San Diego Federal Jury Finds Apple Violated 3 Qualcomm Patents in iPhones

A San Diego federal jury on Friday found that certain Apple iPhones infringe on three Qualcomm non-standard essential patents and awarded the chipmaker $31 million in damages.

The jury reached a verdict after an eight-day trial in San Diego federal court before U.S. District Judge Dana Sabraw. The patents centered on power-saving techniques in transmissions between processors, ways to link to the internet faster after boot up and low-power graphics rendering in smartphones.

The award for infringing on three patents amounted to $1.41 per iPhone sold between July 2017, when Qualcomm filed the lawsuit, to today.

While the damages aren’t huge, the infringement verdict for Qualcomm involving non-essential patents could play a role in the wider dispute between the two companies.

In other lawsuits, Apple contends Qualcomm has concocted a scheme that allows it to overcharge for its standard essential patents.

But Apple has largely ignored or put little value on Qualcomm’s non-standard essential patents — which make up about two-thirds of the 130,000 patents in its intellectual property portfolio.

Qualcomm licenses patents on a portfolio basis, not individually. Smartphone makers pay 3.25 percent of the wholesale price of the device to license only standard essential patents, and 5 percent of the device price to license both standard essential and non-essential patents. There is a $400 cap — so the maximum device makers would pay for a full portfolio license is $20 per phone.

Standard essential patents center on technologies that have been adopted by the wireless industry to ensure devices from different manufacturers communicate with each other. For example, technologies that enable a text message sent from an iPhone can be read on an Android device.

There are limits on remedies for infringement of standard-essential patents since they must be used.

Non-essential patents aren’t required to be used in devices. They theoretically can be designed around by engineers to avoid infringement. But if infringement is found, there are fewer limits on damages.

Don Rosenberg, Qualcomm’s general counsel, said the unanimous verdict holds Apple accountable for using the San Diego company’s inventions without paying for them.

“The three patents found to be infringed in this case represent a small fraction of Qualcomm’s portfolio of tens of thousands of patents,” Rosenberg said.

An Apple spokesperson thanked the jury but said the company was disappointed by the verdict.

“Qualcomm’s ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in U.S. federal court and around the world.”

In the patent trial, Qualcomm argued that the three patents mostly translate to technologies that improve iPhone performance at low power.

Apple told the jury that it developed technology that didn’t infringe on Qualcomm’s patents. The company also claimed the idea for one of the patents came from an Apple engineer. At the time, the two companies were working together to meet Apple’s requirements for using Qualcomm chips in iPhones.

The three patents in this trial were all originally part of the complaint that Qualcomm brought before the U.S. International Trade Commission. The company sought to ban the import of certain iPhones that use Intel cellular modems.

Qualcomm withdrew the patent on faster boot-up from the ITC case before a hearing was held. An ITC administrative law judge found no infringement on the low-power graphics rendering patent.

But the ITC judge did find infringement on the power saving techniques in transmissions between processor chips in iPhones.

The full commission is now reviewing the administrative judge’s finding and is scheduled to issue a final determination on March 26.

Qualcomm also has won patent infringement claims against Apple in China and Germany, though it has lost some as well. Several cases are still pending worldwide.

A key trial in the wider legal fight between the two companies is slated to begin April 15 in San Diego federal court.

Qualcomm’s shares closed trading Friday up 2 percent at $56.60 on the Nasdaq exchange.