Qualcomm Shouldn't Get Import Ban on Apple, Consumers Contend

(Bloomberg) -- Qualcomm Inc. shouldn’t be able to use a U.S. trade agency to knock out Intel Corp. as a competitor for chips inside Apple Inc.’s smartphones, a group of Apple consumers said in a court filing Thursday.

Consumers in a consolidated class action lawsuit accusing Qualcomm of antitrust violations want District Court Judge Lucy Koh in San Jose, California, to prevent the company from pursuing any import ban that might be imposed on Apple phones using Intel chips.

Qualcomm has filed patent-infringement complaints against Apple at the U.S. International Trade Commission in Washington, with a preliminary decision in one case expected in September. It’s part of a global billion-dollar battle between the companies over how much Apple should pay for access to Qualcomm’s technology used in mobile phones.

An import ban “would freeze out Intel’s nascent challenge to Qualcomm’s illegal monopoly,” the consumers said. It “would injure competition in a market already suffering from Qualcomm’s anticompetitive behavior.”

The consumers filed their suits to piggyback on one filed by the U.S. Federal Trade Commission which claimed Qualcomm was misusing its patents and market power to shut out competitors, particularly for Apple devices.

Fair Price

Qualcomm denies having a monopoly and said it’s entitled to compensation for the billions it spends on ways to make all mobile devices work better. It’s accused Apple of refusing to pay a fair price for technology it uses, and in a filing in a state court on Wednesday said the iPhone maker is ignoring a court order to turn over needed information. It’s an argument Qualcomm has made before -- a judge in the FTC case sanctioned Apple in December.

Trade Judge Thomas Pender, who just finished up a trial in the case, indicated he was inclined to find Apple in violation of Qualcomm’s patent rights. The agency’s only remedy in such cases is to issue import bans, and Qualcomm has asked that such an exclusion order be imposed on iPhones that don’t have Qualcomm chips.

Since the height of the so-called Smartphone Wars between Apple and Samsung Electronics Co., critics have argued that the trade commission shouldn’t be dragged into commercial disputes that usually end up with monetary settlements. Apple filed complaints there against its smartphone rivals.

The agency, whose task is to protect U.S. markets from unfair trade practices, works more quickly than district courts. That speed -- and the possibility of being shut out of the U.S. -- can give patent owners powerful leverage in any negotiations.

The case is In Re: Qualcomm Antitrust Litigation, 17-MD-2773, U.S. District Court for the Northern District of California (San Jose).

--With assistance from Ian King.

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Ros Krasny, Peter Blumberg

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