Qualcomm loses first round in Apple patent fight

Apple’s iPhones shouldn’t be banned from the US even though they infringe a patent owned by Qualcomm, a US International Trade Commission judge found Friday.

Judge Thomas Pender found that Apple infringed one of three Qualcomm patents in the case but declined to recommend the import ban sought by Qualcomm. The judge’s recommendation “makes no sense,” Qualcomm said.

The judge’s findings are subject to review by the full commission, which has the final say. If the commission goes along, it would eliminate a powerful bargaining chip Qualcomm could use to push Apple into agreeing to pay license fees. “Qualcomm has continued to unfairly demand royalties for technologies they have nothing to do with to protect their monopoly,” Apple said in a statement. “We’re glad the ITC stopped Qualcomm’s attempt to damage competition and ultimately harm innovators and US consumers.”

Qualcomm is seeking an import ban of Apple’s iPhones that have chips made by Intel. This is the first of two cases brought by Qualcomm before the trade agency in Washington. Goes against mandate

“We are pleased the ALJ found infringement of our patented technology, but it makes no sense to then allow infringement to continue by denying an import ban,” Qualcomm General Counsel Donald Rosenberg said in a statement, referring to the administrative law judge.

“That goes against the ITC mandate to protect American innovators by blocking the import of infringing products,” Rosenberg said. “There are many ways Apple could stop infringing our technology without affecting the public interest.”

Qualcomm will look to the full commission decision and will pursue more than 40 other patent-infringement cases brought against Apple globally, he said.

The trade agency doesn’t have the authority to force Apple to pay patent royalties. Qualcomm is seeking that in district court, and the judge’s infringement finding, if upheld by the commission, could help the chip-maker there.

Massive leverage

“The leverage would be massive with the import ban, but the infringement still provides them with something,” said Matt Larson, an analyst with Bloomberg Intelligence. “It could create exposure for Apple later, which is helpful to Qualcomm in the current licensing discussion.”

During the trial, Apple argued it wouldn’t be in the public’s interest to have phones with Intel chips kept from the US market. While the judge’s full findings won’t be public until both sides get a chance to redact confidential information, America’s role in developing the next generation of mobile communications was a key issue in the case.

The commission’s job is to protect US markets from unfair trade practices and it has to balance patent rights with what’s best for the economy. It’s scheduled to make a final decision by January. A different trade judge is scheduled to release her findings in a second case that same month, and the public’s interest is a prime issue in that case as well.

Chips phased out

Apple has phased out its use of Qualcomm chips during the dispute and its latest phones don’t use any of the San Diegobased chip-maker’s products. In urging the agency not to block its phones with Intel chips, Apple contends that the competition between the two dominant chip-makers is crucial to propel development of the next generation of communications, known as 5G.