Court Opinion

ID: 2672581
Source: CourtListenerOpinion
Date Created: 2014-05-05 19:10:30.435408+00
Date Added: 2024-06-11T09:17:12.157345
License: Public Domain

Case: 14-1089          Document: 24           Page: 1       Filed: 05/05/2014

               NOTE: This order is nonprecedential.

    United States Court of Appeals
        for the Federal Circuit
                         ______________________

    MICROSOFT CORPORATION, A WASHINGTON
               CORPORATION,
                Plaintiff-Appellee,

                                        v.

    MOTOROLA, INC., GENERAL INSTRUMENT
  CORPORATION AND MOTOROLA MOBILITY LLC,
            Defendants-Appellants.

 ---------------------------------------------------------------------------------

      MOTOROLA MOBILITY, INC. AND GENERAL
          INSTRUMENT CORPORATION,
               Plaintiffs-Appellants,

                                        v.

    MICROSOFT CORPORATION, A WASHINGTON
                 CORPORATION
                Defendant-Appellee.
              ______________________

                               2014-1089
                         ______________________

    Appeal from the United States District Court for the
 Western District of Washington in Nos. 2:10-cv-01823-
 JLR and 2:11-cv-00343-JLR, Judge James L. Robart.
                 ______________________
Case: 14-1089    Document: 24     Page: 2    Filed: 05/05/2014

 2                MICROSOFT CORPORATION     v. MOTOROLA, INC.

                      ON MOTION
                  ______________________

      Before LOURIE, DYK, and REYNA, Circuit Judges.
 LOURIE, Circuit Judge.
                          ORDER
     Microsoft Corporation (“Microsoft”) moves to transfer
 this appeal to the United States Court of Appeals for the
 Ninth Circuit. Motorola, Inc., Motorola Mobility LLC,
 and General Instrument Corp. (collectively, “Motorola”)
 oppose the motion. For the following reasons, we grant
 the motion.
                             I.
     Pursuant to the common patent policies of the Inter-
 national Telecommunications Union (“ITU”) and Institute
 of Electrical and Electronics Engineers Standards Associ-
 ation (“IEEE”), Motorola declared that it was willing to
 negotiate a license for use of its foreign and domestic
 patents that embody certain video coding and wireless
 local area network standards on a non-discriminatory
 basis on reasonable (“RAND”) terms.
     In October 2010, Motorola offered to license those
 standard-essential patents to Microsoft at a proposed
 royalty rate. Microsoft rejected the offer, and filed suit
 against Motorola in the United States District Court for
 the Western District of Washington asserting that
 Motorola’s licensing proposal was unreasonable and in
 breach of its RAND obligations. Microsoft further sought
 a declaration that it was entitled to a license to those
 foreign and domestic patents on RAND terms.
    The day after the filing of Microsoft’s complaint,
 Motorola initiated its own suit against Microsoft in the
 United States District Court for the Western District of
Case: 14-1089    Document: 24    Page: 3      Filed: 05/05/2014

  MICROSOFT CORPORATION   v. MOTOROLA, INC.                3

 Wisconsin, seeking damages and other appropriate relief
 for patent infringement of U.S. patents subject to its
 RAND commitments. Citing the relatedness of the in-
 fringement case and contract case, the Western District of
 Wisconsin transferred Motorola’s patent infringement
 action to the Western District of Washington pursuant to
 28 U.S.C. § 1404(a).
     After Motorola’s action was transferred, the Western
 District of Washington denied a motion to dismiss
 Motorola’s patent infringement claims and re-file those
 claims as compulsory counterclaims in Microsoft’s con-
 tract case. It noted that “the essential facts are not so
 intertwined and logically connected that considerations of
 judicial economy and fairness dictate that the issues be
 resolved in one lawsuit.” However, the court consolidated
 the actions “for all purposes” pursuant to Fed. R. Civ. P.
 42(a) in view of its conclusion that “at least some common
 questions of law or fact, and the interests of judicial
 economy will be served by consolidation.”
     While the U.S. proceedings unfolded, the Mannheim
 Regional Court in Germany enjoined the sale of Mi-
 crosoft’s Xbox gaming system and certain Microsoft Win-
 dows products in Germany, finding those products
 infringed Motorola’s European standard setting patents
 and that Microsoft could not enforce the ITU and IEEE
 patent policy agreements. Soon after that ruling, the
 Western District of Washington enjoined Motorola from
 enforcing the German court’s injunction on the grounds
 that the U.S. and German actions involved the same
 issues and Microsoft’s contract action could resolve
 whether injunctive relief is an appropriate remedy with
 respect to infringement of Motorola’s U.S. and European
 standard essential patents.
     Motorola appealed the district court’s preliminary in-
 junction ruling to the Ninth Circuit. While acknowledg-
 ing that Motorola’s patent claims had been consolidated
Case: 14-1089     Document: 24       Page: 4    Filed: 05/05/2014

 4                  MICROSOFT CORPORATION      v. MOTOROLA, INC.

 with Microsoft’s action, because it concluded Microsoft’s
 complaint sounded in contract, the Ninth Circuit found
 that it had jurisdiction over the case. In exercising that
 jurisdiction the Ninth Circuit affirmed the injunction,
 concluding that it would not be legally erroneous to find
 that Motorola’s RAND commitments constituted a legally
 enforceable contract.
     Following the Ninth Circuit’s injunction ruling, the
 district court resolved Microsoft’s breach of contract claim
 in two phases. First, the district court conducted a bench
 trial to determine the appropriate RAND royalties for two
 sets of U.S. and European patents. The court then con-
 ducted a jury trial on Microsoft’s breach of contract
 claims. After the jury rendered a verdict in favor of
 Microsoft, the district court entered judgment pursuant to
 Rule 54(b) of the Federal Rules of Civil Procedure, and
 Motorola filed a notice of appeal naming this court as the
 court to which it was seeking review. Microsoft now
 moves to transfer the case to the Ninth Circuit.
                               II.
     This court has jurisdiction to decide an appeal from a
 final decision of a district court “if the jurisdiction of that
 court was based, in whole or in part, on section 1338.” 28
 U.S.C. § 1295(a)(1). Section 1338 provides that the feder-
 al district courts have exclusive jurisdiction over “any civil
 action arising under any Act of Congress relating to
 patents.” 28 U.S.C. § 1338(a).
     The Supreme Court has held that in order to demon-
 strate that a case is one “arising under” patent law, the
 plaintiff must “set up some right, title or interest under
 the patent laws, or at least make it appear that some
 right or privilege will be defeated by one construction, or
 sustained by the opposite construction of these laws.”
 Christianson v. Colt Indus. Operating Corp., 486 U.S. 800,
 807-08 (1988).
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  MICROSOFT CORPORATION    v. MOTOROLA, INC.                5

     In its injunction ruling, the Ninth Circuit rejected the
 position that this court had jurisdiction over the matter
 based on its view that Microsoft’s complaint sounds in
 contract. Microsoft Corp. v. Motorola, Inc., 696 F.3d 872,
 881 (9th Cir. 2012) (“The Federal Circuit has jurisdiction
 over an interlocutory appeal only if it would have jurisdic-
 tion over a final appeal in the case under 28 U.S.C.
 § 1295. 28 U.S.C. § 1292(c)(1). Microsoft’s complaint
 sounds in contract and invokes the district court’s diversi-
 ty jurisdiction . . . .”).
     Motorola acknowledges that, as a general matter, the
 jurisdictional decision of a coordinate court is the law of
 the case. Christianson, 486 U.S. at 816. But it says that
 here, “neither party nor the Ninth Circuit realized the
 implications of the consolidation of Motorola’s patent
 infringement claim with Microsoft’s contract claim” at the
 earlier stages of this litigation. Opposition to Transfer at
 19.     However, this argument finds no support in the
 Ninth Circuit’s decision, which makes clear that it was
 aware of the consolidation of the cases when it deter-
 mined that it rather than this court had authority over
 the case. See Microsoft, 696 F.3d at 878.
     Nor are we persuaded by Motorola’s argument that
 the Ninth Circuit’s preliminary assessment of the merits
 issues justifies reconsidering its jurisdictional ruling. See
 Opposition to Transfer at 20 (“[T]he Ninth Circuit ad-
 dressed the narrow issue of whether the district court
 abused its discretion in issuing the anti-suit injunction,
 expressly reserving any determination on the merits.”).
 The issue of whether this court or the appropriate region-
 al circuit has appellate jurisdiction is defined by looking
 to the complaint. See Christianson, 486 U.S. at 808 (well-
 pleaded complaint rule governs). Thus, the preliminary
 nature of the merits issues before the Ninth Circuit carry
 no consequence.
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 6                   MICROSOFT CORPORATION   v. MOTOROLA, INC.

      Under the law of the case doctrine, we must adhere to
 a coordinate court’s jurisdictional ruling unless there is a
 showing of “extraordinary circumstances such as where
 the initial decision was clearly erroneous and would work
 a manifest injustice.” Christianson, 486 U.S. at 817; see
 also id. at 819 (“Under law-of the-case principles, if the
 transferee court can find the transfer decision plausible,
 its jurisdictional inquiry is at an end.”).  Here, there is
 no manifest justice. Nor is there a “clearly erroneous”
 result. The requested relief in Microsoft’s complaint
 plausibly supports the Ninth Circuit’s conclusion that this
 matter does not arise under the patent laws.
      Motorola contends that the cases arise at least in part
 under § 1338 based on the district court’s consolidation of
 Microsoft’s contract action with its patent infringement
 action. In fact, however, it appears that the district court
 merely consolidated the cases for purposes of judicial
 economy. The patent infringement complaint is not part
 of this appeal, not having been decided by the district
 court. Under such circumstances, it is plausible to con-
 clude, as the Ninth Circuit seems to have done here, that
 the act of “consolidation d[id] not merge the suits into a
 single cause, or change the rights of the parties.” Johnson
 v. Manhattan Ry., 289 U.S. 479, 496-97 (1933); see also
 Cole v. Schenley Indus., Inc., 565 F.2d 35, 38 (2d Cir.
 1977) (when complaints are consolidated a court must
 still consider the jurisdictional basis of each complaint
 separately).
     While we have considered Motorola’s other argu-
 ments, because we conclude that the Ninth Circuit’s
 decision was, at a minimum, plausible, we grant the
 motion to transfer.
     Accordingly,
     IT IS ORDERED THAT:
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  MICROSOFT CORPORATION   v. MOTOROLA, INC.                 7

     The motion is granted to the extent that the appeal
 and any pending motions are transferred to the United
 States Court of Appeals for the Ninth Circuit pursuant to
 28 U.S.C. § 1631.
                                    FOR THE COURT

                                    /s/ Daniel E. O’Toole
                                    Daniel E. O’Toole
                                    Clerk of Court