The United States International Trade Commission (USITC) was recently tapped to hear the ongoing spat between two of the world’s leading tech companies to determine whether Apple infringed three patents owned by chipmaker Qualcomm. It’s easy to view this dispute as another instance of tech giants duking it out over their stake in the thriving tech ecosystem, but this case has far-reaching implications for the $950 billion app economy and the millions of jobs it creates.
While patent infringement suits are heard in courts around the world every day, the USITC is a unique administrative law forum for patent disputes. Unlike other venues, the USITC cannot award monetary damages. Instead, if it determines an infringement has occurred, the USITC may block foreign imports at the U.S. border and deny market access for products found to be in violation of legal commitments. The outcome of this patent case has the potential to block the import of many of the products Apple makes, but would also hurt the thousands of downstream innovators and small businesses that depend on mobile technologies to share their products with the world.
This is a high stakes case. Hundreds of thousands of app developers and software companies rely on mobile communications devices equipped with smart chip technologies to provide the seemingly limitless consumer and enterprise software solutions enjoyed around the world. Tech innovators count on hearty competition in the information and communications technology ecosystem to secure the necessary computing power to share their products efficiently and effectively. And players throughout the tech ecosystem depend on the development and deployment of 5G networks to unlock the benefits of a ubiquitously-connected future driven by the internet of things (IoT).
The growth and potential of our most crucial industries depend upon access to smart chip-equipped mobile technologies. In the same way 5G and sensor-enabled technologies can help a miniature medical device automatically share a patient’s biometric data with a physician or hospital, connected devices can identify an unauthorized presence and alert security professionals with vital data, or offer new broadband network capabilities for our nation’s public safety and first responders. The possibilities are endless.
For the same reasons, the Qualcomm v. Apple case has many implications. Beyond the impacts this case will have on app developers and innovators, it will also challenge legal precedent and send ripples throughout the patent world.
First, as part of its USITC complaint, Qualcomm has requested a ban of Apple products that infringe on the three patents outlined in their case. Such a ban would not apply to Apple products that have Qualcomm chips, but only Apple products that have chips from other companies that Qualcomm alleges infringes on their patents. This unprecedented request raises serious questions regarding the scope of a USITC import ban and the USITC’s authority.
Second, the impact of this case and potential ban on Apple products would jeopardize the symbiotic relationship between mobile hardware and the innovative software developer community that brings benefits to consumers across the globe. If the USITC decides to prohibit the import of Apple devices into the United States, it would hurt the millions of consumers who rely on competitive prices and product variety in the market.
Lastly, the USITC will best serve the public interest by understanding where and how this complaint fits into broader patent disputes. This dispute is a part of the wider debate regarding patent infringement disputes generally and the treatment of standard essential patent (SEP) policy specifically. In fact, the integral nature of SEPs to existing and future innovations has made the licensing of these patents especially important, but also challenging. Notably, the Federal Trade Commission (FTC) recently brought an enforcement case against Qualcomm for its aggressive “no license, no chips” policy and other violations of commitments to license the SEPs for their chips on fair, reasonable, and non-discriminatory (FRAND) terms. Qualcomm’s decision to exclude SEPs from its USITC complaint against Apple opens the door to undermine the FTC in its ongoing district court case. Should the USITC choose to evaluate the Qualcomm v. Apple case outside the context of the FTC case and wider litigation landscape, the USITC’s processes may become a tool used to support Qualcomm’s anti-competitive behavior and jeopardize downstream innovators.
If the USITC decides to issue an exclusion order in the ongoing Qualcomm v. Apple patent infringement case, their unprecedented decision would not just harm the dynamic and vibrant app ecosystem, it would distort the vital competition amongst the mobile technology markets that exist today and the prospects for IoT innovations of the future.