ITC Might Block Imports of Intel-Supplied iPhones After All
The iPhone 7 Plus
The International Trade Commission has put back in play a possible exclusionary order against Intel-powered iPhones.
The ITC announced Wednesday it will review an administrative law judge's recommendation last September that Apple's infringement of a Qualcomm smartphone chip patent be excused. ALJ Thomas Pender had found that the remedy of excluding some Apple iPhones from importation would force Intel out of the market and hand Qualcomm a monopoly on 5G modem chips, contrary to the public interest.
Wednesday's order signaled that the full commission might consider a limited exclusion order recommended by ITC staff that would allow Intel to continue supplying 5G technology to Apple, even if it infringes Qualcomm's 9,535,490 patent., but not the older 4G/LTE chips that infringe.
Pender rejected that approach in his initial determination last September, saying it was “wishful thinking” that such a carve-out would persuade Intel to remain in the 5G chip market. Qualcomm called Pender's order “unprecedented” and has said Intel's threat to quit the market isn't credible.
The full commission asked the parties to brief whether a carve-out would be “practicable, feasible, and would effectively balance enforcement of Qualcomm’s ’490 patent rights against the interest of avoiding Intel’s exit from the relevant market for premium baseband chipsets.”
The commission also asked the parties “whether national security concerns may be taken into consideration for the purpose of evaluating the public interest” and, if so, whether a limited exclusion order would implicate them.
The announcement also contained some good news for Apple. The commission said it would also review whether Pender had properly construed Qualcomm's patent claim—raising the possibility it may not be infringed—and whether the claim might be obvious over prior art. If Qualcomm were to lose on either of those grounds, it would moot the public interest issue.
Qualcomm is represented before the ITC by Quinn Emanuel Urquhart & Sullivan; Adduci, Mastriani & Schaumberg and Cravath, Swaine & Moore. Apple is represented by Wilmer Cutler Pickering Hale and Dorr and Fish & Richardson.
The commission indicated it will issue a decision by Feb. 19. It would then be subject to a 60-day period of review by the United States Trade Representative.
The Federal Trade Commission and Qualcomm are scheduled for a bench trial before U.S. District Judge Lucy Koh of San Jose in January over whether Qualcomm has engaged in anticompetitive conduct in the 3G and 4G markets. Qualcomm is also facing trials later this year in a follow-on $5 billion antitrust class action and Apple's antitrust lawsuit.
