Transnational Apple-Qualcomm Fight Lands in Silicon Valley

SAN JOSE, Calif. (CN) – Technology giants Qualcomm and Apple faced off in federal court Wednesday, in the Silicon Valley front of their escalating and acrimonious battle over key cellular components.

Qualcomm produces chips and other technologies that Apple uses in its products – specifically the iPhone and iPad – to enhance functionality.While the two companies formerly worked in concert, their relationship has degraded to the point where they’re filing suits and countersuits in three countries and the European Union – and billions of dollars are at stake.

European Union

Wednesday’s hearing in the Silicon Valley involved a $1.2 billion antitrust fine handed to Qualcomm by the European Commission this past January. The commission said Qualcomm paid Apple to use its chipsets in its phones in an anticompetitive attempt to freeze out rivals. EU investigators say the practice began in 2011 and ended in 2016 and centers on broadband connectivity.

Qualcomm has appealed the enormous fine and asked Apple via subpoena in U.S. federal court to produce documents it believes will help absolve it of wrongdoing. But Apple says the request to produce more than 56 million documents is burdensome and came far too late in the process.

“The ask here is an enormous one,” said Apple attorney Mark Selwyn during the hearing before U.S. Magistrate Judge Nathanael Cousins.

But Gary Borenstein argued Qualcomm is asking for a set of documents already produced in other cases between the two companies.

“Apple’s refusal to comply with the subpoena is nothing more than a procedural roadblock Apple seeks to erect, rather than a legitimate effort to avoid the burdens of discovery,” Borenstein wrote in a motion.

Apple may have an interest in undermining Qualcomm’s effort given the two companies are embroiled in bitter patent disputes in the United States, China and the United Kingdom.

China

The Fuzhou Intermediate People’s Court of China granted Qualcomm injunctions against Apple after the chipmaker said Apple used its patents to improve application management and photograph enhancements on touchscreen devices. It’s not clear how much Qualcomm seeks in the suit for what it claims are patent infringements.

San Diego

In San Diego County Superior Court in Southern California,where Qualcomm is headquartered, the chipmaker accuses Apple of taking its trade secrets and giving them to Intel in order to make a competitor’s technology perform better in its iPhone and iPad products.

The suit accuses Apple of breaking a software agreement by sharing elements of its source code for various products.

Apple has also taken the initiative as the plaintiff is some suits, suing Qualcomm in San Diego federal court on claims at least eight battery life-related patents it owns have been repeatedly violated by Qualcomm. Qualcomm responded by filing suit in the same court the next day, claiming Apple infringed 16 Qualcomm patents.

The lawsuits followed filings in a separate federal case in San Diego in which Apple accused Qualcomm of operating an illegal business model by simultaneously selling chips it makes while also charging royalties for the technology. Apple characterized the practice as illegal double-dipping.

Washington and the International Trade Commission

In a similar case pending in the District of Columbia, Qualcomm accused Apple of abusing its patents related to modem chips, which help smartphones connect to wireless networks.

Notably, the U.S. International Trade Commission sided with Qualcomm in the case, finding Apple violated a patent involving battery-saving technology. While the ITC’s decisions aren’t binding, judges often follow their recommendations.

United Kingdom

Apple also sued Qualcomm in the United Kingdom, making similar claims that Qualcomm’s royalty demands are illegal and violate a concept in intellectual property law that revolves around standard essential patents, or SEPs.

SEPs are fundamental to the operation of a given technology, and patent holders must offer terms that are fair, reasonable, and nondiscriminatory. Apple claims Qualcomm is charging unreasonable rates for its SEPs.

People who watch the intersection of technology and the legal world expect the battle between Apple and Qualcomm to be long and bitter, much like the protracted dispute between Apple and Samsung that rolled on for the better part of a decade and still offers a labored gasp from time to time.

Discovery

Cousins told both parties on Wednesday he would take the matter under submission.

Cousins has presided over other aspects of the parties’ discovery disputes. In December 2017, he fined Apple $25,000 per day for failing to produce documents in the Federal Trade Commission case against Qualcomm even though Apple wasn’t a party to the action.

In the present dispute, Cousins is expected to rule within the next few weeks.

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