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19-07-25 MediaTek Amicus Brief ISO FTC Opposition
19-07-25 MediaTek Amicus Brief ISO FTC Opposition
No. 19-16122
v.
QUALCOMM INCORPORATED,
Defendant – Appellant.
Steven C. Holtzman
Gabriel R. Schlabach
BOIES SCHILLER FLEXNER LLP
44 Montgomery Street, 41st Floor
San Francisco, CA 94104
Telephone: (415) 293-6800
Inc. (“MediaTek”) respectfully moves for leave to file the attached brief
(“Qualcomm’s”) motion for stay pending appeal. The FTC consents, and
STATEMENT OF INTEREST
chips per year powering cell phones, tablets, voice assistant devices,
smart TVs, and media players. Having been slowed in modem chip
Qualcomm’s request for stay of the District Court’s Order would have an
1
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involved.” Sonoma Falls Developers, LLC v. Nev. Gold & Casinos, Inc.,
Order.
Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), Verizon
398 (2004), and MetroNet Services Corp. v. Qwest Corp., 383 F.3d 1124
(9th Cir. 2004). MediaTek’s brief will explain why this argument is
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Inc., 555 U.S. 438 (2009). MediaTek’s brief will explain why the District
With regard to the public interest, MediaTek’s brief will address the
Court by offering its analysis of the scope of the District Court’s Order,
Order will accelerate rather than hinder the cellular industry’s transition
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Yonatan Evan, counsel for Qualcomm, stated that Qualcomm will take
CONCLUSION
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CERTIFICATE OF COMPLIANCE
the count of the word processing system used to compose this brief,
CERTIFICATE OF SERVICE
foregoing with the Clerk of the Court for the United States Court of
Appeals for the Ninth Circuit by using the appellate CM/ECF system.
No. 19-16122
v.
QUALCOMM INCORPORATED,
Defendant – Appellant.
Steven C. Holtzman
Gabriel R. Schlabach
BOIES SCHILLER FLEXNER LLP
44 Montgomery Street, 41st Floor
San Francisco, CA 94104
Telephone: (415) 293-6800
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TABLE OF CONTENTS
CORPORATE DISCLOSURE STATEMENT ............................................ i
INTRODUCTION ...................................................................................... 1
ARGUMENT ............................................................................................. 2
CONCLUSION ........................................................................................ 15
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TABLE OF AUTHORITIES
CASES
Lair v. Bullock,
697 F.3d 1200 (9th Cir. 2012) ............................................................... 2
Nken v. Holder,
556 U.S. 418 (2009) ............................................................................... 2
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iv
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chips per year powering cell phones, tablets, voice assistant devices,
smart TVs, and media players. Having been slowed in modem chip
INTRODUCTION
1
MediaTek affirms that no counsel for any party authored this brief in
whole or in part; no party or party’s counsel contributed money to fund
preparation or submission of the brief; and no one but MediaTek
contributed money to fund the preparation or submission of this brief.
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modem chip monopoly not only during the pendency of this appeal but
will suffer. The public interest requires the District Court’s Order to
ARGUMENT
A stay pending appeal “is not a matter of right,” Lair v. Bullock, 697
F.3d 1200, 1203 (9th Cir. 2012), but a form of “extraordinary relief”; a
Cty. Bd. of Ed. v. Scott, 404 U.S. 1221, 1231 (1971). When a government
party opposes a request for stay, the Court considers three factors:
likelihood of success on the merits, (2) whether the appellant will suffer
irreparable injury absent a stay, and (3) where the public interest lies.
Nken v. Holder, 556 U.S. 418, 426, 435 (2009). All three factors weigh
brief focuses on the first and third factors. As to the second factor,
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good faith and applies the same creativity in negotiating that it has in
contrary (Mot. 22-27) fail for the reasons discussed by the FTC. (Opp. 15-
20.)
lawsuits.” Cont’l Ore Co. v. Union Carbide & Carbon Corp., 370 U.S. 690,
factual components and wip[e] the slate clean after scrutiny of each”);
City of Anaheim v. S. Cal. Edison Co., 955 F.2d 1373, 1376 (9th Cir. 1992)
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of the three factors set forth in MetroNet Services Corp. v. Qwest Corp.,
383 F.3d 1124, 1131-35 (9th Cir. 2004), for evaluating the contours of a
Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585, 593-94, 608
(1985); Otter Tail Power Co. v. United States, 410 U.S. 366, 370-71 (1973).
4
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profits by refusing to license competitors. (Mot. 15-17; see also DOJ Br.
unlawful practices.
In Aspen Skiing, the Supreme Court made clear that the ultimate
doing business with a smaller rival.” 472 U.S. at 610. The record here
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Sherman Act when done “to achieve an anticompetitive end.” 540 U.S. at
409. The record here clearly fulfills that requirement as well, even
standards,2 (2) its previous record of licensing its patents to rivals as well
as customers, (3) its exhaustive sales of chips (with patent rights included
in the chip sale) in markets where it lacks monopoly power, and (4) its
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64.)
margin & profit,” and “Take away the $$ that MTK can invest in
3G.” (SA090.)
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market, and that MediaTek’s delayed entry adversely affected its ability
license its competitors in the modem chip market, flouting a Korea Fair
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suppliers is justified because other licensors have followed its lead (Mot.
simply discards the indisputable contrary factual findings it does not like.
MediaTek and other chip suppliers sell chips without first demanding a
power. (A163-64.) And other major cellular SEP owners license their
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licensors have neither the ability nor incentive to leverage any decision
manner. “Behavior that otherwise might comply with antitrust law may
States v. Dentsply Int’l, Inc., 399 F.3d 181, 187 (3d Cir. 2005).
Inc., 555 U.S. 438 (2009) suffers from similar defects as its duty-to-deal
4As the District Court found, Qualcomm manipulated its monopoly chip
supply (“no license, no chips”) not only to secure supra-FRAND royalties,
but also to exclude competition through the use of exclusivity-based
rebates, threats to customers’ ability to purchase chips even from
competitors, and gag clauses prohibiting customers from complaining.
Thus, the conduct at issue is not simply charging customers too much
and thereby squeezing rivals’ margins. All of Qualcomm’s exclusionary
conduct worked in tandem: the refusal to license chip suppliers enabled
Qualcomm to ensure a licensing relationship with common customers,
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species of exclusive dealing under which Qualcomm will not deal with
erroneous. See ZF Meritor, LLC v. Eaton Corp., 696 F.3d 254, 277, 280-
OEMs and their customers”); Church & Dwight Co. v. Mayer Labs, Inc.,
which Qualcomm in turn infected with its chip power, then included
exclusionary conditions in the resulting license terms. For example, the
exclusivity conditions Qualcomm imposed on Apple’s ability to obtain
royalty relief dramatically delayed and stunted Intel’s entry. (A94-105,
A148-52.) The relief at issue is narrowly tailored to prevent repetition of
the anticompetitive cycle.
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antitrust laws.” Fed. Trade Comm’n v. H.J. Heinz Co., 246 F.3d 708, 726
(D.C. Cir. 2001).5 A stay pending appeal could allow Qualcomm to cement
and the public interest has been immense, and the need to restore
5 Notably, none of the cases that Ericsson cites to support its public
interest arguments involved a public antitrust enforcement action.
(Ericsson Br. 4-5.)
6 Similarly, any suggestion that the District Court failed to identify a
harm to the competitive process overlooks the extensive evidence of the
systematic exclusion of competition cited by the Court.
7 https://newsroom.intel.com/news-releases/intel-modem-statement/.
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Qualcomm and its amici’s claim that the injunction will lead to
not binding on Ericsson or any other licensor, and the general patent law
interests discussed by former Chief Judge Michel (Michel Br. 11-12) are
not implicated by the relief at issue here. Chief Judge Michel’s discussion
patent rights permit holdup, the record evidence in this case shows that
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innovation (Ericsson Br. 6-9; DOJ Br. 11-13) are untethered to any
cellular innovation. As the FTC points out (Mot. 17 n.13), Qualcomm has
obtain licenses will slow down the industry’s transition to 5G. (Mot. 4;
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CONCLUSION
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This brief contains 2,798 words, excluding the items exempted by Fed. R.
App. P. 32(f). The brief’s type size and typeface comply with Fed. R. App. P.
[ ] is a cross-appeal brief and complies with the word limit of Cir. R. 28.1-1.
[X] is an amicus brief and complies with the word limit of Fed. R. App. P. 29(a)(5),
Cir. R. 29-2(c)(2), or Cir. R. 29-2(c)(3).
[ ] is for a death penalty case and complies with the word limit of Cir. R. 32-4.
[ ] complies with the longer length limit permitted by Cir. R. 32-2(b) because (select
only one):
[ ] it is a joint brief submitted by separately represented parties;
[ ] a party or parties are filing a single brief in response to multiple briefs; or
[ ] a party or parties are filing a single brief in response to a longer joint brief.
[ ] complies with the length limit designated by court order dated _____________.
CERTIFICATE OF SERVICE
foregoing with the Clerk of the Court for the United States Court of
Appeals for the Ninth Circuit by using the appellate CM/ECF system.
No. 19-16122
v.
QUALCOMM INCORPORATED,
Defendant – Appellant.
Steven C. Holtzman
Gabriel R. Schlabach
BOIES SCHILLER FLEXNER LLP
44 Montgomery Street, 41st Floor
San Francisco, CA 94104
Telephone: (415) 293-6800
TABLE OF CONTENTS
Document Page
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CX8292-001
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5
FEDERAL TRADE COMMISSION, ) C-17-00220 LHK
6 )
PLAINTIFF, ) SAN JOSE, CALIFORNIA
7 )
VS. ) JANUARY 7, 2019
8 )
QUALCOMM INCORPORATED, A ) VOLUME 2
9 DELAWARE CORPORATION, )
) PAGES 160-407
10 DEFENDANT. )
) SEALED PAGES 368 - 407
11
12
13 TRANSCRIPT OF PROCEEDINGS
BEFORE THE HONORABLE LUCY H. KOH
14 UNITED STATES DISTRICT JUDGE
15 A P P E A R A N C E S:
MTK005
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CaseMOYNIHAN
5:17-cv-00220-LHK Document
DIRECT BY MR. KEHL 1510 Filed 07/02/19 Page 176 of 209 335
4 KIND OF CONDITION.
6 BELIEVE.
13 Q. AND WHEN YOU SAY "WIDE BAND CDMA," YOU MEAN THAT CHIP IS
17 ABOUT IT. BUT IT'S DIFFERENT TO THE CDMA WE WERE TALKING ABOUT
18 EARLIER.
20 THE 6268?
24 FOCUS.
MTK006
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CaseMOYNIHAN
5:17-cv-00220-LHK Document
DIRECT BY MR. KEHL 1510 Filed 07/02/19 Page 177 of 209 336
22 CONCERNS?
25 FROM QUALCOMM.
MTK007
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CaseMOYNIHAN
5:17-cv-00220-LHK Document
DIRECT BY MR. KEHL 1510 Filed 07/02/19 Page 178 of 209 337
5 KNOW, SOME OF THIS TIME I WAS TRAVELLING BACK AND FORTH TO, TO
9 THEY HAD GONE FASTER. WE FELT LIKE THEY WERE SORT OF MAYBE
10 BEING SLOW.
13 AGREEMENT.
15 JX 0050?
17 TIME.
21 A. YES.
23 EVIDENCE.
MTK008
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CaseMOYNIHAN
5:17-cv-00220-LHK Document
DIRECT BY MR. KEHL 1510 Filed 07/02/19 Page 179 of 209 338
3 BY MR. KEHL:
12 DELIVER.
14 A. PROBABLY, YES.
17 HALF OF 2011.
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CaseMOYNIHAN
5:17-cv-00220-LHK Document
DIRECT BY MR. KEHL 1510 Filed 07/02/19 Page 180 of 209 339
1 PRESSURE.
5 TIER 1 OEM'S.
15 TO HAVE, YOU KNOW, VERY STRONG INTERNAL R&D TEAMS. THEY GOT
25 REQUIREMENTS.
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3 CERTIFICATE OF REPORTERS
10 HEREBY CERTIFY:
13 ABOVE-ENTITLED MATTER.
14
15
______________________________
16 IRENE RODRIGUEZ, CSR, CRR
CERTIFICATE NUMBER 8076
17
18
_______________________________
19 LEE-ANNE SHORTRIDGE, CSR, CRR
CERTIFICATE NUMBER 9595
20
22
23
24
25
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CX8168-069
JX0050-069
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