This week Apple and Qualcomm ended their multi-year legal battle. As you'll note at the bottom of this report Patently Apple covered this issue extensively for the first year. This was supposed to be one of the Biggest IP Trials in History. The press was baffled over the suddenness of the deal being announced to end this battle while both sides were still in court giving their opening statements to the jury.   

 

It was a known fact that Apple had held back royalty payments to Qualcomm as Apple launched their lawsuit against Qualcomm, so the settlement including a one-time payment is likely just Apple paying Qualcomm what was due. So that point in their announced deal appears to be of little significance.

 

The agreement to pay royalties to Qualcomm was likely negotiated to be in the press release so that their business model could remain in tact. That's the part of the agreement that some question and feel Apple caved-in on, at least on paper. No one knows the fine print of the deal so it'll remain an open question mark for now.

 

The significance of Qualcomm insisting that the deal mention Apple was to pay them royalties is because the judgement from Judge Koh on the FTC's case is due in the not-too-distant future.

 

In January a Bloomberg report began by stating the following: "Qualcomm Inc. could be the most prolific technology innovator of the mobile era. Or it could be a master of anti-competitive practices, thwarting rivals’ development while snatching up profits at the expense of its customers’ margins. Maybe it’s both.

 

In a non-jury trial that’s wrapping up, the U.S. Federal Trade Commission has offered plenty of evidence that Qualcomm is an industry bully. Whether the agency has delivered a knockout blow to convince U.S. District Judge Lucy Koh that the company is a monopolist who breaks the law is a tough call: Koh hasn’t revealed a clear bent during arguments this month. An adverse ruling for Qualcomm could topple its licensing business model.

 

According to the FTC, Qualcomm leveraged its market dominance to compel them into signing mandatory licensing agreements when purchasing semiconductors -- a business model dubbed "no license, no chips."

 

So for Qualcomm, a deal with Apple is great and the timing better, prior to Judge Koh's ruling – but Qualcomm is not out of trouble just yet and so they're still working the press in the hopes of painting Apple as a liar and putting the FTC's case into question.  

 

The timing of a new report by the Washington Post ("Post) is no coincidence. It's purposely designed to put a Qualcomm-spin to Apple's motives and character to show how Qualcomm was the victim here, not Apple.

 

The Post states that sealed documents, obtained as part of a trial between the two tech giants have been made public. The exact sections of the documents revealed by the Post uniquely paints Apple as the true villain in this legal battle. Not a single quote or segment of the Post's report provides Apple's position on any matter. How convenient for Qualcomm.

 

The tale that the Washington Post ("Post") has spun is focused on very specific points.

 

Point #1

 

The Post states that "During the roughly two years Apple was locked in a legal battle with one of its suppliers, Qualcomm, the iPhone maker publicly argued that the chip maker’s technology was worthless.

 

But according to an internal Apple memo Qualcomm showed during the trial this week between the two tech companies," a different story. "In a March 2015 email that was part of the sealed documents, Apple’s vice president of hardware, Johny Srouji, wrote of Qualcomm technology, "Engineering wise, they have been the best."

 

Another Apple memo described Qualcomm as having a "unique patent share" and "significant holdings." There's no context, just frozen partial lines to support Qualcomm's position. How convenient.

 

Point #2

 

According to the Post, "The documents also raise questions about the methods Apple used to inflict pain on Qualcomm and whether Apple really believed its own arguments to lawmakers, regulators, judges and juries when it tried to change not just its long-standing business agreement with Qualcomm but the very laws and practices that have allowed inventors to profit from their work and investments. Apple has argued that Qualcomm’s patents were no more valuable than those of competitors like Ericsson and Huawei, but Qualcomm argued in court that the documents show otherwise.

 

After the Post crafting that specifically worded cloud of doubt on Apple's motives according to their theory, they then convenienly get a professor to back the doubt that they created. The Post Quotes Adam Mossoff, a law professor at George Mason University and director of the Center for the Protection of Intellectual Property stating: "While it’s very common for companies who are engaged in legal disputes to play hardball, the disclosure of these documents is very unsettling. "It potentially reveals that Apple was engaging in a bad faith argument both in front of antitrust enforcers as well as the legal courts about the actual value and nature of Qualcomm’s patented innovation."

 

Interestingly the Post adds that "Qualcomm and Apple declined to comment." It's probably part of the deal for both parties to not comment on the deal. Hence the Washington Post's report surfacing supporting Qualcomm's position is a way to get around a likely gag-like clause. How convenient.

 

Point #3

 

The Post further wrote: "An Apple document from June 2016, called “Qualcomm Royalty Reduction,” predates Apple filing suit against Qualcomm in San Diego federal court by more than six months.

 

The purpose was spelled out clearly: "Goal: Reduce Apple’s net royalty to Qualcomm." Apple said in the document it planned to accomplish this in several ways, including "Hurt Qualcomm financially" and "Put Qualcomm’s licensing model at risk."

 

This is exactly what Judge Koh is weighing in on and the Washington Post keyed in on this specific quote found in a ton of documents to assist Qualcomm. How convenient.

 

Point #4

 

In another segment, the Post wrote: "There was more to the story, though. In one internal document cited by Qualcomm’s lawyers, Apple said it sought to 'create evidence' by scrupulously licensing other less expensive patents to make Qualcomm’s look expensive. According to the documents, Apple said it would 'selectively filter' a group of patent licenses for 'the most desirable deals,' using the patents as 'evidence as a comparable in disputes with others.' Qualcomm lawyer Evan Chesler alleged the 'others' referred to Qualcomm.

 

The posted added "Apple declined to comment on the documents and allegation." Yes, Apple said no comment on the entire article, but by continually saying Apple declined to comment on specific points is simply a way to apply more spin, imply more quilt.

 

The post quoted Qualcomm's lawyer Chesler arguing to the jury: "So they went out to these other companies and they negotiated very cheap deals within the last couple of years to create the evidence to come in here and tell you that those guys are the good guys because they are getting less for their patents and we are the bad guys."

 

Where is Apple's rebuttal?  The case ended and the Washington Post just let that Qualcomm argument sit their in mid-air favoring Qualcomm's position. How convenient.

 

You could read the full pro-Qualcomm Washington Post report here.

 

Below you'll find Patently Apple's coverage of the Apple-Qualcomm legal battle over the first eleven months that we mentioned at the top of this report,. The very first report listed below is titled "The U.S. Fair Trade Commission Sues Qualcomm for Forcing Apple to use its Chips in iDevices." It was the case that kick-started the Apple-Qualcomm war, framed by the FTC's case.

 

This is what it still all boils down to. This is what Judge Koh is still to rule on. It's the very heart of the Apple-Qualcomm war. This is the ruling that really matters. This is the ruling that could ultimately demolish Qualcomm's business model. So while the Apple-Qualcomm case was settled last week, the core issue at hand has not been concluded until Judge Koh rules.  

 

The Washington Post's report being anti-Apple and pro-Qualcomm was designed to show the public how Qualcomm isn't the bad guy here and didn't force Apple to use it's chips as Apple alluded to. That it's all been an Apple conspiracy from the get go according to Qualcomm and the Washington Post.  The Post crafted  their report to produce that exact conclusion. Presenting any credible Apple position was never entertained. It was all pro-Qualcomm which makes their report pure spin.  

 

Is that even possible? Of course it is. The Washington Post for the most part had been one sided against President Trump for over two years based on spin that ultimately blew up in their face when Special Counsel Mueller's conclusion was recently made public that there was no Trump-Russia collusion, period. Spin, no matter how long it's supported is still spin. Adolf Hitler understood this form of propaganda as he once stated that "If you tell a big enough lie and tell it frequently enough, it will be believed."

 

In the end will the Post's hack job sway Judge Koh in any way? I rather doubt it and in fact it could back fire on them. It could easily be viewed that the Post's report is Qualcomm's way of trying to snow the public and paint Koh into a corner. It's a Snow White fairy tale account of the battle between Apple and Qualcomm to help Qualcomm shareholders sleep at night.

 

Until Judge Koh's ruling is in, Qualcomm shareholders are still not out of the woods just yet.

 

Apple – Qualcomm Battle History

The battle between Apple and Qualcomm has been raging on since the year began as our list of reports below proves out (2017).

     

Jan 17, 2017: The U.S. Fair Trade Commission Sues Qualcomm for Forcing Apple to use its Chips in iDevices

Jan 20, 2017 - Apple Sues Qualcomm for $1 Billion Claiming Unfair Exclusionary Tactics and Charging Excessive Royalties

Jan 22, 2017: Apple's Full lawsuit against Qualcomm Comes to Light Revealing Secret Licensing Agreements and more

Jan 25, 2017: Apple takes their War against Qualcomm to Beijing China

Jan 25, 2017: While Qualcomm is Guilty of Gouging Asian Smartphone OEMs, the Chip Maker Believes that Apple is the Problem

March 02, 2017: Apple has launched a new Lawsuit against Qualcomm in the U.K.

April 11, 2017: Qualcomm Fires Back at Apple with Counterclaims Lawsuit Claiming Breach of Contract and more

April 28, 2017: Qualcomm Lowers Q3 Fiscal 2017 Guidance due to Apple Holding back Royalty Payments

May 03, 2017: Qualcomm Plans Retaliation against Apple and ask the International Trade Commission to Stop iPhone Sales

May 12, 2017 - The FTC Responds to Qualcomm's Motion to dismiss their case about Monopoly Power, Samsung & Intel File Amicus Briefs

May 17, 2017: New Court Filing Details Qualcomm Suing Apple's iPhone Suppliers for withholding Royalty Payments

July 06, 2017: Qualcomm Files another Patent Infringement Complaint against Apple with International Trade Commission

June 20, 2017: Apple has asked the Court to Stop Qualcomm's Double Dipping 'No License, No Chips' Market Tactic

July 19, 2017: Apple joins in new Lawsuit against Qualcomm filed by Suppliers Hon Hai, Pegatron, Wistron and Compal

July 21, 2017: Intel Files Statement with ITC claiming Qualcomm is trying to Force them out of the Modem Business with Apple

Aug 09, 2017: U.S. International Trade Commission to Investigate Apple's Alleged Unfair Trade Practice within 45 Days

Aug 14, 2017: U.S. Securities and Exchange Commission has Requested Qualcomm provide more info on Dispute with Apple

Sept 08, 2017: U.S. Federal Judge Rules that Apple's Multiple Foreign Lawsuits against Qualcomm can Proceed

Oct 11, 2017: Taiwan's FTC Hits Qualcomm with a Record $773 Million Fine for Abusing their Monopoly Power

Oct 13, 2017: Qualcomm, as Expected, Seeks to Stop iPhone Sales in China with new Patent Infringement Case Filed

Nov 02, 2017: Qualcomm Sues Apple for Providing Intel with Qualcomm source code to Assist Intel's Future modems for iDevices

Nov 29, 2017: Apple Sues Qualcomm over Two Snapdragon Processors that Infringe on their Intellectual Property

Nov 30, 2017: Qualcomm Wastes no Time in Retaliating against Apple with another Patent Infringement Lawsuit filed in California

 

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