PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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Jennifer Milici, D.C. Bar No. 987096 

J. Alexander Ansaldo, Va. Bar No. 75870 

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

Elizabeth A. Gillen, Cal. Bar No. 260667 

Daniel Matheson, D.C. Bar No. 502490 

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

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

(202) 326-2912; (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, 

vs. 

QUALCOMM INCORPORATED, a 

Delaware corporation, 

Defendant. 

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

PLAINTIFF FEDERAL TRADE 

COMMISION’S BRIEF REGARDING 

POST-DISCOVERY EVIDENCE 

Case 5:17-cv-00220-LHK Document 928 Filed 10/31/18 Page 1 of 6
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PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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The FTC is prepared to show at trial that Qualcomm’s course of conduct, including its 

policies of refusing to sell modem chips to handset manufacturers without a license and refusing 

to license rival modem-chip manufacturers, stifles competition in markets for modem chips. 

Qualcomm admits that it has employed these policies for more than a decade and that it continues 

to employ them today. The FTC is also prepared to show at trial that there is a cognizable risk of 

recurrent violation of the FTC Act through Qualcomm’s use of market power to weaken rivals, 

including by continuing its long-standing anticompetitive licensing practices. Under wellestablished case law, these showings of ongoing conduct and likely recurrent violation of the FTC 

Act would be sufficient to warrant injunctive relief. See, e.g., United States v. W.T. Grant Co., 

345 U.S. 629, 633 (1953) (injunctive relief should be granted if “there exists some cognizable 

danger of recurrent violation”); FTC v. Evans Prods. Co., 775 F.2d 1084, 1087-88 (9th Cir. 1985) 

(“general rule” of equitable jurisdiction that “an injunction will issue only if the wrongs are 

ongoing or likely to recur” applies to the FTC Act); FTC v. USA Fin., LLC, 415 F. App’x 970, 

975 (11th Cir. 2011) (affirming injunction where “defendant’s past conduct indicates that there is 

a reasonable likelihood of further violations in the future”); FTC v. Accusearch Inc., 570 F.3d 

1187, 1201-02 (10th Cir. 2009) (following W.T. Grant and upholding injunction granted under 

the FTC Act); see also FTC v. Medlab, Inc., 615 F. Supp. 2d 1068, 1082 (N.D. Cal. 2009); FTC 

v. Lake, 181 F. Supp. 3d 692, 703 (C.D. Cal. 2016). 

Qualcomm has not shown good cause to modify the trial schedule or to re-open discovery. 

It has long been clear that the Court intends to hold a single trial on both liability and 

remedy. The Court entered its first scheduling order on April 19, 2017, setting both a deadline for 

the close of fact discovery of March 30, 2018, and a trial date nine months later, beginning 

January 4, 2019. (ECF No. 75.) Before the Court issued the order, the parties submitted a joint 

case management report stating that “[t]he parties do not seek bifurcation of any issues.” (ECF 

No. 71, at 17.) The scheduling order did not provide for separate remedy proceedings. (ECF No. 

75.) 

In the parties’ November 8, 2017 joint statement, Qualcomm proposed, for the first time, 

that the January 2019 trial relate only to liability and that the Court hold a separate proceeding on 

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PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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remedy. (ECF No. 286, at 10 n.3). On November 15, 2017, the Court rejected Qualcomm’s 

proposal. Nov. 15, 2017 Hr’g Tr. at 4:21-5:1 (“It sounds like you want 15 days for liability and 

then you are going to want, I don’t know how many days for [remedy], and I’m not going to 

agree to that.”). The Court did, however, add two days to the trial. (ECF No. 308, at 2.)1 

On the same day, the Court also responded to Qualcomm’s position that then-recent 

competitive conditions would be relevant to the defenses it planned to assert. (ECF No. 286, at 

11). The Court directed that any evidence presented at trial, including the refresh that Qualcomm 

was proposing, must derive from “full discovery,” and not “cherry picked data” or “cherry picked 

custodians.” Nov. 15, 2017 Hr’g Tr. at 27:16-17; id. at 26:18-19. The parties proceeded to 

conduct substantial discovery, including from third parties, on both liability and remedy, through 

the close of fact discovery. 

Since fact discovery closed, the parties have submitted seven joint case management 

statements to the Court. See ECF Nos. 672, 705, 710, 763, 766, 780, 914. It was not until October 

8, 2018, nine days before the seventh statement was due to the Court, and less than three months 

before trial, that Qualcomm informed the FTC that it intends to rely on certain post-discovery 

evidence at trial.2

 Qualcomm has offered no justification for its failure to propose months ago a 

discovery plan that would allow it to rely on such evidence.3 Qualcomm’s untimely 

announcement prejudices the FTC, which will be unable to conduct adequate discovery on these 

or other recent issues prior to trial, and precludes any finding of good cause to modify the 

schedule to re-open discovery or to delay a trial on a remedy. See Fed. R. Civ. P. 16(b) (a court’s 

scheduling order can only be modified for “good cause”); see also Johnson v. Mammoth 

Recreations, Inc., 975 F.2d 604, 609 (9th Cir. 1992) (“Rule 16(b)’s ‘good cause’ standard 

 

1

 The FTC does not oppose briefing the scope of remedy either post-trial or following a decision 

on liability. Consistent with the Court’s prior orders, any such briefing should be based on the 

evidence introduced during the January 2019 trial. 

2

 Before October 8, Qualcomm had not raised the possibility of refreshing discovery with the 

FTC since February 2018 and had not raised the issue with the Court since December 8, 2017. 

3

 The majority of the post-discovery licenses that Qualcomm produced in the related Southern 

District actions were signed by the end of July, and many were signed in the months before that. 

Qualcomm presumably knew that the post-discovery licenses might be agreed to at least some 

months prior to their execution. 

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PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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primarily considers the diligence of the party seeking” the modification and “carelessness is not 

compatible with a finding of diligence and offers no reason for a grant of relief.”). 

It is too late to conduct meaningful discovery prior to trial. 

As the Court has directed, Qualcomm should not be permitted to supplement the record 

with evidence cherry-picked from its own files, and it is now too late to conduct meaningful 

additional discovery prior to trial. Qualcomm argues that license agreements that post-date the 

close of fact discovery should be considered at trial because they “were demonstrably unaffected 

by any alleged market power.” (ECF No. 914, at 16.) But the discovery required to test that 

assertion would have to include documents and testimony from multiple Qualcomm custodians 

involved in licensing and chip sales, as well as document and deposition discovery from third 

parties.4

 Discovery from third-party licensees, which include foreign corporations, could take 

many months to complete. See ECF No. 914, at 10-11. And, while the parties conducted that 

discovery, Qualcomm could enter additional agreements that would require yet more discovery 

for the Court to have up-to-the-minute information. 

To date, Qualcomm has not been clear about the second category of post-discovery 

evidence that it seeks to introduce, asserting only that Apple and other unnamed major OEMs 

have “reduced or eliminated” modem chip purchases from Qualcomm. (ECF No. 914, at 15.) 

Qualcomm specifically states that Apple sourced modems from Intel for its 2018 iPhone models, 

but Apple’s decision to use Intel chips was made before the close of fact discovery and is the 

subject of existing discovery. See, e.g., Nevo Report, at 149 n.508 (quoting deposition testimony) 

(ECF No. 791-7, Ex. 1). Qualcomm has not identified any OEM that reduced chip purchases from 

 

4

 Qualcomm’s assertions that the post-discovery agreements are “5G licenses” and that, because it 

has not yet supplied commercial quantities of 5G modem chips, it cannot have market power, are 

misleading in several respects. First, Qualcomm has entered a number of agreements to sell 5G 

chips. See Qualcomm, “Global OEMs Select Qualcomm Snapdragon X50 5G NR Modem Family 

for Mobile Device Launches in 2019,” Feb. 8, 2018, available at 

https://www.qualcomm.com/news/releases/2018/02/08/global-oems-select-qualcommsnapdragon-x50-5g-nr-modem-family-mobile-device. Second, the post-discovery licenses appear 

to include terms covering multiple standards, not just 5G. See FTC Nevo Mot. at 2 n.3 (ECF No. 

790). Third, Qualcomm could have used threats to cut off the supply of chips that it is shipping to 

secure agreements to 5G terms. Whether it in fact used such threats can only be determined 

through discovery, including third-party discovery. 

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PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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Qualcomm after the close of discovery nor any evidence that it intends to rely upon at trial. If 

Qualcomm seeks to introduce its own confidential information, the FTC must be given the 

opportunity to test that evidence through discovery, including discovery from the as-yetunidentified OEM(s). 

If Qualcomm were correct that the Court must provide for supplemental discovery 

regarding recent events, then discovery ought not to be limited to the two categories of 

information that Qualcomm has identified. Qualcomm is in a position to cherry-pick recent events 

– and the documents that it created about those events – that might lend some support to its 

arguments while omitting those inconsistent with it. In contrast, the FTC does not have access to 

Qualcomm confidential information, and cannot identify narrow additional discovery to support 

its positions without the opportunity to receive and review documents on multiple topics from 

Qualcomm. Any abbreviated pick-your-favorite process of supplemental discovery is likely to 

provide the Court with a distorted picture that favors Qualcomm. 

The FTC’s request for equitable relief does not require perpetual discovery. 

There is no provision of the FTC Act or the Federal Rules that requires the Court, before 

granting an injunction, to choose between allowing discovery to continue up to the date of trial or 

admitting a defendant’s cherry-picked evidence untested by discovery. As a practical matter, 

there will always be some lag time between the close of discovery and the Court’s consideration 

of the evidence. Here, the Court has moved the case quickly and efficiently from discovery to 

trial; there has been no unreasonable delay justifying supplemental discovery. 

The cases Qualcomm has cited to date do not support its position. None of these cases 

concern a defendant seeking to introduce evidence from its own files without the opportunity for 

the plaintiff to take discovery. See ECF No. 914, at 8 & n.13. And none of the cases in which the 

FTC was a plaintiff addressed whether a court that has expeditiously moved a case from 

discovery to trial must consider evidence of transactions occurring between the close of fact 

discovery and trial before ordering a remedy. See id. at 8.

The FTC respectfully requests that the Court clarify that the January 2019 trial will 

encompass both liability and remedy and the March 30 fact discovery deadline will be enforced. 

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PLAINTIFF FEDERAL TRADE COMMISSION’S 

BRIEF REGARDING POST-DISCOVERY EVIDENCE 

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

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Dated: October 31, 2018 

Respectfully submitted, 

FEDERAL TRADE COMMISSION, 

/s/ Jennifer Milici 

Jennifer Milici 

J. Alexander Ansaldo 

Joseph R. Baker 

Elizabeth A. Gillen 

Daniel Matheson 

Mark Woodward 

Federal Trade Commission 

600 Pennsylvania Avenue, N.W. 

Washington, D.C. 20580 

(202) 326-2912; (202) 326-3496 (fax) 

jmilici@ftc.gov 

Attorneys for Federal Trade Commission

Case 5:17-cv-00220-LHK Document 928 Filed 10/31/18 Page 6 of 6