Dueling Qualcomm, Apple rulings leave battle lines unchanged

(Reuters) – Split decisions on Tuesday by a U.S. government panel in acrimonious patent disputes between iPhone-maker Apple and chip supplier Qualcomm left the battle lines largely unmoved ahead of a U.S Federal Trade Commission ruling and a major trial next month.

A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China November 7, 2018. REUTERS/Aly Song

The International Trade Commission, a government agency empowered to hear disputes over patented technology, issued a final ruling in one case that went in Apple’s favor while an ITC administrative judge made a non-binding recommendation that supported Qualcomm.

In both cases Qualcomm Inc sought to have imports of Apple Inc iPhone 7, 8 and X models containing chips made by Intel Corp banned. Because iPhones are made overseas, banning imports would choke Apple’s sales of the phones in the United States.

The two American companies have been locked for two years in a sprawling legal dispute in which Apple has accused Qualcomm of unfair patent licensing practices. Qualcomm has in turn accused Apple of patent infringement.

Qualcomm and Apple did not immediately comment after the second ruling.

Gaston Kroub, a patent lawyer in New York not involved in the cases, said Qualcomm’s strategy at the ITC was to use the threat of a sales ban to pressure Apple into reaching a settlement of all patent and antitrust claims between the companies.

“Qualcomm will be happy they got at least something, but at the end of day, with this final determination, Apple will be emboldened to think it can continue to ward off Qualcomm’s attacks,” Kroub said. “I don’t see anything here that would impact Apple’s defense strategy.”

The focus moves now to upcoming skirmishes that will likely be more important. A ruling is expected soon in an antitrust case brought by the U.S. Federal Trade Commission accusing Qualcomm of abusing a monopoly on mobile chip technology.

A case brought by Apple making similar claims goes to trial in April.

After the non-binding decision in Qualcomm’s favor was announced on Tuesday, Apple shares closed down 1 percent to $186.79 in regular trading, and Qualcomm closed up 2.4 percent to $58.

In late trading after the announcement of the binding decision that favored Apple, Apple shares moved up .5 percent and Qualcomm shares moved down .4 percent.

Qualcomm has filed lawsuits in the United States, China, Germany and other countries alleging the iPhone uses its technology without authorization. Apple has a lawsuit pending in California alleging Qualcomm’s seeks inflated royalties for licensing its technology in violation of antitrust laws.

Qualcomm has a patent infringement suit against Apple in federal court and sales bans against Apple in China and Germany, though the China ban has not been enforced and Apple resumed sales of phones in Germany by shipping phones with only Qualcomm chips.

But Apple has also racked up victories by invalidating many Qualcomm patents, and the chip supplier has been dealt setbacks in its FTC trial, where a pre-trial ruling forced it to license its technology to other chip firms.

In a separate case that centered on some of the same patents at issue in the ITC case decided Tuesday, a jury in federal civil court in San Diego earlier this month found that Apple infringed three Qualcomm patents.

Reporting by Jan Wolfe and Stephen Nellis; Editing by Cynthia Osterman

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