What's the opposite of Litigator of the Week?

Derek Aberle, Steve Altman, Eric Reifschneider, Fabian Gonell, and Lou Lupin.

The Qualcomm lawyers were criticized by name in a decision issued on Tuesday by U.S. District Judge Lucy Koh of the Northern District of California, who singled them out as the “architect, implementers, and enforcers of Qualcomm's licensing practices.”

Her bluntness is startling—rarely do you see a judge pointing the finger so directly at in-house counsel.

In a 233-page decision, Koh in siding with the Federal Trade Commission in a massive antitrust case found that the San Diego-based chipmaker “strangled competition.”

CNN called the ruling “disastrous” for Qualcomm. The New York Times said it strikes “at the heart of the company's business” and the Washington Post quoted an analyst who called it “a gut punch for Qualcomm.” The company's stock closed down almost 11 percent on Wednesday.

Koh in her opinion suggests company lawyers bear a large share of the blame for conduct she deemed anticompetitive—and that the lawyers were well aware they might be crossing the line.

“Lawyers explicitly stated that Qualcomm's licensing practices raised concerns about antitrust liability, but chose to continue those practices anyway, with full knowledge that Qualcomm's unreasonably high royalty rates violate FRAND and that Qualcomm's licensing practices harm rivals,” Koh wrote. “That willful, conscious decision to continue Qualcomm's licensing practices is further evidence of intent to harm competition.'”

Ouch.

So who are these guys anyway?

Derek Aberle was president of Qualcomm until he left the company at the end of 2017, working his way up after he first joined Qualcomm as legal counsel in 2000. He earned his law degree from the University San Diego School of Law and was admitted to the bar in late 1996. He's now the president, co-founder and COO of Xcom.

He did not respond to a request for comment.

Per the FTC, “Aberle played a key role in Qualcomm's intellectual property licensing business for nearly 20 years, negotiated many of the license agreements central to the FTC's claims, and has received tens of millions of dollars in exchange for his contributions to Qualcomm's licensing strategies.”

He also apparently really didn't want to testify at trial. The FTC in December filed a motion asking for leave to serve him via certified mail. The agency explained that Aberle had dodged repeated attempts at service, to the point where a boy, presumed to be his son, duct-taped the gate to their house shut.

Aberle did wind up taking the stand—and Koh was not favorably impressed. “It is odd that Aberle had better recall during the January 2019 trial than nearly a year earlier at his March 2018 deposition. The court does not find Aberle's prepared for trial testimony credible,” the judge wrote.

Then there's Steve Altman—a fellow University of San Diego School of Law alum whom the FTC said also tried to avoid being served. Qualcomm described Altman as the “chief architect of the company's licensing business model.”

According to the FTC, Altman spent decades at Qualcomm, serving as general counsel until 2000, president from approximately 2004 to 2011, and vice chairman until he retired in January 2014.

He could not be reached for comment.

Koh was not pleased with Altman's trial testimony either, ruling that a contemporaneous document he prepared 11 years earlier “is more persuasive than Altman's trial testimony given to avoid antitrust liability.”

Eric Reifschneider joined Qualcomm in 2012 from Dewey & LeBoeuf, where he was managing partner of the firm's Northern California offices and the chairman of its global technology and intellectual property group.

Petra Pasternak writing in 2012 for Lit Daily affiliate The Recorder covered his move to Qualcomm, reporting that he first worked alongside Aberle in patent litigation against Nokia and then became (in Aberle's words) “our go-to guy.” Previously, he was a partner at Cooley.

Reifschneider is now senior VP of strategic planning at the Marconi Group. He did not respond to a request for comment.

Fabian Gonell, who also did not respond to a request for comment, is senior vice president of licensing strategy and legal counsel for Qualcomm. He earned his law degree from Fordham and was previously a litigator at Cravath, Swaine & Moore.

Koh was particularly harsh in her assessment of his testimony, labeling it “not credible.” She added, “[T]he court rejects Qualcomm's self-serving justifications as pretextual.”

“First, Gonell pretended not to recall Qualcomm's 2012 IRS meeting until the FTC played a recording from the meeting with which Gonell disagreed,” Koh wrote.

“Second, Gonell's own recorded statements to the IRS, a U.S. government agency, contradict Gonell's prepared for trial testimony. … Gonell's demeanor in court when feigning ignorance was also not credible.”

As for Louis Lupin, he was Qualcomm's general counsel from 2000 to 2007 and is barely mentioned in Koh's decision other than on the list of shame. He's now retired and could not be reached for comment.

So is there a larger lesson here? Or perhaps it's more of a warning—lawyers are supposed to know better. Whether you're in-house counsel or an executive with a J.D., Judge Koh for one will name names if she believes you tried to skirt the bounds of the law.

See also: Rip Up All the Qualcomm Licenses, Judge Koh Rules

 

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