Qualcomm wins $31.6 million patent verdict against Apple

25 March 2019 4:35pm

15 March 2019. By Mike Swift.

In a first trial against Apple before a local jury, a federal jury in San Diego agreed with Qualcomm's claims that the iPhone maker should pay $31.6 million in damages, or $1.41 per iPhone, for infringing Qualcomm patents on technology that allows Apple's smartphone to connect with cellular networks and use power more efficiently.

The jury endorsed Qualcomm's argument during an eight-day trial that newer iPhone models Apple sold since 2017 that were powered by Intel — not Qualcomm — modem chips infringed three patents. The eight-member jury awarded Qualcomm the same running royalty — $1.41 per infringing iPhone — that Qualcomm had sought.

“The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly. The three patents found to be infringed in this case represent just a small fraction of Qualcomm’s valuable portfolio of tens of thousands of patents," said Don Rosenberg, Qualcomm's general counsel.

Rosenberg said that "patent courts in China and Germany have ruled that Apple is infringing additional Qualcomm non-standard essential patents and issued injunctions on infringing devices." In theory, today's unanimous verdict could open the door to Qualcomm seeking an injunction against the sale of newer iPhone models in the US, although the high judicial standard for granting injunctions in the US makes that less likely.

Also unknown is how today's verdict might affect a pending ruling by the US International Trade Commission about a potential import ban of infringing iPhones.

Typically, ITC proceedings move much more quickly than district court cases, so the effect of a district court ruling before the ITC is unclear. One of the Qualcomm patents the jury found to be infringed today by Apple, however, the '490 patent, was also found to infringed by the ITC administrative law judge in that case. The ITC is expected to rule on March 26.

The San Diego trial, part of a thicket of antitrust and intellectual property disputes between Apple and Qualcomm, began last week with jury selection and opening statements before US District Judge Dana M. Sabraw on March 5.

The trial was the first of what could be four antitrust and intellectual property trials between Apple and Qualcomm in Southern California over the next year, and the two-week trial was Qualcomm’s first chance to convince a hometown jury that its innovations — even more than Apple’s — were what made the smartphone smart.

During the trial, Apple argued that the accused technology in this case didn't come from Qualcomm, and therefore, Apple didn't infringe Qualcomm’s patents.

“Every bit of technology Qualcomm is accusing in our smartphone was developed by Apple engineers, or in a collaboration between Apple engineers and Intel engineers,” Apple lawyer Juanita Brooks told the eight-member jury during her opening statement.

The core of Qualcomm’s argument to the jury over the course of the trial was that the 15 minutes of increased battery life in an iPhone powered by more efficient Qualcomm chips allowed Apple to charge about $2 more for its newest iPhone X.

Qualcomm had been seeking a total of about $31 million from Apple based on its allegations that Apple sold 30.9 million iPhones that infringed three Qualcomm patents. Those phones were newer iPhone models sold since 2017 that used Intel, not Qualcomm, modem chips to connect to cellular networks.

The jury found that Apple iPhone 7, 7 Plus, 8, 8 Plus and X infringe two Qualcomm patents, '949 and ‘490; and Apple iPhone 8, 8 Plus and X infringe patent ‘936.

Qualcomm was seeking between 42 and 55 cents in reasonable royalties per infringing iPhone for each of the three patents it told the jury Apple had infringed, or $1.41 per device, for each infringing phone sold by Apple. The San Diego chipmaker sought $13 million from Apple for the ‘490 patent, $9 million on the ‘936 patent and $9 million for the ‘949 patent.

The amount of damages Qualcomm was able to seek was greatly limited when Sabraw ruled before the trial that the chipmaker couldn't seek damages for any infringement by Apple prior to the filing of the suit in mid-2017.

One of Qualcomm's expert witnesses, economist Patrick Kennedy, testified that a significant part of Apple's selling point for the $999 iPhone X was its 30 extra minutes of battery power.

"You saw the video, you saw it sitting up there as a banner. So, 15 minutes, $2, that's the benefit," Kennedy testified on March 8. "Qualcomm is not even asking for the $2; it is $1. One dollar for 15 minutes of battery life in a $999 phone."

In a written statement, Apple said that while the company is “disappointed with the outcome, we thank the jury for their service in this case.  Qualcomm's ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in US federal court, and around the world.”