Evan Chesler/courtesy photo

Qualcomm is under antitrust pressure from the Federal Trade Commission and a class of 250 million cellphone purchasers in San Jose.

But on Friday the spotlight shifted to San Diego, where Apple Inc. and its contract manufacturers are seeking summary judgment that Qualcomm “double dips” by selling mobile phone chips and licensing the technology embodied in them, a cornerstone allegation in three ongoing antitrust suits against Qualcomm.

Apple argues that the Supreme Court's 2017 Lexmark decision made crystal clear that once a patentee's rights are “exhausted” on selling the patented product. Qualcomm, seemingly rattled by the argument, issued Apple a covenant in September not to sue for infringing all nine Qualcomm patents that Apple is seeking to invalidate. That covenant, Cravath Swaine & Moore partner Evan Chesler argued in Friday's hearing, renders Apple's exhaustion argument nonjusticiable.

“They're trying to destroy our business,” Chesler said at one point. But “the covenant is clear, it's dispositive on this, and respectfully, your honor, you have no jurisdiction to rule.”

Apple attorney Ruffin Cordell of Fish & Richardson complained that Qualcomm is playing a game of patent Whac-a-mole, putting the parties through claim construction and discovery and then pulling away the patents as trial approaches next year.

“It is something the court is going to have to grapple with. Mr. Chesler can't evade it,” Cordell said. Qualcomm is “deathly afraid that this court or any other would pass judgment on the exhaustion issue.”

But Chesler seemed to have a lot of authority on his side, notably Super Sack Manufacturing v. Chase Packaging from the Federal Circuit, and Qualcomm's own case against Broadcom in the Southern District of California, litigated by Chesler.

To top it off, Chesler sought to hoist Apple on its own petard, quoting one of Apple's own filings last year which stated that Qualcomm could grant a covenant not to sue “that would permanently moot any claim for infringement, pursuant to Super Sack.”

Cordell argued that the nine patents have long been at the forefront of Apple's and Qualcomm's licensing dispute, which is also part of the broader case before Curiel. Qualcomm can't get into a time machine and undo the leverage it gained from the nine patents in licensing discussions years ago, Cordell said. He also suggested its unseemly for Qualcomm to drop its claims of infringement after telling Curiel last year that “the house is on fire” and quick resolution of the case was critical.

At the same time, Apple seemed to hedge by asking Curiel to let it add a 10th Qualcomm patent to its summary judgment motion or, alternatively, grant leave to amend its complaint to add more Qualcomm patents if necessary.

Curiel didn't give away much at the hearing, though he did express a cautious measure of sympathy with Apple's position. He said Qualcomm's behavior reminded him less of Whac-a-mole and more of Peanuts' Lucy pulling away the football from Charlie Brown just as he's about to kick it.

“It does strike me that one could take the view” that Qualcomm has engaged in “gamesmanship,” Curiel said, noting the “significant amount of time” he and the parties spent preparing for the claim construction hearing and issuing the order.

“If Apple had come to us and said, 'We're going to litigate 3,000 patents,' the court would have said no,” he observed.

He told the parties he would try to rule in the next two weeks. Gibson, Dunn & Crutcher partner Jason Lo argued for Apple's contract manufacturers.

As for the “house on fire” line, Chesler noted that was in the context of Qualcomm's unsuccessful request that Curiel enforce the parties' contract during the litigation.

“It didn't save the day for me, but it was a memorable line, perhaps,” he said. “The house was on fire, and it's now done $7 billion in property damage.”