Qualcomm has taken the common and expected step of asking Judge Lucy H. Koh of the United States District Court for the Norther District of California to stay, pending its appeal to the United States Court of Appeals for the Ninth Circuit, the enforcement of last week's historic antitrust ruling, which was a victory for the FTC and a defeat for the San Diego chipmaker in virtually every respect (this post continues below the document):
19-05-28 Qualcomm Motion to... by on Scribd
The standard for a stay is a mix of irreparable harm, the likelihood of the appeal to succeed on the merits, harm to the party that obtained the injunction, and the public interest. Given that the FTC is a government agency and not a commercial operator, the last two factors are practically indistinguishable as the FTC will have to argue on the basis of what the stay means for its actual beneficiaries (other industry players, and by extension, consumers).
Unsurprisingly, Qualcomm believes all factor weigh in its favor. With a view to irreversible consequences, Qualcomm points out that any exhaustive patent license agreement it might be forced to enter into with a rival chipset maker might stay in force and effect, and Qualcomm is also concerned about having to sell chipsets exhaustively to currently-unlicensed customers (meaning Qualcomm couldn't double-dip and collect royalties thereafter). And, as everryone expected, the prospect of having to renegotiate license agreements (which entails the specter of companies halting their payments, as Qualcomm has experienced in China and the U.S.), scares Qualcomm.
The alternative to a stay for the duration of the entire appeal would be a stay pending the Ninth Circuit's motion on a motion to stay that Qualcomm would file with the Ninth Circuit to the same effect (seeking a stay pending the appeal).
It would be highly unusual for Judge Koh to agree with Qualcomm that her decision isn't appeal-proof. After the painstaking effort she put into her 233-page ruling, Qualcomm's rehashing of previously-rejected arguments isn't going to change her mind.
In terms of what experts think of the chances of Qualcomm's Ninth Circuit appeal, I would like to recommend listening to this Knowledge@Wharton discussion with Professors Herbert Hovenkamp (if I recall correctly, the most frequently cited scholar on antitrust in the U.S.) and Thomas Cotter. You can find a link to an audio file on the latter's Comparative Patent Remedies blog, which I have recommended so often (that, in fact, is mutual, and I enjoyed listening to his speeches at two recent German conferences). Professor Cotter is a law professor at the intersection of IP and antitrust. Both professors express a rather bearish view on Qualcomm's chances on appeal, and they aren't too optimistic for Qualcomm's motion to stay, given that the cease-and-desist orders here are a narrow remedy: they are just meant to prevent Qualcomm from engaging in certain kinds of bad stuff. (Of course, some specific performance in terms of a renegotiation of existing contracts and the granting of licenses to chipset makers, while it flows from the same concept, technically goes further.)
Everyone whose opinions on this I've heard or read so far (including the two professors) agrees that the hurdle is much lower for Qualcomm to win a very limited stay: the above-mentioned alternative of a stay pending the time it takes the Ninth Circuit to resolve the equivalent of this motion. My prediction is that either Judge Koh or the Ninth Circuit will grant that "ministay," but a stay pending the entire appeal is significantly harder to obtain. Judge Koh may deny the entire motion; the Ninth Circuit may make a distinction between the different remedies and maybe treat the ones with a direct contractual impact differently from some others.
Another expected procedural step is that Qualcomm brought a motion to shorten the FTC's time to respond, though giving the FTC only until Friday is fairly aggressive and the FTC, without stating reasons, has already indicated its disagreement to Qualcomm (this post continues below the document):
19-05-28 Qualcomm Motion to... by on Scribd
In a dispute like Apple v. Samsung or Oracle v. Google, that timeline wouldn't be unreasonable. But the FTC has very limited resources compared to Qualcomm and other private parties playing in that league.
Judge Koh could deny Qualcomm's motion to stay without even requiring a response from the FTC, much less holding the hearing that Qualcomm requests. That would shorten time to an even greater extent, and conserve government resources. The judge knows this case inside out; she really doesn't need any briefing or argument beyond Qualcomm's (very well-written) motion in order to resolve this one.
[Update] The FTC, as they had told Qualcomm beforehand, opposed the motion to shorten time on Thursday, Judge Koh gave the procedural motion short shrift: "Order by Judge Lucy H. Koh Denying  Motion to Shorten Time. (This is a text-only entry generated by the court. There is no document associated with this entry.)" The FTC's response will therefore be due on June 11. Qualcomm would then have until June 18 to file a reply brief but may decide not to do so in order to accelerate the process. [/Update]
Meanwhile, Qualcomm and its friends and allies are relitigating the case through op-eds. I saw one recently from someone who has previously taken absurd views on the case, and what that "analyst" wrote suggests (provided that he was briefed by Qualcomm, which is highly likely) they will focus, as I also predicted on a Susquehanna International Group conference call last week, on economic theories (as industry testimony couldn't have been worse for them) and their last line of defense (procompetitive justifications) going forward.
The Wall Street Journal is presently the preferred media outlet for Qualcomm's supporters. I generally like the WSJ a lot (my conservative political leanings are no secret), but the Qualcomm context is a rare exception. Last week, the WSJ's Editorial Board engaged in judge-bashing near-simultaneously with its report on the ruling; at that time of the New York night, it's obvious the Editorial Board had pre-approved that piece. And now, near-simultaneously with the two motions I just showed you, a Republican FTC commissioner, Christine Wilson, shocked many observers with a WSJ op-ed bashing Judge Koh's decision and what is actually the most notable success for her own agency in (at least) decades. If that op-ed is any indication, Mrs. Wilson is like former FTC commissioner Maureen Ohlhausen on steroids. MLex's Joshua Sisco didn't mince words on Twitter (this post continues below the tweet):
Not only do I simply disagree with a position on standard-essential patents that I think is a serious threat to innovation and fair competition but I'm also disappointed from a #MAGA point of view because it looks like chaos in the Trump Administration when you have the Assistant Attorney General heading the Antitrust Division (Makan Delrahim) and his subordinates go against the FTC in a recent court filing (that, as I predicted, failed to impress Judge Koh), and now there's a Republican FTC commissioner taking to the WSJ to attack her own agency's enormous achievement in this case. I guess we'll see more of this as the appellate process unfolds, and I doubt some people will exercise much restraint, regardless of the reputational and institutional implications their desperate actions will have.
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