Recommendations from the Office of Unfair Import Investigations, more commonly referred to as "ITC personnel", arrived Monday as part of a hearing in Qualcomm's second ITC complaint against Apple, reports Florian Mueller of FOSS patents.
In particular, staff attorneys noted that although Qualcomm's three lever patents are valid, Apple did not infringe.
In addition, Qualcomm failed to establish a domestic industry with one of its patents-in-suit, a requirement to prove violation of section 337 of the Tariff Act of 1930. The immediate ITC action is a section 337 investigation based on a complaint made by Qualcomm against Apple last year. In order to comply with procedural requirements, Qualcomm must prove that there is an industry in the United States with regard to the product in question, in this case the baseband processors.
Finally, ITC employees found that the proposed import ban in the United States, where Qualcomm insists, will negatively affect market competition for the baseband processor and have a negative impact on the production of alternative hardware.
Qualcomm is committed to banning iPhone models powered by Intel baseband chips, which, if implemented, would only sell those models with Qualcomm chips. This strategy was used to circumvent the public interest considerations of ITC, Mueller said.
"Given that Intel is the only major competition, Qualcomm is now – finally at last – in the market of baseband chips, and all this time I found that this litigation did not alleviate the interest of the public interest," said Mueller. "It undoubtedly aggravated the situation, also from an antitrust standpoint."
Although ITC staff act as a neutral third party, judicial judgments of administrative judges are often in line with their recommendations. These opinions are often approved by the Commission, which, according to Mueller, takes the final decision.
Despite the less than rosy start of his second ITC complaint – or maybe because of this – Qualcomm CEO Steve Mollenkopf in an interview with Bloomberg on Tuesday he said he sees a settlement on the horizon.
"We have a dispute about the price of IP, we think this is now in a time span in which our strategy unfolds and the environment is such that I think you are in a position where a deal can be made," Mollenkopf said.
The comments are in line with previous Mollenkopf statements, suggesting that Apple is simply maneuvering towards favorable prices for Qualcomm technology. He said much the same in interviews with Fortune and the The Wall Street Journal Last year Apple predicted that Apple would eventually settle out of court.
Apple threw the first stone in the legal scrum at the beginning of last year in a lawsuit claiming that Qualcomm is abusing its "monopolistic power" with regard to the wireless modem industry to demand excessive royalties. That lawsuit claims that Qualcomm withheld nearly $ 1 billion in promised discounts as a retaliation for Apple's participation in antitrust investigations in South Korea.
Qualcomm moved three months later and has since filed several claims against Apple, including two complaints at the ITC and lawsuits in China. Apple has also submitted Chinese promotions.
Interestingly, the ITC staff in the first complaint made a recommendation in favor of Qualcomm, in which the chairman of the preliminary investigation by the governing body Apple would find in violation of a patent with respect to battery technology. A definitive first determination in that case is scheduled later this month.