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Apple's iPhones infringe Qualcomm patent and should be banned, ITC judge says

But an International Trade Commission ruling in a second case sides with Apple and says the company didn't infringe Qualcomm's patents.

iphone x iphone 8 8 plus

Apple and Qualcomm have been battling over patents and licensing. 

Sarah Tew/CNET

The International Trade Commission on Tuesday handed down two rulings in Apple and Qualcomm's battle over patents. One found in favor of Qualcomm while the other sided with Apple. 

In one case, a judge said Apple's iPhones have infringed a Qualcomm patent and should be banned from sale. But a full commission review in a second, separate case said Apple didn't infringe Qualcomm patents and dismissed that suit. It also said it found that Qualcomm's patents aren't valid. 

In the first findings published Tuesday, Administrative Law Judge MaryJoan McNamara, in an initial determination, said Apple has infringed claim one of Qualcomm's US Patent No. 8,063,674, which relates to power management in computing devices. The technology improves the performance of the power on/off on a device's control network and processor while also reducing power consumption and improving battery life. Qualcomm accused Apple's A10, A11 and A12 chips, which act as the brains of the iPhone 7 to the iPhone XS, of infringement. 

Because of that infringement, McNamara wrote, she plans to recommend that iPhones should be banned from sale in the US. She found that Apple didn't infringe other patents asserted by Qualcomm and said some of Qualcomm's patent claims are invalid.

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"A complete recommendation on remedy and bond will be forthcoming together with findings of fact and an analysis of the effects of the public interest factors on the issue of remedy," McNamara wrote. "However, it should be noted that I will be recommending that a limited exclusion order together with a cease and desist order, both with certification provisions, issue against Apple."

The ruling isn't final but will next go to a panel of judges, who should issue a decision by July 26. It then can be examined by President Donald Trump.

Qualcomm welcomed the news in the first case.

"We appreciate Judge McNamara's recognition of Apple's infringement of our hardware patent and that she will be recommending an import ban and cease and desist order," Don Rosenberg, Qualcomm general counsel, said in a statement.

It said in a press release that "the Commission's decision is inconsistent with the recent unanimous jury verdict finding infringement of the same patent after Apple abandoned its invalidity defense at the end of trial. We will seek reconsideration by the Commission in view of the jury verdict."

Apple, meanwhile, said in a statement that "We're pleased the ITC has found Qualcomm's latest patent claims invalid. It's another important step to making sure American companies are able to compete fairly in the marketplace." The company called Qualcomm's ITC case an effort "to distract from having to answer for the real issues, their monopolistic business practices." It added that "we look forward to detailing the many ways they're harming consumers and stifling innovation when we present our case in San Diego next month."

With the second case, an initial ruling in September by Administrative Law Judge Thomas Pender determined that Apple infringed one Qualcomm patent related to power management but didn't infringe two other patents. He didn't, however, believe iPhones should be banned from sale, saying the statutory public interest factors "weigh against issuing a limited exclusion order" related to the infringing products.

But the full panel review, released Tuesday, determined that Qualcomm's patents weren't valid, thanks to "clear and convincing evidence" from Apple. 

"No remedial orders shall be issued, which renders moot any issues of remedy, the public interest, or bonding," the ITC said. "The investigation is terminated."

Apple and Qualcomm have been fighting over patents and licensing since January 2017, when Apple filed suit against Qualcomm for roughly $1 billion, saying the maker of wireless chips didn't give fair licensing terms for its technology. Apple wants to pay a lower amount for using Qualcomm technology in its devices. Qualcomm, the world's biggest provider of mobile chips, responded by suing Apple for patent infringement and seeking a ban on iPhone sales. The company maintains that no modern handset -- including the iPhone -- would've been possible without its cellular technologies.

The US isn't the first court to recommend banning iPhones for infringing Qualcomm intellectual property. In early December, a Chinese court ordered four of Apple's Chinese subsidiaries to stop importing or selling iPhones because of patent infringement. Later that same month, a court in Munich found that Apple infringed Qualcomm's technology for power savings in smartphones and ruled that the iPhone maker must halt sales of the device in Germany.

In late 2017, in the case that Judge Pender is overseeing, Qualcomm asked the ITC to ban the import and sale of certain iPhones that use Intel's 4G modem. Those would've included the iPhone X88 Plus7 and 7 Plus that run on AT&T and T-Mobile. The phones that run on networks from Verizon and Sprint use Qualcomm's modem and wouldn't have been included in the ban.

In that case, Qualcomm initially asserted 88 claims from six patents. The ITC's decision from September upheld only one claim from one patent. Tuesday's decision invalidated that single claim. 

Duking it out in court

Earlier this month, a jury in San Diego determined that Apple violated three Qualcomm patents and should pay the chipmaker $31 million for infringing on its technology. Qualcomm had alleged that Apple used its technology without permission in some versions of the iPhone. The jury awarded Qualcomm the full amount it had requested at the start of the two-week trial.

The companies next face off on April 15 for a trial over Qualcomm's licensing practices. Because Qualcomm owns patents related to 3G, 4G and 5G phones -- as well as other features like software -- any handset maker building a device that connects to the networks has to pay a licensing fee, even if it doesn't use Qualcomm's chips. Apple and the companies that build its phones, like Foxconn, don't believe Qualcomm charges a fair rate. That trial, also in San Diego, will last 20 days before being handed to the jury. 

At the same time, Qualcomm is waiting for a judge's decision in a US Federal Trade Commission lawsuit that argued the chipmaker is a monopoly. The FTC two years ago accused Qualcomm of forcing customers like Apple to work with it exclusively and charging excessive licensing fees for its technology. 

Because of the legal disputes, Apple has moved away from using Qualcomm modems in its devices. Its newest phones, the iPhone XSXS Max and XR, use only Intel 4G chips.

Originally published March 26, 11:25 a.m. PT.
Updates, 12:02 p.m.: Adds Qualcomm statement; 2:24 p.m.: Includes second ITC case
ruling; 3:49 p.m.: Adds Apple comment; 11:46 p.m.: Includes additional details and Qualcomm statement on the second ruling.

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