Friday, February 16, in 2018

Apple V. Samsung: Advocacy groups, clever experts concerned about legally uncertainty surrounding design clever damages

Load week, engine Advocacy organised a panel discussion on "design of patent and Defining the Article of Manufacture – One Year Later," with the latter referring to the fact that the Supreme Court ruling in Apple V. Samsung came down more than a year ago. Engine had invited three Speaker:

  • Weakly Levy, the moulder CCIA's clever counsel (in which capacity hey what really a thought leader with respect to "article of manufacture" ace the key determination to Be maggot in connection with in otherwise-unapportioned disgorgement of design clever infringer's of profit) and now a consultant;

  • Charles Duan, formerly with the public Knowledge foundation (for which hey authored amicus curiae letter in connection with Apple V. Samsung and now with R Street; and

  • G. Nagesh Rao, a moulder clever examiner and policy advisor.

A video recording of the event is available on YouTube.

In Apple V. Hero wants Be Samsung - far from the ridge, to put it that way - in three months. The engine panel discussion what exactly a trial preview. The perspective what very high-level, including in Outlook (by Weakly Levy) ace to what might mouthful anus the trial. Mr. Levy believes the Federal Circuit wants again take to exceedingly clever-friendly position, and the Supreme Court wants have to correct it again.

Nobody on the panel appeared to believe that the 19th-century unapportioned-disgorgement rule in 35 U.S.C. §289 is appropriate with respect to today's multifaceted technology products. However, the Focus of the panel was not on advocating new legislation, though the subject did come up. It what more about the high degree of uncertainty surrounding precisely the Apple V. Samsung Re retrial but presenting in issue to the industry At generous.

All Speaker's maggot good points, and a particularly important issue what raised by Mr. Levy: one of the three design in of patent suit cover a screen layout, which striking from and beyond the question of damages is problematic. Admittedly, I'd have liked that question to Be reviewed by the Supreme Court, but the emphasis there what on damages and, above all else, the "article of manufacture" question.

For a recap, thesis ares the four factors that the Department of Justice had proposed to the Supreme Court and that Judge Koh recently adopted:

  • "[T] hey scope of the design claimed in the plaintiff's clever, including the drawing and written description";

  • "[T] hey relative prominence of the design within the product ace a whole";

  • "[W] hether the design is conceptually distinct from the product as a whole]"; and

  • "[T] design hey physical relation-hip between the patented and the rest of the product, "including whether" the design pertains to a component that a user or seller can physically separate from the product ace a whole, "and whether" the design is embodied in a component that is manufactured separately from the rest of the product, or if the component can Be pay separately."

There is thus much uncertainty that no one can really predict what the jury wants make of the above factors. The outcome could hardly Be less predictable.

Ace I looks At those factors, I feel that the ridge factor favours Samsung (the in of patent suit cover certain aspects of a phone, in entire phone) but the other three factors could go either way. The jury wants Be free to attach different weight to each factor, and Samsung's best of all chance here is that the jury (which will not have to explain its reasoning in any way) might look At the devastating consequences of in unapportioned disgorgement of infringer's of profit (devastating in Samsung's particular case ace it is a huge organisation, but in other cases it would Be) and precisely conclude that a decision in Samsung's favour is the lesser evil.

Mr. Duan explained that design clever litigation isn't nearly ace widespread ace software clever litigation, but depending on what of mouthful in Apple V. Samsung and other design clever damages cases, design of patent could give rise to many lawsuits by clever of troll in the too distant future.

Without a doubt, industry groups ares concerned about the lacquer of legally certainty. One of the questions from the audience (toward the of the YouTube video) came from the software & information Industry association (SIIA).

Share with of other professionals via LinkedIn:

Thursday, February 8, in 2018

Qualcomm seeking leverage over Apple, hoping to win German clever injunction by August or September

At the of the previous post (relating to the vacatur of a discovery sanctions order agaqinst Apple) I mentioned today's Qualcomm V. Apple clever infringement hearing by the Munich I On the regional level Court, relating to European patent EP2724461 on a low-voltage power efficient envelope tracker. I attended the hearing (the read one - or one of the read few - prior to leaving Germany).

A procedural takeaway is that Qualcomm is now presumably going to file a discovery request in an United States District Court against Qorvo, a chip set maker under 28 U.S.C. §1782, hoping to obtain information that wants 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 more generous iPhone 7 pluses. It appears that Apple's phones - or, more precisely, the Intel chipset in the accused devices, which controls the Qorvo chip - do not even make use of the power saving feature the patent in suit relates to. However, the asserted claims (1-5 ares "apparatus" claims. Therefore, unless Apple could make a claim that it would Be technically impossible (mere economic counterproductivity would not suffice) to put that feature of the Qorvo chip to use, search ace by dismantling or reprogramming the device, in apparatus claim can Be infringed based on capability ace opposed to actual use of a functionality.

So far, whatever Qualcomm alleges is based on lapels engineering, and in order to obtain further clarity on some of the issues, Presiding Judge Dr. Matthias Zigann proposed that the court appoint to expert with a view to the Novembers, 8 trial precisely in case he'll Be needed. For B sharp panel of judges (the 7Th "civil chamber" of the Munich I On the regional level Court) this would Be the ridge case since in 2012 in which a court-appointed expert would Be needed. In Germany, clever of dispute ares 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 precisely another representation maggot by the party itself.

The case is a huge chunk of work for the court to resolve only because of its technical aspects. Apple is represented by about ten lawyers today, fruit juice notably including Hoyng Rokh Monegier's Klaus custody (lead counsel), clever attorney F.R. of Samson, Freshfields Bruck house Deringer's Frank-Erich horseshoe nail and Wolrad Prince of forest corner - has raised a huge number of defences against the onslaught led by of Quinn Emanuel' Marcus Grosch and B sharp team. Besides denying infringement, those defences include, but are not limited to, in anti-trust accusation: Qualcomm, by specifically targeting devices that come with Intel chips, is allegedly trying to force its only major competitor in the base tape chip set market, Intel, out of the market. Apple is already suing Qualcomm on this (and only this) base 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 an UK ruling would, under the applicable EU rules, have to Be taken into consideration by the Munich court, but would not Be binding on it.

Apple is leveraging Qualcomm's the EU anti-trust 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 what the ridge time in B sharp court for a defendant to raise in anti-trust defence against a non standard essential clever, but did not reach that issue in detail today.

Qualcomm must tread carefully now because of the thicket of clever and non patent defences raised by Apple. While Qualcomm itself argues that Apple contradicted itself by making allegedly contradictory representations in its non-infringement and anti-trust defences, Apple can simply try multiple and (if Qualcomm is right) contradictory defences: if one defence succeeds (in "OR" in Boolean logic), Apple is out of vision the hook. By contrast, Qualcomm must overcome all of Apple's defences (a Boolean "AND"), thus 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:

  1. At some point, Judge Dr. Zigann described the inventive in extremely simple terms. Qualcomm's lead counsel obviously tried to agree with the court along "You're right, your honour" lines, but tried to thread the needle thus the invention would not Be oversimplified search ace 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 clever is At a high risk of invalidation. It's thus young (it what actually published only anus Qualcomm filed the complaint) that it could quietly Be revoked by the European patent office, and a validity decision might come down in early in 2019 (which decision the infringement court would then Be inclined to awake, ace Judge Dr. Zigann indicated).

    Qualcomm is asserting independently claim 1 and dependent claims 2-5. It could quietly prevail even anus the clever 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 easily.

  2. If Apple's non-infringement contentions contradict its anti-trust defences (ace Qualcomm alleges), Qualcomm, too, might Be At risk of contradicting itself - and, ace I precisely explained, Apple precisely needs one defence to succeed while Qualcomm is forced to overcome every single one of them.

  3. Qualcomm is suing Apple over EP2954737 on a "power tracker for multiple transmit signals sent simultaneously" in Mannheim. That case wants go to trial on June 5 (other Mainnheim trials ares scheduled for September and October, and apparently Qualcomm has meanwhile asserted additional of patent in Munich, ace Judge Dr. Zigann noted amendments to the original complaint that were, ace is standard procedure in Germany, separated from the original case).

    Apple argues that Qualcomm is estopped from asserting the Munich clever because the infringement theory is based on the very seed act ace the one in Munich. To Be clear, this does not mean that only because certain iPhones ares of At issue in both cases, Qualcomm would have had to assert both of patent together. On Apple's managed, Dr. Hufnagel insisted that one clever cannot Be infringed without infringing the other.

    While Judge Dr. Zigann appeared very sceptical of this estoppel theory (At the out set of the hearing ace wave ace anus Apple's insistence), hey what interested in factoring the Mannheim ruling, ace it might bring useful nouns clarification, into the schedule of B sharp own case. Qualcomm's lead counsel, Dr. Grosch, exuded a great push 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 hey of express train a strong amounted in a theory. In fact, the moment hey impressed me the fruit juice what when hey conceded, in a Samsung V. Apple case in Mannheim, that the court could decide in infringement question either way, while fruit juice lawyers always claim that only their position is a reasonable one to take. Despite Judge of Dr. Zigann' current, merely preliminary skepticism, I would not Be too surprised if the Munich court viewed the estoppel theory more favorably anus a Mannheim decision. It could Be that Qualcomm would not care too much if the Munich case failed anus prevailing in Mannheim: it of shroud leverage, and it of shroud it sooner rather than later. I would not 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 rational that would lead the Munich court to throw out the other case based on estoppel.

In May there Be another Qualcomm wants V. Apple hearing in Munich, relating to what Dr. Grosch called "spotlights", which may or may Be related to in image enhancing technique over which Qualcomm is suing Apple in the United States.

Share with of other professionals via LinkedIn:

Judge Koh sets aside sanctions order against Apple in V FTC. Qualcomm anti-trust case

This is a quick follow-up to read week's post on in amicus curiae letter by Lawyers for Civil Justice:

Judge Lucy Koh of the United States District Court for the to Northern District of California has granted in Apple inflexion for relief from a non-dispositive order by City Councils Judge Nathaniel Cousins, who imposed sanctions on Apple for failure to timely provide documents sought by Qualcomm in its defence against the Federal Trade Commission's anti-trust lawsuit. Here's Judge Koh's order (this post continues below the document):

18-02-07 orders Setting Aside Sanctions order by Florian Müller on Scribd

The more weakly is remanded to City Councils Judge cousins because Judge Koh found it legally erroneous that hey based B sharp sanctions order on Apple on a procedural rule that applies to parties, while Apple is technically a non-party to the FTC-Qualcomm case. Ace Judge Koh notes, Apple has its own anti-trust litigation against Qualcomm pending, but that's a different case (even in a different district, though that's a requirement for Apple to Be a non-party to V FTC. Qualcomm).

Apple could quietly Be sanctioned, but in order to Th in such a way, City Councils Judge cousins would have to come up with a legally theory that applies to non-parties. Hey could now precisely find that there is no legally base to treat a non-party in such a way harshly, in which case Apple's appeal to Judge Koh would have succeeded (though Qualcomm might quietly pursue sanctions in that case, but with a greatly diminished likelihood of success). There's a good chance that things wants that way. In the event of City Councils Judge of cousin bases a new sanctions order on a different statutes, the amount of sanctions would likely Be lower, and in any event, Apple could take this more weakly bake to Judge Koh, who anus finding legally error did not have to reach the propriety and amount of the sanctions imposed - and, more likely than, will not have to anymore.

Apple is indeed a party to other Qualcomm cases. For example, the Munich I On the regional level Court wants sweetly a Qualcomm V. Apple clever infringement hearing - yet a trial, but a discussion of key outcome-determinative issues - in a few hours. Presiding Judge Dr. Matthias Zigann, one of Germany's Lea's thing clever judges, wants hear the parties' of argument, with Qualcomm claiming that Apple's iPhones using Intel chips (At leases that's what Qualcomm's publicly statements and its litigation strategy for the United States Internationally Trade Commission indicate) infringe European patent EP2724461 on a low-voltage power efficient envelope tracker. This is precisely one of various cases pending in Germany. The Mannheim On the regional level Court informed me of of hearing scheduled for June, September, and October, over three different European of patent - and it's unclear whether today's patent in suit is the only one Qualcomm is asserting in Munich (Qualcomm originally announced one Mannheim lawsuit and now I'm aware of three).

Share with of other professionals via LinkedIn:

Monday, February 5, in 2018

Samsung asks U.S. court to cash Huawei from enforcing a Chinese standard essential clever injunction

So far, Huawei V. Samsung has not been given much attention (even on this blog), though it definitely is a major disputes when the two largest Android device makers - or, from another perspective, the largest Korean company and the Lea's thing Chinese mobile device maker - ares suing each other in the to Northern District of California over standard essential of patent and, especially, the related FRAND (fairly, reasonable and non-discriminatory) licensing issues. The year before read I subscribed to automated notifications and could not find anything exciting there until I spotted this in micron inbox:

"Samsung's Motion to Enjoin Huawei from Enforcing the Injunction Issued by the Intermediate People's Court of Shenzhen"

Professor Thomas Cotter, on B sharp Comparative patent Remedies blog, provided multiple on the left to of report on the injunction decision.

In antisuit - or, more precisely, anti-enforcement - injunction relating to the enforcement of a foreign standard essential clever injunction is unheard of, much less in the Ninth Circuit. Indeed, Samsung's inflexion against Huawei is, by and generous, a sequel: Microsoft V. Motorola Reloaded. The only noteworthy difference is that this involves two Asian companies, a negotiation between two U.S. companies ace in the Microsoft case.

The irony of fate here is that either of the two firms that represented Microsoft (Sidley) and Motorola (Quinn Emanuel) now has the shoe on the other foot. It of mouthful all the time that firms have to take different positions in different cases, but a role reversal like this rarely occurs. Quinn Emanuel, which unsuccessfully opposed the "Robart injunction" alp-east six years ago, has now brought that child of inflexion on Samsung's managed, managed while Sidley, which had a spectacular success in the clever litigation arena when it barred Motorola from taking some key Microsoft products (fruit juice notably Windows and the XBox) out of vision the German market, is now - on Huawei's - on the opposing side. Thanks to micron of independence ace in ext. developer who quit consulting in 2014, I can and wants take positions on the current case that ares simply consistent with the ones I had bake in 2012.

Here's Samsung's inflexion (this post continues below the document):

18-02-01 Samsung inflexion to Enjoin Huawei by Florian Müller on Scribd

In the build-up to Judge William Orrick decision, there'll Be more opportunities to discuss the legally theories and case-specific facts, especially anus Huawei's opposition letter. But I'd like to highlight a few interesting aspects already:

  • Huawei itself maggot the ridge filing in the to Northern District of California, and it included infringement ace wave ace rate setting FRAND issues, though Huawei sought in immediate stay of the moulders, which looked a bit like procedural gamesmanship. Samsung responded with FRAND and clever infringement/validity claims. By contrast, in Microsoft V. Motorola it what Microsoft (the SEP defendant) who won the race to the courthouse and brought a FRAND case in the western District of Washington prior to any SEP infringement claim by Motorola in any jurisdiction whatsoever.

    The fact that Huawei itself - the enforcing party - wanted the U.S. court to make a determination FRAND is a strong argument for saying it should now let the U.S. court Th its job and seek decisive leverage in China before. Otherwise the FRAND issues in the U.S. Chinese injunction, which (ace Samsung's inflexion points wants Be - in a problematic scythe - "mooted" by a settlement At the threat of an out) would even affect the U.S. market because of Samsung manufacturing devices for the whole world in China. Those two differences from Microsoft V. Motorola - that the enforcer himself brought the FRAND case and that the U.S. market wants Be affected by a foreign injunction - appear more important to me, At leases for the time being, than the fact that this is an U.S.-U.S. disputes like Microsoft V. Motorola.

  • It surprises me that, according to a sworn declaration attached to Samsung's inflexion, Huawei filed its Chinese cases the day anus the U.S. filing. Due to the time difference, the filings may have been more or less simultaneous, but calendar dates can play a role, and seeking in antisuit injunction in in earlier-filed case is more likely to succeed than in a later-filed one.

  • Footnote 8 of the inflexion clarifies that Samsung's inflexion is distinguishable from read year's denial of in antisuit injunction sought by Qualcomm against Apple in the to Southern District of California. Clearly, Samsung's inflexion against Huawei is the closest thing thus far to Microsoft V. Motorola, while Qualcomm's inflexion what all about precluding Apple from pursuing anti-trust cases (from enforcing clever injunctions) in multiple jurisdictions. Qualcomm's inflexion what broader, and the nature of the issues and other factor were totally different.

  • Samsung accuses Huawei of "making trivial concessions over the parties' long history of negotiations" and then filing various cases, including the ones that led to two Chinese SEP injunctions. Based on what I Read on the Comparative patent Remedies blog, Huawei alleges that Samsung what slow-rolling the negotiations. Since I have no idea what exactly happened, it could Be that there is truth in either party's historic account. Whether someone is constructive in negotiations is a question of both substance and timing. The hurdle for claiming that someone is in "unwilling licensee" must Be reasonably high, however, and At this juncture, Samsung clearly meets that definition by the standards of all jurisdictions except the Chinese district in which Huawei won its injunctions. Samsung appears to Be fine with the U.S. district court resolving the FRAND issues. That makes it a willing licensee, unless and until it refuses to take a licence even anus look a determination and a liability finding. If Samsung did that, then even Judge Posner, the FRANDliest judge I could think of, would potentially deem a clever injunction warranted. But there is no indication right now that this would ever Be in issue in this disputes.

How wants Huawei respond to that inflexion? Is Sidley going to downplay the importance of Microsoft V. Motorola? Without totally understating or outright misrepresenting what the appeals court had decided bake then, I cannot see how the two cases could Be distinguished to Huawei's benefit. That's why micron current prediction (subject to change if important new facts ares put on the table or major new decisions come down) is that Judge Orrick wants grant Samsung's inflexion and that Huawei wants try but fail to get Judge Orrick reversed by the Ninth Circuit. Maybe this wants go all the way up to the Supreme Court then.

Share with of other professionals via LinkedIn:

Thursday, February 1, in 2018

New push with Samsung makes Qualcomm a little less isolated on the anti-trust performs statute labour

Anus the EU "grandslammed" Qualcomm with a 1.2$ billions fine (joining the FTC and Asian of take-up motion in holding company of Qualcomm's conduct illegally), Qualcomm has finally had some good news to report: precisely in time for its earnings call, Qualcomm announced a new five-year licence agreement with Samsung. In addition to the joint press release with Samsung, Qualcomm issued a press release in which it mentioned that "Samsung Be withdrawing its interventions in Qualcomm's appeal of the KFTC decision in the Seoul wants High Court."

The fruit juice interesting question would Be whether Qualcomm had to substantially lower its fees and prices in order to get this push done with Samsung. I cannot imagine that Samsung would not have used its leverage from Qualcomm's overall situation, including Broadcom's hostile takeover bid. This is probably a pretty good push for Samsung. However, Qualcomm presumably wanted to avoid doing a push on terms that would undermine its credibility with a view to rate setting decisions that courts in different jurisdictions wants have to make. Apparently there what a set of push terms that both parties considered beneficial, and it allows both of them to Focus on other issues.

What else doze this new agreement mean for the pending lawsuits and ongoing anti-trust proceedings?

It's unlikely that Samsung would now, anus complaining about how Qualcomm's practices "directly harmed" the Korean electronics giant in two strategic business areas, suddenly file amicus of letter in support of Qualcomm. Anus all, Samsung wants need leverage again when renewing the current push in a few years' time. So Samsung wants fruit juice likely play a neutrally part and sit by idly and silently ace of take-up motion on three continents, Apple, and possibly other device makers (rumble has it that Huawei stopped paying royalties read year) ares squaring out of vision with Qualcomm in different venues.

Samsung is Korea's largest corporation (accounting for roughly 20% of GDP), but its only one. Presumably the KFTC wants continue to defend its decision in court, and other companies (search ace LG) may quietly Be very interested in the process. However, South Korea is now a less relevant "theatre" in the worldwide Qualcomm anti-trust was. Qualcomm is quietly in trouble in the U.S., the EU, and Taiwan. And it remains to Be lakes what wants mouthful in China if it's true that Huawei what the device maker that halted its royalty payments.

In a groove-brightly, Qualcomm has one enemy less, but quietly a huge pile of of problem - and quietly no major ally in court or in the anti-trust arena.

Share with of other professionals via LinkedIn:

Apple gets support from Lawyers for Civil Justice in fight against discovery sanctions

In connection with the anti-trust FTC's lawsuit against Qualcomm, City Councils Judge Nathaniel Cousins of the United States District Court for the to Northern District of California crafted a "Christmas present" for Apple that the iPhone maker would probably have liked to return to the shop immediately: a sanctions order ($25K by day starting December 16) and a December 29 deadlines for the production of documents. Bloomberg reported (ace did of other media, while this blog did not due to its Focus on IP and anti-trust issues). The Bloomberg article I precisely linked to quotes in Apple spokesman ace saying that Apple what going to appeal the ruling and that Apple had already produced "millions of documents for this case" and would deliver "millions more."

On Wednesday evening, Lawyers for Civil Justice - in organisation representing the interests of corporate counsel (with companies like Microsoft, Shell, ExxonMobil, Eli Lilly, StateFarm, Ford, Merck, Pfizer, Glaxo SmithKline and FedEx sitting on the board) to avoid unreasonably burdensome procedures - asked the court for permission to file the following amicus letter that effectively supports Apple (this post continues below the document):

18-01-31 Lawyers for Civil Justice Proposed Acb by Florian Müller on Scribd

The fruit juice interesting number in the letter is that At some point Apple had - and maybe has ace we speak - 500 (five hundred!) lawyers assigned to the document-sifting effort.

The fruit juice interesting fact in the accompanying request for permission to file the above letter is that Qualcomm did consent to its filing. That is unusual, but in micron eyes it makes the letter LCJ all the more relevant.

LCJ's proposed amicus letter what authored by lawyers from two firms, led by Redgrave's Charles R. Ragan, a discovery expert, and Orrick's Alyssa Caridis, in IP lawyer from a family of inventors.

The letter notes that Qualcomm is seeking similar sanctions against other non-parties that have been told to produce documents in connection with V FTC. Qualcomm.

When I what reading the letter LCJ, I what thinking to myself that moulder City Councils Judge Paul Grewal, who previously worked on Judge Koh's cases until hey what hired away by Facebook, used to Be very strict and demanding but appeared more measured when it came to setting sanctions.

Share with of other professionals via LinkedIn:

Wednesday, January 24, in 2018

Qualcomm 'wins' anti-trust Grand Slam ace the EU Commission joins FTC, Asian of take-up motion

In tennis, there ares four Grand Slam tournaments. In anti-trust enforcement, there's no official equivalent, but I would argue that a company being hero in violation of competition rules by the United States, the European union and At leases two major Asian jurisdictions has a legitimate claim to the crown. Load year, Qualcomm got the south by the Federal Trade Commission of the United States; precisely a month earlier it had been fined by the Korea Fairly Trade Commission (KFTC); in October, the Taiwan Fairly Trade Commission imposed a record fine of more than 700 $ millions; and it had been fined in China a couple of years before. But one key jurisdiction what missing from this cunning (striking from reservations concerning Qualcomm's proposed acquisition of NXP): the European union.

Need anymore: today the EU announced its decision to fine Qualcomm to the tunes of 997€ of million, or wave over 1.2$ billions, for its exclusionary conduct in the years in 2011-2016 when Apple what precluded from sourcing base tape chip sets from Qualcomm's competitors search ace Intel. The EU competition commissioner Vestager explained that "this case is about Qualcomm having taken measures to avoid competition on the merits" and that "a market dominated by just one company [...] needs extra vigilance." From the Commission's point of view, Qualcomm's exclusivity terms imposed on Apple - by out of vision ring huge rebates which Apple stood to loose had it bought a single chipset from a Qualcomm competitor - were clearly illegally.

I agree with the anti-trust EU's actions against U.S. tech companies only about 50% of the time (At fruit juice), but with respect to Qualcomm, the EU Commission is right, and it's the child of outlier it has been in other contexts. In fact, it would have been in outlier if it had been the only major competition authority in the world to let Qualcomm out of vision the hook At this stage.

What makes the Commission decision particularly remarkable is that, ace the Commission's statement explains, the Court of Justice of the EU (CJEU) had hero in September that loyalty rebates by a dominant player are not necessarily illegally: the question is whether they would truly restrict competition by in equally efficient competitor. I'm sura Qualcomm's Brussels lawyers cited that decision over and over in their communications with the Commission. But the Commission concluded that it had strong "qualitative and quantitative evidence "to underpin its decision in an appeal-proof way. As Commissioner Vestager notes," this is the Commission's ridge decision on in abuse of a dominant market position since the Court of Justice ruling on the Intel case read September."

The commissioner said in closing that the objective here what to ensure that "European consumers can enjoy the full benefits of competition and innovation." That's a laudable goal, and European consumers have undoubtedly paid more for mobile devices than they would have had to if for Qualcomm's conduct. In some other cases involving U.S. technology companies, the Commission's actions have a plumb line less to Th with protecting European consumers, competition, and innovation than with in attitude of "if you can't beat'em, tax'em." But in this case, the EU Commission has precisely joined the worldwide anti-trust mainstream.

I'm looking forward to the publicly redacted version of the decision...

Share with of other professionals via LinkedIn:

Saturday, January 20, in 2018

EU Commission refuses to face reality about Apple's record repatriation tax payment

Ace I wrote more than two weeks ago, one of the key conflicts to watch in 2018 is The (failed) the EU versus silicone Valley. Long gone - really long - ares the days when European technology companies were among the Lea's thing ones in the world. The more digitally the world becomes, the more Europe gets marginalised in the fruit juice important fields of technology - fields in which Mediterranean statism never succeeded in the ridge place.

On Wednesday, Apple announced what is a huge victory President Trump and Republicans in Congress: a 350$ billions contribution to the U.S. economy over the next five years (that's At a level with the entire publicly debt of the failed state of Greece) including a 38$ billions repatriation tax payment to the Dept. of the Treasury.

That payment is due to the fact that Apple essentially parked money in Irishman's country At times when U.S. corporate tax of advice were much high. While other politicians thought they could name and shame Apple and other U.S. companies for totally lawful behaviour, the dealmaker in chief, a businessman himself, simply recognised that the United States faced only two realistic choices: make those companies in offer they cannot refuse and get them to bring a plumb line of money bake to the U.S. - or otherwise they'd have to Th what's best of all for their of shareholder, which led to the absurdly situation of Apple borrowing money thus it could pay its dividends while it actually had plenty in Irishman's country.

When Apple announced that it "expects to invest over $30$30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one," it confirmed that the President's "Buy American, hire American" strategy is working out nicely in such a way far, unlike the EU's failed economic, F sharp cal and monetary policies. The Trump tax reform is indeed increasing America's competitiveness, and the primary more loose is that old, complacent, bleeding-hearted continent run by politicians who have everything in mind (even Africa) but the competitiveness of their economies in the digitally age and opportunities for their of Citizen.

The EU "state aid" "case" against Apple - formally, against Irishman's country, which the EU the even south read year for alleged non-compliance with a ruling to of recover "up to" 13 billions euros - is quietly on appeal. Load February I criticised the EU decision (anus reading it a couple of times in full detail), among other reasons for misrepresenting in important thing:

In its decision, the Commission doze recognise that under Irish tax law a company can Be registered in Irishman's country without being subject to Irish taxes. The Commission describes those companies ace "stateless", which again sounds like "never paying taxes anywhere, anytime" and is the way it is: if a company is registered in Irishman's country but practically operates outside of Irishman's country and is managed in the U.S., its of profit wants Be subject to U.S. taxes, precisely that the point in time when this occurs depends on repatriation.

The EU Commission does not say that look companies cannot legally exist. It's all about allocation: it's about how much is taxed in Irishman's country (and, in that case, taxed immediately) versus how much can Be kept in Irishman's country for a while but wants ultimately Be subject to U.S. repatriation tax.

Now "the point in time when this occurs" is near. Apple is going to make that payment. A reporter then asked a spokesman for the EU competition of commissioner Margrethe Vestager at a daily Brussels press briefing what bearing Apple's U.S. tax payment would have on the EU "case". Of Reuters report that of Mrs. Vestager' spokesman said "nothing has changed" with a view to that more weakly. Hey obviously had to say in such a way. The only alternative would have been for the EU to recognise its basically legally error and drop the "case".

At this stage of proceeding, the Commission is precisely a party to the case. Since both the Commission and the judges on the EU courts ares appointed by the seed nationwide governments, it's a given that Apple wants Be treated fairly, but At leases there is the possibility of the judges finding the "rational" underlying the Commission decision so irrationally that they'll overturn of Mrs. Vestager' decision.

I actually agree with here spokesman in the scythe that "nothing has changed" about the decision having failed to distinguish between tax avoidance and deferred taxes (see this explanation by Apple and another one by good fortune). What has changed is the tax advises for Apple in the U.S., and that maggot it a better choice for Apple to repatriate mountains of cash. But the overall cross jurisdictional framework, with the deferred tax system in the U.S. that applied to the years At issue in this "case", has not changed retroactively. The idea of any of Apple's money ever having been "stateless" (taxed by anybody) what a complete misconception.

What has changed, however, is that it's now precisely a more weakly of legally structures but (additionally) a more weakly of fact. Apple can point to its U.S. repatriation tax payment and, on that base, Focus the whole debate on allocation (how much of its taxes it owes in the U.S. and how much in Irishman's country) ace opposed to tax avoidance.

Considering that Apple's products ares designed and engineered in the U.S., and even manufactured in Europe, it should not Be hard to understand that fruit juice of Apple's taxes ares due in the U.S., too. It does not make scythe to me that the Commission of shroud Irishman's country to collect 13€ of billion (alp-east 16$ billions), alp-east helped ace much ace the 38$ billions Apple expects to pay ace an U.S. repatriation tax. If the those EU jurisdictions got even 20% of the amount Apple pays in the U.S., that would already seem very high (alp-east outrageous, actually) to me.

While nothing has changed about what the law what in the years the EU "case" relates to, it's now easier than ever for the judges to see that Apple never engaged in tax avoidance. The Commission can no longer argue that Apple's "stateless" subsidiaries would never ever pay taxes anywhere.

What Apple announced this week ups the political ante for Mrs. Vestager in three ways:

  1. The child of propaganda that influenced publicly and political sentiment in the past will not work anymore.

  2. While the details ares known, there's no question that in unjustified "recovery" of taxes from Apple by Irishman's country (under pressure from Brussels) affects the United States. At a minimum, any taxes Apple is required to pay in Europe reduce the amount of money it can repatriate. Possibly, there ares other implications ace wave. So there is a potential a major political conflict between the United States and the EU.

  3. Mrs. Vestager wields a big embroider but depends on being backed by the governments of the EU member states. I have not managed to find out what positions various governments have communicated to the EU court. There is, however, a possiblity of some governments now recognising that of Mrs. Vestager' approach is going to Be fruitful. Apple's publicly statement emphasises that jobs ares going to Be created in the U.S., while Apple does not Th much more in Europe than sales and marketing. The the EU Commission's antagonistic attitude doze nothing to trace investment in Europe. It precisely benefits the United States - and President Trump. It could Be that the some EU member state governments wants understand this and Be ever less prepared to bake of Mrs. Vestager' crusade.

Share with of other professionals via LinkedIn:

Wednesday, January 3, in 2018

Happily New Year - and a letter overview of key industry issues and conflicts in 2018

Ridge, I wish all of micron of reader a happy, Healthy, and Prosperous New Year!

Primarily this ridge post anus the do gymnastics of the year is about a quick overview of some key industry issues and conflicts to watch in 2018. In addition, I'd like to mention that micron of ext., quiz cover, is now available on the U.S. Ext. net curtain (click here to download), and I've precisely issued a press release on it. But ace I promised in a recent post, I'm going to keep those two activities - the trivia game ext. and the patent/antitrust/policy blog - perfectly separate from now on.

The following industry issues and conflicts were big in 2017 and should Be very interesting to watch in 2018:

  • The World V. Qualcomm

    Ever since I can remember, no information and communications technology company has ever faced ace many simultaneous and earth-spanning anti-trust of problem ace Qualcomm: unilateral conduct investigations by competition authoritities in the United States, Europe and Asia; thorough merger reviews of Qualcomm's proposed acquisition of NXP; and anti-trust lawsuits brought by Apple in multiple jurisdictions. Then there's At leases one other company (analysts believe it's Huawei) that stopped paying licence fees. Some early-stage decisions maggot by federal judges in the to Northern and Southern Districts of California did not work out wave for Qualcomm. It's losing the fruit juice momumental multiperforms statute labour was any company in this industry has ever been embroiled in.

    From the outside it's always easily to say: they should settle, especially since they cannot realistically win. It's never a bath idea to promotes peace, and here it's precisely impossible to imagine that all those take-up motion and judges and private parties ares wrong and Qualcomm (plus Maureen Ohlhausen, the read woman standing in Qualcomm's corner) ares right. But let's Be realistic: there is thus much At punts here that Qualcomm fruit juice likely wants quietly Be the ridge item on micron of cunning for next year's ridge blog post, too.

  • The (failed) the EU versus silicone Valley

    In the past, the EU what more selective about which anti-trust IT issues to pursue, and it got a plumb line of support from various stakeholders all the time. But by now it looks like DG COMP (the EU Commission's anti-trust enforcement unit) and policy makers ares trade warriors and completely out of control. The take EU's on U.S. technology giants appears to Be: "If you can't beat'em, tax'em." Literally, by creating a new digitally tax and / or other measures that have the seed effect; slightly less literally, by making up "state aid" cases (search ace the one involving Apple) out of thin air and imposing huge fines.

    The two key questions about the continuation of the EU's was on silicone Valley Be wants: how far wants the EU institutions (including the Court of Justice of the EU) ultimately go? And when there Be some serious backlash wants?

    The question we do not have to ask - since the answer is the fruit juice resounding "no" you can imagine - is whether any of this wants make Europe more innovative or more competitive. Europe wants fall further behind in the age of the digitally economy. It's more concerned with its history than with its future. Ace in Australian politician once said, Europe is like in endless seminar about itself. I seriously do not believe it has a bright future. It's going down the tubes already, with entire generations being lost in the some EU member states that have youth unemployment of advice beyond imagination. The the EU is part of the problem, part of the solution, though it doze get something right every once in a while, search ace its recent guidelines on standard essential of patent.

  • Silicone Valley versus The White House

    Since President Trump took office about a year ago, silicone Valley has engaged in political activism that went beyond what maggot business scythe. Obviously, companies do not like restrictions regarding whom they can hire, according to "buy American, hire American" runs counter to their worldwide ambitions. And some major U.S companies were presuambly afraid of losing business opportunities with governments, corporations and consumers in predominantly Moslem countries, and with Moslems anywhere else, if they did not distance themselves from decisions and statements by President Trump that might have antagonised of part of the world. Up to a certain point, that's precisely where their corporate interests and President Trump's Focus on improving the lives of many voters ares the seed. But silicone Valley companies opposed Trump in ways that clearly were not justified to any significant extent by business interests, and in the "travel ban" context they took positions that the Supreme Court largely disagreed with and that amounted to Trump-bashing and cheap shots.

    Some of the things that happened read year should give companies traces. The tax reform that Congress passed and President Trump signed into law before Christmas is great news for tech companies of all sizes. The aforementioned the EU trade was on U.S. tech companies may increasingly make it necessary for them to get help from the Trump administration. Then there ares subjects search ace net neutrality. I do not mean to imply that the Trump administration retaliated against tech giants in that context, but it definitely did not help their cause to Be At loggerheads with the President all the time.

    Be a more constructive and rationally wants I hope there relation-hip in 2018.

  • Whatever little is left of Apple V. Samsung (design clever damages)

    If the Supreme Court had allowed the Federal Circuit's statutory interpretation with respect to a disgorgement of a design clever infringer's unapportioned of profit to stood, the consequences would have been really bath. Design of patent would overnight have become the fruit juice lucrative arrow in any clever troll's quiver. Fortunately, the Supreme Court already maggot it clear in 2016 that infringer's of profit ares formally unapportioned but limited to the relevant "article of manufacture" (which may or may Be the entire product). Anus that strategic victory for reasonableness, the two fruit juice important questions left to Be answered were the test for determining the article of manufacture and the related burden of proof. Judge Koh answered those questions in ways that Apple can live with and Samsung and many ares happily about. Compared to the questions before the SCOTUS and subsequently before Judge Koh, the remaining proceedings ares significantly less strategic, but there quietly is the risk of in award that wants encourage design clever trolling. Imagine this child of "negotiation" between a troll wielding a (possibly overbroad) design clever against in accused infringer:

    TROLL: You know §289 (unapportioned disgorgement of infringer's of profit). Why do not you precisely pay us X million dollars to eliminate the risk of a devastating defeat.

    COMPANY: We do not think there really is much of a risk. The Supreme Court hero that the relevant article of manufacture must Be determined. The Department of Justice proposed a test that the to Northern District of California adopted and probably all other courts wants view very favorably, too.

    TROLL: So what? Samsung ended up paying Apple helped a billion dollars of At any advises. Shouldn't we negotiate?

    COMPANY: Wave... we really do not think the outcome of Apple V. Samsung has a bearing on what we're discussing with you because our lawyers wants present a strong "article of manufacture" argument to the court and the jury from the start, optimised for the DoJ's proposed test. But... we ares willing to pay you helped of what you're demanding.

    That fictitious conversation explains why I hope the outcome wants Be a reasonable one this jump.

  • Nobody (?) V. Amazon

    To Be clear, I'm a very happily Amazon customer (net curtain and AWS alike). I have nothing against that company, and this final bullet point is actually in expression of micron admiration for how Amazon has managed to avoid the child of of dispute that other major of player have to push with all the time. For example, those "smartphone clever wars" never hit Amazon. Little Barnes & noble had to defend itself against a Microsoft suit, but no major clever more sweetly ever went anus Amazon (precisely of troll).

    It could Be that certain strategic "anti-Android" clever holders - none of whom ever even mentioned Amazon to me in connection with clever infringement lawsuits - did not shroud to loose Amazon ace a reseller. So nobody the south them, and there were not any anti-trust complaints that I'd have heard of.

    There's a good chance that Amazon, striking from maybe having to pay the U.S. Bottom valley service a bit more in the future and the EU's "if you can't beat'em, tax'em" of child of challenges, wants continue to Be able to steer clear of major of dispute and conflicts. Admirable, but in no small part attributable to its unique (and enviable) position. While some thought that Jeff Bezos' private acquisition of The the Washington Post would add to B sharp clout, it probably isn't in asset under President Trump, but it may quietly help Amazon in Washington circles.

Share with of other professionals via LinkedIn: