It hasn’t been a week full of good news for Qualcomm. Qualcomm is losing battles on three different fronts, putting serious pressure on its global campaign to maintain the patent licensing scheme that regulators in many countries have found to have anti-competitive effects.
FTC v. Qualcomm
The FTCU.S. Federal Trade Commission. An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice. Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF]. v. Qualcomm case, in which the FTCU.S. Federal Trade Commission. An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice. Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF]. is arguing that Qualcomm’s licensing practices represent illegal anti-competitive conduct, has been submitted to Judge Koh. The FTC—having already won one major victory, with Judge Koh issuing summary judgment that Qualcomm has been violating its obligations for years—put forth a compelling case that Qualcomm has engaged in a pattern of conduct that had the effect of taxing its competitors. (Qualcomm’s reason for violating this obligation, per a discussion with the IRS? It was “humongously more lucrative” to ignore the obligation.)
During the trial, Qualcomm repeatedly made assertions about how it operated—whether claiming it didn’t threaten to stop selling chips to companies who chose not to license its patents or claiming that no one in the industry obtains chipset-level licenses, even though Qualcomm requires them when it’s the licensee—that the FTCU.S. Federal Trade Commission. An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice. Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF]. rebutted with documentary evidence. Qualcomm’s case—centering on the argument that the FTCU.S. Federal Trade Commission. An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice. Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF]. had failed to show any competitive harm—lacked impact, given that the FTCU.S. Federal Trade Commission. An independent regulatory agency charged with consumer protection and competition policy, which conducted several influential studies on how patents work in practice. Authored several key studies: 2003’s To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy [PDF] and 2011’s The Evolving IP Marketplace: Aligning Patent Notice and Remedies with Competition [PDF]. showed via industry witnesses and expert testimony that Qualcomm’s practices had harmed competitors like Intel by delaying their ability to gain a foothold in the market and had allowed Qualcomm to continue charging the same percentage rate, even as their share of the technology contributed to the standards declined over time.
While we won’t know Judge Koh’s ruling for some time—even a judge with a track record of working as quickly as Judge Koh does will take some time to digest the evidence and arguments in a case of this scale—we do have a hint. More than a year and a half ago, Judge Koh denied Qualcomm’s motion to dismiss the case. She based her decision on certain factual claims.
None of those claims has been rebutted by Qualcomm during the course of the trial. All remain true.
Germany
Beyond the Northern District of California, Qualcomm’s foreign adventures have also hit a significant roadblock. While Qualcomm won an initial battle, convincing a German court to issue an injunction against several older Apple phones[1. The German court issued this order even though it never had any opportunity to study the details of the chip in question, only a teardown report. The chipmaker, Qorvo, was willing to provide access to the details to the court, but Qualcomm refused to agree to the protections Qorvo asked for to prevent its confidential information winding up in the hands of Qualcomm’s engineers. As a result, that information wasn’t presented in court. This is significant because in the U.S., the International Trade Commission determined that the U.S. equivalent to the European patent in question was not infringed—and the ITCInternational Trade Commission had access to the details of the chip.], its more important cases, claiming that all of Apple’s phones infringe Qualcomm patents, have run into a wall. Half of the cases were thrown out, with the court deciding that the patents simply weren’t infringed. And in the other half of the cases, the German court invited Qualcomm to submit its response regarding the European Patent Office’s determination that the patents were not valid.
USPTO
It’s not just in Europe that Qualcomm’s patents are seeing scrutiny and failing to hold up. In the U.S. Patent and Trademark Office, eight of Qualcomm’s patents have already been deemed reasonably likely to be proven invalid in IPRs. There are another 10 Qualcomm patents awaiting preliminary decisions. But so far, none of the IPRIntellectual Property Rights. Usually associated with formal legal rights such as patent, trademark, and copyright. Intellectual property is a broader term that encompasses knowledge, information, and data considered proprietary whether or not it is formally protected. petitions filed against Qualcomm’s patents have failed at the threshold question of a reasonable likelihood of invalidity—even though approximately 40% of petitions fail at this stage.
Qualcomm may have good technology, but more and more, it’s looking like that technology has been marred by its association with questionable business practices and poor quality patents.
