There’s been a lot of discussion about Qualcomm’s recent Chinese injunction against Apple. But that’s a distraction—the real story is, and remains, the trio of lawsuits against Qualcomm for anti-competitive practices that will be conducted over the first half of 2019. First, in January, the Federal Trade Commission’s lawsuit. Next, in April, Apple’s lawsuit. And finally, in June, one of the largest consumer class actions in history.
With Qualcomm’s business model resulting in antitrust fines across the world and continuing investigations in the U.S., including a decision by Judge Koh that significantly undercuts its ability to engage in unfair licensing practices, it’s unsurprising that Qualcomm wants to cling to minor victories. Unfortunately for Qualcomm, even those minor victories involve serious due process concerns—ironic, given Qualcomm’s complaints about a lack of due process when they’re the ones on the defense.
In particular, the widely reported Chinese injunction is an ex parte preliminary injunction—an injunction issued without notice to the enjoined party, and without any opportunity to respond. In other words, Qualcomm went to the court and asked them to prevent Apple from selling any products alleged to infringe. The court then decided to issue such an order. At no point in this process was Apple made aware of the request, or presented with any opportunity to argue against such an injunction.
That sort of injunction is completely banned in the U.S. under the Federal Rules of Civil Procedure because it completely fails to meet the minimum bounds of due process.
The Chinese injunction also issued just a few days after the Chinese Supreme People’s Court issued new guidance on this type of injunction (which will take effect in January). That guidance explicitly states that “[b]efore the court decides on a preliminary injunction, the parties should generally be inquired.” In other words, Qualcomm is benefiting from a decision by a rural Chinese judge that was already questionable, issued just before new guidance from the Supreme Court would take effect making clear that preliminary injunctions should not be issued on an ex parte basis.
So much for Qualcomm’s respect for due process.
Here, while Apple was provided the opportunity to defend itself at a hearing, the court was deprived of key evidence—the schematics of the chip alleged to infringe, and the testimony of the designer of that chip. And the court wasn’t deprived of this evidence because Apple didn’t want to present it, or because the chip designer (Qorvo) was unwilling to allow it to be presented. The schematics and testimony were used in a U.S. International Trade Commission (ITC) case filed by Qualcomm.
In fact, the U.S. ITC, with access to exactly that evidence and testimony, found that the U.S. counterpart patent was not infringed. That was in September.
After that happened, Qualcomm’s European counsel apparently chose not to agree to hold that evidence confidential—even though Qualcomm’s U.S. counsel, from the same firm, had agreed to such conditions.2 And because they wouldn’t agree to prevent others—particularly Qualcomm’s engineers, who design products that compete with Qorvo’s—from seeing that evidence, it couldn’t be presented to the German courts.
In other words, after losing in the U.S. where this evidence was available, Qualcomm appears to have taken actions to prevent the availability of that evidence in the German trials.
So in China, Qualcomm uses a procedure that doesn’t allow a defendant to participate at all. And in Europe, Qualcomm affirmatively avoids presenting evidence of how the allegedly infringing chip actually operates—evidence that led to a finding of non-infringement in a U.S. court.
These are the actions of a company that knows that it’s built on questionable licensing tactics and broken promises, desperately trying to distract from the attention being paid to exactly those anti-competitive actions.