Wrong thread. This is the ITC case, where there is only the possibility of an injunction, not damages. As you know, it's not a court, but an agency. Patent-familiar Administrative Law Judges make the decision. Perhaps this is a good time to review what happened last time at the ITC:
- Apple tried to claim that Samsung using a percentage of the device was not fair. The ITC responded that it was quite common for cellular FRAND patents:
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The ITC also noted that asking for patent cross licenses was a common ETSI FRAND patent contract point as well.
- Apple tried to claim patent exhaustion from the sale of the chip (sound familiar?), but the ITC ruled that since Apple bought the chips outside the US (no doubt to avoid paying US taxes), the US exhaustion benefit did not apply.
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- Finally, Apple could not prove that they had negotiated in good faith, or even really negotiated at all. Apple had only instantly complained each time they met with Qualcomm, that the rates were unreasonable. To which the ITC responded:
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At the same time, the DOJ noted that injunctions were possible if a potential licensee passed certain time periods without serious negotiation.
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When the Obama White House (representative) overturned the last ITC ban against Apple, they stated that they were neither supporting nor negating the ITC decision. They were letting Apple go because it would mess up the US competitive landscape too much if iPhones were not available for sale.
I'm aware of the USITC case. I was responding to a general assertion about Apple not being able legally to stop making royalty payments.
When it comes to an ITC action, the reasons that Apple won't (again, ultimately) lose there are a little different than the reasons Apple won't lose (with regard to a possible injunction) in a U.S. court action. But there's considerable overlap.
As for the ITC ruling involving Apple and Samsung, it was overruled by the U.S. Trade Representative for good reason. And had it not been overruled by the administration, Apple would have appealed it to the Federal Circuit. It had already indicated as much.
As for the USTR's stated reasons for overruling the exclusion order, yes, they were effects on competitive conditions in the U.S. economy and on U.S. consumers. Those are the kinds of policy considerations which such exclusion orders are, in accordance with 19 USC §1337(d)(1) and 19 USC §1337(j)(2), supposed to be reviewed (by the President or his assignee) based on. The USTR didn't support or dispute the ITC's findings of fact or legal analysis because doing so would be outside the scope of the USTR's review power under 19 USC §1337(j)(2). Simply put, that wasn't the USTR's job in that situation. That would, if necessary, be the job of a court. The ITC's legal analysis (and, perhaps, its findings of fact) would have been reviewed by the Federal Circuit had the USTR not overruled the exclusion order for other reasons.
The USTR also, in explaining its consideration of the ITC's exclusion order, cautioned against the problems which would result from granting such orders in relation to SEPs. It can create improper leverage for SEP holders and issues with patent hold-up. That's not to say that they should never be issued, but the bar (as the DOJ and USPTO indicate and the USTR suggests) needs to be pretty high. Put simply, the conduct on the part of the accused infringer needs to be pretty recalcitrant.
The facts of Apple's dispute with Samsung in that case are obviously different than those in the present dispute between Apple and Qualcomm, though there are of course some similarities. But in the present case there's even more reason for an exclusion order to be denied based on the policy considerations specified in 19 USC §1337(d)(1). For that and other reasons I'm confident that an exclusion order (again, one which withstands appeals) will not happen.
Returning to the issue of an appropriate royalty base: There's been even more clarity from U.S. courts since that ITC decision. At this point it should be clear to anyone considering this specific legal point that royalties based on the entire value of an end product are not appropriate and not FRAND (i.e. if they are imposed unilaterally, i.e. demanded as a condition of issuing a license). (That is, except when the EMVR applies, which it doesn't in this case. I've discussed that exception several times elsewhere.) The ITC could, I suppose, still stubbornly refuse to accept that legal determination. But, in the U.S., it's a determination for the courts to make. In a dispute on that point between the ITC and, e.g., the Federal Circuit, the Federal Circuit wins. Other bodies might choose to consider unilaterally-imposed entire market value royalty bases to be acceptable, but when it comes to U.S. courts they will lose - absent a significant reversal on that issue from the Federal Circuit or the Supreme Court.
One last point regarding patent cross licensing: The issue, as it has been raised by Apple and various regulatory bodies, isn't patent cross licensing in itself. The issue is requiring a license seeker to cross license their own patents
without offsetting compensation.
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In the non-ITC case, Apple will of course try to sway a gullible jury with lots of handwaving, but this one fact (and there's no reason to believe it is anything other than a fact since it will be quickly provable or not) speaks for itself.
Qualcomm says they did not make any different (or especially worse) deal for the iPhone or any modem chip, because they already had a deal with Foxconn (and other factories) which was and is the same no matter whose phone they made or whose chips were used.
Moreover, since this is well known as exactly how Qualcomm does ALL licenses, there's zero reason to believe anything else. So no, Apple's innuendo that they were singled out from the start makes no sense. Foxconn already had a Qualcomm deal, and Apple was not part of that (which no doubt they loved since it kept their cost down).
Apple wouldn't need to sway a gullible jury. What it would need is (1) a properly instructed jury (based on various legal determinations which, e.g, the Federal Circuit has made) and (2) to be able to demonstrate some of the things which it (i.e. Apple) has alleged. I strongly suspect that some of those things are true, but I of course can't know for sure. But at this point we not only have Apple making these accusations, we have regulatory bodies in at least 5 nations plus the EU having made preliminary (and in some cases final) determinations that Qualcomm has engaged in improper (and in some cases illegal) conduct.
Further, and again, Apple doesn't need to demonstrate that it's been singled out. What others have agreed to certainly goes to whether certain terms are FRAND. But courts saying that they aren't, or otherwise laying out principles which apply in determining whether they are, is more controlling. Some of the things which Qualcomm has been accused of are most certainly not FRAND compliant, regardless of whether Qualcomm has been challenged on them in the past (or whether they benefit other license seekers).
