Motorola Wins Legal Victory Over Apple in Germany, Impact Disputed

Late Friday, FOSS Patents reported that Motorola Mobility had won an injunction against Apple in Germany, a decision that could potentially prevent Apple from selling any of its mobile devices in the country. Curiously, the injunction was issued as a default judgment, with Apple apparently deciding not to defend itself for unknown reasons.

The strange circumstances have led to some dispute over whether the injunction will have any impact on Apple's operations in Germany, with The Verge's Nilay Patel arguing that the victory is a "totally symbolic" one for Motorola given that it affects only Apple Inc. and not its Apple Germany subsidiary that actually sells the devices in that country.

Motorola Mobility filed lawsuits against both organizations, and while Apple Germany is vigorously fighting its case, Apple's lawyers let the Apple Inc., lawsuit slide, resulting in this default judgement and injunction. But since Apple Inc., doesn't actually sell anything in Germany, it's a totally symbolic victory for Motorola — there aren't any products to ban.

Apple itself also took an apparently unconcerned attitude toward the ruling, noting that it fails to impact the company's sales "at this time".

This is a procedural issue that has nothing to do with the merits of the case. This does not affect our ability to sell products or do business in Germany at this time.

Florian Mueller at FOSS Patents vehemently disagrees with Patel's interpretation, noting that there is danger to Apple if courts rule that the parent Apple Inc. company is judged to be an entity selling products in Germany. As one example, Mueller points to the fact that Apple's German website is registered to Apple Inc. and not Apple Germany, meaning that enforcement of the injunction could lead to Apple having to shut down its German website operations. Another example suggests that the injunction could simply prevent Apple Inc. from delivering shipments to Apple Germany, thereby cutting off sales further up the distribution chain without a direct judgment against Apple Germany.

Mueller argues that any restrictions on Apple Inc.'s ability to business in Germany will have an effect on the company's business there, even with actual sales being funneled through the Apple Germany subsidiary. Consequently, he believes that Apple will begin to feel an impact "within weeks" unless Apple wins a suspension of the injunction. In a follow-up post, Mueller notes that a number of German lawyers have indicated that Apple is likely to win such a suspension as the trials continue to play out, but that Apple will need to move quickly to appeal the verdict in order to minimize any impact from it.

All of the lawyers I talked to had consistent positions. In particular, all of them agree with me that the default judgment against Apple Inc. of Cupertino would have very near-term business impact unless Apple wins a suspension. They all agree that in one way or another, Apple's German business also depends on Apple Inc. being unrestricted to do business in Germany. And they all concur that Apple is more likely than not to win a temporary suspension (for the period until a substantive decision following a second hearing by the same court). "More likely than not" is a conservative consensus position. An unnamed one of them told me he can't imagine any other outcome.

As for why Apple allowed the default judgment to be made in Motorola's favor, Mueller puts forward an array of theories, from Apple's lawyers simply missing the court date for some reason to strategic plans to either draw out the case or to preserve the ability to introduce certain new evidence. With so many other cases and investigations relating to Apple's intellectual property disputes, it can be difficult to determine how a move in one case could affect other events, similarly hampering the ability to understand Apple's rationale.