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ALJ McNamara Finds Violation by Apple in Second Qualcomm Investigation & Recommends Remedy Despite Public Interest Arguments

(as published by ITC TLA)

In the Matter of CERTAIN MOBILE ELECTRONIC DEVICES AND RADIO FREQUENCY AND PROCESSING  COMPONENTS THEREOF (II), Inv. No. 337-TA-1093, Initial Determination and Recommended Remedy (March 26, 2019)

Summary: On March 26, 2019, ALJ McNamara issued her Initial Determination finding a violation based on one claim asserted by Qualcomm in this second-filed Investigation against Apple. The accused iPhone models incorporate a chipset component. Some accused models incorporate a chipset manufactured by Intel, while others incorporate a chipset manufactured by Qualcomm. The parties did not dispute the technical operation of the accused Apple iPhones. Instead, the infringement disputes centered on the parties’ dueling claim interpretations. ALJ McNamara resolved certain disputed claim constructions in Qualcomm’s favor, leading to a finding of infringement of one asserted claim. The chipset component itself was not found to infringe. Rather, only the assembled Apple iPhone processor, which incorporates the chipset component, was found to infringe.

As to remedy, Qualcomm requested “a limited exclusion order and a cease and desist order that would affect only those Apple iPhones that contain Intel base band chips.” Apple opposed a remedy on public interest grounds similar—if not identical—to the public interest factors that Apple relied on in the earlier decided 1065 Investigation. Namely, Apple insisted that its “premium” chipset supplier, Intel, would be forced to leave the market and abandon its development of 5G technology if remedial orders issued, leaving Qualcomm the only remaining supplier to mobile device manufacturers. 

ALJ McNamara acknowledged the importance of 5G technology to United States national security interests, but nevertheless disagreed with Apple’s “zero-sum game” approach to remedy. ALJ McNamara determined it was inappropriate to deny Qualcomm a remedy based on speculation about what Intel might do in the wake of ITC remedial orders against Apple. ALJ McNamara instead recommended tailored remedial orders designed specifically to “motivate” Apple to create a non-infringing redesign that would allow Apple to continue using Intel chipsets. She noted that, “[g]iven Apple’s engineering prowess and financial capability, surely a redesign is well within its means.” Specifically, ALJ McNamara recommended remedial orders with carve-outs that would permit Apple to: (1) repair and replace Apple’s iPhones previously sold in the United States and (2) import infringing devices for the purpose of testing and developing of a design-around. 

ALJ McNamara noted that the earlier-decided 1065 Investigation and this 1093 Investigation presented “overlapping, though not identical, public interest considerations.” She issued the ID on the same day that the Commission issued the Notice of the Commission’s Final Determination in the 1065 Investigation, which found no violation of Section 337 and, therefore, did not address “any issues of remedy, the public interest, or bonding.”

Apple and Qualcomm have since filed a joint motion to terminate the Investigation based on a settlement agreement.