FTC’S OPPOSITION TO 

QUALCOMM’S MOTION TO STAY

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Jennifer Milici, D.C. Bar No. 987096 

Joseph R. Baker, D.C. Bar No. 490802 

Geoffrey M. Green, D.C. Bar No. 428392 

Rajesh S. James, N.Y. Bar No. 4209367 

Daniel Matheson, D.C. Bar No. 502490 

Kenneth H. Merber, D.C. Bar No. 985703 

Mark J. Woodward, D.C. Bar. No. 479537 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

(202) 326-3695; (202) 326-3496 (fax) 

jmilici@ftc.gov 

Attorneys for Plaintiff Federal Trade Commission 

UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

FEDERAL TRADE COMMISSION, 

 Plaintiff 

 v. 

QUALCOMM INCORPORATED, a Delaware 

Corporation, 

 Defendant. 

Case No. 5:17-cv-00220-LHK 

FEDERAL TRADE COMMISSION’S 

OPPOSITION TO QUALCOMM 

INCORPORATED’S MOTION FOR STAY 

PENDING APPEAL 

Courtroom: 8, 4th Floor 

Judge: Hon. Lucy H. Koh 

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TABLE OF CONTENTS 

I. INTRODUCTION ...................................................................................................................1 

II. BACKGROUND .....................................................................................................................2

III. LEGAL STANDARD ..............................................................................................................3

IV. ARGUMENT ...........................................................................................................................4 

A. Qualcomm fails to show irreparable harm. ..........................................................................4 

1. Qualcomm fails to show irreparable harm arising 

from cessation of its no license, no chips policy. ..........................................................5 

2. Qualcomm fails to show irreparable harm from making licenses 

to its SEPs available to its modem-chip competitors on FRAND terms. ......................6 

3. Qualcomm’s claim of irreparable harm suffers additional, fatal flaws. ........................7 

B. Prompt enforcement of the Court’s order is in the public interest. ......................................8 

C. Qualcomm fails to show a strong likelihood of success on appeal....................................11 

1. Qualcomm’s arguments on irreparable harm undermine its arguments 

on the merits of its appeal. ...........................................................................................11 

2. Qualcomm challenges rulings of the Court that are owed considerable 

deference on appeal. .....................................................................................................12 

3. Qualcomm fails to identify any conclusion of law that the appeals 

court is likely to reverse. ..............................................................................................13 

V. CONCLUSION ......................................................................................................................16 

 

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TABLE OF AUTHORITIES 

Cases 

Allied Tube v. Indian Head, Inc., 486 U.S. 492 (1988) ............................................................... 15

Apple, Inc. v. Motorola, Inc., 869 F. Supp. 2d 901 (N.D. Ill. 2012) .............................................. 6 

Apple, Inc. v. Motorola, Inc., 757 F.3d 1286 (Fed. Cir. 2014), overruled on other 

grounds by Williamson v. Citrix Online, LLC, 792 F.3d 1339 (Fed. Cir. 2015) ..................... 6

Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007) ........................................ 14, 15 

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993) ..................... 13

Caldera, Inc. v. Microsoft Corp., 87 F. Supp. 2d 1244 (D. Utah 1999) ...................................... 14

Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451 (1992) ................................ 14

Forsyth v. Humana, Inc., 114 F.3d 1467 (9th Cir. 1997), overruled on other 

grounds by Lacey v. Maricopa Cnty., 693 F.3d 896 (9th Cir. 2012) ..................................... 14

FTC v. Publ’g Clearing House, CV-S-94-623-PMP, 

1995 WL 792074 (D. Nev. July 13, 1995) .............................................................................. 4 

Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc., 736 F.3d 1239 (9th Cir. 2013) .................... 4 

Hilton v. Braunskill, 481 U.S. 770 (1987) ..................................................................................... 3 

Huawei Technologies Co. v. Samsung Electronics Co., 

340 F. Supp. 3d 934 (N.D. Cal. 2018) ................................................................................... 14

Lair v. Bullock, 697 F.3d 1200 (9th Cir. 2012) ............................................................................. 4 

Lawlor v. Nat’l Screen Serv. Corp., 349 U.S. 322 (1955) ............................................................. 8 

Leiva-Perez v. Holder, 640 F.3d 962 (9th Cir. 2011) .......................................................... 3, 4, 11 

Malarkey v. Texaco, Inc., 794 F. Supp. 1248 (S.D.N.Y. 1992) ................................................... 10

McWane, Inc. v. FTC, 783 F.3d 814 (11th Cir. 2015) ................................................................. 15 

Microsoft Corp. v. Motorola, Inc., 795 F.3d 1024 (9th Cir. 2015) .............................................. 15

Navellier v. Sletten, 262 F.3d 923 (9th Cir. 2001) ....................................................................... 12 

NCAA v. Regents of Univ. of Okla., 463 U.S. 1311 (1983) ........................................................... 4 

Nken v. Holder, 556 U.S. 418 (2009) ............................................................................................ 3 

Ohio v. Am. Express Co., 138 S. Ct. 2274 (2018) ....................................................................... 15 

Overstreet v. Thomas Davis Med. Ctrs., P.C., 978 F. Supp. 1313 (D. Ariz. 1997) ....................... 3 

Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n, 

814 F.2d 358 (7th Cir. 1987) ................................................................................................. 14 

Qualcomm Inc. v. Compal Elecs., Inc., 283 F. Supp. 3d 905 (S.D. Cal. 2017) ............................. 6 

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Sablan v. Dep’t of Fin. of Com. of N. Mariana Islands, 856 F.2d 1317 (9th Cir. 1988) ............. 12 

United Shoe Mach. Corp. v. United States, 258 U.S. 451 (1922)................................................ 14

United States v. Apple Inc., 992 F. Supp. 2d 263 (S.D.N.Y. 2014) ............................................... 8

United States v. Dentsply Int’l, Inc., 399 F.3d 181 (3d Cir. 2005) .............................................. 15 

United States v. Grinnell Corp., 384 U.S. 563 (1966) ................................................................. 15 

United States v. Hearst, 563 F.2d 1331 (9th Cir. 1977) .............................................................. 12 

United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001) (en banc) ................................. 15

United States v. Nutri-Cology, Inc., 982 F.2d 394 (9th Cir. 1992) .............................................. 10 

United States v. Syufy Enters., 903 F.2d 659 (9th Cir. 1990) ...................................................... 13 

Va. Pet. Jobbers Ass’n v. Fed. Power Comm’n, 

259 F.2d 921 (D.C. Cir. 1958) (per curiam) ............................................................................ 3

Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 

559 F.2d 841 (D.C. Cir. 1977) ................................................................................................. 4 

Winding Creek Solar LLC v. Peevey, No. 13-CV-04934-JD, 

2018 WL 1912136 (N.D. Cal. Apr. 23, 2018) ......................................................................... 3 

Winter v. Natural Resources Defense Council, 555 U.S. 7 (2008) .............................................. 10 

Treatises

Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 651b5 

(3rd & 4th eds. 2010–2018) ................................................................................................... 14 

3 Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶ 651c (1996 ed.) ............................ 15 

11 Charles Alan Wright, Arthur R. Miller, Mary K. Kane et al., 

Federal Practice and Procedure § 2904 (3d ed. Apr. 2019 update) ......................................... 3 

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I. INTRODUCTION 

Following a hard-fought trial on the merits and an exhaustive review of the evidence, this 

Court concluded that Qualcomm has engaged in a course of anticompetitive conduct over many 

years, resulting in harm to competition, market participants, and consumers. The Court entered 

an injunction to put an end to Qualcomm’s unlawful conduct and to restore competition. 

Qualcomm now seeks a stay of the injunction that would allow it to maintain its longstanding 

anticompetitive practices during the pendency of its appeal. But Qualcomm fails to justify such 

extraordinary relief. Qualcomm’s claims of irreparable harm are general, speculative, and 

contrary to both governing legal principles and the evidence presented at trial. Among other 

things, the trial evidence shows that Qualcomm has tools available to it to limit any potential 

consequences of agreements it negotiates during the pendency of the appeal in the unlikely event 

that it ultimately prevails. 

Qualcomm’s OEM customers, its modem-chip rivals, and cellular-handset purchasers are 

not so fortunate. Should the Court stay enforcement of its order, Qualcomm will “perpetuate its 

artificial surcharge on rivals’ chips, which harms rivals, OEMs, and consumers” (FOFCOL at 

228)1

 throughout the pendency of the appeal and beyond. Licenses can take months to negotiate, 

and should the Court stay its order, negotiations free from anticompetitive practices will not 

begin until Qualcomm’s appeal has run its course. This would adversely affect competition at a 

critical time, just as the cellular industry is transitioning to 5G technology. 

Qualcomm also fails to show any serious prospect of reversal on appeal. The legal 

foundations of the Court’s order are supplied by decisions of the U.S. Supreme Court, the Ninth 

Circuit, and other courts of appeals. Many of Qualcomm’s asserted appellate arguments 

challenge the Court’s factual findings, evidentiary rulings, and trial-management decisions—all 

 

1

 References to “FOFCOL” are to the Court’s May 21, 2019 Findings of Fact and Conclusions of 

Law, ECF Nos. 1490, 1491. 

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matters as to which the Court of Appeals owes the Court considerable deference. Moreover, 

Qualcomm’s argument that it will suffer irreparable harm if enjoined from bringing chip 

leverage to bear in license negotiations cannot be reconciled with its repeated representations 

during this litigation that chip leverage has no material impact on Qualcomm’s licensing 

revenues. 

The Court should deny Qualcomm’s motion. 

II. BACKGROUND 

Following a bench trial in January 2019, the Court on May 21, 2019, concluded that 

Qualcomm had violated the antitrust laws and entered a permanent injunction. (FOFCOL at 216-

233.) 

The Court’s injunction consists of five provisions: First, Qualcomm must refrain from 

implementing its no license, no chips policy and must “negotiate or renegotiate license terms 

with customers in good faith under conditions free from the threat of lack of access to or 

discriminatory provision of modem chip supply.” (FOFCOL at 227.) Second, Qualcomm must 

“make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and nondiscriminatory (‘FRAND’) terms and to submit, as necessary, to arbitral or judicial dispute 

resolution to determine such terms.” (FOFCOL at 229.) The remaining provisions prohibit 

Qualcomm from entering into express or de facto exclusive dealing agreements for the supply of 

modem chips; prohibit Qualcomm from interfering with its customers’ ability to communicate 

with government agencies about law enforcement or regulatory matters; and require Qualcomm 

to submit to certain compliance and monitoring procedures. (FOFCOL at 230–33.) 

On May 28, 2019, Qualcomm filed a motion to stay enforcement of the Court’s 

injunction pending Qualcomm’s appeal of the judgment. (ECF No. 1495 (“Mot.”).) A three-page 

declaration of Alex Rogers, President of Qualcomm Technology Licensing accompanied 

Qualcomm’s motion. (ECF No. 1495-1 (the “Rogers Declaration”).) 

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III. LEGAL STANDARD 

Courts may, in the exercise of their discretion, suspend or modify an injunction during 

the pendency of an appeal. Fed. R. Civ. P. 62(c). Mindful that a “stay is an ‘intrusion into the 

ordinary processes of administration and judicial review,’” courts do not exercise this discretion 

lightly. Nken v. Holder, 556 U.S. 418, 427 (2009) (quoting Va. Pet. Jobbers Ass’n v. Fed. Power 

Comm’n, 259 F.2d 921, 925 (D.C. Cir. 1958) (per curiam)). The stay applicant “bears the burden 

of showing that the circumstances justify an exercise of [the court’s] discretion,” id. at 433–34, 

and as this burden “is a heavy one, more commonly stay requests will not meet this standard and 

will be denied.” 11 Charles Alan Wright, Arthur R. Miller, Mary K. Kane et al., Federal Practice 

and Procedure § 2904 (3d ed. Apr. 2019 update). 

In assessing a stay application, courts consider: “(1) whether the stay applicant has made 

a strong showing that [it] is likely to succeed on the merits; (2) whether the applicant will be 

irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the 

other parties interested in the proceeding . . . ; and (4) where the public interest lies.” Nken, 556 

U.S. at 434 (quoting Hilton v. Braunskill, 481 U.S. 770, 776 (1987)). The third and fourth factors 

merge where, as here, the government is the opposing party. Leiva-Perez v. Holder, 640 F.3d 

962, 970 (9th Cir. 2011).

Of the stay factors, irreparable harm is the most important: If an applicant fails to make a 

“threshold showing regarding irreparable harm . . . then a stay may not issue, regardless of the 

[applicant]’s proof regarding the other stay factors.” Id. at 965. To meet the threshold, the stay 

applicant must demonstrate harm that is both substantial and irreversible. An applicant cannot 

meet the threshold simply by showing that an order, unless stayed, would require the applicant to 

modify its contracts or business practices. See, e.g., Winding Creek Solar LLC v. Peevey, No. 13-

CV-04934-JD, 2018 WL 1912136, at *1 (N.D. Cal. Apr. 23, 2018) (no irreparable harm where 

defendant had a “sound alternative” to the contracting practices enjoined); Overstreet v. Thomas 

Davis Med. Ctrs., P.C., 978 F. Supp. 1313, 1315 (D. Ariz. 1997) (defendant failed to establish 

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irreparable harm by arguing that the court’s order, unless stayed, would necessitate “extensive 

changes to its methods of operation”).2

To support a showing of irreparable harm, the applicant must proffer “specific facts or 

supporting factual data.” FTC v. Publ’g Clearing House, No. CV-S-94-623-PMP, 1995 WL 

792074, at *7 (D. Nev. July 13, 1995). “[U]nsupported and conclusory statements regarding 

harm” will not suffice. Herb Reed Enters., LLC v. Fla. Entm’t Mgmt., Inc., 736 F.3d 1239, 1250 

(9th Cir. 2013) (internal quotation marks omitted). 

If an applicant shows that irreparable harm is probable, courts in the Ninth Circuit 

consider the remaining stay factors in tandem. Leiva-Perez, 640 F.3d at 965. The applicant must 

also show either: “(a) a strong likelihood of success on the merits and that the public interest 

does not weigh heavily against a stay; or (b) a substantial case on the merits and that the balance 

of hardships tips sharply in the [applicant’s] favor.” Id. at 970. 

IV. ARGUMENT 

A. Qualcomm fails to show irreparable harm. 

Although Qualcomm seeks to stay the Court’s injunction in its entirety, neither 

Qualcomm’s motion nor the Rogers Declaration identifies any harm traceable to implementation 

of three of the injunction’s five provisions. (Mot. at 5–6 (citing provisions pertaining to exclusive 

dealing, interference with communications with government agencies, and compliance and 

monitoring procedures, but not contending that any irreparable harm would flow from 

 

2

 The decisions on which Qualcomm relies do not hold otherwise. The injunctions at issue in 

those cases required the applicant to do more than renegotiate contracts and modify business 

practices. They concerned injunctions that, unless stayed, would, respectively, “destr[oy the 

defendant] in its current form,” Wash. Metro. Area Transit Comm’n v. Holiday Tours, Inc., 559 

F.2d 841, 843 (D.C. Cir. 1977); eliminate a state’s campaign-contribution laws on the eve of 

general elections, Lair v. Bullock, 697 F.3d 1200, 1214–15 (9th Cir. 2012); and place “the entire 

1983 [intercollegiate football] season . . . at risk not only for [the defendant] but for many, if not 

most, of the schools which it represent[ed].” NCAA v. Regents of Univ. of Okla., 463 U.S. 1311, 

1313 (1983). 

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implementation of these provisions).) As to the two provisions that it does address, Qualcomm 

fails to show irreparable harm. 

1. Qualcomm fails to show irreparable harm arising from cessation of its 

no license, no chips policy. 

The first provision of the Court’s injunction prohibits Qualcomm from maintaining its no 

license, no chips policy. Qualcomm asserts that implementation of this provision would cause it 

irreparable harm in the form of “revenue loss.” (Mot. at 10.) The challenged provision, however, 

permits Qualcomm to collect all revenues to which Qualcomm has a legitimate claim. 

Specifically, the provision permits Qualcomm to negotiate (i) royalties that “reflect the fair value 

of Qualcomm’s patents” (FOFCOL at 227–29), and (ii) chip prices that reflect the market-based 

value of its modem chips (id.; see also id. at 42). 

Qualcomm proffers two arguments to explain how the first provision of the Court’s 

injunction might cause irreparable harm. Both arguments lack evidentiary and legal foundation. 

First, Qualcomm speculates that it might sell modem chips to OEMs that become 

unlicensed while the appeal is pending. (Mot. at 8; Rogers Decl. ¶ 6.) The Rogers Declaration 

asserts that if Qualcomm “sell[s] modem chips to unlicensed OEMs while the Order is reviewed 

on appeal, those unlicensed OEMs will claim that such sales exhaust” certain of Qualcomm’s 

patents, and that “Qualcomm will not be able to unwind such sales.” (Rogers Decl. ¶ 6.) The 

Rogers Declaration fails to explain how, if at all, exhaustive modem-chip sales would harm 

Qualcomm. Like any other supplier of handset components, Qualcomm can price its modem 

chips to reflect the value of its patents substantially embodied in those chips. (FOFCOL at 44, 

46, 56, 62, 69, 77, 83, 113, 163–64 (finding that Qualcomm’s no license, no chips policy is 

unique within the industry); see also id. at 88, 113, 162–64 (finding that Qualcomm’s policy is 

also unique within Qualcomm, as it sells components other than modem chips exhaustively).) 

And like any other patent holder, Qualcomm can negotiate licenses covering any patents that are 

not substantially embodied in its modem chips, i.e., that would not be exhausted by their sale. 

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Second, Qualcomm speculates that enforcement of the Court’s order pending appeal 

might prompt certain unidentified OEMs to cease paying any royalties to Qualcomm even as 

they continue to practice Qualcomm’s patents. (Mot. at 10; Rogers Decl. ¶¶ 9–10.) Neither 

Qualcomm’s motion nor the Rogers Declaration explains why an order that allows OEMs to 

negotiate royalties that “reflect the fair value of Qualcomm’s patents” (FOFCOL at 228–29) 

would deprive Qualcomm of reasonable royalties. Cf. Qualcomm Inc. v. Compal Elecs., Inc., 283 

F. Supp. 3d 905, 918–19 (S.D. Cal. 2017) (rejecting Qualcomm’s contention that the defendants’ 

alleged breach of their license agreements would “cause irreparable harm by emboldening other 

licensees to improperly seek to breach or renegotiate their license agreements” and dismissing 

assertions contained in the supporting declaration of Alex Rogers as “remarkably general and 

speculative”). Nor does Qualcomm explain how harm arising from any suspension of royalty 

payments would prove irreparable, given that Qualcomm retains its right to seek reasonable 

royalties for its patents, including damages for any past infringement. (FOFCOL at 228 

(“Qualcomm and OEMs can negotiate patent license terms that reflect the fair value of 

Qualcomm’s patents, rather than terms that reflect Qualcomm’s monopoly power in modem 

chips”).) See generally Apple, Inc. v. Motorola, Inc., 869 F. Supp. 2d 901, 915 (N.D. Ill. 2012) 

(Posner, J.) (Apple’s alleged infringement of a Motorola patent did not irreparably harm 

Motorola because a “FRAND royalty would provide all the relief to which Motorola would be 

entitled if it proved infringement of the . . . patent”), aff’d in part and rev’d in part, 757 F.3d 

1286, 1332 (Fed. Cir. 2014) (agreeing with the district court that “Motorola’s FRAND 

commitments . . . strongly suggest that money damages are adequate to fully compensate 

Motorola for any infringement”), overruled on other grounds by Williamson v. Citrix Online, 

LLC, 792 F.3d 1339 (Fed. Cir. 2015). 

2. Qualcomm fails to show irreparable harm from making licenses to its 

SEPs available to its modem-chip competitors on FRAND terms. 

Qualcomm also claims that it will suffer irreparable harm if it makes SEP licenses 

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available to its modem-chip competitors on fair and reasonable terms. (Mot. at 8–9.) 

Qualcomm’s claim rests on two premises: (i) an assertion that licensing competitors is 

significantly less efficient than licensing handset manufacturers (Mot. at 9; Rogers Decl. ¶ 5), 

and (ii) an assumption that Qualcomm’s modem-chip competitors, notwithstanding this asserted 

inefficiency, will nonetheless insist on taking SEP licenses from Qualcomm. Qualcomm fails to 

substantiate either premise. 

Qualcomm’s motion and the Rogers Declaration simply repeat conclusory assertions 

about the inefficiency of licensing competitors, assertions that the Court has already—and 

justifiably—dismissed as pretextual and not credible. (FOFCOL at 132–34.) Qualcomm provides 

no basis for second-guessing the Court’s findings. 

Qualcomm also fails to substantiate or explain its implicit assumption that, even if 

licensing modem-chip suppliers were significantly less efficient than licensing handset OEMs, 

chip suppliers would nonetheless insist on licensing Qualcomm patents that their OEM 

customers could license more efficiently. This assumption is facially implausible. 

3. Qualcomm’s claim of irreparable harm suffers additional, fatal flaws. 

The harms that Qualcomm asserts depend critically on the Rogers Declaration’s 

assumption that any license agreements that Qualcomm concludes during the pendency of the 

appeal would be long-term agreements, extending “five years or more,” and assertion that these 

agreements would prove “difficult, if not impossible, to unwind . . . even if the injunction and 

Order [were] overturned or modified on appeal.” (Rogers Decl. ¶ 8.) 

These statements are unsubstantiated and contrary to evidence presented at trial. That 

evidence demonstrates that Qualcomm and its counsel are entirely capable of negotiating 

(i) short-term or “interim” licenses and (ii) contractual provisions that would mitigate or 

eliminate any long-term adverse consequences to Qualcomm of a license agreement concluded 

during the pendency of its appeal. (E.g., FOFCOL at 54 (describing “temporary” and “interim” 

license agreements that Qualcomm negotiated with one OEM in 2012); JX0087 at -002 (2013 

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amendment to license agreement between Qualcomm and another OEM, providing each party 

the “right to terminate this Agreement for convenience at any time, by providing at least thirty 

(30) days’ prior written notice”).) 

Finally, to the extent Qualcomm argues that certain harm will flow not from the 

injunction, but from industry participants’ awareness of the Court’s public factual findings and 

legal conclusions (see Mot. at 9–10; cf. id. at 2 (claiming harm to “other major SEP holders” not 

subject to the injunction)), that putative harm is not an appropriate basis for a stay. It stems from 

the persuasive authority of the Court’s findings and analysis, which will stand regardless of 

whether the Court’s injunction is stayed pending appeal. 

B. Prompt enforcement of the Court’s order is in the public interest. 

The Court’s opinion details how Qualcomm’s practices have “strangled competition in 

the CDMA and premium LTE modem chip markets for years.” (FOFCOL at 215.) In its stay 

motion, Qualcomm disputes the Court’s findings, reasserts arguments the Court has rejected, and 

simply asserts that if it continues its unlawful practices, “[t]he risk of anticompetitive effects 

absent a stay is minimal.” (Mot. at 20-22.) The Court’s opinion establishes otherwise. And 

“‘[t]he public interest in vigilant enforcement of the antitrust laws’ is indisputable.” United 

States v. Apple Inc., 992 F. Supp. 2d 263, 290 (S.D.N.Y. 2014) (quoting Lawlor v. Nat’l Screen 

Serv. Corp., 349 U.S. 322, 329 (1955), and denying motion for stay pending appeal). 

Were the Court’s order stayed, Qualcomm could “continue to charge unreasonably high 

royalty rates,” rates that “would perpetuate its artificial surcharge on rivals’ chips, which harms 

rivals, OEMs, and consumers, and would enable Qualcomm to continue to reap the fruits of its 

Sherman Act violation.” (FOFCOL at 228.) The appellate process could easily extend through 

the initial rollout of 5G technology (see CX8198 at -004 (Qualcomm letter to shareholders 

stating that 5G to launch globally in 2019)), and a stay would allow Qualcomm time to use 

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anticompetitive practices to entrench its monopoly power in modem-chip markets during this 

critical period (FOFCOL at 221).3 These further competitive consequences would prove difficult 

to reverse following a Ninth Circuit decision affirming this Court’s judgment. 

A stay would also permit Qualcomm to use modem-chip leverage to impose other 

anticompetitive terms on new licensees and OEMs whose licenses expire during the stay. 

Qualcomm’s past licenses contained provisions restricting licensees’ ability to communicate with 

antitrust authorities. (FOFCOL at 232.) A stay would permit Qualcomm to continue to use these 

and other tactics to thwart law enforcement and frustrate the efficacy of the Court’s remedy. 

(FOFCOL at 231 (addressing provisions that Qualcomm secured in an agreement post-dating the 

January 2017 Korea Fair Trade Commission order).) 

Qualcomm argues that a stay would not harm competition because the “industry . . . is 

now dynamic and robust” and Qualcomm’s practices have not harmed its modem-chip rivals in 

any event. (Mot. at 21.) Both arguments simply repeat claims presented at trial and properly 

rejected by the Court. As the Court found, Qualcomm’s practices have reduced competition and 

contributed to the exit of several competitors and hobbled those that remain. (FOFCOL at 202–

08.) Qualcomm presents no basis to conclude that those harms would abate during a stay.4

 

Nor does the longstanding nature of Qualcomm’s conduct justify a stay. (Mot. at 20–21.) 

The Court found that Qualcomm’s practices have significantly contributed to its long-term 

maintenance of monopoly power in the relevant markets. (FOFCOL at 204.) A long-term 

 

3

 Qualcomm notes that some of its competitors have announced 5G products in development 

(Mot. at 21), but as the Court found, the evidence presented at trial demonstrated that 

“Qualcomm is likely to replicate its market dominance during the transition to 5G” (FOFCOL at 

221). 

4

 In the midst of this argument, Qualcomm suggests that the Court’s order should be stayed 

because it would “compel[] Qualcomm to assert patents against rivals,” which is a 

mischaracterization of the Order. The Court ordered Qualcomm to “make exhaustive SEP 

licenses available to modem-chip suppliers,” but did not order Qualcomm to sue rivals in the 

event that they fail to seek a license. (FOFCOL at 229.) 

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monopoly buttressed by anticompetitive practices may be a “stable status quo” (Mot. at 21), but 

allowing that status quo to persist would run counter to the public interest in enforcement of the 

antitrust laws. Indeed, a stay would have the unfortunate effect of “mak[ing] this Court an 

instrument for further frustrating instead of promoting the aim of the [antitrust laws].” Malarkey 

v. Texaco, Inc., 794 F. Supp. 1248, 1251 (S.D.N.Y. 1992) (declining to grant a stay despite 

significant duration of pre-judgment status quo). 

Finally, Qualcomm vaguely argues that enforcement of the Court’s order, by diminishing 

Qualcomm’s corporate profits, may harm national security. Qualcomm cites no trial evidence 

linking its corporate profits to national security. Instead, Qualcomm’s argument rests entirely on 

a letter attached to the Rogers Declaration; the letter, from the Treasury Department, blocks a 

company headquartered overseas from acquiring Qualcomm, citing the potential acquirer’s plans 

to reduce research and development in 5G systems. (ECF No. 1495-2.) The letter does not 

endorse, or even mention, the Qualcomm practices the Court has enjoined. Nor does the letter 

address how an injunction that preserves Qualcomm’s ability to license its patents on terms that 

reflect “fair value” could harm Qualcomm’s investment incentives or implicate national security. 

Qualcomm’s argument that anything that diminishes its corporate profits would necessarily 

threaten national security is absurdly overbroad and contrary to Congress’s determination, in 

enacting the Sherman Act, that competition furthers the public interest. See United States v. 

Nutri-Cology, Inc., 982 F.2d 394, 398 (9th Cir. 1992) (“[P]assage of the statute is itself an 

implied finding by Congress that violations will harm the public.”). 

The only case that Qualcomm cites as an instance of national security trumping other 

equitable considerations is readily distinguishable. In Winter v. Natural Resources Defense 

Council, 555 U.S. 7 (2008), the U.S. Supreme Court vacated a preliminary injunction against 

certain naval exercises after officers of the U.S. Navy submitted numerous affidavits detailing 

how the preliminary injunction would “hinder efforts to train sonar operators under realistic 

conditions, ultimately leaving strike groups more vulnerable to enemy submarines.” Id. at 23–25. 

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Qualcomm’s reliance on such an inapposite precedent serves only to highlight the weakness of 

its claims. 

C. Qualcomm fails to show a strong likelihood of success on appeal. 

Given that the balance of other factors weighs in favor of enforcement of the Court’s 

order, Qualcomm would have to show a strong likelihood of success on appeal to obtain a stay. 

Qualcomm has not made, and cannot make, such a showing. In fact, given the Court’s thorough 

consideration of the record and the law, Qualcomm cannot even show “a substantial case on the 

merits.” Leiva-Perez, 640 F.3d at 967–68 (internal quotation marks omitted). Qualcomm’s 

arguments on the merits are all arguments that the Court carefully considered and properly 

rejected. 

1. Qualcomm’s arguments on irreparable harm undermine its arguments 

on the merits of its appeal. 

Qualcomm’s arguments on irreparable harm are in considerable tension with its 

arguments on the merits, and undercut Qualcomm’s assertions regarding its likelihood of success 

on appeal. First, Qualcomm plans to dispute the Court’s conclusion that the company used its 

modem-chip leverage to collect from OEMs a material surcharge over and above the reasonable 

royalties that Qualcomm would otherwise negotiate. (Mot. at 15.) Qualcomm’s position on 

irreparable harm, however, strongly suggests that the company’s no license, no chips policy has

imposed a surcharge, and a substantial one. Qualcomm asserts that, should the Court’s order 

prohibit it from employing chip-supply leverage in license negotiations, Qualcomm will suffer a 

substantial and irreparable loss of revenue. Indeed, Qualcomm suggests that that the loss may 

amount to billions of dollars. (Mot. at 10.) 

Second, Qualcomm argues on the merits that higher royalties, paid in the first instance by 

handset OEMs, do not harm Qualcomm’s rivals, who presently are able to practice Qualcomm’s 

patents without paying Qualcomm royalties. (Mot. at 15, 21.) Were Qualcomm’s merits analysis 

correct, rivals would have little incentive to exchange a regime in which they practice 

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Qualcomm’s patents free of charge for one in which they pay Qualcomm reasonable royalties. In 

claiming irreparable harm, however, Qualcomm asserts the opposite: should the injunction 

become effective, rivals will prove eager to conclude licenses with Qualcomm. (Rogers Decl. ¶ 5 

(contending that these licenses will create a “multi-level licensing regime”).) Qualcomm’s own 

arguments again demonstrate that it is not likely to succeed on appeal. 

2. Qualcomm challenges rulings of the Court that are owed considerable 

deference on appeal. 

Several of Qualcomm’s prospective appellate arguments challenge the Court’s casemanagement decisions, evidentiary rulings, and factual findings, all of which will receive 

considerable deference on appeal. For example, Qualcomm challenges the Court’s rejection of 

Qualcomm’s proposal, first presented to the Court in October 2018, to introduce evidence of 

events post-dating the March 30, 2018 close of fact discovery. (Mot. at 11–12.) The Court 

determined that introduction of such evidence would require reopening discovery and postponing 

trial in order to avoid unfair prejudice, and declined to modify its scheduling order or to admit 

post-discovery evidence. (Order Denying Qualcomm’s Request to Introduce Evidence of PostDiscovery Events, ECF No. 997.) To rule otherwise, the Court observed, would require an 

endless cycle of additional discovery and trial delays. (Id. at 10 (“By necessity, the evidence at 

trial will never be fully up-to-date following the cutoff for discovery.”).) These case management 

and evidentiary rulings are entirely reasonable and entitled to considerable deference on appeal. 

See Navellier v. Sletten, 262 F.3d 923, 941–42 (9th Cir. 2001) (trial management and evidentiary 

rulings reviewed for abuse of discretion); Sablan v. Dep’t of Fin. of Com. of N. Mariana Islands, 

856 F.2d 1317, 1321 (9th Cir. 1988) (“Broad discretion is vested in the trial court to permit or 

deny discovery . . . .”); United States v. Hearst, 563 F.2d 1331, 1349 (9th Cir. 1977) (rules 

confer “broad discretion on the trial judge to exclude evidence on any of the grounds specified in 

Rule 403”). 

Qualcomm also challenges—or disregards—factual findings that are subject to deference 

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on appeal. For instance, Qualcomm argues that the Court improperly failed to consider current 

and future market conditions (while conceding that Qualcomm’s conduct would continue). (Mot. 

at 12–13.) In addition to advancing an erroneous legal standard,5 this argument ignores the 

Court’s findings as to present and likely future market power. The Court found, supported by 

substantial evidence, that many of Qualcomm’s rivals have exited modem-chip markets, that 

those that remain have been “hobbled by Qualcomm’s practices,” and that Qualcomm has 

exercised “continued dominance.” (FOFCOL at 206–08.)6 The Court further found, based on 

Qualcomm admissions and other substantial evidence in the record, that there is “a significant 

risk that Qualcomm will be dominant in 5G.” (FOFCOL at 224.) These factual findings as to 

current and future market power are well supported by the record and subject to deferential 

review. 

3. Qualcomm fails to identify any conclusion of law that the appeals court 

is likely to reverse. 

Qualcomm’s remaining arguments likewise fail to establish a strong likelihood of success 

on appeal. First, Qualcomm contends that the Court’s order “raises serious questions regarding 

the FTC’s novel and unprecedented ‘tax’ or ‘surcharge’ theory of antitrust liability.” (Mot. at 

14.) The Ninth Circuit and other circuit courts of appeals, however, have expressly endorsed 

 

5

 According to Qualcomm, the FTC may only obtain an injunction based on evidence of market 

power “right up to the moment the case comes to trial.” (Mot. at 11 (citation and internal 

quotation marks omitted).) If the case law imposed such a requirement, it would mandate the 

cycle of never-ending discovery and trial delays that the Court sought to avoid. But the cases that 

Qualcomm cites say nothing of the sort. In United States v. Syufy Enterprises, 903 F.2d 659, 664 

(9th Cir. 1990), the district court held that market power had not been established at any point in 

time. The issue of purportedly stale evidence in support of an injunction simply never arose. In 

Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209 (1993), a private 

lawsuit, the Court never addressed the standard for an injunction at all, and certainly did not 

fashion a requirement for consideration of post-discovery evidence. 

6 See also CX8191 at -089 (Qualcomm strategic planning document for fiscal year 2018 

depicting Qualcomm as the only merchant supplier of premium-tier SOCs); Moynihan 

(MediaTek) Tr. 365:1–4 (Mediatek has “not closed the gap” in premium-tier and high-tier 

modem chips). 

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raising rivals’ costs as a valid antitrust theory. See, e.g., Forsyth v. Humana, Inc., 114 F.3d 1467, 

1478 (9th Cir. 1997), overruled on other grounds by Lacey v. Maricopa Cnty., 693 F.3d 896, 925 

(9th Cir. 2012); Premier Elec. Constr. Co. v. Nat’l Elec. Contractors Ass’n, 814 F.2d 358, 368 

(7th Cir. 1987); see also Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law ¶651b5 (3rd & 

4th eds. 2010–2018). And there is little question that a monopolist’s conditioning product sales 

on its customers’ agreement to pay a penalty or surcharge on their purchases from the 

monopolist’s rivals is anticompetitive. See United Shoe Mach. Corp. v. United States, 258 U.S. 

451, 456–58 (1922); Premier, 814 F.2d at 368–69; Caldera, Inc. v. Microsoft Corp., 87 F. Supp. 

2d 1244, 1250 (D. Utah 1999). Qualcomm’s effort to camouflage its surcharge as a patent 

royalty does not materially alter the straightforward antitrust analysis. See, e.g., Premier, 814 

F.2d at 368–71 (surcharge imposed by defendant on rival contractors anticompetitive though 

labeled as a payment for administrative services). See generally Eastman Kodak Co. v. Image 

Technical Servs., Inc., 504 U.S. 451, 466–67 (1992) (antitrust law favors “market realities” over 

“formalistic distinctions”). 

Second, the Court’s decision does not create an “intra-district split” (Mot. at 15), nor will 

affirming the Court’s order require the Ninth Circuit to probe the outer limits of duty-to-deal 

principles under the Sherman Act. The opinion that purportedly creates a “split,” Huawei 

Technologies Co. v. Samsung Electronics Co., 340 F. Supp. 3d 934 (N.D. Cal. 2018), expressly 

referred to and distinguished this case. The district court accepted Huawei’s contention that, 

unlike the FTC here, Samsung had offered no evidence that Huawei acquired or maintained 

monopoly power in any relevant market through exclusionary conduct. See id. at 952 

(distinguishing this Court’s order denying Qualcomm’s motion to dismiss). 

Nor does this case present an unwarranted extension of duty-to-deal jurisprudence. 

Federal appellate precedents have recognized the importance of FRAND commitments and other 

“meaningful safeguards” that prevent subversion of the standard-setting process “by members 

with economic interests in stifling product competition.” Broadcom Corp. v. Qualcomm Inc., 501 

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F.3d 297, 309–10 (3d Cir. 2007) (quoting Allied Tube & Conduit Corp. v. Indian Head, Inc., 486 

U.S. 492, 501 (1988)); see Broadcom, 501 F.3d at 313 (identifying FRAND commitments as 

among these safeguards); Microsoft Corp. v. Motorola, Inc., 795 F.3d 1024, 1031, 1041 (9th Cir. 

2015) (same). They have also recognized that conduct that breaches or circumvents these 

safeguards can form a basis for antitrust liability when such conduct unreasonably restrains trade, 

e.g., Allied Tube, 486 U.S. at 501, or contributes to the acquisition or maintenance of monopoly 

power, e.g., Broadcom, 501 F.3d at 313–14; see also Order Denying Motion to Dismiss, ECF 

No. 134 at 41–46 (concluding that the voluntary nature of Qualcomm’s FRAND commitments 

and the administrability of a judicial remedy, among other factors, distinguished Qualcomm’s 

breach of its FRAND commitments from refusals to deal outside the standard-setting context). 

Third, Qualcomm fails to show a strong likelihood of success on appeal based on the 

Court’s application of the rule-of-reason burden-shifting framework. The burden-shifting 

framework applied by the Court, including its analysis of causation standards applicable to a 

government antitrust case, has been applied by numerous federal appellate courts and endorsed 

by the leading antitrust treatise. See, e.g., United States v. Microsoft Corp., 253 F.3d 34, 79 (D.C. 

Cir. 2001) (en banc) (courts should “infer ‘causation’ from the fact that a defendant has engaged 

in anticompetitive conduct that ‘reasonably appear[s] capable of making a significant 

contribution to ... maintaining monopoly power’”) (quoting 3 Phillip E. Areeda & Herbert 

Hovenkamp, Antitrust Law ¶ 651c, at 78 (1996 ed.)); see also McWane, Inc. v. FTC, 783 F.3d 

814, 837 (11th Cir. 2015); United States v. Dentsply Int’l, Inc., 399 F.3d 181, 187 (3d Cir. 2005); 

cf. Ohio v. Am. Express Co., 138 S. Ct. 2274, 2284 (2018) (explaining that an antitrust plaintiff 

may show anticompetitive effects “indirectly,” that is, by supplying “proof of market power plus 

some evidence that the challenged restraint harms competition”). Qualcomm does not even 

attempt to explain how Microsoft and other appellate precedents are inconsistent with United 

States v. Grinnell Corp., 384 U.S. 563, 570–71 (1966) (Mot. at 20), or other Supreme Court 

precedent. On this point, too, Qualcomm has not established any likelihood of success on appeal. 

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V. CONCLUSION 

For the foregoing reasons, the Court should not stay its Order. 

 Respectfully submitted, 

Dated: June 11, 2019 

/s/ Jennifer Milici 

JENNIFER MILICI 

JOSEPH R. BAKER 

GEOFFREY M. GREEN 

RAJESH S. JAMES 

DANIEL MATHESON 

KENNETH H. MERBER 

MARK J. WOODWARD 

Bureau of Competition 

Attorneys for Plaintiff Federal Trade 

Commission 

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