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10.15.17

Qualcomm’s Nightmares Are Getting Worse as Antitrust Questions Are Raised and Assessed

Posted in Antitrust, Apple, Asia, Patents at 9:22 am by Dr. Roy Schestowitz

Silicon chip

Summary: Qualcomm is getting itself deeper in trouble as fines pile up and its multi-billion dollar dispute with Apple isn’t getting it anywhere

THE company known as “Qualcomm” used to exist in the market. One could actually buy things with the “Qualcomm” brand on them. Nowadays, Qualcomm is just something that’s a tax. It’s embedded in many products and the tax includes software patents, which aren’t even valid in many of the respective markets. Later this week we intend to organise our articles about Qualcomm in a Wiki page similar to that of the EPO.

“It’s embedded in many products and the tax includes software patents, which aren’t even valid in many of the respective markets.”Several days ago Qualcomm got slapped with a massive fine (almost $0.8 billion in a nation as small as Taiwan). Will they fine them even more in nations like Korea and China? We shall see…

From the report of Bloomberg (found via Florian Müller):

Qualcomm Inc. was fined a record NT$23.4 billion ($773 million) by Taiwan’s Fair Trade Commission in the latest blow from regulators over the way the U.S. company prices mobile phone chips and patents.

The company has been violating antitrust rules for at least 7 years and Qualcomm collected NT$400 billion in licensing fees from local companies during that time, the Taiwanese regulator said in a statement on its website Wednesday. The San Diego-based company didn’t immediately respond to a request for comment.

Qualcomm has attracted scrutiny from regulators around the world, with it practices probed in South Korea, China, Japan, the European Union and elsewhere. The company is engaged in a fierce battle with Apple Inc. that has seen the iPhone maker cut off billions of dollars in payments to Qualcomm.

Müller wrote about it in his own blog later on. To quote:

The Taiwan Fair Trade Commission’s decision to impose a record fine of more than $700 million on Qualcomm and to demand a departure from some of Qualcomm’s longstanding, problematic practices is really huge. If I didn’t believe so, I wouldn’t be writing this blog post about two hours after receiving approval from Apple to publish my iOS game, after three years of development. We’re initially making the game available in 24 countries now and will do our U.S. launch (after a bit more fine-tuning) next month, at which time I’ll be more specific about category, name, features, everything.

[...]

This has been a very eventful ten months for Qualcomm in antitrust terms. It’s hard to identify the tipping point, but my prediction is Qualcomm will have to fundamentally change its patent licensing and other business practices in the not too distant future, and when that happens, today’s Taiwanese decision will be considered to have been among the more important events in that regard.

IAM, as expected, isn’t too happy. “Whatever happens with the appeals,” it wrote, “the fact that the TFTC has shown its cards means there is one less major regulatory question mark for Qualcomm in Asia. The focus of the antitrust war may shift to the US and EU going forward, although there is still important Apple-Qualcomm litigation going on in China, Taiwan and Japan.”

On a separate day IAM spoke about NXP patents and Qualcomm, which it dubbed “one of the world’s leading licensors” (more like one of the world’s leading bullies). To quote:

According to a news report earlier this week Qualcomm has offered to agree to certain patent-related conditions in order to get the greenlight for its $38 billion takeover of NXP from European Union regulators. The giant US chipmaker is said to have told regulators that it will not acquire NXP’s standard essential patents (SEPs) and will not assert the Dutch company’s IP relating to near field communication (NFC) technology, except for defensive purposes.

Given that Qualcomm is one of the world’s leading licensors and makes a big chunk of its profits from monetising its patent portfolio in the mobile space, these possible concessions are very significant. The San Diego based business’s licensing practices are of course well and truly in the spotlight right now thanks to various regulatory investigations and its increasingly bitter spat with Apple. As we reported earlier today, Qualcomm was fined $773 million by Taiwan’s antitrust authorities (the company has said it will challenge the decision in court) and has also been hit with fines in the recent past by South Korea and China.

An article from Eric Jhonsa at The Street has meanwhile explained “Why Apple Is Likely to Come Out Ahead in Its Royalty Battle With Qualcomm” and to quote the summary:

Apple probably won’t get everything it officially wants in its legal fight with Qualcomm. But similar to what happened in its patent battles with Samsung, Apple might end up in a better position than if it had never sued.

As we explained at the start of the year, if Apple wins this battle, it will be good news for Android, too. Apple has just, yet again, been sued for patent infringement. Will Apple interpret that as a wakeup call regarding patents? Perhaps a nice goal for us to have is to compel companies like Apple to understand that software patents aren’t in their interest and therefore fight along with us.

“Will Apple interpret that as a wakeup call regarding patents?”In the meantime, as of Friday, “Qualcomm Seeks China iPhone Ban, Expanding Apple Legal Fight” (because it’s feeling the pressure).

To quote Bloomberg again:

Qualcomm Inc. filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc. so far in a sprawling and bitter legal fight.

The San Diego-based company aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made. The product provides almost two-thirds of Apple’s revenue. Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, according to Christine Trimble, a company spokeswoman.

Qualcomm is just trying to intimidate Apple, but we very much doubt this pressure (or financial risk) will turn Apple away. At the end, we certainly hope that Qualcomm will lose and preferably fold as a company. Qualcomm has nothing left to offer.

10.11.17

The FRAND Lobby is Trying to Sneak Software Patents Into Countries That Banned Them

Posted in Antitrust, Europe, Microsoft, Patents, RAND at 2:58 am by Dr. Roy Schestowitz

India IAM lobbyingSummary: The patent lobby is attempting to find new ways to impose patents on software (with euphemisms like “reasonable”, “non-discriminatory” or “fair”), even in places that explicitly disallow these

THE Association for Competitive Technology (ACT), Business Software Alliance (BSA) and other front groups of Microsoft have long lobbied for FRAND. It’s one way for Microsoft to systematically impede/suppress/discourage if not altogether ban/obstruct Free/Open Source software. Cablegate has a lot of evidence of it.

Any FRAND Trojan horse is basically an attempt to put a cost on things that are otherwise free, such as software. When everyone is free to implement something, in the form of Free/Open Source software, the only barrier can be software patents.

India, as is widely known, is not allowing software patents, yet IAM keeps shaming and bullying India to change that policy. IAM is basically like a lobbying group masquerading as a publication. Yesterday Jacob Schindler wrote about it again, in support of FRAND. To quote the final portion:

Over at SpicyIP, Rajiv Choudhry discusses the new FRAND initiative in the context of what he terms an “ongoing turf war” between the TRAI and the CCI. In the patent space, the latter has become a fixture thanks to its intervention in two SEP disputes involving Ericsson. The CCI launched investigations of the Swedish company based on complaints by both Intex and Micromax, both of which Ericsson sued for patent infringement. In March 2016, the Delhi High Court ruled that those probes could continue, suggesting that the CCI is going to have jurisdiction to look into such SEP matters going forward. If anything comes of this TRAI consultation, there could be a second SEP watchdog in India that patent owners will need to pay close attention to.

As a reminder, earlier this year IAM did its usual lobbying in India, e.g.:

Also yesterday there was an observation about this new report regarding FRAND in relation to Qualcomm. “FRAND, ACT and Mingorance, sounds like a nightmare for freedom,” Benjamin Henrion remarked on this report. To quote a portion:

Qualcomm’s patent fee model is based on the widely used so-called “fair, reasonable and non-discriminatory” (FRAND) licensing model. The European Commission, however, has yet to make a final decision on which technology patent fee model it favours.

Look who the author is quoting. It’s appalling. A Trojan horse from IP Europe and more Microsoft-connected front groups. Recall what we wrote about it on Sunday and see this new tweet which says “Paris hosts standard body organisations’ and IP Europe’s initiative for a code of conduct in IoT and 5G licensing.”

They are trying to stick software patents tax using buzzwords like IoT and 5G.

Also regarding Qualcomm, this new blog post deals with the European Commission’s take:

There have been strong indications that the European Commission’s Directorate-General for Competition (DG COMP) has serious concerns about the potentially anti-competitive effects of Qualcomm’s proposed acquisition of NXP Semiconductors. By now, there can be no doubt about that: the Commission’s website states that Qualcomm submitted commitments four days ago. No one offers commitments if unconditional clearance is achievable.

Typically, companies discuss such proposed commitments with the Commission beforehand. If the Commission believes the commitments might be useful, it puts them to a market test, giving stakeholders an opportunity to comment. Here, there is no official confirmation–just rumors–of an ongoing market test.

It’s important to be aware that the fight for software patents is taking new forms; they often disguise it as “FRAND” (every now and then they say “RAND”) and software patents are being framed as “AI” or “cloud” or “IoT” or whatever (at the EPO too).

09.22.17

Intellectual Ventures, GNU/Linux/Android/FOSS Patents, and the Ascent of European Patent Trolls

Posted in Antitrust, Asia, Europe, GNU/Linux, Google, Microsoft, Patents at 3:24 pm by Dr. Roy Schestowitz

Summary: The existing status of GNU/Linux in a world full of patent trolls, which not only target OEMs from Asia — typically in the US — but are also dragging them into Europe, aided by the EPO’s ‘patent bubble’

THE FREE/LIBRE software world is thriving. It’s spreading everywhere. But that does not mean that users of such software are protected from frivolous lawsuits, especially in countries where software patents exist. Developers too are occasionally being threatened or sued; we have given examples where projects got shut down due to these actions.

Readers might rightly wonder why we haven’t said a single thing about Red Hat’s latest press release; we instead included about a dozen stories in our daily links under the Red Hat section (not much new there, just reiteration of a promise from a decade and a half ago). We are more concerned about real, existing, potent threats to software.

According to today’s blog post from IAM, Microsoft’s patent troll Nathan Myhrvold now dominates the world’s largest troll, Intellectual Ventures. IAM is a fan of his and this is what it wrote:

Intellectual Ventures founder Greg Gorder has left the firm, becoming the latest of the quartet of its founders to step away from the business, following Peter Detkin and Ed Jung. According to his bio, which remains on the IV website, Gorder left earlier this month and will now “focus on his family’s philanthropic activities”.

Detkin stood down as vice chairman in January 2015, although he has continued to devote part of his time to IV-related work. Earlier this year he became a senior adviser to Sherpa Technology Group, the consulting business that was established by former VP of IP at IBM and IP Hall of Fame member Kevin Rivette. Jung also took on a new role at the start of the year, becoming CEO of Xinova, the innovation business that was spun out of IV in 2016.

“Intellectual property is the next software,” Myhrvold once said. It means that to him it’s all about patents. This Microsoft-connected patent troll is already suing quite a few companies that distribute BSD and/or GNU/Linux. It’s not a matter of “if” or “when”. The battle began years ago, but Intellectual Ventures operates through various shells. One of those is Dominion Harbor, which is publicly defaming me and smearing the EFF. To them, there’s much money at stake.

“HTC took some of these patents for defensive purposes after Apple and Microsoft had sued or blackmailed.”As is widely known by now (it’s in our daily links also), Google is taking over a large portion of HTC and IAM notes that “HTC does have around 2,000 US patents including third-party assets from the likes of HP, NEC and Nokia. It is now clear that those patents will stay in the Taiwanese company’s possession.”

HTC took some of these patents for defensive purposes after Apple and Microsoft had sued or blackmailed. HTC was Apple’s first Android target (before Apple moved on to Samsung, the largest Android OEM at the time).

Samsung’s home base, South Korea, still seems to have very low tolerance for patent parasites/trolls (and the likes of them). IAM says that the new antitrust boss (KFTC) will be tough on those who seek to restrict competition using patents:

Over the past few years, South Korea’s antitrust regulator has been one of the toughest on issues of intellectual property. Now, the leader of the Korea Fair Trade Commission (KFTC) says the body is about to start an inquest focused on how patents affect competition in the Internet of Things (IoT) or 5G space.

KFTC chairman Kim Sang-jo mentioned the role of patents in IoT during an appearance Monday at which he outlined five priorities for competition policy. 5G communications, digital broadcasting and connected devices were named as fields in which the KFTC plans to study the market for “monopolistic and oligopolistic situations”. Apparently the watchdog will establish a “monitoring network for prevention of patent rights abuse”; it is not clear what that means, but if it leads to investigations of specific patent owners, it will make waves given the commission’s history of dealing out major fines.

Germany, on the other hand, goes the other way, with the EPO being a prominent symptom of it. German companies, in a country where trolling has become a fast-growing epidemic, are stockpiling patents and Florian Müller expects those companies to become trolls before these patents expire. To quote what he wrote the other day:

Meet the patent trolls of the 2030s: Bosch, Volkswagen, Daimler, BMW

our days before the 67th International Motor Show (IAA) in Frankfurt will end, I’d like to offer a bold prediction: unless a miracle of the kind I can’t imagine happens, Germany’s automotive industry (car manufacturers as well as suppliers) will suffer a fate similar to that of the smartphone divisions of the likes of Nokia and Ericsson, ultimately resulting in “trollification” by the 2030s.

As Frankfurter Allgemeine Zeitung noted last month, 52% of all patent filings related to self-driving cars belong to German companies, with Bosch alone (which is number one and followed by Audi and Continental)holding three times as many patents in that field as Google and Apple or Tesla not having any significant patent holdings in that field yet. Besides Bosch, Audi, and Continental, three other German companies are among the top 10 patent holders in this field: BMW, Volkswagen, and Daimler.

Patent filings related to self-driving cars are picking up speed, so the landscape will almost certainly change in some ways in the coming years, but not entirely.

Müller can see these writings on the wall. We could not agree more; the situation at the EPO is untenable and patent grants in Germany are disproportionately high (almost an order of magnitude more than the UK’s). We certainly hope that EPO workers are paying attention to these trends; every patent grant can cause to an innocent engineer an equal (or greater) amount of agony than that inflicted by Battistelli. We’ll say more about patent trolls in our next post.

09.06.17

When Patent Maximalists Say ‘Innovation’ is Moving to Asia or China They Mean Litigation Chaos Moves There

Posted in Antitrust, Asia, LG, Patents, Samsung at 6:51 pm by Dr. Roy Schestowitz

The latest ‘revolution’ in China is deeply self-corroding

China flag

Summary: China’s short-term patent policy already backfires by attracting patent parasites (growing at the expense of producing industries)

IT was only days ago that mainstream media relayed the lie (unsupported by facts) that the US loses leadership to China (in the patents sense). All that the US ‘loses’ is patent trolling and other such nuisance. Earlier today we saw this new press release whose headline made it abundantly clear that patents are not about innovation but about “blocking competitors” (their words, i.e. opposite of innovation).

“In Korea (the South), which in principle does not allow patenting of software, there are two massive corporations which dominate the charts (not only in Korea).”As we have been noting here for about a year, China is creating a massive patent bubble; last year alone, for example, over a million patent applications were filed! Yes, over a million! Imagine how rubbish these must be to reach/added up to such a figure!

In Korea (the South), which in principle does not allow patenting of software, there are two massive corporations which dominate the charts (not only in Korea). Those corporations are LG and Samsung (especially the latter). Design patents should generally not be granted; that’s what copyrights and trademarks (or “registered designs”, not patents) are for, but Samsung joins this gold rush anyway, possibly in anticipation of more Apple lawsuits (this matter may soon reach the US Supreme Court). The other day Florian Müller said that the “Korean court denies Qualcomm’s motion to stay execution of KFTC antitrust ruling,” referring to yet another headache that we covered here before. The background:

Last December, the Korea Fair Trade Commission (KFTC) handed down a decision against Qualcomm that U.S. tech companies welcomed. The following month, the FTC and Apple sued Qualcomm on antitrust grounds in California. In March, it became known that Qualcomm’s refusal to licenses its standard-essential patents (SEPs) on FRAND terms to other chipset makers is one of the various concerns the Korean competition authority has.

Korea is a smart country; unlike China, it’s not being rushed into the patent bubble. It’s not being shamed into patent maximalism, either. Their regulatory agencies have already dealt big blows to US corporations such as Intel (we covered this at the time) and they don’t let bullying become the norm. Also, as we noted here many times before, Korean companies very rarely initiate legal action with patents (unless attacked first). It’s something about their culture.

“Korea is a smart country; unlike China, it’s not being rushed into the patent bubble.”Compare that to China.

“China’s top patent owner Huawei,” as IAM put it the other day, is ‘collecting’ patents right now (from a Japanese company). Here is what IAM predicts:

China’s top patent owner Huawei has continued its third-party acquisition efforts with the recent pick-up of seven US patent grants from Japanese company Hitachi. Several weeks on from that transaction, it doesn’t look like the apparent patent sale was part of a larger deal to settle the US legal tussle between the two companies, which is ongoing in the Eastern District of Texas. Instead it underline’s the Japanese company’s all-of-the-above approach to monetising patents as its business is transformed.

Those unruly patent zealots, as IAM put it in another article, have devolved into a “shouting match” in China:

A somewhat hostile question from an Apple-linked private practice lawyer sparked a heated and, at times, ugly exchange of the sort rarely seen at patent conferences in Beijing this afternoon. Apple and Chinese firm Iwncomm have been battling it out in Chinese courtrooms for more than a year, and attendees at the China Patent Annual Conference, which kicked off today at the China National Convention Center, saw it play out before their eyes.

Iwncomm is far from a household name, even in its native China (where it’s also known as Xi’an Xidian Jietong). But its IP profile has risen significantly since it became the first plaintiff to obtain an SEP-based injunction in China. In a session focused on IP licensing which also featured Apple senior legal counsel Steve Wang, Iwncomm managing director Cao Jun introduced his company and explained his view on why China shouldn’t be afraid to strengthen IP protections.

We have become accustomed to a lot of legal ‘action’ in China, unlike say in Korea or Japan (their courts are tougher on patents). As of this week, IAM calls some of the most horrible patent trolls “PIPCOs” (avoiding the term “troll” like Trump avoids “climate change”). It’s about china again (ZTE) and here is what the business model is compared to:

The PIPCO model is not entirely dead — the success of the likes of InterDigital, Rambus and Finjan show that it can still work for a select few — but it’s clear that most licensing businesses in the future will remain private.

We have been writing quite a bit about Finjan lately. It’ll hopefully perish in the US, but the likes of it seem to have spread eastwards to China.

If China doesn’t recognise just how misguided its patent policy is, not much will be left there other than lawsuits (as opposed to production). This is of course good for patent zealots like IAM and its funding sources, but very bad to productive companies.

08.31.17

Patent Trolls Are Under Attack and on the Run

Posted in America, Antitrust, Courtroom, Patents, Security at 5:51 pm by Dr. Roy Schestowitz

“I would much rather spend my time and money and energy finding ways to make the Internet safer and better than bickering over patents.”

Dean Drako, Barracuda’s CEO

Summary: Wetro Lan LLC panics and pays ‘protection’ money after a failed trolling attempt; MPEG-LA too is under fire, as an antitrust lawsuit has finally been filed against it

EARLIER today we found two interesting reports, one from Dale Walker and another from Joe Mullin, who has been tracking and writing about patent trolls for about a decade. Following TC Heartland we certainly hope that things will change; patent trolls will hopefully altogether go out of business [sic] some time soon. Extortion and racketeering have no value/benefit to the economy.

Walker explained how the latest twist of events got started: “The Moscow-based security company [Kaspersky] was first approached by a patent holder in October last year, who issued a patent lawsuit and demanded a $60,000 cash settlement to make the case disappear.”

Guess what happened instead (and not for the first time).

The tables are turning. Wetro Lan and other patent trolls find themselves on the run when they may be forced to pay the defendant’s legal fees and sometimes lose their patents too. This is what happened in this latest case. To quote Mullin:

The patent-licensing company, Wetro Lan LLC, owned US Patent No. 6,795,918, which essentially claimed an Internet firewall. The patent was filed in 2000 despite the fact that computer network firewalls date to the 1980s. The ’918 patent was used in what the Electronic Frontier Foundation called an “outrageous trolling campaign,” in which dozens of companies were sued out of Wetro Lan’s “headquarters,” a Plano office suite that it shared with several other firms that engage in what is pejoratively called “patent-trolling.” Wetro Lan’s complaints argued that a vast array of Internet routers and switches infringed its patent.

This is the key part:

As claim construction approached, Kaspersky’s lead lawyer Casey Kniser served discovery requests for Wetro Lan’s other license agreements. He suspected the amounts were low.

Finally there’s this:

On a post to his personal blog detailing the victory against Wetro Lan, founder and CEO Eugene Kaspersky says his company has now defeated five claims from patent assertion entities, including the infamous claims from Lodsys, a much-maligned patent holder that sent demand letters to small app developers. Lodsys dropped its case against Kaspersky right before a trial.

While the company has spent plenty in legal fees, its total payout to so-called “trolls” has been $0. Firms that engage in “trolling” know that companies often simply settle instead of dealing with the costs and pain of a court litigation.

Kaspersky and others in his field do not like software patents. They speak out about it (occasionally).

The above reveals an interesting strategy where neither invalidation or (legal) fees award acts as a deterrent; it’s discovery requests. Apropos, Patently-O published this short post earlier today about the meaning of “all expenses,” noting a new CAFC decision where the judgment “was split – with Judges Prost and Dyk in majority and Judge Stoll in dissent and arguing that the term “expenses” is not sufficient to overcome the traditional american rule regarding attorney fees.”

The second story we found today came from IAM, which revealed MPEG-LA as the target of litigation, for a change (background about this troll can be found in our Wiki). Patent trolls can, as it turns out, be sued, this time using antitrust law. This gigantic troll is in hot water not only in the far east, with the lawsuit actually being filed in the US:

Chinese appliance maker Haier has filed an antitrust lawsuit in the Northern District of New York against MPEG LA and six licensors that are part of its ATSC patent pool. The complaint accuses the companies and pool administrator of a range of anti-competitive practices affecting the market for televisions, the effect of which it says is to disadvantage implementers like Haier which compete on price at the lower end. For that reason, Chinese companies – many of which have argued that their low margins entitle them to different patent licence terms – will be interested to see how far this case goes.

It’s nice to see the patent trolls getting a taste of their own ‘medicine’ (or poison). It’s now them who find themselves needing to shell out ‘protection’ money.

07.24.17

Qualcomm-Apple Dispute Escalates Further (Lawsuits Come to Europe) With the Cost of Linux-Powered Devices Also at Stake

Posted in Antitrust, Apple, Courtroom, Patents at 2:57 am by Dr. Roy Schestowitz

The latest twist is, Qualcomm ended up suing Apple — using rather dubious patents — in Munich and in Mannheim

Mannheim, Germany
Mannheim, Germany

Summary: Another catchup with a high-profile case (complaints and lawsuits ad infinitum) that will help determine one’s ability to leverage patents in bulk — including software patents — against phone-making OEMs

THE summertime has been full of news about Qualcomm, a company we wrote quite a lot about in relation to its abusive patent litigation campaign and the growing number of complaints against that. The subject is important to those who are interested in patents on phones, including software patents. Aren’t they far too expensive already?

“The subject is important to those who are interested in patents on phones, including software patents.”Last month, for example, Qualcomm’s actions culminated in attempts to block iPhone imports. It affects Linux too, by extension. Here is Simon Phipps writing about this one patent aggressor going after another, Apple (which attacks Android/Linux). It was also covered by Florian Müller, Android sites, hardware sites, financial sites, press releases, and technical press. CNET focused on how it might affect iPhone users.

As usual, any story that involves “Apple” tends to attract more coverage than something about an Android OEM. We hypothesised about the reasons for that in the distant past.

“As usual, any story that involves “Apple” tends to attract more coverage than something about an Android OEM.”Qualcomm’s actions were a reaction to Apple’s complaint. Citing Lexmark (SCOTUS), for example, Müller recently wrote about the FTC complaint. He said this: “I believe Qualcomm is trying to nuance its corporate structure here because it will try to somehow argue (which is going to be a tall order and I doubt it will persuade Judge Koh) that the Supreme Court’s recent Lexmark ruling on patent exhaustion wouldn’t apply to Qualcomm’s situation.

“Most of Qualcomm’s nine defenses (stated at the end of the document) are legal theories that are identical or related to what didn’t persuade Judge Koh in connection with the motion to dismiss, plus theories according to which whatever may appear anticompetitive is actually good for consumers (or, conversely, whatever remedy might appear procompetitive would ultimately harm consumers). Considering how much I, as a consumer, believe to have indirectly paid to Qualcomm over the years (vs. what other patent holders presumably collected), I disagree. In particular, the consumer-friendliest remedy would be to enforce Qualcomm’s “to all comers” FRAND licensing obligation so that Intel, Samsung and others could sell baseband chips to device makers that come with a license to Qualcomm’s standard-essential patents.”

“Qualcomm has preyed on Android OEMs, so an Apple win would be beneficial to Linux in this case.”Writing in late June he said there were “many billions at stake” and the mainstream press covered that too. Qualcomm had attempted to produce a so-called ‘study’, but Apple kept refuting it. Even CCIA, in the form of Patent Progress, wrote about that at the time. Wall Street media chose the headline “Apple Alleges ‘Mounting Evidence’ Against Qualcomm”, noting that:

Apple found “continuing — and mounting — evidence of Qualcomm’s perpetuation of an illegal business model that burdens innovation,” according to the filing. It claims some of the patents that Qualcomm wants to get paid for are invalid and that Qualcomm hasn’t fulfilled its obligation to charge fair and reasonable rates on patents related to industry standards.

As a reminder, we actually support Apple in this dispute. Qualcomm has preyed on Android OEMs, so an Apple win would be beneficial to Linux in this case. It would also harm Microsoft’s ability to shake down Android OEMs (Qualcomm’s recent threats to Microsoft and Intel notwithstanding). Precedence matters here.

Back in June the media recalled Qualcomm concessions/defeat, noting that “Qualcomm’s Refund to BlackBerry Swells to $940 Million”…

“BlackBerry is no ally here, but its ability to extract money (back) from Qualcomm is actually a good thing.”That was a deep and profound loss for patent maximalists – yet again!

BlackBerry’s devices now run Android, but BlackBerry may be getting out of that business and become a classic patent troll. The Canadian firm has already resorted to using software patents in the Eastern District of Texas against the competition. Bloomberg said a month ago that “BlackBerry Falls Most in Two Years as Software Sales Falter”. Well, the Bloomberg article has spread since [1, 2] and this was covered elsewhere.

BlackBerry is no ally here, but its ability to extract money (back) from Qualcomm is actually a good thing.

“…now it’s Qualcomm that’s coming under critical review from the European Commission.”“The final check that San Diego’s Qualcomm must write to smartphone maker BlackBerry for overpayment of patent royalties is $940 million,” said this article and Müller spoke of another pain for Qualcomm, namely the barrier to its NXP deal. “More than five years ago,” he recalled, “Google’s acquisition of Motorola Mobility was delayed significantly by merger reviews on both sides of the Atlantic and U.S. regulatory approval was subject to certain promises related to patent enforcement. At the time, Motorola Mobility (the acquisition target) was aggressively asserting FRAND-pledged standard-essential patents against Apple and Microsoft. Against that background of blatant FRAND abuse, competition enforcers weren’t prepared to grant fast-track approval.”

Well, now it’s Qualcomm that’s coming under critical review from the European Commission.

In patent extremists’ view, Qualcomm is doing nothing wrong. They don’t care about innovation and competition, only about maximal patent tax. IAM selectively covered this, choosing to defend standard essential patents (SEP) as follows:

While patent owners in the US in recent years have become accustomed to change in the legal environment courtesy of the Supreme Court and Congress, some have also had to contend with the much broader application of competition laws by local antitrust authorities. The Federal Trade Commission (FTC) has taken a lead role in actively policing the licensing activities of standard essential patent (SEP) holders, starting with Rambus in the mid-2000s and most recently with its investigation into Qualcomm’s licensing practices.

In contrast to this, Müller cited Judge Lucy Koh. Here is the relevant portion:

Qualcomm tried hard, but unsuccessfully, to get the FTC’s antitrust lawsuit in the Northern District of California dismissed. Maybe Qualcomm hoped, more realistically, the FTC would have to amend the complaint in some important ways, possibly complicating the case to the point where the U.S. competition agency would find it hard(er) to justify using the resources required for pressing on. The reason I suspected the latter is because, based on hearsay from about seven years ago, the European Commission’s investigation of Qualcomm’s practices with a focus on Nokia (now more of a Qualcomm friend than foe), essentially got derailed by scare of conducting a resource-intensive, complex and somewhat subjective (thus more likely to be overruled) rate-setting exercise. In the FTC case here, the presently-Acting Chair of the FTC, Maureen Ohlhausen, opposed the decision authorizing the complaint, and might have been the first decision-maker to argue that the case should be dropped or settled (the latter without any useful remedies) due to litigation economics. Industry concern over such a decision by the FTC was and remains real, as an open letter to President Trump showed in April.

This was also covered in [1, 2, 3]. The FTC lawsuit isn’t going to stop any time soon.

“…many of the patents at hand are on software and likely not patent-eligible/valid under Alice.”Not too long afterwards Apple was joined by its hardware partners and Müller framed it as follows: “In April, Qualcomm (in its counterclaims to Apple’s Southern California complaint) already alleged that Apple had interfered with Qualcomm’s contractual relationships with the contract manufacturers, which is why the related royalty payments ground to a halt a few months ago. Therefore, it really never made sense to me in the first place that Qualcomm brought a separate action against the contract manufacturers (in which it has meanwhile requested a preliminary injunction): the thing to do, in my view, would have been for Qualcomm to add the contract manufacturers to the case as third-party counterclaim defendants.”

“Apple and its contract manufacturers present united, ever stronger front against Qualcomm,” Müller added later. That’s pretty recent news:

On Monday, four of its contract manufacturers (the ones Qualcomm is suing in the Southern District of California) impleaded Apple into Qualcomm’s breach-of-contract suit. Before midnight on Tuesday, Apple and its contract manufacturers (the most well-known of which is Foxconn) made various filings in San Diego. It will definitely take me some time to digest, but as I follow the various Qualcomm matters closely, I can share some observations here already.

This one report about it speaks of “patent actions made against indefensible software patents” because, as we noted here before, many of the patents at hand are on software and likely not patent-eligible/valid under Alice.

Qualcomm then resorted to throwing more lawsuits Apple’s way, this time in Germany [1, 2].

Just before the weekend Josh Landau (CCIA) argued that “If Qualcomm Wins At The ITC, We All Lose,” for it’s not only Apple’s business that’s at stake. To quote:

This afternoon, CCIA filed comments on the public interest in the Qualcomm v. Apple case pending at the International Trade Commission (ITC). Qualcomm sued Apple in the ITC as part of the large dispute between the two companies. (The dispute continues to grow, having recently added a case in Germany and suits and counter-suits between Qualcomm and the contract manufacturers Apple uses.)

As part of ITC investigations, the ITC seeks comments on how the requested relief would affect the public. As I’ve written before, Qualcomm’s practices are anti-competitive and harmful to consumers. And by seeking to exclude Apple from selling any iPhones that lack Qualcomm processors, Qualcomm is trying to use the ITC as a tool to maintain their anti-competitive practices in the face of lawsuits from Apple and the FTC.

We generally haven’t kept a very close eye on this case because it involves two (or three, if we count BlackBerry too) companies that we don’t support and would rather see destroying one another. At the end of the day, however, the outcome will have serious ramification for any company that sells devices with GNU/Linux, be it Tizen or Sailfish OS or Android in its various flavours. Müller seems to be the only person who’s really keeping up and abreast of every development.

05.27.17

Patent Dangers to Linux and Android: Qualcomm, Apple, and Nokia

Posted in Antitrust, Apple, GNU/Linux, Patents, Samsung at 6:24 am by Dr. Roy Schestowitz

Summary: The prevailing problem which is companies with mountains of patents going after OEMs, using a bulk of infringement accusations, and demanding ‘protection’ money

IN the US, Qualcomm has just made a move to stop Apple, which already stopped paying Qualcomm and is leading somewhat of a rebellion against Qualcomm (under trouble in multiple continents).

In Korea, Qualcomm is in troubled waters too. Korean companies like Samsung are also affected, so the actions against Qualcomm are bipartisan from the iOS/Android perspective. Qualcomm upsets everyone.

Days ago, according to this, “Apple had a deadline for responding to Samsung’s mid-March petition for writ of certiorari” (request for Supreme Court review) in the second California Apple v. Samsung case, which had received very significant support from software and Internet companies, non-governmental organizations and law professors.”

Apple’s patent war on Samsung seems to have become a distraction as meanwhile, in the past few years, Huawei became the largest Android OEM. That used to be Nokia, which is now preoccupied with patents and has just settled with Apple again. The Finnish media wrote that “Nokia and Apple settle intellectual property {sic} lawsuits, become partners” (they mean patents). It happened just a few days ago:

Finnish communications giant Nokia and US tech behemoth Apple announced on Tuesday that they have settled all of their litigation and signed a patent license and a business cooperation agreement.

As noted here, “Apple and Nokia announced a settlement today after only about 5 months of litigation. Apple v. Samsung has been going for more than 6 yrs…”

What a waste of time and energy. Only lawyers profit from these battles.

As noted in this article, we don’t know who pays and how much, but we can only guess that Nokia is paid by Apple, for it has more patents in this area and reports were always suggestive of a demand from Nokia (for a number of years):

The companies said today they have settled all outstanding litigation and agreed to a patent license. While exact financial terms are confidential, Apple will be making an up-front cash payment to Nokia, followed by additional payments over the course of the agreement.

Microsoft has already spread Nokia’s patents to patent trolls, scattering these in a way that harms Android. It’s problematic for many reasons and we mostly care about the effect on GNU/Linux.

05.14.17

Industry Giants Challenge Qualcomm’s Patent Practices While the Federal Trade Commission (FTC) Closely Examines Such Behavior

Posted in America, Antitrust, Apple, Hardware, Patents, Samsung at 3:10 am by Dr. Roy Schestowitz

Qualcomm doesn’t do much but collect patent royalties

Qualcomm building
Photo credit: Coolcaesar

Summary: Scrutiny of Qualcomm’s patent aggression and coercion — scrutiny that can profoundly change the way software patents, SEPs and FRAND are viewed — as seen in various amicus briefs (amici) from industry giants that are affected

THE many patents granted primarily by the USPTO to Qualcomm continue to represent a threat to the productive industry, as we noted earlier this year [1, 2, 3, 4].

“Remember that it was a Samsung foe, Apple, which played a big role in this battle and has in fact stopped paying Qualcomm (which sent the stock nosediving).”Belatedly, companies are complaining and regulators take a closer look at Qualcomm’s behaviour. Even a Microsoft AstroTurfing/front group, Association for Competitive Technology (ACT), is going to intervene, based on Florian Müller, who wrote a couple of new posts late on a Friday [1, 2], having just scrutinised new documents.

“Intel’s brief in FTC v. Qualcomm is pretty good,” he wrote. “It was just too late for me to still comment on it yesterday. Will do so next week.”

He quotes from the brief: “For years Qualcomm has maintained an interlocking web of abusive patent & commercial practices that subverts competition on merits” (hypocritical for Intel to state that).

Here is what Samsung had to say. “Samsung just filed an amicus brief supporting the FTC against Qualcomm,” Müller noted, “explaining how it’s being harmed by QCOM’s conduct in two biz areas.”

From his post about it:

In today’s opposition to a Qualcomm motion to dismiss the FTC’s antitrust complaint, the FTC says “[o]ther chipmakers may not wish to sue Qualcomm for a number of reasons, including fear of countersuit for infringement, escalation, litigation fees, disrupted relationships with OEMs [...].” While all of that can affect a chipmaker’s calculus, the situation is far worse for device makers: they have to fear massive disruption should Qualcomm cease to supply its chipsets to them. Also, Qualcomm’s rebate deals (that effectively result in some patent royalties being paid back) appear to be tied to total abstention from any kind of antitrust action against Qualcomm. All in all, it’s like a strangehold on an entire industry.

Remember that it was a Samsung foe, Apple, which played a big role in this battle and has in fact stopped paying Qualcomm (which sent the stock nosediving). Here is some of the latest:

The Federal Trade Commission (FTC) has just responded to Qualcomm’s motion to dismiss its antitrust complaint in the Northern District of California….

We have studied some of the above and it certainly seems like most of the industry, not just the FTC, is eager to put an end to Qualcomm’s exploitation of software patents to make money out of nothing but “licensing”.

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