Apple and Qualcomm Prepare for Next Phase of Patent Battle After Mixed US Decisions

(Reuters) – Decisions split Tuesday by a US government panel in acrimonious patent disputes between iPhone maker Apple and chip supplier Qualcomm left their battlefields virtually unchanged before the Federal ruling Trade Commission of the United States and a major trial next month.

The International Trade Commission, a government agency empowered to hear disputes over a patented technology, has made a final decision in a case that has been favorable to Apple, while an ITC administrative judge has made a non-binding recommendation supporting Qualcomm in another.

In both cases, Qualcomm Inc. has requested the ban of imports of Apple Inc models for iPhone 7, 8 and X containing chips manufactured by Intel Corp. Since iPhones are manufactured abroad, the ban on imports would stifle the sales of Apple phones in the United States.

The two US companies have been stuck for two years in a dispute in which Apple has accused Qualcomm of unfair practices in patent licensing. Qualcomm in turn has accused Apple of patent infringement.

"Qualcomm is using these cases to avoid having to respond to the real problems, their monopolistic business practices," Apple said in a statement.

After hiring the first decision in his favor, Qualcomm said it would request a "reconsideration" of the second decision because it was contrary to a jury trial that the chip vendor had won earlier this month before a federal court in San Diego, where the jurors had found a violation of Apple's right. three Qualcomm patents.

"The Commission's decision is inconsistent with the recent unanimous verdict of a jury finding a violation of the same patent after Apple dropped its defense of invalidity at the end of the trial," Qualcomm said in a statement. "We will request reconsideration by the Commission following the verdict of the jury."

Gaston Kroub, a patent attorney in New York and not involved in these cases, said that Qualcomm's strategy at ITC was to use the threat of an import ban to pressure Apple to achieve a settlement of all patent and antitrust claims between the two companies.

"Qualcomm will be happy to have at least something, but by the end of the day, with this final determination, Apple will be emboldened to think that it can continue to repel Qualcomm's attacks," said Kroub. . "I do not see anything here that would have an impact on Apple's defense strategy."

The focus is now on the skirmishes that will probably be more important. A decision is expected soon in an antitrust case brought by the US Federal Trade Commission, accusing Qualcomm of abusing a monopoly on mobile chip technology.

A case filed by Apple making similar claims is going to court in April in California following allegations by Qualcomm that is seeking inflated royalties for firing its technology in violation of antitrust laws.

After announcing the non-binding decision in favor of Qualcomm on Tuesday, Apple's shares closed down 1% to $ 186.79 in normal transaction, and Qualcomm closed up 2.4% to $ 58 .

But stocks reversed the trend at the end of the session after the announcement of the binding decision in favor of Apple. Apple's shares were up 0.73% and Qualcomm shares up 0.69%.

Qualcomm has prosecuted the United States, China, Germany and other countries, accusing iPhone of using its technology without authorization.

Qualcomm has won sales bans against Apple in China and Germany, although the ban in China is not enforced and Apple has taken over sales of phones in Germany by shipping phones with only Qualcomm chips.

Apple has also won by invalidating many of Qualcomm's patents, at least on a preliminary basis. And the chip vendor suffered setbacks in its FTC lawsuit, where a pre-trial decision forced it to transfer its technology to another chip company.

On the two cases decided Tuesday by the ITC, the ruling in favor of Apple can only be appealed in federal court. The decision in favor of Qualcomm is subject to review by the six ITC members, who will make a final decision.