Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. We've got a lot going on today, so let's get right to it:

•    Things did not go well for the FTC at the Ninth Circuit on Thursday, but at least it didn't have the DOJ on its side.

•    Oracle makes its case against Google to the Supreme Court, without the word "suck."

•    Google and Hogan Lovells try, try again on venue and win this time.

As always, you can email me your thoughts and follow me on Twitter.

Brian Fletcher argued on behalf of the Federal Trade Commission at the Ninth Circuit on Thursday.

 

Five takeaways from FTC v. Qualcomm

 

The Federal Trade Commission and Qualcomm brought their antitrust fight to the U.S Court of Appeals for the Ninth Circuit on Thursday. Ninth Circuit Judges Johnnie Rawlinson and Consuelo Callahan and U.S. District Judge Stephen Murphy III, visiting from Michigan, entertained an hour-long argument. You can read my news summary at The Recorder here. Below are five additional takeaways:

➤ Qualcomm is going to get at least a partial victory. This panel sounded extremely cool to the FTC's primary theory of antitrust liability, that Qualcomm abused its dominant position as a modem chip supplier to extract unreasonable royalties from smartphone makers. "Is that just maybe over-capitalistic, but not necessarily anticompetitive?" Callahan asked at one point, summarizing the tenor of the questioning.

The bottom-line question seemed to be whether the court will give U.S. District Judge Lucy Koh a second try on the FTC's alternate theory of liability, or end the case right now. Qualcomm attorney Tom Goldstein of Goldstein & Russell seemed to smell blood in the water. "I think the parties agree that everyone would benefit if the court doesn't stop with the duty-to-deal question, and does address the fundamental issue of whether there's a harm to the competitive process," he told the court.

➤ Qualcomm admitted the error of its ways (at least for purposes of the argument). I've said for the last year that Koh's painstaking fact finding would be the toughest obstacle for Qualcomm on appeal. Goldstein wisely didn't force the issue.

"Do you disagree about the assumption that you have monopoly power?" Rawlinson asked him at the outset of the hearing.

"We do not," Goldstein replied. "In this court, we're trying to be very careful and conscious of the clearly erroneous standard as it comes to factual findings."

The judges looked relieved, and Goldstein was freed up to focus the rest of his argument on what he characterized as Koh's legal error.

➤ Was the Supreme Court watching? It was hard not to imagine that the advocacy on display Thursday would play well at 1 First St. Goldstein was his usual effective self, while the FTC's attorney, Stanford professor and former Assistant to the Solicitor General Brian Fletcher, admirably parried hostile questions while steering back to the FTC's strengths. "I think you're doing great," Murphy told him at one point.

➤ The Justice Department got a chilly reception. DOJ is opposing the FTC as Qualcomm's amicus curiae, something Rawlinson found "really interesting." Deputy Assistant Attorney General Michael Murray of the Antitrust Division argued that Koh entered her injunction "without proper consideration of the public interest, including national security concerns."

Rawlinson asked how national security plays into antitrust law. "Is there a case that supports that proposition, or is this a policy argument?" she asked.

"You haven't offered any market analysis or any sort of financial evidence" to support a national security argument, Murphy added.

Murray reminded the court that Defense and Energy Department officials filed declarations warning of the dangers of disrupting the 5G licensing landscape. He said DOJ simply wants any injunction to be narrowly tailored.

"How could the injunction be more narrowly tailored, from your perspective?" Rawlinson asked.

Murray didn't want to go there. "That would be up to the district court after hearing additional—"

"But what would your position be?" Rawlinson pressed. "Do you have a position as you stand here today?"

"I can't enumerate all of our suggestions at this point," Murray began.

"Can you enumerate one?" Rawlinson asked.

Murray said excluding 5G licensing and standard setting, which were beyond the scope of the trial, would be one possibility.

➤ Why are we here? As a district judge, Murphy has presided over a handful of patent cases. And he knows which court they get appealed to. "Why don't we let the OEMs exercise their rights in patent law to file predatory pricing, monopoly, abusive patent claims, whatever?" he asked Fletcher. "And then the Federal Circuit can deal with it, who does this stuff all the time."

Fletcher once again steered back to the factual record. "What OEM after OEM testified is that we can't do that, because when we try to invoke our ordinary patent law remedies, Qualcomm says, 'Stop it, or we'll stop selling you chips."

Orrick partner Josh Rosenkranz

Oracle Tones It Down (Slightly) for High Court

 

The alternatives to Java no longer suck. At least, not at the Supreme Court.

Oracle submitted its merits brief to the high court on Wednesday. Gone is mention of a 2010 email from a Google software engineer complaining that there were no good alternatives to licensing the Java programming language.

"We've been over a bunch of these, and they they all suck," Tim Lindholm wrote to Android team leader Andy Rubin at the time.

Oracle presented that email as a smoking gun at its two San Francisco copyright trials against Google, and included it in both of its appellate briefs to the Federal Circuit.

But apparently "suck" might be a little too racy for the Supreme Court's tender ears. Instead, Oracle is relying on an email from another engineer that described the alternatives as "half-ass at best."

Oracle is represented by Orrick, Herrington & Sutcliffe and by Kirkland & Ellis. Orrick partner Josh Rosenkranz is counsel of record.

More broadly, Oracle accuses Google of trying to "rewrite copyright law" to justify its copying of 11,000 lines computer code, and then claiming fair use for a commercial venture that's generated "$42 billion (and counting)."

The only winners under Google's view of the IP laws will be "monopolists and corporate giants with resources so vast that they can always beat the startup to release their superseding version," Oracle argues. For good measure it cites to a New York Times op-ed about Amazon.com's "strip-mining" of startup companies. Google filed its brief in January. It argues that it copied only a tiny fraction of the Java language—just enough of Java's "filing system" so that the millions of developers who understand the language could write applications in it. Oracle is trying to hold those developers "hostage" by refusing to let Google re-implement the Java tool using Google's own software code in a smartphone environment, Google says.

Google also argued that the jury's verdict of fair use is entitled to deference on appeal, and that the Federal Circuit "impermissibly relied on its own resolution of disputed factual questions about real and potential market harm."

Goldstein & Russell's Tom Goldstein is counsel of record to Google, which is also represented by Williams & Connolly; Keker, Van Nest & Peters; King & Spalding and Kwun Bhansali Lazarus.

 

Google Gets Out of Texas

 

Google really, really does not want to defend patent infringement cases in the Eastern District of Texas.

In 2018, the tech giant and Hogan Lovells petitioned the Federal Circuit to transfer a case out of ED-Tex on the ground that merely leasing server rack space from ISPs in the district did not constitute "a regular and established place of business."

A panel made up of Judges Timothy Dyk, Jimmie Reyna and Richard Taranto denied the writ, though Judge Reyna dissented. Two more judges dissented from the denial of en banc review last year.

So Google and Hogan tried, tried again this year, and now they've succeeded. "The wisdom of our decision to allow the issues to 'percolate in the district courts' has been borne out," Dyk wrote for a unanimous panel on Thursday in In re Google, "as additional district court decisions have crystallized and brought clarity to the issues."

Maybe not quite enough clarity for Judge Evan Wallach, who concurred separately. He wrote that Google might in effect be doing business in the district at the computers of each of its user/customers. But he couldn't tell for sure because Google wouldn't answer questions about its business model at oral argument. "Because this is a question I believe should be entertained by District Courts, I concur," he wrote.

So that ought to settle everything.

This still goes down as a win for a Hogan team led by counsel Thomas Schmidt, partner Neal Katyal and senior associate Keith O'Doherty. Respondent Super Interconnect Technologies was represented by Bragalone Conroy.

My ALM colleague Alaina Lancaster has more details here.

That's all from Skilled in the Art this week. I'll see you all again on Tuesday.