Apple and Qualcomm antitrust trial could start April 15 in San Diego, judge says

6 December 2018 10:14am

30 November 2018. By Mike Swift.

​Apple and Qualcomm are poised to face off in a trial over Qualcomm’s alleged anticompetitive patent-licensing business on April 15 in San Diego in a tech industry blockbuster jury trial that could last up to 20 days with billions of dollars at stake.

US District Judge Gonzalo Curiel said at a pretrial conference today that two years of litigation between the California tech companies, as well as for contract manufacturers who build Apple devices, have brought the two sides to the brink, where they need to make the fateful decision whether to settle or plunge into a trial.

At this point, trial is the likely scenario, Apple lawyer William Isaacson told Curiel. “There have been, unfortunately, a lot of articles lately saying the parties are close to a settlement. That is not true,” Isaacson said.

“The parties are at loggerheads” on any settlement proposal, he added. Qualcomm’s lawyers did not dispute Isaacson’s statement, although it is understood that Qualcomm is still hopeful that a settlement is possible.

Apple, however, took pains to stress its readiness for trial. “We are not engaged in settlement discussions and haven’t been in many months. We are ready for trial,” Apple lawyer Juanita Brooks told Curiel later in the hearing, underscoring Apple’s resolve.

The looming trial would be one of the highest-stakes technology trials of the past decade, ranking with Apple’s patent and antitrust dispute against Samsung and Oracle’s battle with Google over rights to the Android mobile operating system.

Curiel said the complexity of the claims and the parties are such that he needs at least four months to prepare for the trial; the judge said he will set a pretrial schedule that will include a series of hearings in March where Apple and Qualcomm, and Apple contract manufacturers Foxconn, Compal Electronics, Pegatron and Wistron, will seek to strike expert testimony and otherwise lay out the battlefield for the trial.

Since the start of 2017, the manufacturers, Apple and Qualcomm have been involved in a tangled mix of antitrust, patent, and contract litigation involving licenses to Qualcomm’s standard-essential patents, and whether those licenses have been offered on fair terms.

MLex reported this month that the manufacturers are seeking $9 billion in damages in an antitrust lawsuit against Qualcomm, which could be trebled to $27 billion. While damages sought by the contract manufacturers are technically separate from damages Apple would seek from Qualcomm,  given the overlap between Apple and the manufacturers, any damages that go to the contractors are likely to partially end up in Apple’s hands.

Qualcomm, meanwhile, will argue that the dispute is at its essence a contract dispute, with the contract manufacturers failing to make their patent license payments to the chipmaker for the past two years.

“It’s a very interesting case. It’s a very important case, as well, but there are so many issues swirling around it,” Curiel said. “I don’t think there’s been any precedent to this litigation” in terms of the diversity of issues and the “kind of parties that we have here.”

The swirling issues, Curiel said, include twin cases before US District Judge Lucy Koh in San Jose, California, involving Qualcomm’s patent business. The US Federal Trade Commission is suing Qualcomm in one case, and class-action plaintiffs are suing the San Diego chipmaker in the other.

The FTC case against Qualcomm is due to go to trial in January, and those cases “may have bearing on this case,” Curiel observed. “So certainly, there are still a number of moving parts.”

In a preview of the type of legal firepower that will be in evidence if the case goes to trial, more than 30 lawyers, including the general counsels of both Apple and Qualcomm, Katherine L. Adams and Donald J. Rosenberg, respectively, crowded into Curiel’s dark-paneled, windowless courtroom in San Diego.

One point of concern common to both Apple and Qualcomm today was whether the court will be able to find a group of jurors who will be able to spend an entire month hearing the trial. Curiel said he will select a group of nine or 10 jurors, and that he will select a larger jury pool than normal because of potential conflicts due to many people’s stock ownership in Apple, but also Qualcomm’s prominence in San Diego, where it is a central element in the local economy.

“I’ll likely call more jurors than I normally would, just because I’m concerned there’s going to be something about this case that produces some issues for a larger number of jurors than we would normally have,” the judge said. “These are two tech giants and, maybe through the questions we pose, we start learning things and we follow up and we start learning issues” about the potential jurors.

While Curiel is clearly prepared to go to trial, he also issued a thinly veiled warning to both sides about the risks of not reaching a settlement.

“This technology world is very interrelated. So, what is used against Qualcomm today,” Curiel noted, “might be used against Apple tomorrow.”

Joshua Sisco contributed to this article.

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