Motorola Wins Injunction Against Apple In Germany, Could Ban Sales of iPhone & iPad

Apple's patent woes worsen, as their lawsuit with Motorola Mobility has reached an interesting point. An initial ruling in Germany could prevent Apple from selling all versions of the iPhone and the original and 2nd-generation iPad.

FOSS Patents reports that this is the first "substantive" ruling on this case, as the previous default ruling will be discussed at a hearing coming up in February.

The patent in question for this ruling was EP1010336 (B1) (US equivalent No. 6,359,898), which describes a "method for performing a countdown function during a mobile-originated transfer for a packet radio system." It was declared "essential" for the GPRS standard which is universally used nowadays. So Apple had tried to use the "FRAND" defense; that is, because the patent is essential to the standard, Apple claimed that they needed "fair, reasonable, and non-discriminatory" terms for licensing it. The problem is that Apple hasn't met all of the requirements for this defense:

Essentially, they can't just hold a FRAND defense against a patent holder who's suing them. Instead, they have to proactively make efforts to procure a license on FRAND terms by making an irrevocable, binding offer to the patent holder and by posting a bond for ongoing royalties. 

Only if the FRAND patent holder denies a license despite having such an offer on the table, the defendant can claim that an injunction would result in a violation of competition law and, as a result, should not be granted.

FOSS Patents highlights exactly why the court ruled in Motorola's favor:

The logic presented by Motorola's counsel convinced the court: someone using a patented invention should have to pay a price for being found to have infringed. While competition law requires the patent holder to extend a license on FRAND terms going forward, past infringement is a different matter. If, in the alternative, damages for past infringement were limited to a FRAND royalty rate, Motorola and Judge Voß argue, an infringer might ultimately get to use the patent on more favorable terms than someone procuring a license at the outset. They say that favorable terms would result from a scenario in which payments for using the patent in the past can be avoided by proving the patent invalid.

This doesn't bode well for Apple. As for the devices that are regarded as infringing:

The ruling generally relates to all Apple products that implement the patent-in-suit. The ruling notes that, "inter alia", this includes the iPhone, iPhone 3G, iPhone 3GS, iPhone 4, iPad 3G and iPad2 3G. But the iPhone 4S, which was released after this litigation started (April 2011), undoubtedly implements the same telecommunications standard.

Despite the fact that the iPhone 4S was released after the lawsuit, any rulings would also cover it since it also infringes on the patent. The likelihood of Apple engineering around this infringement is low as well, because of how important and integral it is to the standard.

Motorola was ordered to post a $134 million bond if it wishes to enforce the injunction and prevent sales. The bond is present so that in case the injunction is overturned later in an appeal, Apple can recoup some of its losses. The lawsuit targeted Ireland-based seller Apple Sales International, and sales would only be prevented in Germany.

Of course, Apple has committed to appealing the injunction, as it has told tech blog AllThingsD:

“We’re going to appeal the court’s ruling right away,” an Apple spokesperson told AllThingsD. “Holiday shoppers in Germany should have no problem finding the iPad or iPhone they want.”

Another patent, related to MobileMe/iCloud, was also heralded by FOSS Patents previously for being a likely win for Motorola. Be sure to check out their post for the full details and legal ramifications of the ruling. Motorola also issued press release indicating that they're please with the win, so check that out as well.