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U.S. International Trade Commission to Investigate Apple's Alleged Unfair Trade Practice within 45 Days



On July 6 Patently Apple posted a report titled "Qualcomm Files another Patent Infringement Complaint against Apple with International Trade Commission." At that time Qualcomm announced that it was filing a complaint with the United States International Trade Commission (ITC) alleging that Apple had engaged in the unlawful importation and sale of iPhones that infringe one or more claims of six Qualcomm patents covering key technologies that enable important features and functions in iPhones. Qualcomm was requesting that the ITC institute an investigation into Apple's infringing imports and ultimately issue a Limited Exclusion Order (LEO) to bar importation of those iPhones and other products into the United States to stop Apple's unlawful and unfair use of Qualcomm's technology." Yesterday U.S. trade officials have agreed to investigate Qualcomm Inc.'s allegations that Apple Inc infringed on patents its iPhone 7 and other devices.


Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a company statement that "Qualcomm is pleased with the ITC's decision to investigate Apple's unfair trade practices and the unauthorized importation of products using Qualcomm's patents."We look forward to the ITC's expeditious investigation of Apple's ongoing infringement of our intellectual property and the accelerated relief that the commission can provide."


Qualcomm further noted that "The investigation will examine whether Apple has engaged in unfair trade practices by importing and selling certain mobile electronic devices, including iPhones and iPads that infringe one or more claims of six Qualcomm patents. Qualcomm is requesting that the ITC issue a Limited Exclusion Order to bar importation, and a Cease and Desist Order to bar further sales and marketing in the United States, of iPhones and iPads that use cellular baseband processors other than those supplied by Qualcomm's affiliates."


Several sources quoted the ITC stating that they would make its decision 'at the earliest practicable time' and would set a target date for completing its investigation within the next 45 days.


The timing of ITC ruling will no doubt amplify the tension in this case as the ruling will be announced as Apple's iPhone 8 begins to roll out and Apple enters the holiday season.


On the other hand, the FTC argued in May that Qualcomm's customers "accept elevated patent royalties they otherwise would refuse" only because they are forced "to negotiate in the shadow of Qualcomm's threat to withhold chips." As a result, "Qualcomm collects far more in royalties than other licensors in the industry with comparable patent portfolios." The FTC accused Qualcomm of illegally maintaining a monopoly.


The FTC has also received an amicus brief from Samsung stating that Qualcomm refuses to license its standard essential patents on a fair, reasonable way. Intel then filed a formal statement with the ITC about Qualcomm attempting to force them out of business with Apple. And lastly, a group representing major technology companies has aligned itself against Qualcomm Inc in its legal dispute with Apple Inc by calling on regulators to reject Qualcomm's bid to ban the import of iPhones.


So while Qualcomm "is pleased with the ITC's decision to investigate Apple's unfair trade practices," in the big picture the case against Qualcomm is strong with all major tech companies against them. They might not be pleased with the final outcome.


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