Judge Slices Apple Claims in Patent Feud With Qualcomm

SAN DIEGO (CN) – A federal judge Tuesday dismissed claims by Apple involving a handful of Qualcomm’s patents in the ongoing dispute between the two technology giants over chipsets used in smartphones.

U.S. District Judge Gonzalo Curiel dismissed 56 claims brought by Apple relating to nine of Qualcomm’s patents-in-suit at issue. The antitrust litigation accuses Qualcomm of monopolizing the chipset technology and overcharging the iPhone maker and its contract manufacturers for it.

Last month, Qualcomm’s attorney Evan Chesler told the judge Apple and its contract manufacturers – including Compal Electronics – owed billions in unpaid royalties for using the chipset technology.

Chesler said the dispute between the tech companies was not over individual patents owned by Qualcomm, but the licensing agreements entered into by the parties for use of Qualcomm’s portfolio of thousands of patents.

Because Qualcomm issued an agreement not to assert nine of the patents-in-suit, Chesler argued it rendered the 56 claims related to non-infringement, invalidity and unenforceability of the patents moot. He said the claims should be dismissed for lack of subject matter jurisdiction.

In his 16-page order Tuesday, Curiel agreed and dismissed the claims without prejudice.

The judge found Apple’s claims that Qualcomm’s patents are exhausted and unenforceable, and thus it ineligible for royalties from either Apple or its contract manufacturers, does not hold up.

“These are contract terms. Qualcomm’s breach of contract claim against the [contract manufacturers], which Qualcomm contracted with, for nonpayment of the royalties is just that: a claim based on contract terms and contract law and not based on patent infringement,” Curiel found.

While Qualcomm’s covenant-not-to-sue prevents it from suing Apple under patent laws, it does not preclude Qualcomm from making claims about the patents to demand “royalties under the license agreements and from using the patents to demonstrate the value of Qualcomm’s patent portfolio,” Curiel noted.

He pointed out “it is an open question” whether California courts would consider a contract unenforceable if it called for payments of royalties on exhausted patents and that he could not enter declaratory judgment in favor of Apple on that issue.

“Without a resolution to that issue, Qualcomm’s breach of contract claims (and Apple’s enforceability defenses to such claims) would persist, even if it was declared that the patents were exhausted,” Curiel wrote.

Curiel also noted a previous finding that royalties the contract manufacturers owe to Qualcomm for using its chipset technology in the iPhones they make for Apple is not dependent on whether the patents-in-suit are valid or not.

“The royalties the [contract manufacturers] owe to Qualcomm based on the [license agreements] are not dependent on whether the patents-in-suit are valid or not,” Curiel found.

“Apple’s argument that the [contract manufacturers] would not owe a royalty for invalid patents is unpersuasive,” he added.

A final pretrial conference in the case is scheduled for Nov. 30.


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