Thomas Goldstein. (Photo: Diego Radzinschi/ALM)

Qualcomm is asking the U.S. Court of Appeals for the Ninth Circuit to stay U.S. District Judge Lucy Koh's antitrust injunction. The order, issued in May following a bench trial, would force Qualcomm to license rival chip suppliers on FRAND terms and renegotiate licenses with smartphone makers free from threats to disrupt their supply of modem chips.

Qualcomm has added Supreme Court advocate Thomas Goldstein of Goldstein & Russell to its all-star team, suggesting it anticipates the Ninth Circuit won't be the last stop for Federal Trade Commission v. Qualcomm.

If not stayed pending appeal, Koh's order will require “the nation's leading innovator of cellular technology to fundamentally change the way it has done business for decades—a period in which the industry has flourished, competition has increased, prices have declined, and innovation has accelerated,” states the motion, which is signed by Goldstein.

Though seeking an immediate stay, Qualcomm is also asking the Ninth Circuit to expedite its appeal on the merits, with briefing to be completed by October. The FTC is not opposing the request, which could mean a decision as early as next year.

Qualcomm's team at the Ninth Circuit also includes Cravath, Swaine & Moore; Keker, Van Nest & Peters; and Morgan, Lewis & Bockius.

Senior Judges Mary Schroeder and William Canby and Judge Morgan Christen are assigned to the Ninth Circuit motions panel for July.

Koh summarily denied a similar stay motion from Qualcomm last week. Her injunction also forbids Qualcomm from fashioning actual or de facto exclusive dealing agreements with companies such as Apple Inc., LG Electronics Inc. and Samsung Electronics Inc., and precludes Qualcomm from interfering with such companies' ability to communicate with government regulators. Qualcomm is not seeking an immediate stay of those provisions before the Ninth Circuit, though it says it will challenge them later in the appeal.

Instead, it argues that the first two prongs of Koh's order are based on legal errors and already causing irreparable harm to its relationships with the original equipment manufacturers (OEMs) who produce smartphones and other mobile devices. “One licensee now relies on the order to justify a preexisting breach of its current license agreement,” Qualcomm states in its motion. “At least one OEM has stated that Qualcomm must license a chip rival, in order to permit the OEM to buy the rival's chips with Qualcomm's patents exhausted, while seriously considering ceasing paying royalties to Qualcomm under its current agreement.”

The company asserts that the Justice Department's Antitrust Division chief, Makan Delrahim, has described the theory Koh relied on as a “misuse of the antitrust laws,” and that one of the five FTC commissioners has called her order “bad law and bad policy.”

In particular, Qualcomm and Goldstein focus on Koh's finding that Qualcomm had an antitrust duty to deal with rival chip manufacturers. “The Supreme Court has recognized the bedrock principle that a business—including a monopolist—is generally entitled to determine with whom it will do business and in what manner,” Goldstein writes. He also challenges Koh's determination that Qualcomm effectively imposes a “surcharge” on rivals' chips.

The company also argues that the injunction cuts against the public interest. “The Government has recognized that Qualcomm's technological leadership is vital to the 'national security of the United States,' which could be harmed as a result of a change to Qualcomm's business model,” Goldstein writes.

Before Koh, the Federal Trade Commission turned the public interest argument back on Qualcomm, arguing a stay would let it unfairly entrench its monopoly power during the critical rollout of 5G wireless technology over the next couple of years.

Qualcomm's “argument that anything that diminishes its corporate profits would necessarily threaten national security is absurdly overbroad and contrary to Congress's determination, in enacting the Sherman Act, that competition furthers the public interest,” the FTC had argued.

The agency said that Qualcomm's claims of irreparable harm “cannot be reconciled with its repeated representations during this litigation that chip leverage has no material impact on Qualcomm's licensing revenues.”