Monday, January 7, 2019

Regardless of Qualcomm's patent injunction, iPhone 7 and 8 still widely available in Germany

In a few hours, the second day (and the second week) of the FTC v. Qualcomm antitrust trial will begin in the United States District Court for the Northern District of California. In case you missed them, these are the three posts on Day One of #ftcqcom:

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Compared to the fundamental competition issues in the FTC case (which pretty much all industry players appear to take issue with, though it remains to be seen what testimony Qualcomm will present in its case-in-chief), Qualcomm's patent infringement campaign against Apple in three jurisdictions is but a sideshow. Regardless of strategic relevance, the pair of injunctions (same patent-in-suit against Apple Inc. in one case and against two European Apple entities in the other case) recently handed dow by the Munich I Regional Court (announcement; impact assessment; defendant's dilemma) made more headline news than the FTC trial. A sales ban is something that consumers can relate to, and the very term sounds scary, but a here's a reality check.

It's now early Monday afternoon in Germany, and so far there's no indication that Qualcomm's enforcement efforts are having even remotely the impact that patent holders and their shareholders would usually expect to have when posting bonds over $1.5 billion, as Qualcomm did last week.

As I explained in my original impact assessment, those injunctions are binding on only the particular defendants in those cases. They don't have an erga omnes effect that would require third parties to comply.

Even from over here in the Bay Area, it's easy for me to ascertain that German iPhone resellers don't give a damn. Four links and screenshots prove that you can still get iPhone 7, 8 and even the X (though Apple stopped selling it) from the three major mobile carriers (T-Mobile, Vodafone, and O2) as well as the leading consumer electronics retail chain, MediaMarkt.


They still carry iPhone 7 and 8. Here's a space-gray iPhone 8 with 64 GB:

Vodafone (iPhone 7, 8, and X)

O2 (Telefónica) (iPhone 7 and 8)

MediaMarkt (CE retail chain)!wls&followSearch=9823&format=JSON&omitContextName=true&searchParams=%2FSearch.ff%3Fquery%3Diphone%2B8%26channel%3Dmmdede&searchProfile=onlineshop&settings=mmdede (search result; one can still find iPhone 7 and 8 there)

What you see here is the commercial reality in the German marketplace. Forget about the fake news. There was a major German newspaper (arguably the most famous one) that wrote after the Munich decision that it was going to hurt Apple in the final days of the Christmas Selling Season. In reality, even Apple's own stores still offered all iPhones until last week, and as this post here shows, resellers are still offering them now as if Qualcomm had never posted its bonds over $1.5 billion.

I'm quite sure it will still look like this in a week or month or even several months from now. Time is not on Qualcomm's side with demand for old iPhones decreasing every day, the FTC v. Qualcomm trial progressing, and the Apple v. Qualcomm trial in San Diego startingi in about three months from now.

Some more rulings are due in Germany this month, but there's no reason to assume that Qualcomm will get any leverage here, especially in light of a workaround in iOS 12. Qualcomm's ITC cases weren't going too well either, and right now they're on hold due to the government shutdown. Here's what the ITC's website says:

"Due to a lapse in federal appropriations, USITC applications are operating in a read-only capacity. Document filing has been disabled. USITC applications will not be updated until appropriations are allocated. Similarly, submissions to EDIS will not be accepted until appropriations are allocated. Full services will be restored the next business day after appropriations are allocated."

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