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Qualcomm Wins First Round in Apple Patent Fight at ITC – Part 1
by Olivier Blanchard | October 26, 2018
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About two months ago, I outlined how the multi-front global dispute between Apple and Qualcomm had begun to enter a new phase – one in which Apple appeared to have lost the initiative, and was increasingly finding itself forced to play defense. Just two months after I wrote that piece, and barely a week since the previous one, I think I have spotted what looks like another update worthy of mention.

1. Quick Recap: How we got here.

Qualcomm began filing complaints against Apple for patent infringement in various jurisdictions around the world a little over a year ago, – namely the United States, Europe (Germany), and China, as well as with the International Trade Commission (ITC) – seeking injunctions that could, should Apple be found guilty of infringing on Qualcomm’s patents, potentially result in bans (import, sale, and/or manufacturing, depending on the country) of certain iPhone models.

Qualcomm also separately alleges that Apple has violated the terms of its Master Software Agreement (MSA), and that it shared Qualcomm trade secrets with Intel. (Qualcomm claims to have irrefutable proof that Apple stole proprietary technology to pass it on to Intel.) All in all, we are talking about roughly 40 Qualcomm cases against Apple give or take a few, touching on a range of alleged IP infringements and “trade secret misappropriations” on Apple’s part, almost entirely relating to software and hardware found in Apple’s most important product: the iPhone.

2. ITC Case Update: What’s new?

One of two cases currently under review by the International Trade Commission (ITC) saw some movement earlier this month when Judge Thomas Pender (the administrative judge handling this phase of the case) issued a preliminary opinion – called an initial determination (ID) – before handing it over to the Commission for the next phase of the process. You can read his initial determination here, but here is the gist of it:

  1. Apple is in the wrong: In his view, Apple did infringe one of the patents asserted by Qualcomm. (This is by far the most significant item I spotted in his ID, as it validates at least one of Qualcomm’s claims against Apple.)
  2. But… : In his view, although Apple is indeed guilty, matters of “public interest” preclude even a temporary import ban on the impacted iPhones. (We will dig into this point in Part 2. I happen to think that he is dead wrong about this one thing, and I will explain why.)
  3. Context: This is not a final ruling. It is merely an initial determination. The case, which will include the judge’s recommendations, will be reviewed by the full Commission in January.

3. What does this mean?

  1. Qualcomm’s ITC case against Apple is moving forward, with the full Commission in January now one big step closer to ruling in Qualcomm’s favor (at least as it relates to claim 31 of patent number 9,535,490).
  2. If found guilty and the Commission agrees with Judge Pender’s recommendation, Apple may narrowly escape an import ban on affected iPhone models. Note: If the Commission decides to rule entirely against Apple and ignore Judge Pender’s recommendation, it could impose a partial iPhone ban as a remedy. (I will explain why the Commission could ignore Judge Pender’s recommendation against a ban in Part 2.)
  3. Whichever side of this thing you happen to be on, don’t uncork the champagne just yet. The final ruling won’t come until January of 2019, and we don’t yet know how much influence Judge Pender’s recommendation will have on the final ruling.

Despite some dubious news coverage interpreting this ruling as a victory for Apple (which makes no sense whatsoever), we score this one squarely as a win for Qualcomm, at least at this juncture.

To be continued.

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