Welcome to Skilled in the Art. I'm Law.com IP reporter Scott Graham. We're starting to ramp up for trial No. 2 in the trilogy of cases challenging Qualcomm's licensing practices. Apple and Qualcomm are set to square off a month from today in San Diego federal court. On Thursday, U.S. District Judge Gonzalo Curiel laid down some of the ground rules—yes, Qualcomm can bring up its trade secret concerns; no, it can't tout President Trump's national security order—while ruling that Apple didn't breach its promise of litigation peace. I've also got some quick reaction to the appointment of a new chief judge at the PTAB, and one last takeaway from PTO Director Andrei Iancu's appearance Wednesday before a Senate panel. As always you can email me your own thoughts and follow me on Twitter.

Coming Up: Round 2 of the Qualcomm Antitrust Wars

The spotlight on Qualcomm's licensing practices is shifting south.

While we await a decision from U.S. District Judge Lucy Koh of San Jose in the FTC's antitrust action, Apple and its contract manufacturers are barreling toward trial against Qualcomm next month in San Diego federal court. On Thursday, Curiel handed Apple a pretrial victory worth billions of dollars while setting evidentiary rules for the trial.

Qualcomm has alleged in its counterclaims that Apple breached a litigation peace agreement by inducing antitrust investigation and then cooperating with it and similar inquiries all over the world. Qualcomm was trying to recover billions that it paid Apple to essentially not complain about supra-FRAND royalties or patent exhaustion. Curiel granted summary judgment to Apple.

In a heavily redacted opinion, he ruled that to the extent Apple encouraged the FTC to launch its antitrust investigation, Apple did so before the contract took effect in 2013. And punishing Apple for responding to the subsequent inquiries would “have the effect of concealing ongoing illegal conduct to the detriment of the public,” Curiel concluded.

As for the ground rules, during a three-hour hearing Curiel:

➤ Denied Qualcomm's motion to exclude evidence of “royalty stacking.” Curiel said he would follow U.S. District Judge James Holderman's 2013 ruling in In re Innovatio IP Ventures and let jurors consider the risk that aggregate royalties on standard-essential patents could exceed the value of the standard.

➤ Granted Qualcomm's motion to exclude evidence of its alleged public relations strategy. Boies Schiller Flexner partner Karen Dunn argued for Apple that Qualcomm has waged a multi-million dollar, “no fingerprints” PR campaign against the iPhone maker as part of its anticompetitive strategy. Curiel ruled that whether Qualcomm engaged PR firms, or what they allegedly did on Qualcomm's behalf, would be an unnecessary distraction. But if—hypothetically—there's evidence that Qualcomm told its PR consultants its business model needs buffing and polishing, that could come in.

➤ Denied Apple's motion to exclude evidence of alleged misuse of Qualcomm trade secrets. Qualcomm is suing Apple in state court for allegedly spilling its trade secrets to Intel. Qualcomm's allegations could be admitted if Apple tells the jury that Qualcomm shut off its supply of modem chips last year in retaliation for Apple's lawsuit. Cravath, Swaine & Moore partner Vanessa Lavely argued for Qualcomm that, if Apple opens the door to that issue, “we're entitled to tell the full story.” Fish & Richardson partner Ruffin Cordell argued for Apple that this is “a pure mudslinging exercise” and that Qualcomm hasn't produced “a scintilla of evidence” that Apple misused any trade secrets. Curiel suggested the issue may have to be presented in neutral terms such as Qualcomm “proposed further restrictions on its source code” that Apple would not agree to.

➤ Denied Apple's motion to exclude evidence that it's been poaching San Diego-based engineers from Qualcomm. Lavely noted that Tim Cook himselfhas touted Apple's recent growth in San Diego. Curiel said that evidence could be used to rebut arguments that Qualcomm is a “dinosaur” living off ancient IP, or it could show that barriers to entry into the modem chip market “may not be as insurmountable as Apple would present to the jury.”

➤ Granted Apple's motion to exclude evidence that the Trump administration has called Qualcomm a national security asset. Curiel said admitting the “announcements and pronouncements” from President Trump and Treasury's Committee on Foreign Investment in the United States would be unfairly prejudicial. He also precluded Qualcomm from arguing, at least in opening statements, that a loss at trial for Qualcomm would be a win for Asian companies like Huawei and Samsung. As with all of his in limine rulings, Curiel emphasized that it's not “etched in stone” for the duration of the trial.

This Courtroom Ain't Big Enough for the Two of Us

Curiel's courtroom seats approximately 50 spectators. Apple counsel William Isaacson of Boies Schiller asked Curiel if he'd consider moving the trial to the larger ceremonial courtroom to help accommodate all the lawyers, technicians and members of the public (and media!) who may attend.

Curiel seemed wary—it sounded as if there's not a secure route between his chambers and the ceremonial courtroom. But the judge said he'd explore setting up an overflow room where specators could watch a video feed from his courtroom.

With a sheepish smile, Isaacson gestured toward the phalanx of 14 lawyers representing Apple and its contract manufacturers just for this pretrial hearing. “Even with the overflow,” he said, “there's a consideration of overflow of lawyers.”

Curiel said he'd take it under consideration.

New Chief Seen as Steady Hand at PTAB

After a six-month search, the PTO has appointed Scott Boalick chief judge of the Patent Trial and Appeal Board, and Jacqueline Bonilla deputy chief. I have a quick rundown of their appointments here.

Boalick has been with the board for 12 years. He and Bonilla have been serving in acting capacities since last summer, so PTAB practitioners are getting known quantities.

Finnegan, Henderson, Farabow, Garrett & Dunner partner Erika Arner, the president of the PTAB Bar Association, said that with the two appointments, “the PTAB is well on its way to providing stability and predictability for patent owners and challengers.”

Boalick and Bonilla bring years of experience and PTAB expertise “and have been engaged with stakeholders over the years, a benefit I expect will continue in their new roles,” Arner said.

Former PTAB APJ Scott Kamholz, who now practices at Covington & Burling, offered some perspective on the three chief judges who've presided since passage of the America Invents Act: “The board needed a dynamic character when it was expanding, and James D. Smith fit that bill,” he said. “David Ruschke brought a public face and accountability as the PTAB faced close scrutiny from several high-profile, unfavorable [Federal Circuit] decisions. Boalick will bring stability and predictability as the PTAB settles into its long-term role as the principal trial court of patent law.”

Bonus Takeaway on Iancu Testimony 

On Thursday I offered up five takeaways from PTO Director Andrei Iancu's testimony before the Senate Subcommittee on intellectual property.

Here is a sixth: Iancu is running with the issue of diversity in patenting. 

At last year's oversight hearing, Sen. Mazie Hirono confronted Iancu with a Yale School of Management study showing women are less likely to be awarded patents than men. Iancu said the study, published just nine days before the hearing, “raises important concerns” but is “fairly new” and that “I have some questions about it.” The PTO has published its own study since then showing that women represent only about 12 percent of named inventors, well below their representation in the STEM workforce. On Wednesday, Iancu led with the issue in his opening remarks. “Such numbers are too low,” he told the panel, “and the USPTO is committed to working with industry, academia and other government agencies to identify additional ways to broaden the innovation ecosphere—demographically, geographically and economically.”

Federal Circuit Takes Back Unwanted Appeal

In an inter-circuit spat over patent appellate jurisdiction, the Federal Circuit is being the adult in the room.

In February, the Fifth Circuit said it was not even plausible that it should have jurisdiction over monopolization claims based on alleged fraud on the PTO. That was somewhat eyebrow-raising given that 10 of 12 Federal Circuit judges had signed off on the decision last year to send Xitronix v. KLA Tencor to the Fifth Circuit.

The Federal Circuit took the case back Thursday, citing the very low plausibility standard the U.S. Supreme Court has established for transfer orders between the circuits. “While we do not agree with some of the legal analysis” from the Fifth Circuit, the court stated in a per curiam order, “we nevertheless conclude its ultimate conclusion that we have jurisdiction is not 'implausible.'”

That's all from Skilled in the Art this week. I'll see you all again on Tuesday.