Context: In 2019, Apple and its supplier Qualcomm settled their global dispute, which Apple started by bringing antitrust claims. But even a few months later, it already became noticeable that certain Apple (and Intel) actions to shoot down Qualcomm patents continued. It’s possible that Qualcomm didn’t want to insist on the withdrawal of those cases, considering that Qualcomm has a huge patent portfolio and if for every three or four patents that are invalidated or narrowed they gain one battle-tested one, it may actually give them more leverage in future disputes with Apple or anyone else. Some of those matters ended quickly, but some lasted years. One of the related disputes in the U.S. even gave rise to a petition for writ of certiorari (request for U.S. Supreme Court review), which was denied. Apple had a standing issue on appeal, given that there was no current controversy but only a potential future one (as Apple explained to the Federal Circuit) should the existing license agreement not be renewed at some point.
What’s new: China’s Enterprise Patent Observatory blog reported yesterday on a decision by the Supreme People’s Court (SPC) of China ending a rollercoaster ride (Enterprise Patent Observatory article of June 19, 2024). A Chinese patent that was first upheld and then invalidated has finally been declared valid by the SPC. The patent reads on touchscreens that detect not only the position but also the force of a contact, presumably reading on Apple’s 3D Touch and Haptic Touch features.
Direct impact: Apple is licensed to Qualcomm’s patent portfolio for about three more years after it exercised a renewal option under the 2019 settlement. Had Apple been in a position to replace Qualcomm’s 5G chips with its own, Apple would presumably not have done so. At this point, infringement litigation between the two companies is not possible. But should Apple want to drop Qualcomm as a supplier, it’s impossible to imagine that Apple will accept Qualcomm’s patent licensing terms. In that case, infringement litigation would arise.
Wider ramifications: Certain politicians and commentators in the Western hemisphere cry foul whenever a Chinese court decision favors implementers of patented technologies, but there are also many decisions that patent holders are happy about. The latter category of decisions just doesn’t get enough attention.
The patent that the SPC upheld is CN103502918, the Chinese member of the same patent family as U.S. Patent No. 8,952,987 (“user interface elements augmented with force detection”). It’s clear based on the description and the claim language that this is about touchscreens that make the distinction between a soft press or a hard press (and anything in between).
A few months ago, China’s PRIP blog reported on Apple’s second-instance success: the first-instance rejection of Apple’s invalidation request was overturned (March 3, 2024 PRIP article). But then Qualcomm appealed the matter further, and the SPC decided in favor of the patent holder.
This is obviously a non-standard essential patent. Last time, Qualcomm asserted only non-SEPs against Apple because there were existing licenses with Apple’s contract manufacturerds. In fact, even many non-SEPs could not be asserted, or at least not against all Apple devices in all markets (because some contract manufacturer may still have been licensed). That is also the reason for which Qualcomm asserted mostly rather young patents.
At the end of the day, commercial essential non-SEPs give a patentee more leverage than anything else. There’s no straightforward FRAND defense. The defendant can try to claim that it’s entitled to a compulsory license, but there’s probably not a single jurisdiction where that is a slam dunk, and there are some jurisdictions where it’s extremely difficult to prevail on that claim (or counterclaim).
Apple and Qualcomm are in a Cold War state. Qualcomm knows that Apple considers its patent royalties usurious and only accepted them under the 2019 settlement and the recent renewal until 2027 because it needs Qualcomm’s high-quality 5G chipsets. That may still be the case in 2027. Apple acquired an Intel division in 2019 after that one failed to deliver a high-quality 5G chipset on a reliable basis (which was the whole reason for the Qualcomm settlement only months after Tim Cook had ruled out a settlement categorically in a television interview where he called Qualcomm’s business model illegal). And five years on, they still don’t have an in-house alternative to Qualcomm’s chips. The Apple Car project also died after about ten years. Apple doesn’t always succeed, and it may now be more interested in making AI chips than baseband processors for smartphones. But should there be another dispute, Qualcomm may have some silver bullets in the form of non-SEPs that survived invalidity challenges and read on key features of Apple products.