Thursday, May 17, 2018

Qualcomm says Apple canceled recent patent and antitrust settlement meeting on short notice

While Apple is seeking north of $1 billion in damages from Samsung in the ongoing jury re-retrial in the Northern District of California, its earth-spanning dispute with Qualcomm continued today in the Munich I Regional Court with a first hearing (the primary objective of which is roughly comparable to that of a Markman hearing in a U.S. patent infringement case). Qualcomm alleges that the iPhone 7 and 7 Plus infringe its EP1199750 on a "post[-]passivation interconnection scheme on top of [an] IC chip."

I'll start with the most interesting piece of information I gleaned there. A Qualcomm employee--presumably an in-house lawyer, but I don't know his name and title--responded to Presiding Judge Dr. Zigann's question about the state of settlement discussions. According to Qualcomm, the parties had scheduled a meeting that would have taken place recently, but Apple canceled on short notice, and no new meeting has been agreed upon yet.

No information on the reasons for which Apple canceled was provided. Maybe there was a scheduling conflict. The parties' positions may also be too far apart at this stage for any such meeting to be productive. Time may tell. Apple usually does settle whenever possible. The long-running Samsung case is an exception for whatever reason (it's hard to see, without inside-baseball type of knowledge that I lack, why they can't just all sit down, perform a realistic probablistic analysis together, and agree on a payment based on a weighted average of different scenarios).

Other than what I just mentioned, today's hearing was not as informative as the two Qualcomm v. Apple hearings I attended in Munich in Februar and earlier this month. That's because the court was unable to take a preliminary position on the infringement allegations for two reasons:

  • Contrary to the Munich court's local patent rules, Qualcomm's complaint did not proffer a claim construction for the most critical claim limitation, "passivation layer." That term is so critical because there is no way that the patent can be infringed unless a certain interconnection between circuits takes place on top of that passivation layer.

    Qualcomm's lead consel in the German Apple cases, Quinn Emanuel's Dr. Marcus Grosch, seemed rather contrite after hearing the court's related criticism. Judge Dr. Zigann ordered him to lay out his proposed claim construction at the outset of the hearing. While he stated the material the passivation layer is composed of in the preferred embodiment specified by the patent document, the court needs more clarity regarding the extent to which such a passivation layer needs to shield other components from water and ions.

  • Not only in this context did Dr. Grosch refer to the knowledge that a person of ordinary skill in the art (the parties did not disagree on what kinds of skills such as POSITA should have) has, as opposed to specific definitions that one could find in the patent document itself. Quite understandably, the three-judge panel cannot answer the related technical questions without help from an expert. Unlike in the U.S., where both parties hire expert witnesses and the court or a jury have to decide whom to trust and courts very rarely appoint their own experts, German courts must rely on a court-appointed expert unless the case can be adjudicated based on undisputed facts as well as facts that the court can easily establish itself.

The actual trial was scheduled for October 4. Meanwhile, either party will submit one more pleading. Apple, represented by Freshfields Bruckhaus Deringer's Prince Wolrad of Waldeck and Pyrmont (litigator) and Samson & Partner's Dr. Oswald Niederkofler (patent attorney), firmly denies the infringement accusations. Among other things, Apple argues that what is alleged to constitute a passivation lawyer in the A10 chip is only about one-eigth as thick as the layers described in the patent. And even if a potential or actual infringement was identified, the case might be stayed pending a nullity action brought before the Federal Patent Court by Apple and Intel. One remark by Judge Dr. Zigann suggested that Qualcomm would have to carefully avoid a claim construction so broad that the patent would be likely to be invalidated. However, the court did not comment on its assessment of the merits of Apple's nullity complaint. Validity is very rarely discussed at a first hearing in Munich. Come October, Apple and Intel's joint challenge to the patent will be front and center unless there is a finding of non-infringement, which no one can predict at this stage.

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