On Thursday, one week after the Department of Justice submitted its puzzling Statement of Interest in the FTC v. Qualcomm antitrust case awaiting Judge Lucy H. Koh's judgment in the Northern District of California, the Federal Trade Commission filed a response that is as concise as it is informative at different levels (this post continues below the document):
19-05-09 FTC Response to DO... by on Scribd
After the ninth word ("untimely" before "Statement of Interest") it's already clear that the FTC doesn't appreciate the DOJ's bewildering kind of intervention. The FTC doesn't talk about why the DOJ would make such a filing now (and not long before, if at all), but it's easy to see: after the Apple-Qualcomm settlement, Qualcomm's allies in the federal government such as DOJ antitrust chief Makan Delrahim (whose subordinates submitted the Statement of Interest) are now concerned that Judge Koh's impending decision might have an impact on the Apple-Qualcomm deal. The DOJ primarily expressed concerns over the FTC's request that the court order Qualcomm to renegotiate all patent license agreements, and who knows what clauses in the Apple-Qualcomm contract might provide for some adjustments based on the outcome of the FTC case. Within the universe of its own that is the FTC v. Qualcomm antitrust litigation, however, the separate and now-settled Apple-Qualcomm dispute is not an outcome-determinative or even just procedurally relevant factor.
What's funny is that the FTC clarifies it "did not participate in or request [the DOJ's] filing." It's a diplomatic way of saying that the filing is unwanted, unwarranted, and unhelpful.
The related footnote (footnote 1) then notes that another district court (in Minnesota) declined to consider a Statement of Interest by the DOJ's Antitrust Division in light of "unjustified delay and the fact that [the] case [had] been fully and thoroughly briefed by all other parties." Generally, the FTC's short filing says between the lines that they totally trust that Judge Koh is not going to be impressed, swayed, or much less fooled by the DOJ's statement anyway, so while they (the FTC) "disagree with a number of contentions in the [DOJ] Statement," they just provide some examples in a footnote. The final sentence of that statement is particularly interesting in my view:
"The Statement also cites documents that Qualcomm chose not to introduce at [the FTC v. Qualcomm] trial [...]:
This is about an Apple-internal document that Qualcomm presented in its opening statement last month in San Diego, according to which Apple just sought to hurt Qualcomm financially but considered its technology the best. While Qualcomm would have tried to leverage that document in front of the San Diego jury (just that the case was settled before the trial began in earnest), it's interesting that it didn't bring this up in January, considering how much time Qualcomm actually had for all sorts of seemingly less relevant issues such as its (undisputed) innovation culture.
"[...] and cites a commentator whom Qualcomm chose not to offer as a witness at trial.":
Tihs refers to the following sentence in footnote 6 of the DOJ statement: "One commentator has observed that these documents 'potentially reveal[] 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.'"
The "commentator" is Professor Adam Mossoff, a law professor at GMU and director of the Centor for the Protection of the Intellectual Property. He's in the tank for Qualcomm and generally for patent holders; he has been for a long time, be it at Congressional hearings, conferences, or in the media. He's extremely good at it, but to portray him as a "commentator" when Qualcomm was contemplating calling him as a witness in the January trial is a distortion.
The FTC notes that it "supports and is prepared to provide further briefing and argument on remedy should the Court’s liability ruling make such briefing and argument necessary," but in yesterday's filing also notes that the question of whether liablity and remedy should be evaluated separately had already been addressed earlier, and the parties had in fact provided briefing on remedy as the FTC's summaries of various documents (or passages thereof) show:
ECF No. 314: "Court rejecting Qualcomm bifurcation proposal"
ECF No. 916: "extensive discussion of remedy issues"
ECF Nos. 928, 929, 932, 933: "party briefs on remedy evidence"
ECF No. 967: "Qualcomm proposed conclusions of law on remedy"
There's no question that the DOJ's Antitrust Division is trying to help Qualcomm against the FTC (and, by extension, Apple, whose credibility the DOJ's statement calls into question), but this effort is unlikely to bear any weight whatsoever with Judge Koh and, with respect to the FTC, may even have been counterproductive. The FTC is a government agency, but it's independent: the President appoints the commissioners, but he can't fire them during their term. The DOJ's Antitrust Division, by contrast, reports to the Attorney General, whom the President can replace whenever he wants. The FTC cherishes its independence, and by interfering with its case, the DOJ may actually just have created a situation in which it's institutionally important for the FTC to show its independence by statements such as the one filed yesterday and whatever statements, decisions or actions may follow. There comes a point where even a commissioner inclined or prepared to settle the case with Qualcomm on a certain set of terms may have to worry about institutional implications.
Share with other professionals via LinkedIn:
