For the first time (just after Samsung, obviously, but that’s a bit different story), an Apple supplier not only disagreed with Apple on several FRAND questions, but also openly attacked it in an official document. Yeah, it’s Qualcomm, Apple’s baseband chip manufacturer.
First spotted by Foss Patents, Qualcomm’s direct attack in an ITC filing is interesting, mainly because of the manufacturer’s situation: its business is mostly based on standard-essential patent monetization, and it feels threatened, right now. The threat comes from Apple’s response to a couple of ITC questions that the Commission encouraged all stakeholders to comment on.
The questions are about the availability of injunctive relief over SEPS and criteria for a FRAND royalty rate. Reading Apple’s comments on the above questions, Qualcomm directly replied to Apple’s answers. Here are two paragraphs from Qualcomm’s reply:
“Of course, Apple’s premise of ‘a willing licensee with a good-faith disagreement who wants nothing other than for a disinterested party to determine what terms are FRAND’ is itself a sham and a pretext. At the recent proceedings before Judge Crabb in the Western District of Wisconsin, Apple’s ‘willing licensee’ mask fell off, when it absolutely refused–even at the cost of having its case dismissed–to commit to take a license to Motorola’s SEP portfolio on whatever terms the court might determine to be FRAND. Having literally walked away, minutes before trial, from an opportunity for an adjudication as to whether Motorola had offered FRAND terms to Apple, Apple should be embarrassed–but apparently is not–to demand that the Commission divest itself of jurisdiction unless and until a ‘U.S. Court has determined [the relevant license terms] to be FRAND’.
If Apple is not a willing licensee, and in any event there is no risk of an exclusion order 8or injunction) shutting down a truly willing licensee, what is the real agenda? It is to shelter the unwilling licensee–the infringer that, like Apple, has no interest at all in paying market-validated royalty rates. It is to ensure that SEP infringers can only be called to account under rules, and in fora, in which they may gain yardage, but can never lose. […]”
What’s obvious from the above paragraphs is that Qualcomm (and we can assume all companies with SEP in their portfolio) isn’t enchanted by the idea of a court-ordered offer, which obviously means price negotiations are limited to a fixed amount.