AAI Urges ITC to Reject Anticompetitive Exclusion Order in Qualcomm iPhone Matter

On November 8, the American Antitrust Institute (AAI) filed comments with the International Trade Commission (ITC). AAI’s comments urge the ITC to follow the recommendation of an administrative law judge (ALJ) and reject Qualcomm’s petition to issue an exclusion order. The order would result in Qualcomm’s monopolization of the supply of premium baseband processors (“chipsets”), semiconductor devices that enables cell phones and other mobile devices to connect with cellular networks.

Separately, the Federal Trade Commission (FTC) is suing Qualcomm for monopolizing the supply of premium baseband processors by, among other things, entering exclusive-dealing arrangements with Apple.

Qualcomm’s ITC petition alleged that Apple iPhones infringed several Qualcomm patents (including some having nothing to do with baseband processors) and sought an order that would exclude infringing iPhones from the U.S. market, except those containing a Qualcomm chipset.

The ALJ rejected all but one of Qualcomm’s infringement claims and recommended that no exclusion order issue because it would harm the public interest. Specifically, the ALJ found that an exclusion order would lead to the exit of the only other supplier in the market, Intel, and enable Qualcomm to reestablish its monopoly in premium baseband processors.

AAI’s comments urged the ITC not to issue an exclusion order because such an order would preempt any effective relief in the FTC’s monopolization case, the trial of which is scheduled to begin in less than two months. Moreover, the order that Qualcomm seeks amounts to an abuse of the ITC process to secure a monopoly on a product (baseband processors) that Qualcomm does not claim are infringing its patents.

The comments point out that Qualcomm can be fully compensated for any infringement in federal district court, where Qualcomm has in fact brought the same infringement claims it has asserted at the ITC. Finally, the comments argue that the ALJ was correct in finding that Qualcomm’s monopolization of the premium baseband chipset market would adversely affect innovation and consumers.