Qualcomm Runs Some Offense Against Apple

Is the tide starting to turn Qualcomm's way in its antitrust battles with Apple and the U.S. government?

It's sure seemed that way for the last few weeks.

First, Qualcomm dodged a potentially destructive ruling last month on Apple's allegation that it “double-dips” by licensing the same modem chips it's selling. Then two weeks ago, Qualcomm obtained two preliminary injunctions against iPhone sales in China based on Qualcomm's Chinese patents.

Apple is rolling out its usual doomsday warnings as it seeks reconsideration from the Fouzhou Intermediate People's Court. According to a Bloomberg reportThursday, the company says enforcing the injunctions would put 5 million Chinese manufacturing jobs at risk, harm Chinese consumers and—the humanity!—force Apple to settle with Qualcomm on unfavorable terms. I assume that would mean paying the royalties it used to pay while it became the most profitable public company in history.

My ALM colleague Anna Zhang reports that LexField Law Offices represents Qualcomm in China.

Now the U.S. International Trade Commission has revived Qualcomm's case for an exclusion order that would block U.S. imports of iPhones that contain Intel modem chips. Wednesday's announcement is more good news for Qualcomm, though it's something of a mixed bag.

The ITC made clear that it's going to consider only a very narrow order—one that's perhaps limited to older iPhone models, or that would end in as little as six months. But Apple and Intel executives have sworn that even such a limited order would be calamitous—forcing Intel out of the market for premium modem chips and handing Qualcomm a monopoly on 5G cellular technology.

Administrative Law Judge Thomas Pender found that argument persuasive. “The bottom line for me,” he wrote back in September, “is that I see the Staff's recommended tailored exclusion order as being a guarantee: (1) of a Qualcomm monopoly; (2) of harm to everyone (especially the economy of the United States) involved but Qualcomm; and (3) of harm to the National Security of the United States.”

Qualcomm's lawyers at Quinn Emanuel Urquhart & Sullivan; Adduci, Mastriani & Schaumberg and Cravath, Swaine & Moore complained to the commission that Apple and Intel had worked “hand-in-glove” to present Pender with “unsubstantiated, self-interested speculation.”

So the full commission will now decide whether vindicating Qualcomm's patent rights is worth calling Intel's bluff and letting the future of 5G fall wherever it may. The bad news for Qualcomm is that the commissioners also are going to take a second look at Pender's findings of infringement and validity. If the commission finds that the single surviving patent claim—on a battery-saving technique—either invalid or not infringed, then there would be no need to debate the public interest.

Given that another arm of the federal government, namely the Federal Trade Commission, is going to trial in San Jose federal court next month, seeking to rip up more than 100 Qualcomm licenses on the grounds that every one is tainted by years of monopolistic conduct, that would certainly seem like a less awkward resolution.

Wilmer Cutler Pickering Hale and Dorr and Fish & Richardson represent Apple before the ITC.

Erise IP Puts Up Lopsided Numbers at the PTAB

FanDuel, DraftKings and Erise IP are on a winning streak at the Patent Trial and Appeal Board.

The fantasy sports bookmakers have prevailed in four separate IPRs against gaming divisions of financial services firm Cantor Fitzgerald over the last two months. The decisions knocked out claims from four patents—including one originally assigned to a former PTO deputy director—that have been at issue in litigation stretching from Delaware to San Francisco.

It started when CG Technology, which operates the CG race and sports book in Nevada, sued FanDuel, Draft Kings and others. CG contended their daily fantasy sports platforms infringed its patents on methods of storing user profiles, keeping out underage gamers, and linking games with user location.

The PTAB knocked out all challenged claims on the four patents in FanDuel v. Interactive Games and FanDuel v. CG Technology Development. Erise partners Eric Buresh and Megan Redmond and technical adviser Callie Pendergrassrepresented the fantasy sports companies before the PTAB, along with Merchant & Gould partner Jonathan Berschadsky. Adam Yowell of Brownstein Hyatt Farber Schreck also provided counsel in one of the IPRs. CG and Interactive Games were represented by Finnegan, Henderson, Farabow, Garrett & Dunner.

One of the IPRs invalidated most of the independent claims on RE39,818, which is on a wireless game controller that stores user information. The patent was originally assigned to Russell Slifer, before he went on to become general counsel at Micron Technology and then PTO deputy director during the Obama administration.

Slifer obtained a $400,000 judgment against CG Technology last year for failing to pay him agreed-on royalties from a 2008 assignment agreement.

Arnold & Porter's Cardiac Kids

It's going to be all or nothing for Boston Scientific in a dispute over heart valve patents with rival Edwards Lifesciences.

Boston and a team of Arnold & Porter attorneys led by partner Matthew Wolf scored a $35 million jury verdict Tuesday after a 10-day trial in Delaware federal court. Jurors also turned away counterclaims aimed at three Boston Scientific patents.

“We continue to be encouraged by the sustained record of positive legal rulings, first in European courts and now in the U.S., which upholds our company's intellectual property,” Boston general counsel Desiree Ralls-Morrison said in a press releaseannouncing the win.

Edwards replied with a yawn. “Edwards does not expect to pay the jury award since, earlier this year, the U.S. Patent and Trademark Office determined that all asserted claims of the '608 patent were invalid,” the company said in its own statement.

The Federal Circuit will now be asked to sort it all out on appeal.

Boston's A&P team included partners Ed Han, Marc Cohn, and Philip Marsh; counsel Amy DeWitt; and associates William Louden, Tara Williamson, William Young Jr. and Mike Kientzle. Young, Conaway, Stargatt & Taylor provided local counsel.

Paul Weiss Rifkind Wharton & Garrison and Morris Nichols Arsht & Tunnellrepresented Edwards at trial. Jeffer Mangels Butler & Mitchell partner Greg Cordray was lead counsel for Edwards before the PTAB, with additional counsel from Paul Weiss and Morris Nichols.

My Mistake

I shortchanged Stryker Corp. $6 million on an item in last week's briefing about its Federal Circuit win over competitor Zimmer Inc. in their long-running patent infringement dispute. Including all supplemental damages, the final judgment was $254 million—not $248 million.

It's an even bigger win than I thought for Stryker and its McAndrews, Held & Malloy team.

That's all from Skilled in the Art this week. I'll see you all again on Tuesday.