Wednesday, October 28, 2020

Qualcomm's next home run: Ninth Circuit denies FTC's petition for rehearing of antitrust case

See, I told you so. NOT. I have a high hit rate (including with respect to both the FTC v. Qualcomm district court decision and the appellate opinion), but I must admit I wasn't on the money in the en banc context. Given the high profile of the FTC v. Qualcomm antitrust case, I was actually optimistic that the Federal Trade Commission's petition for a rehearing en banc would succeed (while I expressed skepticism regarding the prospects of a better outcome for the FTC). It was obvious that the three-judge panel or a majority thereof was going to stand by its ruling, but I thought some other circuit judges would be interested in rehearing the matter. This morning the Ninth Circuit denied the FTC's petition (which had drawn some support from amici curiae, even including Tesla), and it gave it short shrift as no judge even wanted to hold a vote on whether or not to conduct a rehearing en banc (this post continues below the document):

20-10-28 9th Cir. Denial of... by Florian Mueller

Now the FTC will have to decide whether to file a petition for writ of certiorari (request for Supreme Court review). It's quite possible that the FTC's 3-2 majority in favor of the petition for a Ninth Circuit rehearing (consisting of the Republican chairman and the two Democratic commissioners) would also authorize a cert petition. But six of the nine justices are conservatives, three of whom were nominated by President Trump, and they would see that the Trump Administration backed Qualcomm in this dispute. They would likely also take note of the fact that two of the three judges on the Ninth Circuit panel were conservatives (and the third was a relatively conservative-leaning Democrat). But the Supreme Court also has a history of fixing issues with the patent system, particularly with the overleveraging of patents and the patentee overcompensation it leads to. That is not a partisan question, though antitrust law often is. I remember Senator Klobuchar (D-Minn.) lamenting the Supreme Court's restrictive application of the Sherman Act in a statement she made at Justice Barrett's confirmation hearing.

Relatively speaking, I'd have had more hope for the FTC with respect to a Ninth Circuit en banc. But I was too bullish then, so who knows, I may just be too bearish now.

The next major patent-related antitrust case that could reach the Ninth Circuit--and possibly even the Supreme Court--in the near term is Apple & Intel v. Fortress Investment et al.. I blogged about Apple and Intel's opposition to Fortress's second motion to dismiss earlier today and mentioned that FTC v. Qualcomm affects that one. In that particular context, it's definitely bad news for Apple that, for now at least, the panel opinion in FTC v. Qualcomm is controlling Ninth Circuit law. But in Epic Games v. Apple, it may actually help the iPhone maker. That's how it goes.

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