Wednesday, March 27, 2019

Qualcomm wants ITC to reconsider patent invalidity finding because jury decided otherwise after Apple "abandoned" invalidity defense

This is one of the rare cases where company press releases after a judicial decision contain relevant information beyond someone claiming victory, denying defeat, or whatever other form of spin doctoring. After Qualcomm lost its first ITC case against Apple yesterday because the sole remaining patent-in-suit was deemed invalid, Qualcomm issued a press release vowing to seek reconsideration of the ITC determination:

"The Commission's decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial. We will seek reconsideration by the Commission in view of the jury verdict."

I wrote yesterday that the outcome in the ITC over the same six patents asserted (Qualcomm withdrew three patents in the ITC and in district court before trial, though one patent withdrawn in the ITC stayed in the San Diego case and vice versa) makes the jury verdict lose credibility. Qualcomm turns it around and says the ITC decision is "inconsistent" with the San Diego verdict.

So let's compare the two theories. I must admit I wasn't aware of Apple having "abandoned" the related invalidity defense at the end of the San Diego trial (which I didn't attend), and we'll see whether or not Apple agrees that it did. All things considered, I think anyone who wants to disagree with Qualcomm or me or even both of us at the same time would have a point.

One thing is certain based on the jury verdict form: the San Diego jury didn't render a verdict on quality.

The biggest issues I have with Qualcomm's perspective are these:

  • A layperson jury is definitely not better-placed to decide patent cases correctly than the professionals at the ITC who deal with these things on a daily basis and are legally trained. It is particularly well known that juries rarely ever invalidate patents, and that may be the reason why Apple didn't focus on that invalidity defense in San Diego (also, I see no indication that the motion for judgment as a matter of law--on infringement--was withdrawn in whole or in part).

  • The '490 patent is likely invalid in the opinion of the Patent Trial & Appeal Board (PTAB) of the United States Patent & Trademark Office (USPTO), which instituted five inter partes reviews against this patent in January further to petitions filed by Apple. The legal standard is likelihood of success (wth respect to at least one claim, but since five different petitions were brought against the patent, each petition is pretty granular).

Also, there's really nothing that Qualcomm stands to gain from "reconsideration" by the ITC in practical terms. It's just about vindication and probably meant to be a signal to the appeals court (the Federal Circuit) that Qualcomm hasn't given up. But practically, it will now take some time for the ITC to decide on whether or not to reconsider, and even if the ITC did, it would then take time to make a decision. Apple already has a workaround for the '490 patent in place. If the ITC had decided that Qualcomm was entitled to an import ban (based on the merits, which the ITC didn't see, and on not being against the public interest, a question that the ALJ answered with "no" and the Commission didn't even reach), the only practical question here would have been the length of a grace period so Apple could have sought a determination of non-infringement by devices with newer iOS versions. The more time passes, the less sense it makes to even think and talk about outdated iOS versions. Those older versions are not entering the U.S. market anymore, and presumably stopped entering it months ago. So in practical/commercial terms, it's a waste of time--it's ultimately just about the "principle" of proving infringement. Even the San Diego patent infringement damages award is insignificant relative to the overall dispute between the parties.

That said, I can understand that Qualcomm is disappointed because the ALJ had sided with it on the '490 patent, the ITC staff was also on its side (it defended the ALJ's decision against Apple's petition for review), the outcome was more favorable in the San Diego jury trial, and then the Commission (the six people at the top of the U.S. trade agency) deemed the patent invalid. But in that regard, the Commission ruling is simply consistent with the likely outcome of the inter partes review (otherwise the PTAB wouldn't have instituted those five IPRs in January), and the PTAB is actually the most competent forum on patent validity in the United States.

Should the fact that the PTAB instituted some IPRs against the '490 patent have played a persuasive role here (I would think so!), then that doesn't bode well for Qualcomm's second ITC case against Apple, where a judge ruled yesterday that Apple was deemed to infringe a valid patent, though the ITC staff disagreed on infringement and the PTAB considers the patent likely invalid. I, for my part, very much doubt that the other ITC case would ever result in an import ban. The final Commission decision in that one is scheduled for July 26.

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