At the end of the previous post (relating to the vacatur of a discovery sanctions order agaqinst Apple) I mentioned today's Qualcomm v. Apple patent infringement hearing by the Munich I Regional Court, relating to European Patent EP2724461 on a low-voltage power-efficient envelope tracker. I attended the hearing (the last one--or one of the last few--prior to leaving Germany).
A procedural takeaway is that Qualcomm is now presumably going to file a discovery request in a United States District Court against Qorvo, a chipset maker under 28 U.S.C. § 1782, hoping to obtain information that will help substantiate its infringement allegations in the case heard today.
The underlying reason is that Qualcomm's infringement allegations relate to a Qorvo RF (radio frequency) chip found in the iPhones 7 and the larger iPhone 7 Plus. It appears that Apple's phones--or, more precisely, the Intel chipset in the accused devices, which controls the Qorvo chip--don't even make use of the power-saving feature the patent-in-suit relates to. However, the asserted claims (1-5) are "apparatus" claims. Therefore, unless Apple could make a claim that it would be technically impossible (mere economic counterproductivity wouldn't suffice) to put that feature of the Qorvo chip to use, such as by dismantling or reprogramming the device, an apparatus claim can be infringed based on capability as opposed to actual use of a functionality.
So far, whatever Qualcomm alleges is based on reverse engineering, and in order to obtain further clarity on some of the issues, Presiding Judge Dr. Matthias Zigann proposed that the court appoint an expert with a view to the November 8 trial just in case he'll be needed. For his panel of judges (the 7th "civil chamber" of the Munich I Regional Court) this would be the first case since 2012 in which a court-appointed expert would be needed. In Germany, patent disputes are typically decided based on pleadings and oral argument. Parties can bring experts, but their weight is nowhere near the one they have in U.S. proceedings--it's like just another representation made by the party itself.
The case is a huge chunk of work for the court to resolve not only because of its technical aspects. Apple is represented by about ten lawyers today, most notably including Hoyng Rokh Monegier's Klaus Haft (lead counsel), patent attorney F.R. von Samson, Freshfields Bruckhaus Deringer's Frank-Erich Hufnagel and Wolrad Prince of Waldeck--has raised a huge number of defenses against the onslaught led by Quinn Emanuel's Marcus Grosch and his team. Besides denying infringement, those defenses include, but aren't limited to, an antitrust accusation: Qualcomm, by specifically targeting devices that come with Intel chips, is allegedly trying to force its only major competitor in the baseband chipset market, Intel, out of the market. Apple is already suing Qualcomm on this (and not only this) basis in the United Kingdom, and asks the German court to stay its proceedings (unless the complaint would be rejected on other grounds) pending resolution of the UK case. Judge Dr. Zigann noted that a UK ruling would, under applicable EU rules, have to be taken into consideration by the Munich court, but wouldn't be binding on it.
Apple is also leveraging Qualcomm's EU antitrust worries. Depending on what the European Commission's detailed decision (which is undergoing redactions) says, Apple might proposed that the court ask the Commission certain questions in writings. A referral of certain issues to the Court of Justice of the EU is another one of Apple's proposals.
Judge Dr. Zigann noted that this was the first time in his court for a defendant to raise an antitrust defense against a non-standard-essential patent, but didn't reach that issue in detail today.
Qualcomm must tread carefully now because of the thicket of patent and non-patent defenses raised by Apple. While Qualcomm itself argues that Apple contradicted itself by making allegedly contradictory representations in its non-infringement and antitrust defenses, Apple can simply try multiple and (if Qualcomm is right) contradictory defenses: if one defense succeeds (an "OR" in Boolean logic), Apple is off the hook. By contrast, Qualcomm must overcome all of Apple's defenses (a Boolean "AND"), so if its argument in one area contradicts its positions in another, it's game over. I got the impression during the three-hour hearing that Qualcomm faces a significant risk of contradiction in the following three respects:
At some point, Judge Dr. Zigann described the inventive step in extremely simple terms. Qualcomm's lead counsel obviously tried to agree with the court along "You're right, your honor" lines, but tried to thread the needle so the invention wouldn't be oversimplified such as simply using one power source in two ways. When I heard the judge's summary, I thought to myself: if that is it, then this patent is at a high risk of invalidation. It's so young (it was actually published only after Qualcomm filed the complaint) that it could still be revoked by the European Patent Office, and a validity decision might come down in early 2019 (which decision the infringement court would then be inclined to awake, as Judge Dr. Zigann indicated).
Qualcomm is asserting independent claim 1 and dependent claims 2-5. It could still prevail even after the patent is narrowed, but at some point it would either fail to win or, before that one, a victory would be less meaningful because a workaround might be easy.
If Apple's non-infringement contentions contradict its antitrust defenses (as Qualcomm alleges), Qualcomm, too, might be at risk of contradicting itself--and, as I just explained, Apple just needs one defense to succeed while Qualcomm is forced to overcome every single one of them.
Qualcomm is suing Apple over EP2954737 on a "power tracker for multiple transmit signals sent simultaneously" in Mannheim. That case will go to trial on June 5 (other Mainnheim trials are scheduled for September and October, and apparently Qualcomm has meanwhile also asserted additional patents in Munich, as Judge Dr. Zigann noted amendments to the original complaint that were, as is standard procedure in Germany, separated from the original case).
Apple argues that Qualcomm is estopped from asserting the Munich patent because the infringement theory is based on the very same act as the one in Munich. To be clear, this doesn't mean that only because certain iPhones are at issue in both cases, Qualcomm would have had to assert both patents together. On Apple's behalf, Dr. Hufnagel insisted that one patent cannot be infringed without infringing the other.
While Judge Dr. Zigann appeared very skeptical of this estoppel theory (at the outset of the hearing as well as after Apple's insistence), he was interested in factoring the Mannheim ruling, as it might bring useful substantive clarification, into the schedule of his own case. Qualcomm's lead counsel, Dr. Grosch, exuded a great deal of confidence when saying that "an injunction" would come down, "probably in September due to the summer holiday season, but maybe already in August."
I've watched Dr. Hufnagel, the attorney who argued estoppel for Apple, at many trials and tend to place more faith in him when he expresses a strong belief in a theory. In fact, the moment he impressed me the most was when he conceded, in a Samsung v. Apple case in Mannheim, that the court could decide an infringement question either way, while most lawyers always claim that only their position is a reasonable one to take. Despite Judge Dr. Zigann's current, merely preliminary skepticism, I wouldn't be too surprised if the Munich court viewed the estoppel theory more favorably after a Mannheim decision. It could be that Qualcomm wouldn't care too much if the Munich case failed after prevailing in Mannheim: it wants leverage, and it wants it sooner rather than later. I wouldn't put it past Qualcomm that it decided to sail close to the estoppel wind in order to get two bites at Apple. And the risk for Qualcomm is that the Mannheim court might reject the complaint, but provide a rationale that would lead the Munich court to throw out the other case based on estoppel.
In May there will be another Qualcomm v. Apple hearing in Munich, relating to what Dr. Grosch called "spotlights," which may or may not be related to an image-enhancing technique over which Qualcomm is suing Apple in the United States.
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