Judge finds Apple infringes on Qualcomm patent but declines to block iPhone imports

Qualcomm has lost a bid to block sales of certain iPhone 7 models in the U.S. — even though Apple is infringing on one of its patents.

A U.S. International Trade Commission administrative law judge ruled on Friday that Apple infringed on a power saving patent to extend battery life in mobile devices.

Even so, Judge Thomas Pender found it is not in the public interest to ban the sale of certain iPhone 7 models in the U.S. as Qualcomm sought.

Qualcomm can still make its case for a ban to the full International Trade Commission, but Pender’s ruling strikes a blow to its efforts to gain an upper hand in its wide-ranging legal war with Apple.

“We are pleased the administrative law judge found infringement of our patented technology, but it makes no sense to then allow infringement to continue by denying an import ban,” said Qualcomm General Counsel Don Rosenberg in a statement. “That goes against the ITC mandate to protect American innovators by blocking the import of infringing products.”

Rosenberg added that Qualcomm is looking “forward to a full ITC commission review in the coming months and continues to pursue the more than 40 other patent infringement cases we have brought against Apple globally.”

Last year, Qualcomm filed a patent infringement complaint with the ITC that sought to block the sale of iPhone 7 models that contain cellular modem chips from Intel and run on networks from AT&T and T-Mobile.

Qualcomm is the market leader for top-tier cellular modem chips that link smartphones to cell towers and the wider wireless network. It originally charged Apple with violating six patents but trimmed that number down to three just prior to a trial before Pender in June.

In his ruling Friday, Pender found that Apple does not infringe on the other two patents.

The ITC does not have the authority to levy financial penalties. All it can do is block infringing products from being imported into the U.S.

Before it takes that step, however, it must consider the “public interest,” including whether the ban would harm competition or consumers.

Apple argued that an import ban could force Intel to exit the cellular modem business – giving Qualcomm an even more dominant market position.

Qualcomm countered that Intel has spent billions developing 4G and 5G technologies, and it was highly unlikely that it would walk away from that investment.

In the end, Pender found “the statutory public interest factors weigh against issuing a limited exclusion order,” according to a summary of the ruling posted on the ITC website.

Apple applauded Pender’s ruling.

“Qualcomm has continued to unfairly demand royalties for technologies they have nothing to do with to protect their monopoly,” the company said in a statement. “We’re glad the ITC stopped Qualcomm’s attempt to damage competition and ultimately harm innovators and U.S. consumers.”

Qualcomm and Apple are fighting a fierce legal war in courts worldwide over intellectual property. It shows no sign of ending anytime soon. On Monday, Qualcomm upped the ante by accusing Apple of stealing proprietary software and providing it to Intel so it could develop more competitive cellular modem chips for smartphones.

Qualcomm has filed patent infringement and breach of contract lawsuits against Apple in Germany, China, the U.S. and elsewhere. Several of these cases go to trial later this year or next year.

Apple claims Qualcomm uses its market dominance in modem chips to force smartphone makers to overpay for use of its cellular inventions. It has stopped paying patent royalties to Qualcomm, and designed Qualcomm’s chips out of the latest iPhone models.

Qualcomm counters that its cellular technologies are the lifeblood of iPhones. Without them, iPhones would be glorified iPods, which sell for considerably less.

For use of Qualcomm’s patents, Apple was paying $15 to $20 per phone, according to analysts.

Qualcomm has a second infringement case against Apple pending at the ITC. It involves three additional patents. A trial was held earlier this month, where Apple likely made similar public interest arguments regarding a possible ban harming Intel and overall competition in the cellular modem market.

Pender is retiring from the ITC. A new administrative law judge is expected to release initial findings in the second case in January.

Qualcomm’s shares ended trading Friday up 32 cents at $72.03 on the Nasdaq exchange.

mike.freeman@sduniontribune.com;

Twitter:@TechDiego

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