Apple Loses Big Against Motorola In Germany (Update)

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Apple has lost a preliminary injunction filed by Motorola Mobility over a wireless-related patent. That’s not something we’re hearing a lot of these days, but it seems to be the case over in Germany, where a judge in the Mannheim Regional Court has ruled that the iPhone and iPad (3G versions) infringe European Patent 1010336, covering a “method for performing countdown function during a mobile-originated transfer for a packet radio system.”

By now all this patent litigation has likely become tiresome to you, as it has most of us, but this is actually a pretty substantial win for Motorola, and an equally substantial loss for Apple. The loss means that an injunction on all the old iPhones, (probably the 4S, as well) and 3G-capable iPads is preliminarily enforceable against Apple Sales International, which is Apple’s Ireland-based subsidiary.

Motorola has already secured a similar ruling before, but it neglected to give Apple the chance to present its case. This ruling, however, came after both Apple and Motorola presented their full arguments. That said, Apple has very few options to stop the ban. They will likely try to get a stay to appeal the ruling, but it’s unclear whether or not that suspension will be granted.

The ruling also allows for Apple to remove the allegedly infringing technology from its products, but that seems impossible. The patent in question covers technology that seems to be crucial to the functionality of the phone. Even if it wasn’t, it’s probably not commercially viable for Apple to remove it.

But it gets trickier than that. For one thing, enforcing this injunction is a bit of a risk for Motorola. The judge has allowed for Apple to receive a €100 million bond, which would go toward damages sustained during the injunction, should Cupertino find a way to overturn this ruling down the road.

Then there’s the matter of FRAND (fair, reasonable, and non-discriminatory) licensing, which comes into play here since the patent in suit falls under the GPRS data standard. But Germany deals with FRAND issues a little differently. Basically, if a company is found to be using FRAND-style patented technology in its products, the court can only allow that company a FRAND defense if it’s made “an irrevocable, binding offer” to license the patents on FRAND terms and also post a bond for ongoing royalties, reports FOSS Patents.

Apple did make an offer, to license all of Motorola’s FRAND-pledged patents, but threw in a clause that drifts away from the idea of “irrevocable” and “binding.” The issue is that Apple wants to argue the validity of the patent in question, which would mean those royalty payments would fly out the window.

The court in Germany agreed with Motorola when it argued that the offer Apple made to license the patents was shy of what is needed to cover damages. That said, Motorola can license these patents to Apple moving forward, but Apple will have to cough up the dough for past infringement.

Update: Apple has responded, saying it will indeed appeal the court’s decision. Here’s the official word:

We’re going to appeal the court’s ruling right away. Holiday shoppers in Germany should have no problem finding the iPad or iPhone they want.

Here’s a full copy of today’s ruling (but brush up on your German first):