Tuesday, January 29, 2019

FTC v. Qualcomm closing arguments: in a bench trial before Judge Koh, lawyers are just there to supply facts

When Judge Lucy H. Koh (Northern District of California) denied Qualcomm's motion to dismiss the FTC'a antitrust complaint, her perspective on the key legal issues in the case became clear. Since that moment, about 19 months back, Qualcomm has known that the law, as interpreted by this experienced judge, was not on its side--and if the facts weren't going to be on its side either, it knew, or it should have known, it was bound to lose.

The Federal Trade Commission had the burden of proof in this trial, but Qualcomm also faced a significant challenge as the FTC's legal theories could hardly be defeated (otherwise the motion to dismiss would have succeeded least in part). Failure was not an option for Qualcomm.

After ten trial days, the FTC had indisputably received far more--and far stronger--industry testimony for its purposes than Qualcomm. That was to be expected, given the long list of known complainants. The only surprise in that regard was that even Ericsson (a company with similar interests regarding patent monetization) took positions adverse to Qualcomm's defense (except in connection with rival chipset licensing). The FTC's comfortable lead in connection with industry testimony would have allowed it to prevail even with a reasonably narrow defeat in the battle of the experts. But neither Qualcomm's experts nor its lawyers were able to impeach Professor Shapiro or Mr. Donaldson (their victory over Mr. Lasinski was an exception), while the selectivity Qualcomm's experts needed to employ under the circumstances (the facts being what they are) was thinly veiled and easily exposed.

Today's closing arguments weren't going to bring up anything fundamentally new: that would have had to happen during the first ten days. Nothing was surprising today. Of course, the FTC said it had met is burden of proof, and Qualcomm tried to move the goal posts for that hurdle and denied that the FTC had provided enough evidence to win. And since the opening statements, the FTC's lawyers had always been relatively low-key, but never to the extent that they wouldn't have been forceful--just forceful with their style.

After being there on all trial days, I knew I wasn't going to learn anything fundamentally new today. But there was something fascinating to watch, and that's Judge Koh's immovable, inexorable, almost superhuman focus on facts.

There's no question that Qualcomm's lead counsel Bob van Nest delivered a really great performance in terms of persuasiveness. If it had been allowed to film it, it would have been the audiovisual equivalent of a textbook example of a lead counsel really giving his best to surmount the considerable challenges his client faces. But in Judge Koh's courtroom, the name of the game is not persuasiveness.

Just like during testimony, she remained almost exclusively focused on her screen and the printouts in front of her, and sometimes highlighted a passage or took notes. But her eyes were always on her material, not on counsel.

I seriously believe she didn't even look at Mr. van Nest, who was gesticulating a lot, for more than a total of 60 seconds during his 60-minute statement. She wasn't paying more attention to the FTC's Jennifer Milici either, so this was neither party-specific nor personal.

Had this been a jury trial, Qualcomm would have had a much better chance. And in that case, the FTC would either have had to match Qualcomm's courtroom theatrics--which weren't extreme, but there was quite some contrast between the parties' communication style--or it would have been likely to lose.

Even the flipchart trick--Mr. van Nest wrote something on a flipchart only the judge could see--didn't work. She dignified it with her attention for a fraction of a second.

For the FTC's Mrs. Milici, that wasn't a problem. She just made point after point in an almost monotonous form ("monotonous" not in absolute terms, but compared to how others would have displayed outrage over Qualcomm's conduct). But for Mr. van Nest it must have been frustrating to throw all his experience and skills behind a closing argument without that effort ultimately making any difference--not because the judge wouldn't have been attentive, but because the judge was interested in substance.

After what I observed today, I would recommend to any lawyer appearing before Judge Koh in a bench trial to understand one thing: your role is not going to be an attorney of the kind shown in some movies: just be realistic about your role, which is very limited when Judge Koh decides the case alone. In that case, just like today, the only thing the lawyers are really expected to do is to supply outcome-determinative facts. Don't try to "mansplain" the law to her. She can handle that part herself.

Qualcomm had facts to present, but some of them were called into question and others just fell short of turning the tide. For an example, if some company executives said in some videotaped depositions that they didn't feel threatened by Qualcomm, that still doesn't do away with other testimony of real and perceived threats.

The FTC's trial team contented itself from the beginning with just being Judge Koh's water boy or girl--"water" standing for "outcome-determinative facts." The only departure from this approach was just gradual: Mrs. Milici's cross-examination of Qualcomm's economic expert Professor Nevo, whose theories Qualcomm didn't try hard to defend today (focusing instead on re-rebutting Professor Shapiro's rebuttal, delivered yesterday.

Judge Koh actually showed great consideration for all the people who came to listen today, and gave instructions for how to make room so everyone could be seated. Quite often one can see she's a nice and positive person. Not a robot, much less a stone. But when she listens to argument or testimony, it's all about what you say, not how you say it.

No matter how often and how masterfully Qualcomm's lawyers claim that its royalty rate was justified: testimony shows the industry at large views it differently. It's not Qualcomm's lawyers' fault that the facts are what they are. But no judge could have made it harder to compensate for structural shortcomings of a party's position than Judge Koh. It is that focus on facts and interpretation of the law--not bias or anything like it--that doesn't bode well for Qualcomm.

Share with other professionals via LinkedIn: