REFLECTING ON CAREER OF DEFENDING BIG TECH

At IBM, Apple and Qualcomm, Don Rosenberg, who recently retired, worked on significant and sometimes grueling cases at the epicenter of patent rights and antitrust policy worldwide

After a 45-year career as the top corporate lawyer at IBM, Apple and Qualcomm, Don Rosenberg has plenty of stories to tell about the legal battles in big tech. Like his behind-the-scenes role in an FBI sting that caught Hitachi plotting to steal IBM’S software secrets; or his gambit to acquire the iphone trademark ahead of its 2007 debut; or his stonewalling China’s anti-monopoly regulators who sought access to Qualcomm’s U.s.based computer servers during “dawn raids” at the company’s offices in Beijing and Shanghai.

But Rosenberg says his finest hour came three years ago — late in his career — when he spotted a loose thread in the netting around Broadcom’s hostile takeover attempt of Qualcomm. He and his small team pulled it until the whole thing unraveled.

Rosenberg, 70, retired last month as Qualcomm’s general counsel and head of Government Affairs after 14 years at the San Diego mobile technology firm. He helped shepherd the company through grueling lawsuits with Apple, the Federal Trade Commission and competition regulators worldwide.

He also spent 30 years at IBM in jobs, including head of litigation and general counsel. He was involved in the gigantic, nearly billion-dollar arbitrations with Fujitsu over alleged copying of IBM’S mainframe operating system. He personally negotiated a $775 million settlement with Microsoft stemming from claims that the Seattle company engaged in anti-competitive conduct. And he persisted in getting a federal judge to sunset a 1956 antitrust consent decree that cast a shadow over IBM for four decades.

A Brooklyn native who grew up in public housing, Rosenberg took a roundabout path to law. After graduating college with a math degree, he worked as a pension analyst at an insurance company — a job he disliked. His fiancee suggested that he consider law

“I used to talk about how a (patent) portfolio was like a garden. You have to weed it and seed it and cultivate it.”

Don Rosenberg

Qualcomm’s general counsel, who retired Nov. 1 after a 45-year career

school. He sat for the Law School Admissions Test on their wedding day.

Antitrust has been a theme throughout Rosenberg’s career. He won General Counsel of the Year in 2021 from The American Lawyer magazine, which cited Rosenberg and his team for being “at the epicenter of some of the most significant cases that address the intersection of intellectual property and competition policy.”

Rosenberg spoke with the Union-tribune to unpack some of Qualcomm’s recent legal fights and look to the future — as well as speak to what it was like to report to Steve Jobs.

Blocking a hostile takeover

On Nov. 2, 2017, Broadcom Chief Executive Hock Tan — a wizard at wringing value out of acquisitions — held a press conference with then-president Trump to announce the relocation of Broadcom’s corporate headquarters from Singapore back to the U.S.

Four days later, Broadcom made an unsolicited offer to acquire Qualcomm for $105 billion in cash and stock.

Talks quickly turned hostile. The showdown was set for March 2018, when a slate of Broadcom-nominated alternative directors stood for election at Qualcomm’s annual shareholder meeting.

In the run-up to the vote, Rosenberg recalled that Broadcom had trouble with the Committee for Foreign Investment in the U.S. — or CFIUS — during a previous acquisition. The agency has broad authority to review foreign acquisitions of U.S. firms for national security concerns.

He and his team dug into the process of redomiciling. They found that Broadcom hadn’t taken any of the procedural steps necessary to move its headquarters back to the U.S. — including filing with a Singapore court and with U.S. securities regulators.

“It had been a couple of months,” he said. “So, despite their statements that they were going to do it, they were still a foreign entity and therefore subject, in my

opinion, to the CFIUS process.”

That was the genesis of a government inquiry. Qualcomm argued that Broadcom’s cost-cutting would cripple U.S. wireless leadership, opening the door for China to dominate important communications technologies.

Rosenberg and Qualcomm’s outside lawyers had “almost daily conversations with Treasury people and the National Security people, trying to get their heads around what I was talking about — which was yes, it’s a proxy fight and you usually don’t get in the middle of proxy fights. But this is a different animal.”

He contended that if Broadcom’s slate of directors was elected, the acquisition essentially would be a done deal -- without a thorough CFIUS review.

During this back and forth, CFIUS required Broadcom to give it a fiveday advanced notice before taking steps toward redomiciling. Rosenberg hired a Singapore law firm to watch the court where Broadcom would need to begin the process.

Broadcom indeed made a filing with the court, but without notifying CFIUS in advance.

“That had a major impact, I think, on their credibility with the government,” he said.

Things moved fast from there. Trump issued a presidential order “immediately and permanently” blocking the hostile takeover based

on CFIUS findings that it threatened “to impair the national security of the United States.”

“People throw the word around, but that was absolutely an existential moment,” said Rosenberg. “Qualcomm would not be what it is today if that hostile had taken place. And frankly, I don’t think the (mobile) industry would be what it is today if that had succeeded.”

Securing the ‘iphone’ name

In 2006, Apple recruited Rosenberg away from IBM to be its general counsel. He only lasted a year. He doesn’t say much about the experience other than he never got comfortable at Apple.

During one of Rosenberg’s first days in the office, Steve Jobs showed him a handheld device with a big screen, touch-based scrolling and all kinds of other tricks.

“I was blown away, and I expressed that to him,” said Rosenberg. “I remember his big broad smile. That was to be the iphone.”

Rumors spread about the upcoming new handset, and the media was calling it the “iphone” in coverage.

“(Steve Jobs) hated rumors, and he absolutely hated the press. And he would say things like we’re not naming it that because nobody names my products except me,” said Rosenberg. “And I remember having conversations with him saying he could call this device mud. It’s not going to matter. It’s the product that matters.” In the end, Jobs opted for the iphone name. But Cisco Systems owned the trademark, which it got through an acquisition of a company that developed a littleknown “IP phone” that it called the iphone.

It fell to Rosenberg to acquire the trademark. Apple was not on friendly terms with Cisco at the time, he said, and it was no secret that Apple wanted the name.

“I had to negotiate, negotiate, negotiate,” said Rosenberg. “But I can say I had a great argument that they had abandoned the mark. I really felt I had a strong case. I said to them I think I may have a case for fraud on the patent office.”

The companies came to terms.

“We paid for it, but we paid, in my opinion, a lot less than we would have,” said Rosenberg. “So, I was able to acquire the iphone mark, although Steve announced the iphone before I had actually finished. I got a call in the auditorium from the general counsel at Cisco asking what the hell is going on.”

Legacy from patent battles

While Qualcomm largely won its punishing legal bouts of the past couple of years, some investors worry that patent controversies haven’t been laid to rest, particularly with Apple.

They cite the similarities between this latest round of lawsuits with Apple and regulators and litigation brought by Nokia in 2007, which was settled on the eve of trial.

What’s to stop serial challenges to Qualcomm’s patent licensing business model every decade or so?

Rosenberg points to several things. The biggest is the U.S. Ninth Circuit Court of Appeals finding that Qualcomm’s patent licensing practices are legal. It was a major victory and establishes a precedent within the Ninth Circuit’s jurisdiction.

In addition, the company was able to secure court injunctions banning the sale of certain iphone models in Germany and China. Rosenberg says the injunctions highlight the strength of Qualcomm’s intellectual property, which includes a portfolio of more than 100,000 patents.

Qualcomm failed to get injunctions in the United

States. Patent attorneys say case law makes product bans for infringement very difficult, if not impossible, to get in the U.S., particularly for patents included in widely used technology standards.

“I used to talk about how a (patent) portfolio was like a garden. You have to weed it and seed it and cultivate it,” Rosenberg said. “We have helped move the needle on things like patent rights, the value of patents, standard essential patents, the application of competition law to intellectual property rights — through our cases, through our resolutions, through our advocacy and through some of the legislative initiatives that we helped move in the right direction.”

That doesn’t mean rivals won’t take legal action in hopes of sidestepping patent royalties, he added. Patent cases are notoriously lengthy, expensive and unpredictable. Big, well-financed companies that license intellectual property have an incentive to file lawsuits and string out litigation to avoid paying.

But Rosenberg thinks licensees will be more cautious about pursuing these types of tactics after Qualcomm came out on top in these fights.

“A lot of us who participated in this have put the business in a very strong position, stronger than it has been in quite some time,” he said.

mike.freeman@sduniontribune.com