UNITED STATES INTERNATIONAL TRADE COMMISSION

WASHINGTON, D.C.

In the Matter of

CERTAIN MOBILE PHONES, TABLET

COMPUTERS, SMART WATCHES, Inv. No. 337-TA-___
SMART SPEAKERS, AND DIGITAL Docket No. 3596
MEDIA PLAYERS, AND PRODUCTS
CONTAINING SAME

In the Matter of

CERTAIN MOBILE PHONES AND

TABLET COMPUTERS, ALL WITH Inv. No. 337-TA-___
SWITCHABLE CONNECTIVITY, AND Docket No. 3597
PRODUCTS CONTAINING SAME

ERICSSON’S REPLY TO PUBLIC INTEREST STATEMENT OF

PROPOSED RESPONDENT APPLE INC.

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 Introduction

Complainants Ericsson Inc. and Telefonaktiebolaget LM Ericsson (“Ericsson”) submit this

Reply to Apple Inc.’s Public Interest Statement regarding the above-referenced Ericsson

complaints. Apple raises no genuine issues that warrant the Commission declining to institute an

investigation, nor any issues that warrant delegation of public interest issues to an Administrative

Law Judge (“ALJ”). Instead, Apple’s transparent goal is to avoid and/or delay the Commission’s

normal exercise of its jurisdictional authority and its statutory mandate to complete Section 337

investigations at the earliest practicable time. 1 Ericsson opposes Apple’s attempt to import

standard essential patents (“SEP”) issues from another complaint involving different patents into

the above-referenced complaints that do not involve SEPs. Ericsson also opposes Apple’s request

for delegation of public interest issues that (1) have been rejected by the Commission, (2) would

further Apple’s goal of increasing the burden and expense of these investigations, and (3) likely

delay completion of these investigations.

I. There Are No SEP, FRAND, Or Tying Issue Here

The Ericsson patents-at-issue in the above-referenced complaints are not SEP and are not

subject to a fair, reasonable and nondiscriminatory (“FRAND”) commitment. Apple has not, and

cannot, allege otherwise. In fact, Apple admits that the patents asserted in these complaints are

non-standard essential patents (“NEPs”). Instead, Apple suggests that there is some coercive tying

arrangement between these NEP complaints and a separate Ericsson complaint where Apple is

raising SEP/FRAND defenses (Docket No. 3595).

1
“The Commission shall investigate any alleged violation of this section on complaint
under oath or upon its initiative. Upon commencing any such investigation, the Commission
shall publish notice thereof in the Federal Register. The Commission shall conclude any such
investigation and make its determination under this section at the earliest practicable time after
the date of publication of notice of such investigation.” 19 U.S.C. § 1337(b) (emphasis added).

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 Apple’s tying argument is fatally flawed on many grounds; for example: (a) there is no

evidence of any tying arrangement; (b) there is no definition of markets or market power that are

fundamental to tying claims; (c) any tying arguments are at most an affirmative defense or

counterclaim, not a public interest issue; (d) Ericsson offers to license its SEPs without licensing

its NEPs; and (e) Ericsson separated its asserted patents among three complaints, enabling them to

be resolved and terminated independently. Apple also fails to address the Commission’s history

of independent section 337 investigations involving different patents against the same infringer,

see e.g., Ericsson’s two 2015 investigations against Apple 2 and two 2021 investigations against

Samsung, 3 each settled on mutually agreeable terms without a final determination by the

Commission.

Problematically, Apple does not warn the Commission or attempt to distinguish the Federal

Circuit’s rejection of claimed tying between patents in a prior section 337 investigation. In Certain

Recordable Compact Discs and Rewritable Compact Discs, Inv. No. 337-TA-474, respondent

Princo et al. persuaded the Commission that complainant Philips’s practice of package licensing

of its SEP and non-SEP patents constituted a misuse that rendered them unenforceable. Notice of

Issuance of General Exclusion Order and Cease and Desist Orders; Termination of the

Investigation (Feb. 5, 2007). The Federal Circuit rejected the ITC’s “theory that Philips’s package

licensing practice constituted patent misuse by improperly tying nonessential patents to essential

2
Certain Wireless Standard Compliant Electronic Devices, Including Communication
Devices and Tablet Computers; Inv. No. 337-TA-953 and Certain Electronic Devices, Including
Wireless Communication Devices, Computers, Tablet Computers, Digital Media Players, and
Cameras; Inv. No. 337-TA-952.
3
Certain Electronic Devices with Wireless Connectivity, Components Thereof, and
Products Containing Same; Inv. No. 337-TA-1245 and Certain Cellular Communications
Infrastructure Systems, Components Thereof and Products Containing Same; Inv. No. 337-TA-
1248.

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ones.” U.S. Philips Corp. v. Int’l Trade Comm’n (Philips I), 424 F.3d 1179 (Fed. Cir. 2005).

Finally, Apple’s “public interest” arguments regarding past negotiations, arbitration offers,

and Apple’s litigation in the Eastern District of Texas all concern a different Ericsson complaint

(Docket No. 3595), not the Ericsson complaints at issue here. 4

II. The Requested Remedies Are Consistent with Statutory Public Interest Factors

Apple identifies a range of uses and functions for mobile phones, tablet computers, smart

watches, smart speakers, and digital media players, but (a) Apple fails to establish that the large

number of competing devices identified in Ericsson’s Public Interest Statement are incapable of

performing substantially the same functions; (b) Apple’s own software “Simulator runs on your

Mac and behaves like a standard Mac app while simulating an iPhone, iPad, Apple Watch, or

Apple TV environment,” suggesting that those Apple computers that are not Accused Products

may be adaptable as suitable substitutes; 5 and (c) Apple fails to grapple with the core fact that

Ericsson’s patented technologies are used to perform those functions. And the Commission has

previously found that exclusion of mobile phones generally—and Apple’s smartphones and tablets

in particular—is not contrary to the public interest. See e.g., Certain Mobile Devices, Associated

Software, and Components Thereof, Inv. No. 337-TA-744, Comm’n Op. at 30-31 (June 5, 2012)

(“The record shows that there are numerous other sources for [mobile devices] and thus, exclusion

of the infringing articles “will not have a significant negative impact on competitive conditions in

the United States economy or on U.S. consumers”); Certain Mobile Electronic Devices, Including

4
To the extent Apple attempts to further import FRAND-related arguments into its
Public Interest Statement pertaining to these NEP complaints, Ericsson refers to its response to
Apple’s Public Interest Statement filed concurrently in Docket No. 3595.
5
Apple Simulator User Guide, https://developer.apple.com/library/archive/
documentation/IDEs/Conceptual/iOS_Simulator_Guide/Introduction/Introduction.html#//apple_r
ef/doc/uid/TP40012848-CH1-SW1

3
Wireless Communication Devices, Portable Music and Data Processing Devices, and Tablet

Computers, Inv. No. 337-TA-794, Comm’n Op. at 107-114 (Jul. 5, 2013). 6

Apple’s reference to telemedicine and COVID-related functions are no exception. Indeed,

Apple’s own COVID contact tracing app is a joint venture with Google, and functions essentially

identically on the Android platform as on iOS. 7 The same is true of Apple’s other health-focused

apps—the functionality of which can readily be replaced by Apple’s competitors. 8

Apple’s argument that its iOS products are too important to exclude from the market is a

blend of entitlement and doublespeak. While Apple conducts research and development in the

United States, it has outsourced manufacturing to China and other foreign countries. Apple’s

contention that Android and other competing products are not suitable substitutes for Apple’s iOS

ecosystem is belied by Apple’s own SEC filings 9 and Apple’s arguments in antitrust litigations

6
Without disputing those Commission determinations, Apple relies on non-precedential
dicta from an unreviewed Initial Determination of ALJ Lord finding no violation but suggesting
that short-term exclusion of Apple mobile devices “would have a significant impact not only on
[Respondent] and its employees, but on consumers, merchants, and institution that rely on [their
products].” Certain Audio Processing Hardware and Software, and Prods. Containing the Same,
Inv. No. 337-TA-1026, ID at 94 (Dec. 6, 2017). However, as ALJ McNamara observed, “both the
Commission and Apple have consistently stated that mobile devices do not present public, health,
safety, or welfare concerns.” Certain Mobile Electronic Devices and Radio Frequency and
Processing Components Thereof (II), Inv. No. 337-TA-1093 Analysis and Findings with Respect
to the Public Interest, and Recommendation on Remedy and Bond at 23 (Apr. 16, 2019).
7
Exposure Notifications: Help Slow the Spread of COVID-19 With One Step on Your
Phone, https://www.google.com/covid19/exposurenotifications/.
8
E.g., Get Help in an Emergency Using Your Android Phone,
https://support.google.com/android/answer/9319337?hl=en.
9
“The Company [Apple] faces substantial competition in these markets [for smartphones,
personal computers, tablets, wearables and accessories, and services] from companies that have
significant technical, marketing, distribution and other resources, as well as established
hardware, software, and service offerings with large customer bases. In addition, some of the
Company’s competitors have broader product lines, lower-priced products and a larger installed
base of active devices.” Apple Annual Report Form 10-K at 3 (Oct. 28, 2021).

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where it concedes that iOS devices compete with Android devices. 10 And any consumer

preference for Apple products or possible resistance to switching to Android products does not

rise to the absence of any substitutable products that was at issue in the three instances where the

ITC has withheld a remedy due to public interest issues. 11

III. Apple Has Options to Avoid Any Possible Harm to the Public Interest

Apple can again acquire rights to use Ericsson’s technology as it had until January 2022.

Apple can disable the infringing features in its current products and/or switch to different

technology in future products. And any Apple products owned or purchased by consumers prior

to the requested remedial orders that might issue in mid-2023 will not be affected. For now, Apple

reneges on its patent royalty obligations that contributes to its 26.58% profit margin, single-quarter

revenues of $124 billion, a first-in-history market capitalization of $3 trillion, and cash reserves of

$202 billion 12 to pay any damages and obtain any license at the last moment. Apple’s litigation

tactics should not be rewarded with a delegation of public interest issues that would needlessly

impose additional cost, burden, and delays upon the Commission, the Judge, and the parties.

10
Apple argued “[t]he iPhone competes with dozens of smartphones designed and
marketed by multiple well-funded smartphones manufacturers.” Epic Games, Inc. v. Apple Inc.,
No. 4:20-cv-05640-YGR (N.D. Cal. Apr. 8, 2021), Defendant Apple’s Inc.’s Proposed Findings
of Fact and Conclusions of Law PFF 394.1 at 89. “By some estimates, as many as 78 million
people in the United States may purchase a new smartphone each year. [] Apple competes with
Android smartphone manufacturers for each of those purchases. [] Switching costs between iOS
and Android devices have declined over time.” Id. at 399.1-399.2, pp. 92–93.
11
Certain Fluidized Supporting Apparatus, Inv. No. 337-TA-182/188 (Oct. 1984)
(denying relief where hospital burn beds could not be supplied in a commercially reasonable
time); Certain Inclined-Field Acceleration Tubes, Inv. No. 337-TA-67 (Dec. 1980) (determining
that public interest in advancing atomic research precluded exclusion of patented acceleration
tubes); and Certain Automatic Crankpin Grinders, Inv. No. 337-TA-60 (inability of other
suppliers to meet domestic demand for fuel efficient engines during oil crisis precluded relief).
12
Apple Inc. 2021 SEC Form 10-K at 29-33; Apple Inc. Q1 2022 SEC Form 10-Q at 1;
Apple Becomes First U.S. Company to Reach $3 Trillion Market Cap, CNBC.com,
https://www.cnbc.com/2022/01/03/apple-becomes-first-us-company-to-reach-3-trillion-market-
cap.html;Apple Inc. Q1 2022 SEC Form 10-Q at 8.

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February 4, 2022 Respectfully submitted,

Joseph C. Masullo
WINSTON & STRAWN LLP
1901 L Street, N.W.
Washington, D.C. 20036
Telephone: (202) 282-5000

Louis L. Campbell
WINSTON & STRAWN LLP
255 Shoreline Drive, Suite 520
Redwood City, CA 94065
Telephone: (650) 858-6500

David P. Dalke
WINSTON & STRAWN LLP
333 South Grand Avenue, 38th Floor
Los Angeles, CA 90071-1543
Telephone: (213) 615-1700

Steven M. Anzalone
Paul C. Goulet
FISHERBROYLES, LLP
1200 G Street N.W., Suite 800
Washington, D.C. 20005
Telephone: (301) 968-0800
Telephone: (202) 642-6329

Michael M. Murray
FISHERBROYLES, LLP
445 Park Avenue, Ninth Floor
New York, NY 10022
Telephone: (203) 542-5711

Counsel for Complainants Ericsson Inc. and

Telefonaktiebolaget LM Ericsson

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 337-TA-____ (DN3596)

CERTIFICATE OF SERVICE

I, Liberty M. Quan, hereby certify that a copy of the foregoing ERICSSON’S REPLY TO
PUBLIC INTEREST STATEMENT OF PROPOSED RESPONDENT APPLE INC. were
served on February 4, 2022.

The Honorable Lisa R. Barton

☐ Via First Class Mail
Secretary to the Commission
☐ Via Express Delivery
U.S. International Trade Commission
☐ Via Hand Delivery
500 E Street, S.W., Room 112
Washington, DC 20436 ☒ Via EDIS

John Shin, Esq. ☐ Via Hand Delivery

Office of Unfair Import Investigations ☐ Via Express Delivery
U.S. International Trade Commission ☐ Via First Class Mail
500 E Street, S.W.
☒ Other: Email to
Washington, DC 20436
John.Shin@usitc.gov

Benjamin C. Elacqua ☐ Via Hand Delivery

Fish & Richardson P.C. ☐ Via Express Delivery
One Houston Center – 28th Floor ☐ Via First Class Mail
1221 McKinney
☒ Other: Email to
Houston, TX 77010
elacqua@fr.com
Counsel for Proposed Respondent
Apple Inc.

/s/ Liberty Quan

Liberty M. Quan
Senior Paralegal
WINSTON & STRAWN LLP
255 Shoreline Drive, Suite 520
Redwood City, CA 94065