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23 May 2018Patents

Mixed ruling for Qualcomm in Apple FRAND tussle

A UK judge has handed down a mixed ruling for Qualcomm in its standard-essential patent (SEP) dispute with Apple.

Mr Justice Morgan was ruling on two applications by Qualcomm—one asking that Apple’s breach of contract claim against Qualcomm’s UK subsidiary be dismissed and the other seeking confirmation that additional claims against the parent company should be set aside for lack of jurisdiction.

The case is part of a global dispute that began in January 2017 when Apple sued Qualcomm in the US, claiming Qualcomm had abused its monopoly in the mobile device market to gain unfair royalties from Apple’s inventions.

In his decision yesterday, May 22, at the English High Court, Mr Justice Morgan granted Qualcomm’s UK subsidiary its request for summary judgment against the single claim against it. The claimants, which comprise six Apple companies, alleged the subsidiary had breached its obligations under the European Telecommunications Standards Institute (ETSI) to license its patents on fair, reasonable and non-discriminatory (FRAND) terms.

The judge said the claim had “no real prospect of success and there is no compelling, or any, reason why it should proceed to a trial”.

Apple had also made numerous claims against the Qualcomm parent company, based in the US.

These included that five European patents designating the UK are invalid and should be revoked, and that none of the patents is essential to the standards governed by ETSI.

According to Mr Justice Morgan, the Qualcomm parent company has declared approximately 26,700 patents as potentially essential to ETSI’s mobile telephone standards.

Apple had also sought an order that Qualcomm’s rights to all European (UK) patents declared to be essential to ETSI’s standards are exhausted “in respect of any device which incorporates a chipset supplied directly or indirectly to an Apple company with the consent of a company in the Qualcomm group”.

However, the judge noted that Apple had properly served all the patent claims within the jurisdiction.

Apple has also alleged that Qualcomm abused its dominant position in the marketplace under article 102 of the Treaty on the Functioning of the European Union and breached ETSI’s IP rights policy to license patents on FRAND terms.

The company also claimed that Qualcomm is obliged to offer a patent licence to Apple for devices sold in the EU/European Economic Area “in relation to any SEPs for two specified telecommunications standards on FRAND terms”, the judge said.

In the same application that Qualcomm’s subsidiary sought to have the claims against it dismissed, the parent company applied for a declaration that the court has no jurisdiction to adjudicate the allegations against it.

Mr Justice Morgan said there are a number of matters that point to the UK’s being the proper forum, including “the claim is by a company incorporated in this jurisdiction” (Apple’s UK subsidiary was among the six claimants; “the claim is for loss suffered in this jurisdiction”; and “the patent claims are proceeding in this jurisdiction in any event”.

The judge did admit “there is a clear overlap between the patent claims made in the US and the patent claims made in this jurisdiction”, and “there is also a clear overlap between the competition law claims made in the US and the allegation of a breach of article 102 in the present proceedings”.

However, he concluded, the UK is “clearly and distinctly” the proper forum for the claim for breach of article 102, adding: “The fact that there are similar proceedings in the US does not change my assessment.

“Multiplicity of proceedings in different jurisdictions is to be expected where there are allegations that certain conduct has given risen to breaches of the law in multiple jurisdictions,” he said.

The final judgment will be handed down at a later date.

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