Qualcomm, Apple spar over potential delay of iPhone import ban

02 Apr 2020 12:33 pm by Kat Lucero

Apple has told the International Trade Commission that if iPhone imports are banned by the agency, a six-month delay in carrying out the order would be appropriate. Qualcomm, however, said it opposes any holdup because Apple and its chip supplier, Intel, already had ample time to redesign a smartphone that avoids infringing a Qualcomm patent.

The ITC is reviewing an ITC administrative law judge’s decision in September to reject an exclusion order on certain iPhone imports with Intel chips even though Apple had violated intellectual property laws. On Dec.12, the ITC requested more information from interested parties.

In finding that an iPhone import ban would not be in the public interest, Judge Thomas Pender said that such a ban would keep Intel from producing those phone chips and leave Qualcomm with a monopoly.

The commission asked parties whether postponing the order’s effective date for six months or a year, for example, would satisfy each party's demands — enforcement of Qualcomm’s patent rights and prevention of a monopoly in the wake of a possible Intel exit from the 5G technology market. The ITC also asked whether an exemption or a “carve-out” would help remedy Apple’s patent infringement.

The ITC is scheduled to finish the investigation by March 26. If the commission issues any kind of remedy, the US Trade Representative is required to approve or disapprove the order within 60 days.

— Delay —

Apple continues to deny infringement, but the Cupertino, California-based company told the commission a six-month delay would give the company and Intel enough time to continue working on a redesigned iPhone that circumvents Qualcomm’s patent. The delay would also give Apple more time to sell existing iPhones made before the product revision, the company said.

Intel said a “sufficient” delay would stop its exit from the US market; however, an order that carves out 5G technology — allowing its import while excluding older technologies — would be a massive loss for the Santa Clara, California-based company.

“Through a 5G carveout, Intel would lose access to the U.S. ecosystem for 4G — on which 5G is being built — and the critical revenue provided by U.S. sales to Apple of 4G chipsets,” Intel told the commission.

Intel also said a carve-out for US-based research and development would still pose “substantial harm” to Intel’s baseband chipset business.

— No delay —

San Diego-based Qualcomm insists on no delays or carve-outs because Apple and Intel’s claims about damage to the domestic chip market are "entirely speculative and unsupported by credible evidence”.

The commission needs to be aware that such "undue" delays don't prevent the infringers "from essentially sneaking a free option to infringe by securing the time needed to retool their production and distribution systems," Qualcomm said.

Qualcomm argued the ITC shouldn't help Apple concentrate its market power.

Apple's "ominous" predictions are "self-serving," Qualcomm said.

"In fact, Intel will have more of Apple’s business after an exclusion order than it had when this case was filed, and it would be economically irrational for Intel to abandon the development of 5G in view of its strategic importance, the potential upside, and the extent of Intel’s commitment," Qualcomm said.

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