As discussed in our post yesterday, today the Ninth Circuit held oral argument on Motorola’s appeal of Judge Robart’s decision in the Microsoft v. Motorola case.  A video of the argument is available at the Ninth Circuit website, which lasts about an hour.  Trying to predict the outcome of a case based on the hearing argument and statements from the bench is like reading tea leaves–a “fool’s errand”, as some have put it.  So we will not attempt that here (though we may talk amongst ourselves at the water cooler).

A key dispute crystalized by the oral argument concerns the bifurcated procedure where (1) Judge Robart held a bench trial to determine a RAND rate and range of reasonable RAND rates followed by (2) a jury trial to determine whether Motorola breached its RAND obligation.

Motorola argued that this was done in the wrong order–that if a jury found that Motorola breached its RAND obligations, THEN the district court could determine a RAND rate as part of ordering specific performance of a license.  Motorola argued that it was prejudiced by the court first determining a RAND rate/range at a bench trial and then having that injected into the jury trial as essentially an expert opinion that–as far as the ultimate conclusion and underlying factual findings–could not be cross-examined or contradicted.  The stark difference between the unimpeachable judge-determined RAND and Motorola’s actual initial offer to Microsoft was prejudicial and unsurprisingly led to the jury finding that Motorola breached its RAND obligation.

Motorola argued it had agreed to aspects of the procedure under the impression at the time that the case would involve determining licensing terms and specific performance thereof; but that later proved not to be the case as there was no request for license or specific performance in the case.  Motorola also challenged the scope of its agreement to proceed with the bifurcated  procedure, particularly with respect to any agreement to introduce the court-determined RAND and underlying findings without being able to challenge it.  Rather, if the case was not to determine license terms for the court to order specific performance thereon, then there was no need to determine a specific RAND royalty.  Rather, all of the evidence of what might be an appropriate RAND and other circumstances should go to the jury–subject to cross-examination and rebuttal–so that the jury could determine the single issue of breach and damages based thereon.

Microsoft argued that, whatever Motorola is saying now, it had agreed to this bifurcation procedure and either waived challenging it or did not properly object to it.  What was the point of having the bench trial determination of RAND if it were not to guide the jury?  If the court and parties agreed to go through this bifurcation procedure, then allowing challenges to the RAND determination later in the jury trial would undermine that agreed upon approach and basis for determining a RAND rate to begin with.  There is no dispute that the entire thing–including RAND determination–could have gone to jury, but Motorola waived its 7th Amendment right to jury trial on that issue in this case.