Qualcomm is seeking to extinguish all of the patent litigation it had pending with Apple in San Diego federal court.
The company told Judge Gonzalo Curiel in a filing last week in the U.S. District Court for the Southern District of California that it’s given Apple and its contract manufacturers a covenant not to sue for infringement of the nine patents Apple identified last year. That renders “moot and non-justiciable” all of Apple’s declaratory judgment claims regarding infringement, invalidity and fair, reasonable, and nondiscriminatory royalties, according to Qualcomm’s motion, which is signed by Cravath, Swaine & Moore partner Evan Chesler.
Apple argued in a filing Tuesday that there’s still a live controversy over the patents because Qualcomm contends they’re essential to practicing cellular standards.
Apple kicked off the case by instructing its contract manufacturers to stop paying royalties on Qualcomm chip technology used in iPhones. Apple then sued for breach of contract, antitrust and declaratory judgments on the nine patents. Qualcomm counterclaimed for a FRAND declaration on its entire SEP portfolio, sought $4 billion a year in interim payments while the case is being litigated and sued Apple in the International Trade Commission.
Curiel rejected the interim payments last year, so Qualcomm has been pushing to get to trial as quickly as possible. But it seems to be getting cold feet as the trial date draws nearer—or wants to focus more attention on the ITC actions, the antitrust cases before Judge Lucy Koh of the U.S. District Court for the Northern District of California or its German dispute with Apple.
Last spring, Qualcomm tried to withdraw its FRAND counterclaim from Curiel’s court. Now it’s promised not to sue over any of the nine patents Apple identified. That also moots Apple’s contention that the Supreme Court’s recent Lexmark decision on patent exhaustion renders all of Qualcomm’s chip patents unenforceable, Chesler contends. “Once the threat of a patent infringement action is removed—as Qualcomm has done by covenanting not to sue on the patents-in-suit—there can be no controversy regarding a potential exhaustion defense to patent infringement,” he writes.
Qualcomm says it’s forswearing the nine patents because of a recent ruling by U.S. Magistrate Judge Mitchell Dembin in California’s Southern District striking Qualcomm’s expert testimony on infringement, and because deciding the patent claims “will not further resolution of the parties’ broader licensing dispute concerning Qualcomm’s portfolio of more than 130,000 issued patents and patent applications worldwide.”
Dembin ruled earlier this month that Qualcomm made a tactical decision not to serve infringement contentions so it could avoid certain discovery obligations. Therefore, it was barred from presenting expert testimony on infringement. “Rules are rules and tactical decisions have consequences,” Dembin wrote.
Apple suggested Tuesday that Qualcomm is trying to avoid a summary judgment ruling from Curiel on patent exhaustion—the principle that patent owners lose the right to control a product once it’s sold. Exhaustion is “relevant to numerous other claims, counterclaims, and defenses in the case,” Fish & Richardson partner Seth Sproul wrote in a filing Tuesday, including the contract disputes and unfair competition claims.
For those reasons, Sproul wrote, “the parties, the court, and the jury will still be required to assess patent merits, including for the patents-in-suit.”