Tuesday, March 26, 2019

Qualcomm loses first ITC case against Apple, recent San Diego infringement verdict loses credibility

Earlier today, an Administrative Law Judge (ALJ) of the United States International Trade Commission (USITC, or just ITC) issued a preliminary ruling in Qualcomm's favor with respect to one of the three remaining patents-in-suit (out of five originally asserted patents) in the investigation of Qualcomm's second ITC complaint against Apple. But that finding is still subject to review.

A final (apart from a possible appeal) Commission decision just came down at 5 PM Eastern Time in the investigation of Qualcomm's first ITC complaint against Apple. A different ALJ, Thomas B. Pender, had identified a violation of one patent (out of six patents originally asserted in that case), but recommended that, even if this finding had been affirmed, no import ban should have issued in light of Qualcomm's anticompetitive intentions (as the complaint targets only Intel-powered iPhones). The final ruling (PDF), however, is that there is no violation.

Apple's petition for a review of the infringement holding had been granted in December, while Qualcomm's petition for review had been denied.

As a result of the ITC finding that the sole remaining patent-in-suit being invalid (in the ITC's opinion, it fails to meet the nonobviousness requirement for patentability), any further public-interest analysis became unnecessary.

In my commentary since the Commission's determination to review the finding of a violation, I had repeatedly noted that any one out of the first eight (of nine) questions raised by the Commission on review had the potential to decide the case in Apple's favor, so from a probabilistic point of view it was relatively likely (though far from certain) that the result would be "no violation." And, in any event, Apple had already worked around that patent.

For Qualcomm, this decision is nevertheless disappointing. As I wrote about the recent jury verdict in San Diego relating to a "companion lawsuit" that mirrored the ITC complaint, that verdict is grossly inconsistent (almost an understatement) with the outcome in the ITC. Post-trial proceedings are ongoing, and Judge Dana M. Sabraw of the United States District Court for the Southern District of California still has to adjudicate Apple's motion(s) for judgment as a matter of law (JMOL). The chances of a JMOL motion have definitely improved with today's ITC decision, simply because Judge Sabraw will take note of the fact that the professionals at the ITC found no violation of the '490 patent (which is one of the patents at issue in the San Diego case). The standard for JMOL is that no reasonable jury could have found otherwise, and an ITC decision doesn't necessarily make a jury verdict unreasonable, but again, it has become more likely than before.

Qualcomm may appeal the ITC decision, and I guess it will, while Apple will appeal the upcoming San Diego judgment unless its JMOL motion succeeds with respect to all patents-in-suit (in which case Qualcomm would appeal). Both appeals will go to the Federal Circuit, and will likely be consolidated there.

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