Qualcomm still one of the worst companies and most lethal patent aggressors out there...

Summary: OEMs that actually manufacture/sell phones rather than slap a patent fine on them need to (re)group around Apple and help ensure that the patent thicket is removed (or made a lot thinner)

"No One Should Listen to Qualcomm About Patents," Matt Levy wrote yesterday, having pushed for patent reform for a number of years, striving to improve patent quality at the USPTO and put an end to patent trolling (which would be an outcome of the former, as there's a direct correlation). To quote Levy:

Why No One Should Listen to Qualcomm About Patents

Qualcomm is a major opponent, perhaps the strongest opponent, of patent litigation reform. It's becoming pretty obvious why. A few weeks ago, the Korean Fair Trade Commission went after Qualcomm for its anti-competitive licensing practices. This time, it's the U.S. Federal Trade Commission going after Qualcomm for its licensing practices.

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With the FTC complaint, we find a little bit more about Qualcomm's practices. For example, we learn why requiring companies to take a separate patent license in order to purchase chips is abusive. Normally, the purchase of the chips would be enough without a license, because, under the first sale and patent exhaustion doctrines, a seller automatically gives a license to the purchaser for any of the seller's relevant patents.

Qualcomm, however, forces its customers to take a separate patent license that entitles Qualcomm to a percentage of the price of the entire device that uses its chips. That is, a smartphone manufacturer has to pay Qualcomm a percentage of the price of the entire phone for each phone sold, in addition to paying for the chips. That's essentially extortion.

On the other side of the debate we have trolls- and aggressors-friendly sites like IAM, which is actually funded by them. Watch this:

Barnett’s work is particularly timely given the spate of lawsuits that have recently been brought against Qualcomm by, among others, the Federal Trade Commission (FTC) and Apple, over the chipmaker’s FRAND licensing. Those cases frame the argument around a dominant patent owner and technology supplier abusing its position to block out competitors and extract licences from manufacturers.

Qualcomm will no doubt counter with a robust defence; but, as Barnett’s research shows, like many licensors the company is on the wrong side of a set of theories that continue to shape much of the licensing narrative in the US.

So even those whom we expect to be very sympathetic to Qualcomm appear to have lost hope. Florian Müller has meanwhile told me that "one day that U.S. Apple v. Qualcomm case will go to the appeals court and Android OEMs will file pro-Apple amicus briefs" (it's one rare situation where Apple and Android have a common cause and we believe that, inadvertently, Apple helps Android OEMs too in this case).

"So it sounds as though Apple takes its fight against Qualcomm even further."Going back to IAM (which seems to believe readers care patent applicants at SIPO, in spite of the appalling patent quality), here is a recent translation/interpretation of reports that are typically published in Mandarin alone. "According to media reports," IAM says, "Apple lodged two separate complaints against Qualcomm with the Beijing IP Court. One alleges violations of China’s Antimonopoly Law, to the tune of 1 billion yuan ($145 million). The other is a challenge to the chipmaker’s licensing practices, which are described as “unfair and unreasonable”. The new move comes on the heels of a similar suit in the United States by Apple, that itself followed the FTC complaint covered in this blog last week. Qualcomm has dismissed Apple’s actions as a meritless effort to pay less for the technology it uses."

So it sounds as though Apple takes its fight against Qualcomm even further. This would, once again, be beneficial to Android OEMs, and not just Chinese ones. Remember that some of these Qualcomm patents are software patents.

"Nokia, in spite of returning to Linux and Android, represents a threat to Android OEMs in the patent sense."At the same time Apple continues fighting back against Nokia, which became very aggressive just before Christmas. See these new reports [1, 2, 3, 4] about the ITC investigating Nokia’s patent claims against Apple. The ITC is not unbiased (typically favours US companies, as one might expect), so we suspect it will favour Apple (US) over Nokia (Finland). Nokia, in spite of returning to Linux and Android, represents a threat to Android OEMs in the patent sense. The same is true for BlackBerry.

In other news about Apple, the "Federal Circuit Invalidates Ameranth's Menu Software Patents as Unpatentable Abstract Ideas," so there is growing hope that Qualcomm's and Nokia's software patents too will be thrown aside, leaving only patents on physical things. To quote the latest report:

The Federal Circuit’s recent decision in Apple, Inc. v. Ameranth, Inc. highlights the potential impact of characterization of recited features as conventional, routine, generic, or known in the field without further discussion of an innovation that goes beyond these features. Employing the two-step analytical framework of Mayo/Alice to evaluate subject matter eligibility under 35 U.S.C. €§ 101, the Federal Circuit affirmed in part and reversed in part Patent Trial and Appeal Board (“Board”) determinations in Covered Business Method (“CBM”) reviews regarding the patentability of U.S. Patent Nos. 6,384,850 (“’850 patent”), 6,871,325 (“’325 patent”), and 6,982,733 (“’733 patent”).

Remember that software patents die 70-80% of the time at the Federal Circuit (CAFC) and PTAB is widely supported/honoured by CAFC.

CAFC, however, will be the subject of our next post. ⬆