, CBP will not refuse entry on the basis of features that were present on the accused devices at the time of the ITC investigation but were not specifically accused and found to satisfy the limitations in the asserted patent claims identified in the exclusion order. (Dkt. 7-2 at 9.) Second, Customs determined that Motorolas accused products had the functionality that Microsoft now accuses the ability to synchronize with Googles servers during the ITC investigation: [T]here is no dispute that these features [the use of Googles 17
servers and synchronization protocols] were present on the devices before the ITC during the investigation. (Dkt. 7-2 at 11.) Third, Customs determined that, although Microsoft initially alleged that the use of the Google Calendar synchronization protocol infringed the 566 patent, Microsoft then abandoned any such allegation: CBP determines that the record is insufficient to support a finding that the legacy Motorola devices at the ITC were specifically accused and proven to infringe based on their ability to use Googles servers and Googles synchronization protocol. (Dkt. 7-2 at 10.) Neither the first nor the second determination by Customs is under challenge; indeed, they seem beyond reproach as an exercise of Customs administrative discretion and judgment. Instead, Microsofts instant challenge exclusively faults Customs third determination namely, that Microsoft failed to accuse and prove infringement as to Motorolas accused products insomuch as they use Googles servers and synchronization protocol. By Microsofts account, Customs finding should be foreclosed by the law of the case because the ITC allegedly rejected Motorolas request to limit the exclusion order. (Dkt. 7-1 at 18.) Yet Microsofts account of law of the case is far from unassailable. It is, in fact, exceedingly peculiar because it is contrary to what the ITC itself said. The ITC informed Customs that it took no position on the matter and was, far from instructing Customs to do as Microsoft bid, instead suggesting an alternative approach. (Dkt. 7-2 at 10.) It suffices, in order to refute the merits of Microsofts challenge, to note that Customs conscientiously considered Microsofts account and offered a reasonable explanation of why it was parting ways after specifically considering Microsofts submissions, reviewing the relevant pleadings as submitted to the ITC, and even asking the ITC for clarification as to how it saw the relevant case and exclusion order.
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Delving further, particulars of the ITC record are squarely against Microsoft. Thus, Customs specifically found that Microsofts only infringement theory actually advanced and decided before the ITC did not reach Motorolas mobile devices and their use of Google Calendar synchronization protocols that Microsoft is now trying to exclude; Customs did so after studying and chronicling aspects of the ITC proceedings, including testimony by Motorolas witness Peter John Cockerell, testimony by Microsofts expert Hugh H. Smith, Microsofts preand post-hearing briefs, and the ITCs actual opinion, all of which so confirmed. (See id. at 10.) There is nothing for Microsoft to fault in this regard. During the ITCs review of the ALJs initial determination, Microsoft explicitly submitted to the Commission that it had established infringement based solely on use of the ActiveSync protocols, without mentioning the Google Calendar synchronization protocols: MMIs infringement of the 566 patent was proved by virtue of 1) its connection to the Exchange servers (requiring use of [sic] ActiveSync protocol) and 2) a users ability to generate a meeting request with invitees. (Ex. 5 (Microsofts Response to Motorola Mobilitys Written Submission in Response to Notice of a Commission Determination Review a Final Determination) at 52.) During the same briefing, Motorola for its part asked the ITC to explicitly limit the exclusion order so that it would not reach the use of the Google Calendar synchronization protocols: To the extent that Microsoft seeks to exclude the Accused Products ability to use Googles servers and synchronization protocols to synchronize calendar objects created on the Accused Products with a users Google Calendar application, such an exclusion order is overly broad and unsupported by the record in this investigation. . . . Based on the broad wording of its proposed exclusion order, Microsoft is attempting to recapture via an exclusion order the infringement allegations that it abandoned during the course of this Investigation. Allowing Microsoft to extend the scope of its exclusion order to cover abandoned infringement allegations is fundamentally unfair to Motorola, who was not given an opportunity to develop a full record with respect 19
the Accused Products implementation of calendar synchronization using Googles synchronization protocol and to defend against Microsofts allegations regarding this implementation. (Ex. 6 (Motorolas Response to Complainant Microsofts Opening Brief on Commission Review) at 45-47.) In a footnote, the ITC declined to address this issue one way or the other: Motorola also argues that any exclusion order should not extend to the accused products use of Googles servers and Googles synchronization protocol to synchronize calendar objects. We decline to consider this issue . . . . (Dkt. 7-8 at 24 n. 12.) Microsoft calls this footnote indisputable proof that the ITC rejected Motorolas arguments on the merits, making it the law of the case. (Dkt. 7-1, at 18.) Yet, both Customs and the ITC disagree, a fact that Microsoft neglects to mention. (Dkt. 7-2 at 10.) Indeed, it seemingly would be unreasonable perhaps even arbitrary and capricious for Customs to equate the ITCs studied declination to consider an argument with conclusive rejection of that argument by the ITC. Certainly Customs did not venture off established administrative rails simply by finding, as it did, that the footnote in the Commission Opinion seems to imply that the use of Googles servers and Googles synchronization protocol was not specifically accused, or at the very least that the record was unclear, because if it had been specifically accused, the ITC would have expressly denied Motorolas assertion as having been subject to the concession it made and, consequently, the ALJs infringement finding.10 (Dkt. 7-2 at 10.) Moreover, Customs then undertook further diligence by checking with the Office of the General Counsel at the ITC so as to confirm that it was getting things right. When asked for confirmation regarding Indeed, Customs rationale is further supported by Microsofts delay in asserting its arguments regarding Motorolas use of the Google Calendar synchronization protocols. Microsoft received the Commissions Opinion on May 21, 2012 yet waited approximately 11 months until April 25, 2013 to raise Motorolas use of the Google Calendar synchronization protocols with Customs. Throughout this entire 11 month period, Motorola was importing phones that used the Google Calendar synchronization protocols. 20
10
the record it developed and the precise infringement findings that resulted in the exclusion orders issuance, the ITC reiterated that it took no position on the matter. . . . Id. (emphasis added). Of course, Microsoft may continue to disagree with Customs interpretation of the ITCs exclusion order and to prefer its own divergent interpretation; this cannot be mistaken, however, for an instance where Customs has acted arbitrarily and capriciously. (b) Microsofts Specific Indictments of Customs Decisionmaking Are Off Base
Although Microsoft bids this Court to enter the weeds of the ITC proceedings in order to second-guess Customs understanding of them, Microsofts challenge fares no better there. (i) ITC Infringement Evidence
Microsoft attacks Customs finding that Microsoft abandoned its infringement contentions against the use of Googles synchronization protocols, alleging that Customs failed to meaningfully address the relevant evidence, particularly that cited by Microsoft. (Dkt. 7-1, at 26.) But it is Microsofts brief, not Customs Ruling, that ignores the relevant evidence, which demonstrates Microsofts abandonment of the infringement theory it now advances. Customs June 24th Ruling specifically cites four pieces of evidence (1) Dr. Smiths July 8, 2011 deposition testimony (as informed by corresponding testimony from Motorolas Rule 30(b)(6) designee, Mr. Cockerell), (2) Microsofts Pre-Hearing Brief, (3) Microsofts Witness Statements, and (4) Microsoft Post-Hearing Briefs that all confirm Microsoft abandoned its allegations against the Google synchronization protocol.11 (Dkt. 7-2 at 10.) Tellingly, Microsoft even now
These documents also demonstrate the error in Microsofts claim that Motorola conceded, without qualification, that its products infringe the 566 Patent. (Dkt. 7-1, at 8.) Motorolas mid-trial concession applied only to the infringement allegations that were being made at the time of the concession. Because Microsoft had already abandoned its allegations against the Google synchronization protocol, the allegedly unqualified concession did not apply to that technology. Indeed, Microsoft never submitted any admissible evidence demonstrating 21
11
addresses none of these four items on which Customs expressly relied. (See, e.g., Dkt. 7-2 at 10 (Moreover, during his deposition, Microsofts expert witness, High M. Smith, testified that the focus of his infringement analysis was on the ActiveSync protocol alone concerning the limitation in question, which, as CX-1081C reveals, was the synchronization component.) (citing Smith Tr. 141:7-143:13); id. (Microsoft, likewise, does not point to any support in its Pre- or Post-Hearing Briefs for its position that Googles synchronization protocol was specifically accused to satisfy this claim limitation); see also Ex. 1, ALJs Ground Rule 8(f) (Any contentions not set forth in detail as required here shall be deemed abandoned, or withdrawn, except for contentions of which a party is not aware and could not be aware in the exercise of reasonable diligence at the time of filing of the pre-hearing statement.). As Customs noted in the ruling letter, [i]t is well settled that each element of a claim is material and essential and, for a court or the ITC to find infringement, the patentee must show the presence of every element in the accused device by a preponderance of the evidence. (Dkt. 7-2 at 8 (quoting Rohm & Haas Co. v. Brotech Corp., 127 F.3d 1089, 1092 (Fed. Cir. 1997).) As the patent owner, Microsoft bore the burden of proof at the ITC of making a prima facie showing of infringement as to each accused device before the burden shift[ed] to Motorola to offer contrary evidence. L & W, Inc. v. Shertech, Inc., 471 F.3d 1311, 1318 (Fed. Cir. 2006); Rambus Inc. v. Hynix Semiconductor Inc., 642 F. Supp. 2d 970, 976 (N.D. Cal. 2008) (Rambus, as the party asserting infringement, bears the burden of persuasion at trial as to whether or not each of the Manufacturers accused products infringe its claims.). A patentee cannot simply assume that all of the [accused infringers] products are [alike], and thereby shift to [the accused infringer] the burden to show that this is not the case. Shertech, 471 F.3d at 1318; see also infringement by use of Google Calendar synchronization protocols as opposed to by use of ActiveSync. 22
Implicit Networks Inc. v. F5 Networks Inc., Nos. C10-3365 SI, C 10-4234 SI, 2013 WL 1007250, at *13 (N.D. Cal. Mar. 13, 2013). Having failed to carry its burden at trial, Microsoft asks this Court to correct its mistakes. While fixating on isolated items of evidence that it cited to Customs, Microsoft is incorrect in contending that Customs somehow overlooked it. (Dkt. 7-1, at 26). The June 24th Ruling specifically addresses both Dr. Smiths expert report and the updated claim chart labeled CX-1081C and explains why those do not sustain Microsofts arguments: [T]he updated claim chart contained in CX-1081C, which incorporates aspects of Cockerells deposition testimony, focuses on the ActiveSync system and does not refer to Googles synchronization protocol. Microsoft has not identified any portion of its expert reports or witness statements that clarifies where in the record a Google synchronization protocol was claimed to satisfy the synchronization component. (Dkt. 7-2 at 10 (emphasis added).) Tellingly, Microsoft here offers no pin-cite to either CX1081C or to Dr. Smiths expert report that is to the contrary. Moreover, Dr. Smiths expert report and the updated claim chart were served before Microsoft serve the briefs and witness testimony relied upon by customs in its June 24th Ruling. This subsequent evidence shows that as the ITC investigation progressed, Microsoft abandoned its allegations against the Google Calendar synchronization protocol. Likewise, Microsofts reliance on Motorolas Motion to Extend the Target Date is misplaced for several reasons. First, Microsoft fails to note that the parties dispute regarding the 566 patent was merely one portion of one argument raised in Motorolas motion. The majority of Motorolas motion addressed other Microsoft patents. Second, the basis of Motorolas ActiveSync argument was that Microsofts new Active Sync-related infringement theories required additional discovery that could not be completed within the schedule in place at the time. Finally, Motorolas motion was filed on June 29, 2011, and subsequent events made it 23
clear that Microsoft had abandoned its infringement allegations with respect to the use of the Google Calendar synchronization protocols. Specifically, Dr. Smith confirmed at his July 8, 2011 deposition that his infringement analysis was based on the ActiveSync protocols (Dkt. 7-2 at 10), Dr. Smiths July 28, 2012 witness statement contained testimony solely based upon ActiveSync, and Microsofts August 8, 2011 Pre-Hearing Brief made no arguments regarding the Google Calendar synchronization protocols (Dkt. 7-2 at 10), thereby waiving them under Ground Rule 8(f). See Ex. 1 at Ground Rules, pp. 17-18. (ii) Burden of Proof
Microsoft contends that Customs improperly shifted the burden of proof. That, too, is untrue. Here, Microsoft is glossing over both the procedural backdrop of Microsofts submission and the substance of Customs June 24th Ruling. By the time of its ruling at issue, Customs had already determined in an earlier proceeding that Motorola affirmatively proved in accordance with its then-operative burden of proof that its re-designed products do not infringe the 566 patent and are therefore outside the scope of the exclusion order. (Dkt. 7-14.) It was subsequent to that successful showing by Motorola that Microsoft came forward alleging that the use of Googles synchronization protocol was specifically accused of infringement and formed part of the ITCs infringement finding, such that the devices at issue in the ruling letter must refused entry. (Dkt. 7-2 at 2.) Because Microsoft was the moving party under 19 C.F.R. Part 177.12(b) and sought to establish that the use of Googles synchronization protocols was part of the ITCs infringement finding, Microsoft can hardly claim surprise that Customs would examine Microsofts claims against the factual record of the ITC proceeding.
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In any event, nothing in the June 24th Ruling indicates that Customs assigned the burden of proof to Microsoft. Rather, Customs simply sought to determine whether or not the record of the ITC investigation bears out Microsofts factual contention that use of Googles synchronization protocol was specifically accused of infringement and formed part of the ITCs infringement finding. (Dkt. 7-2 at 9-11.) Customs could not make that determination consistent with the APA without identifying substantial evidence to support it. 5 U.S.C. 706(2)(E). In this sense, Microsofts gripe that Customs insisted upon proof from Microsoft effectively faults Customs for doing its job and not simply accepting Microsofts allegations as true. (iii) Notice to Microsoft
Microsoft alleges that Customs failed to give Microsoft proper notice, thereby depriving it of the opportunity to marshal all of the evidence showing that it did not abandon its accusation of phones that use Google servers and synchronization components. (Dkt. 7-1, at 25.) Once again, Microsoft is turning history on its head. It was Microsoft that sought a ruling from Customs, just as it was Microsoft that raised the issue whether use of Googles synchronization protocol was specifically accused of infringement and formed part of the ITCs infringement finding. (Dkt. 7-2 at 2.) It is ludicrous for Microsoft to argue that it lacked fair notice that Customs would rule on the very issue as to which Microsoft was seeking a ruling. The mere fact that Microsoft knew to allege that use of the Google Calendar synchronization protocol was part of the ITCs infringement determination belies any notion that it had no inkling Customs would be ruling on that point, as it did on June 24th. Similarly, Microsoft faults Customs for making its initial determination that use of the Google Calendar synchronization protocol did not fall within the scope of the exclusion order
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without consulting Microsoft. (Dkt. 7-1 at 2, 12-13, 20, 22, 25 & 30.) But Microsoft cites no authority even suggesting that Customs cannot have ex parte communications with an importer. Under the Administrative Procedure Act, ex parte communications can occur in specified circumstances. See 5 U.S.C. 554 & 557(d)(1). That prohibition, however, applies only to adjudications and rule making that require a hearing. See 5 U.S.C. 554 & 557(d)(1). Customs response to a ruling request constitutes neither agency rule making nor adjudication, and Microsoft has not argued otherwise. See Ammex, Inc. v. United States, 62 F. Supp. 2d 1148, 1167 n.16 (Ct. Intl Trade 1999) (APA does not prohibit ex parte communications related to Customs Headquarters Ruling). Further, Microsoft has acknowledged that Customs frequently issues such rulings without consultation with the patentee. (Ex. 4 at 1 (When an importer initiates a request to CBP to allow importation of a new design, the importer makes that request ex parte.).) Indeed, Customs met with Microsoft ex parte en route to its decision at issue, just as it met with Motorola ex parte, just as it routinely meets with various parties ex parte in order to render informed decisions about what products should be excluded when it comes time to implement particular exclusion orders. Such determinations by Customs as to what procedures are most appropriate, in practice, when determining the proper scope of an exclusion order relative to particular imports are part of how it bring[s] the benefit of specialized experience to bear on the subtle questions in this case and part of the administrative process that deserves deference, according to the Supreme Court. United States v. Mead Corp., 533 U.S. 218, 235 (2001). (iv) The Transition Period
Microsoft takes issue with the 30-day transition period that CPB afforded Motorola after Microsoft unilaterally and improperly terminated the ActiveSync license of Motorolas supplier,
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Emtrace. In doing so, Microsoft ignores the procedural history regarding the 30-day transition period. Microsoft pretextually purported to terminate the Emtrace/Microsoft agreement on December 1, 2012, notwithstanding the fact that Emtrace complied with all provisions of the Emtrace/Microsoft agreement. Microsoft specifically cited Microsofts business relationship with Motorola in its termination letter, leaving no doubt that Microsofts actions were intended to harm Motorola. (Ex. 2 at 1-3.) In subsequent correspondence, Emtrace made it clear to Microsoft that Microsofts purported grounds for termination were meritless (Ex. 3.); however, Microsoft ignored these letters and informed Customs of its termination of the Emtrace/Microsoft agreement. In light of Microsofts purported termination of the Emtrace/Microsoft agreement, Customs required Motorola to implement its re-design that removes the email scheduling request feature on all its phones, including those that use Emtraces software. To facilitate an orderly transition and because the changes in Motorolas phones were prompted by Microsofts unilateral (and unjustified) termination of the Emtrace/Microsoft agreement, Customs allowed Motorola to implement its re-design on a rolling basis during the 30-day transition period. This orderly transition served the interest of Motorolas customers and end users and was neither arbitrary nor capricious. Microsofts citations to the Commissions opinion that a transition period was unwarranted (Dkt. 7-1, at 27) are inapposite here. In every ITC investigation, there is a 60-day presidential review period before any exclusion order takes effect. 19 U.S.C. 1337(j)(2). The 60-day presidential review period serves as a default transition period. At issue in the Commission opinion was whether a transition period beyond the default 60-day presidential review period was warranted. (Dkt. 7-8 at 22.) In this case, Customs permitted only a 30-day transition period and only in special circumstances where there
27
was an ongoing dispute about the status of a license and a sudden attempt by Microsoft to revoke an extant license that was, at the very least, questionable; there certainly is no inconsistency between Customs decision and the Commissions opinion. Especially considering that Microsofts out-of-the-blue decision to improperly terminate the Emtrace agreement is what necessitated the transition period, it has no basis for complaining that the transition period was aberrant, much less unlawful. B. Microsoft Faces No Prospect Of Irreparable Harm
Merits deficiencies aside, Microsoft has made no credible showing of irreparable harm, nor can it. No matter how strong its case on the merits, a movant seeking a preliminary injunction must show at least some injury because the entire basis of injunctive relief in the federal courts has always been irreparable harm. Chaplaincy of Full Gospel Churches v. England, 454 F.3d 290, 297 (D.C. Cir. 2006)( quoting Population Inst. v. McPherson, 797 F.2d 1062, 1078 (D.C. Cir. 1986), & Sampson v. Murray, 415 U.S. 61, 88 (1974)). A movants failure to show any irreparable harm is therefore grounds for refusing to issue a preliminary injunction, even if the other three factors entering the calculus merit such relief. Id. Further, the alleged harm must be certain, great and irreparable. Chaplaincy of Full Gospel Churches, 454 F.3d at 297. A plaintiff alleging irreparable harm bears an obligation to demonstrate that its harm is great, even when plaintiff alleges an irrecoverable financial loss. ViroPharma, 898 F. Supp. 2d at 26 (citing Air Cargo, 756 F. Supp. 2d at 125, n.6). [V]ague allegations do not satisfy the irreparable injury standard. Id. at 27. To demonstrate irreparable injury, a plaintiff must allege harm that require[es] a remedy of more than mere monetary damages. A monetary loss will not suffice unless the movant provides evidence of damage that cannot be rectified by financial compensation. Biovail Corp. v. FDA,
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519 F. Supp. 2d 39, 49 (D.D.C. 2007) (quoting Gen. Textile Printing v. Expromtorg Intl, 862 F. Supp. 1070, 1075 (S.D.N.Y. 1994)). Microsoft has not even attempted to marshal evidence that a preliminary injunction is necessary to prevent irreparable harm. Nor could it reasonably do so considering that it has widely licensed the patent in question, delayed raising issue with Customs or Motorola, delayed filing suit, and has available legal and administrative remedies, including a suit for patent infringement damages against Motorola. Instead, Microsoft rests its entire motion on a legally erroneous conclusive presumption of irreparable harm. That conclusive presumption is, however, refuted by this Courts precedent. 1. There Is No Presumption of Irreparable Harm, Conclusive or Otherwise
Microsoft advances no credible theory for this Court to arrive at a conclusive presumption of irreparable harm. Whereas Microsoft wants irreparable harm to be superficially examined and conclusively presumed, federal courts demand much more. See Winter v. NRDC, 555 U.S. 7, 24 (2008) (A preliminary injunction is an extraordinary remedy never awarded as of right. In each case, courts must balance the competing claims of injury and must consider the effect on each party of the granting or withholding of the requested relief.); ViroPharma, Inc. v. Hamburg, 898 F. Supp. 2d 1, 26 (D.D.C. 2012) (Yet, irreparability aside, it remains incumbent on plaintiffs to demonstrate, first, that they are threatened with serious injury. (emphasis in original)); Chaplaincy of Full Gospel Churches, 454 F.3d at 297 (This court has set a high standard for irreparable injury.); Brown v. Dist. of Columbia, 888 F. Supp. 2d 28, 32 (D.D.C. 2012) (The plaintiff, in this case, thus must show that her injury is of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm. (citation omitted)). 29
Microsoft makes no such showing. (Ex. 7, Leonard Decl. 13.) It instead posits irreparable harm based on the mere existence of a exclusion order issued by the ITC, despite a conspicuous absence of supporting authority. Microsoft argues that Eaton Corp. v. United States, 395 F. Supp. 2d 1314, 1329 (Ct. Intl Trade 2005), establishes a presumption of irreparable harm from the failure to enforce an exclusion order issued to prevent the importation of products that infringe a patent. (Dkt. 7-1 at 29.) But that case relied on the now-overturned rule that, in matters involving patent rights, irreparable harm has been presumed when a clear showing has been made of patent validity and infringement. Id. at 1167 (quoting Bell & Howell Document Mgmt. Prods. Co. v. Altek Sys., 132 F.3d 701, 708 (Fed. Cir. 1997)). That is no longer good law because the presumption of irreparable harm from patent infringement was jettisoned in eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388 (2006). In eBay, the Supreme Court held that the Federal Circuit erred by reasoning that the right to exclude conferred by a patent created a presumption that its infringement should be remedied through an injunction. Id. at 392-94.12 There is therefore no presumption that the sale or importation of a product that infringes would impose irreparable harm on the patentee. Nor has Congress implemented any presumption that the failure to enforce a exclusion order imposes irreparable harm. The Supreme Court has repeatedly cautioned against interpreting statutes that authorize injunctions as though they eliminate any of the traditional equitable factors. eBay, 547 U.S. at 393-94 (traditional injunction factors apply to Patent Act); Amoco Production Co. v. Village of Gambell, AK, 480 U.S. 531, 544-45 (1987) (traditional injunction factors apply to Alaska National Interest Lands Conservation Act); Hecht Co. v.
The case upon which Eaton Corp. relied, Bell & Howell Document Management Products, has been explicitly recognized as abrogated by eBay. Am. Beverage Corp. v. Diageo N. Am., Inc., No. 12-601, 2013 WL 1314598, at *45 (W.D. Pa. Mar. 28, 2013). 30
12
Bowles, 321 U.S. 321, 329-30 (1944) (traditional injunction factors apply to Emergency Price Control Act of 1942). A major departure from the traditional equitable standard, such as a complete elimination of any showing of likely harm, should not be lightly implied. Id. at 330. Microsoft invokes the fact that a prevailing patentee in an ITC investigation brought under Section 337 is entitled to an exclusion order even absent a showing that it faces the prospect of irreparable harm from importation of the product. (Dkt. 7-1 at 28-29.) Although that may be true when it comes to seeking an exclusion order in an ITC investigation, Microsoft is not here seeking an exclusion order in an ITC investigation. Instead, Microsoft is seeking a preliminary injunction from a United States District Court against officers of the United States under the Administrative Procedure Act. And there is no congressional statement, much less a clear congressional statement, that a preliminary injunction may be obtained under the APA without a showing of irreparable harm. Indeed, this Court has repeatedly required a showing of irreparable harm when a plaintiff seeks to preliminarily enjoin conduct it alleges violates the APA. See, e.g, Sweis v. United States Foreign Claims Settlement Commn, No. 13-366, 2013 WL 2986252 (D.D.C. June 15, 2013); Elk Associates Funding Corp. v. U.S. Small Business Admin., 858 F. Supp. 2d 1, 30 (D.D.C. 2012); VicroPharma, Inc. v. Hamburg, 898 F. Supp. 2d 1, 25-26 (D.D.C. 2012). Microsofts assumption, in addition to being unsupported, is anomalous. Agencies issue countless orders in their adjudicatory capacities without requiring any showing of irreparable harm. It by no means follows, however, that a party can then obtain a preliminary injunction in district court just by challenging an agencys enforcement decision without making any particular showing of irreparable harm. The showing necessary to obtain an administrative order from an agency naturally differs from the showing necessary to obtain a preliminary injunction
31
from a federal court. The mere fact that the governing statute, 19 U.S.C. 1337, does not require the ITC to find irreparable harm before issuing an exclusion order by no means amounts to a clear statement from Congress that district courts should grant preliminary injunctions compelling enforcement of those orders without regard for the traditional inquiry. 2. Microsoft Remains Free to Seek Patent Infringement Damages From Motorola
In the absence of its purported conclusive presumption, Microsofts claim to irreparable harm crumbles because it is free to seek patent infringement damages from Motorola. Assuming that it can actually prove that Motorolas redesigned products infringe its patent, Microsoft will be able to recover whatever damages it can prove under the Patent Act. (Ex. 7, Leonard Decl. 17.) Indeed, Microsoft is currently seeking damages for infringement of the 566 patent from Motorola in district court. Microsoft Corp. v. Motorola, Inc., 10-cv-1577 (W.D. Wash.). Damages under the Patent Act provide Microsoft with a full remedy for any injury it claims it will suffer. This is conclusively demonstrated by the fact that it has widely licensed the 566 patent, both with respect to ActiveSync and the Google Calendar synchronization protocols, in exchange for money. (Ex. 7, Leonard Decl. 15-17.) Microsoft admits in its motion that it has licensed the 566 patent to, among others, Nokia, Apple, Samsung, Research In Motion, HTC, AsusTek, Kyocera, Pantech, and Sony. (Dkt. 7-1 at 6; Dkt. 7-5 at 2-4.) The fact that a patentee will willingly accept royalty payments is evidence that the patentee can be adequately compensated by a monetary remedy for use of its patent.13 High Tech Med. Instrumentation, Inc.
13
Notably, the ITC proceedings were likewise premised on the monetary compensability of Microsofts injury. Specifically, the ITC required Motorola to post a bond in the amount of $.33 per product based upon Microsoft's established royalty rate which further belies any notion that Microsofts injury could not be quantified and compensated in monetary terms. 32
v. New Image Indus., Inc., 49 F.3d 1551, 1557 (Fed. Cir. 1995); T.J. Smith & Nephew Ltd. v. Consol. Med. Equip., Inc., 821 F.2d 646, 647-48 (Fed. Cir. 1987); see also Ex. 7, Leonard Decl. 15-17. Microsoft is free to seek patent infringement damages from Motorola for any product that Customs lets in and Microsoft is able to prove infringes its patent. There is therefore no irreparable harm.14 That Microsoft is free to seek monetary remedies from Motorola belies Microsofts argument that Customs sovereign immunity itself poses irreparable harm. (Dkt. 7-1 at 30.) Although it may be true that Microsoft is not free to sue Customs for damages, this does not establish that it lacks a monetary remedy. Microsoft remains free to pursue damages for patent infringement in its district court action against Motorola. The only case Microsoft cites on this sovereign immunity point, Feinerman v. Bernardi, 558 F. Supp. 2d 36, 51 (D.D.C. 2008), is not to the contrary. In that case, the plaintiff filed a lawsuit under the APA against the Department of Housing and Urban Development and moved for a preliminary injunction. The plaintiff sought to preliminarily enjoin a HUD decision to debar the plaintiff from future participati[on] in transactions with the executive branch of the federal government for three years based on plaintiffs failure to obtain approval of certain allocations of funds received annually from HUD. Id. at 41. The plaintiff showed that 40% of his business depended on an insurance business that would be prohibited by the order. Id. at 50-
To the extent Microsoft may contend that it stands to lose sales of its own product in the face of competition from Motorola products using Google Sync, that argument would fail: Microsoft has not even attempted to demonstrate requisite nexus between its patent or the Google Calendar synchronization protocol and demand for Motorolas products. See Apple, Inc. v. Samsung Elecs. Co., Ltd., 678 F.3d 1314, 1324, 1327-28 (Fed. Cir. 2012) (affirming denial of preliminary injunction where patentee failed to demonstrate a causal nexus to the alleged harm and the defendants infringement of the patent); Apple Inc. v. Samsung Elecs. Co., Ltd., 695 F.3d 1370, 1374 (Fed. Cir. 2012) (reversing preliminary injunction where patentee failed to prove that the patented feature drove demand for the defendants product). 33
14
51. The court found this sufficient in part because, although this injury was monetary, it could not be recovered from HUD due to HUDs sovereign immunity. Id. at 51. The fact that Microsoft can seek damages from Motorola, which is not entitled to sovereign immunity, distinguishes this case from Feinerman. In Feinerman, there was no similarly situated nongovernmental party against whom the plaintiff could seek monetary redress. In any event, to the extent that Microsoft relied upon the notion that preliminary injunctions are available as a matter of course in APA suits simply because these suits are directed against governmental defendants and cannot give rise to monetary damages, this Court has rightly rejected that notion. See Northern Air Cargo v. U.S. Postal Service, 756 F. Supp. 2d 116, 125 n.6 (D.D.C. 2010) (While the Court agrees that irrecoverable financial loss may constitute irreparable injury in some cases, . . . a party asserting such a loss is not relieved of its obligation to demonstrate that its harm will be great. If this were not the case, then prospective injunctive relief would often cease to be an extraordinary remedy in cases involving government defendants.); ViroPharma Inc. v. Hamburg, 898 F. Supp. 2d, 1, 24 (D.D.C. 2012) (agreeing with Northern Air Cargo and finding absence of irreparable harm). 3. An Injunction Is Not Necessary to Prevent Harm Because Microsoft Can Seek Interim Relief from the ITC
Even assuming that Microsoft could demonstrate that an injunction could prevent irreparable harm, it has not even attempted to show that it is necessary to do so. The party seeking injunctive relief must show that the injury complained of is of such imminence that there is a clear and present need for equitable relief to prevent irreparable harm. Chaplaincy of Full Gospel Churches, 454 F.3d at 297 (quoting Wis. Gas Co. v. Fed. Energy Regulatory Commission, 758 F.2d 669 (D.C. Cir. 1985)); Feinerman, 558 F. Supp. 2d at 50. Microsoft cannot meet this standard because it is free to seek administrative interim relief through an 34
enforcement proceeding at the ITC under 19 C.F.R. 210.75, as fully described above. Surely Microsoft does not deserve the extraordinary remedy of a preliminary injunction from this Court when equivalent relief remains available through normal channels. 4. Microsofts Delay Rebuts Any Claim of Irreparable Harm
Microsofts own delay in bringing this action confirms that it faces no real prospect of irreparable harm. Delay in seeking to enjoin allegedly infringing conduct, although not always dispositive, at least militates against a finding of irreparable harm. Apple, 678 F.3d at 1325-26; High Tech Med., 49 F.3d at 1557. Microsofts lackadaisical approach to any claim it may have against Motorola for its use of the Google Calendar synchronization protocol undermines its position now that there is urgent need to enjoin the importation of Motorolas products that use Google Calendar synchronization protocol. By its own admission, Microsoft has known about Motorolas use of the Google Calendar synchronization protocol since at least 2010, including after the issuance of the exclusion order. (Dkt. 7-1 at 6-7.) Yet Microsoft was sufficiently unconcerned about the Google Calendar synchronization protocol that, far from pursuing it vigorously after the exclusion order was issued, it waited over eleven months to even approach Customs regarding Motorolas use of the Google Synchronization protocol. Instead, Microsoft focused on improperly terminating Emtraces license. Even assuming arguendo that Customs has somehow misinterpreted the exclusion order and the procedural history of the ITC investigation, and Microsoft did not drop its allegations against the Google Calendar synchronization Protocol, any effort to apply the exclusion order to the Google Synchronization Protocol were at best half-hearted. Microsofts claim to a need for an urgent preliminary injunction to prevent irreparable harm now rings hollow.
35
C.
The Balance of Harms and Public Interest Favor Denying an Injunction
In light of Microsofts non-existent showing that a preliminary injunction is necessary to prevent irreparable harm, the balance of harms weighs decisively in Motorolas favor. Microsofts attempt to immediately enjoin the importation of Motorolas products based on its own idiosyncratic reading of an agency order is a transparent attempt to use the injunctive remedy, not as a tool to prevent harm, but as a way of imposing anticompetitive injury on its adversary. Cf. Apple, Inc. v. Motorola, Inc., 869 F. Supp. 2d 901, 921 (N.D. Ill. 2012) (denying a permanent injunction in part in light of [t]he danger that Apples goal in obtaining an injunction is harassment of its bitter rival). Notably, an injunction would only reduce the reasonable royalty damages that Microsoft would potentially recover in any patent infringement litigation based on the importation of these products. (Ex. 7, Leonard Decl., 19-20.) The harm to Motorola, on the other hand, would be significant. (Ex. 7, Leonard Decl., 18.) Microsofts requested relief threatens to shut down the importation of entire lines of Motorola products.15 Motorola has invested significantly in developing, advertising, and manufacturing these products. (Ex. 8, Roberts Decl. 2-4.) The infringement that Microsoft alleges involves the use of only a relatively insignificant functionality. However, the remedy Microsoft seeks will cause significant harm to Motorola. Should Microsoft be granted an injunction, Motorola will be forced to remove functionality from the phones it manufacturers abroad. (Ex. 8, Roberts Decl. 3.) This will involve considerable time and effort, including rewriting of the source code, integrating the new source into the phones, testing the new software, and then receiving approval from the wireless carriers (e.g., Verizon and Sprint). (Ex. 8, Roberts
Motorola recently announced a new line of phones, the Moto X, that will be assembled in the United States and are therefore not subject to the exclusion order. (Ex. 8, Roberts Decl. 2.) 36
15
Decl. 4.) The process of implementing these design changes will take at least several weeks and in the interim, Motorola will not be able to sell the smart phones it is currently offering. (Ex. 8, Roberts Decl. 7.) Moreover, requiring Motorola to remove a functionality from its phones will negatively impact Motorolas relationships with its carriers as well as its reputation among end users. (Ex. 8, Roberts Decl. 9-10.) Considering that Microsoft has made no showing of harm whatsoever and in fact would lose potential patent damages revenue from Motorola if an injunction is entered, the balance of harms tips decidedly against an injunction. (Ex. 7, Leonard Decl., 19.) The harm to Customs and the ITC from an injunction would also be substantial. Customs and the ITC have a legitimate interest in the orderly administrative process surrounding Section 337 investigations and enforcement of any resulting exclusion orders. Microsofts motion attempts to circumvent those procedures, including the procedure for petitioning the ITC for clarification or modification of an exclusion order. The ITC is the forum that is most familiar with the exclusion order at issue and the procedural history that gives rise to it, and it is the forum most interested in ensuring proper (though not unduly expansive) enforcement. As for the public and the courts, they of course have an interest in not transforming every disagreement with Customs interpretation of an exclusion order into a separate federal lawsuit. The regulations provide a process for submitting disagreements with Customs interpretations to the ITC for clarification. 19 C.F.R. 210.75 & 210.76. The public interest will not be served by permitting Microsoft to circumvent the administrative process as it is attempting to do.16
Microsoft argues that the ITC already considered the public interest when it issued the exclusion order and that the public interest is served by enforcement of the exclusion order and excluding products that infringe a U.S. patent. (Dkt. 7-1 at 31-32.) But this simply begs the questions of whether the exclusion order encompasses the use of the Google Calendar synchronization protocol and whether that protocol infringes. As Customs found, the ITC never 37
16
Neither would be the public interest be served by a broad preliminary injunction against consumer electronics that the relevant enforcement agency Customs determined have not been found to infringe and are instead outside the scope of the ITCs exclusion order. A preliminary injunction would injure the legitimate business interests of U.S. wireless carriers and distributors who depend on Motorolas products for their own businesses. It would also harm the public interest by disrupting consumer choice in the marketplace and blocking a significant supplier of mobile devices to the U.S. market.
considered whether the use of the Google Calendar synchronization protocol infringes any patent or whether the public interest would be served by exclusion order against smartphones that use the Google Calendar synchronization protocol but not the accused ActiveSync protocol. Further, Microsoft has failed to show anything improper about Customs ruling. Where the agency in question has fully complied with the law, the public interest is not served by an injunction. See LG Elecs. U.S.A., Inc. v. Dept. of Energy, 679 F. Supp. 2d 18, 37 (D.D.C. 2010) (public interest in ensuring that federal agencies comply with the requirements of federal law not served by an injunction where it appears to have fully complied with the law in this case). 38
IV.
CONCLUSION For the foregoing reasons, Microsofts request for a preliminary injunction should be
denied. Dated: August 2, 2013 Respectfully submitted,
By: /s Paul F. Brinkman Paul F. Brinkman (D.C. Bar No. 441,681) paulbrinkman@quinnemanuel.com Derek L. Shaffer (D.C. Bar No. 478,775) derekshaffer@quinnemanuel.com QUINN EMANUEL URQUHART & SULLIVAN, LLP 1299 Pennsylvania Ave., NW Washington, DC 20004 Telephone: (202) 538-8000 Facsimile: (202) 538-8100 Charles K. Verhoeven Kevin Smith QUINN EMANUEL URQUHART & SULLIVAN, LLP 50 California Street, 22nd Floor San Francisco, California 94111 Telephone: (415) 875-6600 Facsimile: (415) 875-6700 Edward J. DeFranco Matthew A. Traupman QUINN EMANUEL URQUHART & SULLIVAN, LLP 51 Madison Avenue, 22nd Floor New York, New York 10010 Telephone: (212) 849-7000 Facsimile: (212) 849-7100 Counsel for Proposed Intervenor-Defendant Motorola Mobility LLC
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CERTIFICATE OF SERVICE I, Paul F. Brinkman, certify that, on August 2, 2013, I filed the foregoing OPPOSITION OF MOTOROLA MOBILITY LLC TO MICROSOFTS MOTION FOR PRELIMINARY INJUNCTION, DECLARATION OF EDWARD J. DEFRANCO IN SUPPORT OF THE OPPOSITION OF MOTOROLA MOBILITY TO MICROSOFTS MOTION FOR PRELIMINARY INJUNCTION and PROPOSED ORDER with the U.S. District Court for the District of Columbia via CM/ECF, which will cause it to be served upon: Joseph R. Guerra SIDLEY AUSTIN LLP 1501 K Street, N.W. Washington, D.C. 20005 Telephone: 202-736-8000 Facsimile: 202-736-8711 Richard A. Cederoth SIDLEY AUSTIN LLP 1 S. Dearborn Street Chicago, Illinois 60603 Telephone: 312-853-7000 Facsimile: 312-853-7036 Counsel for Plaintiff Microsoft Corporation
Stephen Carl Tosini U.S. DEPARTMENT OF JUSTICE CIVIL DIVISION 1100 L Street, NW Room 1266 Washington, D.C. 20530 Telephone: (202) 616-5196 Fax: (202) 514-7965 Sean McNamara Senior Counsel for Management National Courts Civil Division U.S. DEPARTMENT OF JUSTICE PO Box 480 Ben Franklin Station 1
Washington, D.C. 20044 Telephone: 202-305-7573 Counsel for the United States Defendants By: /s Paul F. Brinkman Paul F. Brinkman

13-08-02 Google's Opposition To Microsoft's Motion For Preliminary Injunction

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13-08-02 Google's Opposition To Microsoft's Motion For Preliminary Injunction

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OPPOSITION OF MOTOROLA MOBILITY LLC TO MICROSOFTS MOTION FOR A PRELIMINARY INJUNCTION

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Microsofts Claims Should Be Dismissed at the Threshold

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The Balance of Harms and Public Interest Favor Denying an Injunction

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denied. Dated: August 2, 2013 Respectfully submitted,

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