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Qualcomm can’t leverage Chinese bogeyman or allege misuse of its trade secrets by Apple in upcoming antitrust and contract trial: pretrial rulings

Judge Gonzalo P. Curiel just entered a minute order summarizing various rulings on Apple’s, its contract manufacturers’, and Qualcomm’s motions in limine (pretrial motions to exclude testimony, evidence, or argument). The rulings came down orally at yesterday’s motion hearing as the order indicates.

While those decisions can have major impact on what the parties to a dispute can say or show at trial time, rulings on motions in limine are typically much less important than summary judgment orders, and a very important summary judgment was published yesterday but dated March 12 (Tuesday): under that one, Qualcomm has lost the opportunity (barring a successful appeal) to claw back billions of dollars from Apple, and it’s now apparently a foregone conclusion that Apple is entitled to an extra $1 billion in payments under a Business Cooperation and Patent Agreement (BCPA). And in other news today a jury verdict (in Qualcomm’s favor) came down in a sideshow case involving a very small amount of money compared to what’s really at stake between the parties.

But there are tens of billions of dollars at stake in the trial that will start on April 15 (with Apple placing the emphasis on antitrust and FRAND arguments, while Qualcomm puts certain contracts front and center), so even the decisions on various motions in limine are worth looking at (even if not in great detail because there’s so many of them). Relatively speaking, even those “MILs” are strategically more important than today’s verdict in a case that is not even about a tenth of a percent of the big antitrust/FRAND/contract case.

It’s important to consider that even if a motion in limine is denied, counsel may still successfully object (at trial time) to some of the related testimony, evidence, or argument.

Qualcomm’s five motions in limine

  1. This Qualcomm motion has been denied, so Apple and the contract manufacturers remain free to present testimony and argument concerning “royalty stacking.” This relates to the problem of numerous patent holders owning patents that have been declared to be essential to a given wireless industry standard, and if each and every one of those patent holders made Qualcomm-like demands on a per-patent basis, the aggregate royalty burden would be impossible for anyone to shoulder on a commercially viable basis.

  2. This one was granted, so Qualcomm has managed to preclude Apple from presenting evidence of its PR strategy, such as discussions between Qualcomm and its PR agents. But the motion made it clear in its first footnote that it “[did] not seek to exclude statements that Qualcomm has made to the press.”

  3. The court deferred judgment on whether to exclude hearsay evidence from unretained experts. The related Qualcomm motion said: “Apple’s exhibit list includes four expert papers by Karl Heinz Rosenbrock or Friedhelm Hillebrand regarding the Intellectual Property Rights Policy (‘IPR Policy’) of the European Telecommunication Standards Institute (‘ETSI’) (the ‘Expert Papers’).”

  4. Qualcomm’s motion to exclude evidence of certain standard-essential patent (SEP) disclosures has been denied. This is about Apple saying certain disclosures by Qualcomm (of essential patents) to two U.S. standard-setting organizations, ATIS and TIA, weren’t timely. This blog first mentioned them in connection with the summary judgment the FTC requested and actually obtained in the Northern District of California regarding licenses to rival chipset makers.

  5. Qualcomm’s second successful motion in limine achieved the exclusion of certain transcripts of what companies that aren’t parties to the Apple & Contract Manufacturers v. Qualcomm case in San Diego said at various investigative hearings held by the United States Federal Trade Commission (FTC). According to the motion, “[t]he witnesses who testified at these hearings included representatives from Samsung, Intel, Motorola, MediaTek and Huawei, among other companies.” Qualcomm complained that using those transcripts would be unfair because “Qualcomm had no opportunity to attend the hearings and cross-examine the witnesses” (unlike at the later stages of the FTC v. Qualcomm proceedings).

Qualcomm’s motions in limine had a pretty good hit rate (two out of five, and a third one may still succeed), but the impact is limited. Maybe there was something in the correspondence between Qualcomm and its PR companies that jurors might deem incriminating in some way, but I doubt it would have been absolutely damning. As for the investigative hearings, the fact that Qualcomm’s lawyers weren’t able to cross-examine those witnesses was a strong procedural argument for Qualcomm to make. However, the three SEP-specific motions in limine (#1, #3, #4) have been denied or deferred. And that’s where the beef really is.

Apple and the contract manufacturers’ 13 joint motions in limine

  1. Judge Curiel granted the motion to exclude testimony and argument regarding Apple non-SEP litigation. This is about positions Apple took in its dispute with Samsung over non-standard-essential patents. No one bashed Apple harder for its damages claims in one Samsung case than I did, but that’s an old story and really doesn’t have a bearing on what a FRAND royalty rate should be.

  2. Because of the denial of the related motion in limine, Qualcomm can still present certain fact witness testimony regarding the relative value of its portfolio. In their motion, Apple and the contract manufacturers had argued that “[t]hese and other Qualcomm fact witnesses have no basis to testify about the relative strength of Qualcomm’s patents because these witnesses have no personal knowledge of other companies’ patents.” I’m sure they’re going to raise this issue on cross-examination, just to minimize the weight any such testimony will be given.

  3. Qualcomm also remains free to present evidence or argument that Apple and the contract manufacturers allegedly make, use, offer to sell, sell, or import Qualcomm’s patented technology. The fact that Qualcomm may say so doesn’t mean it can prove large-scale infringement.

  4. The fourth motion in limine by Apple and its contract manufacturers has been granted in part and denied in part. The part that was granted appears very important: Qualcomm’s allegations of Apple having misused Qualcomm’s trade secrets or confidential information. There is a case pending under California state law, but so far nothing really appears to have come out of all those allegations, and they won’t even be part of the big San Diego case. What Qualcomm will, however be allowed to say is that Apple has actually hired, or tried to hire, some Qualcomm employees. With Apple having set up shop in San Diego and recruiting wireless chipset engineers there, it’s not really a secret–and not even 1% as incriminating as those–as of yet totally unproven–trade secret allegations.

  5. Qualcomm will be allowed to prsent some evidence regarding Apple’s financial strength. Also, Apple would have preferred to separate the question of punitive damages through a bifurcation of the trial, which won’t happen.

  6. Qualcomm can and likely will point to the fact that Apple has indemnification arrangements with its contract manufacturers (which is the normal course of business anyway).

  7. Apple prevailed on a motion in limine related to a totally unspecified contract with someone as well as its revenue sharing model for App Store purchases (as an app developer I have direct experience with that part), and its “MFi” program, which according to the motion “gives developers rights to traemarks, trade secrets, technical specifications, licenses to NEPs, and access to design components from vendors.”

  8. A motion related to a 2015 Apple-Samsung meeting has been deemed moot.

  9. The huge Chinese bogeyman that was part of Qualcomm’s PR strategy around the January FTC trial won’t resurface at next month’s trial. Judge Curiel granted a motion by Apple and its contract manufacturers to exclude evidence or argument that competitors who will benefit from the remedies sought are in Asia (last time I checked, Intel was still in California…) or portraying Qualcomm as an asset to U.S. national security (no patent can ever be an asset to national security since patents are published).

  10. Likewise, Judge Curiel agreed with Apple that some other antitrust cases involving either Apple or Qualcomm competitors like Intel over totally unrelated issues aren’t relevant here.

  11. The parties stipulated that Apple and the contract manufacturers’ motion to exclude evidence of Qualcomm’s corporate character (such as how nice, generous, benevolent or whatever Qualcomm would like to be considered) was moot.

  12. Apple and the contract manufacturers didn’t achieve a wholesale exclusion of “approximately, 92,438 pages of documents Qualcomm has produced since the cutoff [date in this case]” on top of “[m]ore than 18 million documents totaling over 08 million pages” already in the case. The denied motion argued that there was “a deliberate effort by Qualcomm to produce documents about events that have taken place after the fact discovery cutoff.” This sounds like something that may give rise to various case-by-case objections later on.

  13. Granted in part and denied in part. Apple won the exclusion of deposition testimony of French law professor Bénédicte Fauvarque-Cosson regarding the interpretation of the ETSI FRAND declaration under French law (also served as an expert witness for Qualcomm in the FTC case, but wasn’t made use of in the end) and former Bosch IP executive Dr. Bertram Huber (who sat across me at a 2004 government roundtable on patent policy) won’t be allowed to give “improper testimony about legal conclusion,” but he will be free to talk about the history or intent of the ETSI intellectual property rights policy.

Contract manufacturers’ (without Apple involved) two motions in limine

  1. (No. 14) This was basically withdrawn and related to whether Qualcomm could tell the jury that the damage award might be enhanced by a factor of up to three.

  2. (No. 15) The court denied a motion relating to evidence Qualcomm may present regarding a pass-on of damages (by the contract manufacturers to Apple).

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