If you are an Apple customer, you may want to follow a case before the U.S. International Trade Commission (USITC) that could affect your ability to upgrade to the latest iPhone. At the center of the case are infringement claims against Apple involving 88 patent claims from chipmaker Qualcomm. The six patents at issue in this case relate to premium baseband chipsets, which currently connect smartphones to 4G networks and in the future will connect devices to 5G networks.
What Can the USITC Do?
Qualcomm pressed the claims at the USITC, which is a quasi-judicial federal agency that only has one legal remedy available at its disposal in cases like this: a ban on the importation of the allegedly infringing item. This means that even if USITC agrees with just one infringement claim out of the 88 originally brought in this case, it could ban the import of all covered iPhones (that is, all iPhones with Intel baseband chipsets, which adds up to most late model iPhones).
In fact, the administrative law judge (ALJ) assigned to review this case agreed with one infringement claim, and the other 87 were dismissed over the course of the proceeding. For a few important reasons, the ALJ declined to issue the import ban. First, he noted his concern that if iPhones with Intel chipsets are banned, Intel would exit the 4G and 5G markets and only one premium baseband chipset maker would remain. Allowing only a single premium baseband chipset maker to remain in such an important market, the ALJ reasoned, would deprive consumers of higher quality and lower prices driven by competition.
Second, the ALJ determined that undermining the quality and strength of 5G technology would degrade our national security. A lack of competition in the market for 5G hardware could cede leadership in the development of the standard to other countries. Some of these nations—if allowed to lead development of the standard—would undoubtedly require the inclusion of insecure technologies designed to maintain an open backdoor for their own intelligence gathering. This is an unacceptable result, which would inevitably compromise not just online gamers and recreational app users but also mission-critical communications connecting to a 5G network.
Congress Adds Their Voices
Members of Congress are largely in agreement with the ALJ and the App Association on these points and have pointed to additional reasons for the full USITC—as it reviews the ALJ’s decision—not to impose the import ban on iPhones. Thus far, several Members of Congress have weighed in.
Reps. Lofgren, Eshoo, Swalwell, and Matsui: “Our concern is that by granting an exclusion or cease-and-desist order in this instance the Commission would not only impact the FTC’s enforcement action, but also could be inadvertently showing powerful technology companies a strategy for circumventing their FRAND obligations.”
Rep. Andy Biggs: “As with our economic interests, our national security interests also benefit from two U.S. baseband chipset suppliers engaged in the process of setting 5G standards and making 5G chipsets.”
Rep. Darrell Issa: “A Commission exclusion order that deprived Intel of sales to Apple for the U.S. market would effectively reinstate Qualcomm’s troublesome exclusive deals that the FTC is challenging.”
Sens. Ron Wyden and Jeff Merkley, and Reps. Bonamici, Schrader, and DeFazio: “Given the demonstrated facts of a very limited number of competitors in the premium baseband chipset market, government action taken to reduce the number of companies competing in that market would severely impact the competitive conditions in the United States, ultimately harm the American consumer, and would be clearly against the public interest.”
Reps. Ken Buck, Lamar Smith, Matt Gaetz, Doug Lamborn, David Schweikert, and Roger Williams: “The potential harms to competition and U.S. economic and national security interests should weigh heavily in the ITC’s determination.”
Unfortunately, the federal government shutdown slowed progress on this matter, and a January 3 deadline for public comments to the USITC passed. There is no word if the USITC will reopen the public comments once the shutdown ends, but a related matter in a federal court could move it to top of mind. The Federal Trade Commission (FTC) and Qualcomm are due to wrap a month-long trial related to the FTC’s antitrust lawsuit against Qualcomm. The resolution of both matters will create a lasting impact on our networked future.