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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

KEKER, VAN NEST & PETERS LLP

Robert A. Van Nest - # 84065

rvannest@keker.com

Eugene M. Paige - # 202849

epaige@keker.com

Cody S. Harris - #255302

charris@keker.com

Justina Sessions - # 270914

jsessions@keker.com

633 Battery Street

San Francisco, CA 94111-1809

Telephone: (415) 391 5400 

Facsimile: (415) 397 7188

CRAVATH, SWAINE & MOORE LLP 

Gary A. Bornstein (pro hac vice) 

gbornstein@cravath.com

Yonatan Even (pro hac vice)

yeven@cravath.com 

825 Eighth Avenue 

New York, New York 10019-7475 

Telephone: (212) 474-1000

Facsimile: (212) 474-3700

Attorneys for Defendant 

QUALCOMM INCORPORATED

MORGAN, LEWIS & BOCKIUS LLP

Richard S. Taffet (pro hac vice)

richard.taffet@morganlewis.com

101 Park Avenue

New York, NY 10178-0060

Telephone: (212) 309-6000

Facsimile: (212) 309-6001

MORGAN, LEWIS & BOCKIUS LLP

Willard K. Tom (pro hac vice)

willard.tom@morganlewis.com

1111 Pennsylvania Avenue NW

Washington, DC 20004-2541

Telephone: (202) 739-3000

Facsimile: (202) 739-3001

MORGAN, LEWIS & BOCKIUS LLP

Geoffrey T. Holtz (SBN 191370)

gholtz@morganlewis.com

One Market, Spear Street Tower

San Francisco, CA 94105-1596

Telephone: (415) 442-1000

Facsimile: (415) 442-1001 

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

DEFENDANT QUALCOMM 

INCORPORATED’S REPLY IN 

SUPPORT OF MOTION FOR STAY 

PENDING APPEAL

Dept.: Courtroom 8, 4th Floor

Judge: Hon. Lucy H. Koh

Case 5:17-cv-00220-LHK Document 1506 Filed 06/18/19 Page 1 of 13
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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

In its Motion For Stay Pending Appeal (ECF No. 1495, the “Mot.”), Qualcomm 

demonstrated that, absent a stay, the Order would cause Qualcomm irreparable harm, that

Qualcomm’s appeal raises serious questions on which Qualcomm has a fair prospect of success, 

and that staying the injunction pending appeal will not impair but rather further the public 

interest. On June 11, 2019, the Federal Trade Commission (“FTC”) filed its Opposition. (ECF 

No. 1500, the “Opp.”.) The FTC’s Opposition does nothing to undermine the strong justification 

for a stay of the Order pending appeal; all of the factors applied by the Ninth Circuit strongly 

weigh in favor of a stay. 

Qualcomm focuses its Reply on the irreparable harm prong of the stay test, and 

specifically on certain fundamental errors in the FTC’s discussion of that factor, which 

mischaracterizes Qualcomm’s business and the cellular industry. Qualcomm only briefly 

discusses the other two prongs of the stay test and some of the many misstatements in the amicus

briefs from LG Electronics (“LGE”) and ACT The App Association (“ACT”).

A. Qualcomm Has Shown That It Will Be Irreparably Harmed Absent a Stay. 

Absent a stay, Qualcomm will suffer irreparable harm from implementing each of the first 

two provisions of the injunction,

1 which require Qualcomm to (1) negotiate new agreements with 

many licensees; (2) sell chips to unlicensed customers; and (3) grant exhaustive licenses to chip 

makers. (Mot. at 7-10; ECF No. 1495-1 (“Rogers Decl.”) ¶¶ 5-9.)

1. Qualcomm will suffer irreparable harm if it is compelled to negotiate 

new agreements with many OEMs in view of the Order.

Qualcomm showed in its Motion that if it is required to enter into new license agreements 

during an appeal, there is no practical way to undo those agreements if Qualcomm prevails on 

appeal, causing irreparable harm. (Mot. at 9-10; Rogers Decl. ¶ 8.) In response, the FTC makes 

two misplaced assertions. First, the FTC asserts that Qualcomm would not be harmed because 

the Order allows it to obtain “fair value” for its SEPs. (Opp. at 6.) This response is a red herring. 

 1 Should the Court determine that the irreparable harm Qualcomm would suffer as a result of 

provisions (1) and (2) of the injunction does not warrant a stay of the entire Order, Qualcomm 

respectfully submits that the Court should enter a partial stay of only provisions (1) and (2) of the 

injunction.

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

The FTC’s main goal in this case was to lower Qualcomm’s royalty rates; the Court concluded—

and the Order states—that Qualcomm’s rates are “unreasonably high” (Order at 157). Any 

negotiation or renegotiation that would take place in the shadow of the Order (absent a stay) 

would thus prejudice Qualcomm, not because of the loss of any purported leverage based on 

Qualcomm’s chip supply, but because of the need to negotiate in the shadow of an Order that 

declares—erroneously, in Qualcomm’s view—that Qualcomm’s typical licensing terms are 

unreasonable. (Mot. at 9; Rogers Decl. ¶ 7.) Licensees in these negotiations are likely to use 

tactics to further harm Qualcomm, such as stopping payment of royalties under valid contracts, 

even if temporarily. (See Mot. at 10; Rogers Decl. ¶ 9; Han Decl. ¶ 8.) For example, Huawei 

stopped paying royalties to Qualcomm for a period of time during ongoing licensing 

negotiations—even though it has an active license agreement—resulting in significant lost royalty 

revenue to date. (Han Decl. ¶ 8.)

The FTC’s further assertion that Qualcomm could, upon prevailing on appeal, seek 

“damages for any past infringement” to overcome the suspension of royalty payments is likewise 

erroneous. (Opp. at 6.) In this payment suspension case, the licensee still retains its license. But 

it is hornbook law that a license is a defense to a patent infringement claim. 35 U.S.C. § 271(a) 

(“Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, 

or sells any patented invention . . . infringes the patent”) (emphasis added); De Forest Radio Tel. 

& Tel. Co. v. United States, 273 U.S. 236, 242 (1927). Thus, the FTC’s proposed solution 

completely lacks merit. And absent a stay, if Qualcomm were forced to agree to a license with 

reduced royalties, Qualcomm could not recover its lost royalty revenue if it prevailed on appeal. 

(Han Decl. ¶ 6.) This irrecoverable loss of revenue constitutes irreparable harm. 

Moreover, any royalty concessions to one licensee can cause irreparable harm to 

Qualcomm as a result of the effect on other licensees because of the non-discrimination provision 

of Qualcomm’s FRAND commitment or “most favored” provisions in some of Qualcomm’s 

license agreements. And this reduced royalty effect would become further entrenched beyond the 

appeal because licensing negotiations are often conducted by reference to comparable licenses; 

licensees would therefore seek to use unjustifiably reduced royalty terms negotiated in the 

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

shadow of the Order as a benchmark for their agreements, artificially lowering the royalties 

Qualcomm receives below a reasonable royalty. (Id. ¶ 7; see also Trial Tr. at 1876:7-1877:3 

(Nevo) (explaining that Qualcomm’s most-favored royalty rate provisions and non-discrimination 

obligations under its FRAND commitments could drive Qualcomm’s royalties to the “lowest 

common denominator”).) 

Second, the FTC asserts that any harm to Qualcomm is avoidable if Qualcomm negotiates

“short-term or interim licenses”, and that Qualcomm is free to negotiate “contractual provisions 

that would mitigate or eliminate any long-term adverse consequences to Qualcomm”. (Opp. at 7.) 

This response is entirely impracticable and does nothing to address or mitigate the irreparable 

harm Qualcomm will suffer. 

The FTC’s response presupposes that licensees will simply accept “interim licenses” and 

contractual provisions that would mitigate lasting harm to Qualcomm; however, nothing in the 

Order mandates licensees to accept the interim license agreements and the damage-mitigating 

provisions the FTC hypothesizes. (Han Decl. ¶¶ 4-5.) Qualcomm’s experience from past 

licensing negotiations is that licensees value the stability and certainty of long-term agreements. 

(Id. ¶ 5.) Licensees are unlikely to accept provisions that create uncertainty, such as contingent 

future payment of additional royalties for devices that already have been manufactured and sold,

simply to benefit Qualcomm. (Id.) And even if some licensees would be open to negotiating

such provisions, such provisions will not be agreed to for free—licensees would demand 

concessions on other license terms, including reduced royalty rates. (Id.) These concessions 

would themselves cause irreparable harm to Qualcomm, as there would be no way for Qualcomm 

to recover royalty revenue lost during the pendency of the appeal or to undo other licensing terms 

and their effects once the appeal is decided. (Id. ¶ 6.) And the FTC proposes no way—because 

none exists—to restore existing license agreements entered into prior to the interim agreements if 

Qualcomm prevails on appeal. (See Mot. at 9; Rogers Decl. ¶ 8.) 

The cases on which the FTC relies for the proposition that there would be no harm from 

negotiating and renegotiating many new license agreements (Opp. at 3) are nonprecedential and 

inapposite. In Winding Creek Solar LLC v. Peevy, 2018 WL 1912136, at *1 (N.D. Cal. Apr. 23, 

Case 5:17-cv-00220-LHK Document 1506 Filed 06/18/19 Page 4 of 13
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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

2018), the court concluded that an order that a utility commission use a “readily available” 

standard form contract rather than another form contract adjudged illegal, to accomplish the same 

result and with the same counterparties, did not cause irreparable harm. Unlike in Winding 

Creek, the Order does not permit Qualcomm to comply by using an available and easily 

implementable alternative to accomplish the same result, and the contract in that case did not 

potentially affect many other contracts through mechanisms like Qualcomm’s FRAND 

commitment or “most favored” contractual provisions. Here, Qualcomm would be forced to 

radically reshape its licensing business in a way that is unprecedented in the cellular industry, 

undo many existing license agreements, and negotiate many new agreements with new 

counterparties and make exhaustive modem chip sales. (See Trial Tr. at 1418:24-1423:16

(Gonell); Rogers Decl. ¶¶ 5-8.) None of the damage resulting from these activities could be 

remedied if the Order is reversed. And in Overstreet v. Thomas David Medical Centers., P.C., 

978 F. Supp. 1313, 1315 (D. Ariz. 1997), the court concluded only that the movant’s claims of 

expense and extensive business changes were not proven, not that they would not constitute 

irreparable harm had they been established.

LGE’s submission (ECF No. 1501) provides no support for the FTC’s position. Notably, 

LGE acknowledges that it currently is in “continuing negotiations over the next set of long-term

agreements”. (ECF No. 1501-1 at 3 (emphasis added).) The current interim agreement between 

Qualcomm and LGE was negotiated prior to and free from any effect of the Court’s Order, and 

entered into after the parties had already reached a mutual understanding of the material terms of 

a future long-term agreement. (Han Decl. ¶ 13.) This agreement is exceptional and is nothing 

like the short-term agreements with undefined mitigation provisions that the FTC postulates. (Id.

¶ 16.)

Moreover, LGE’s submission (supported by a declaration of an attorney not involved in 

the license negotiations) misstates the facts, demonstrating the opportunistic use of the Order by 

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

licensees to gain leverage in licensing negotiations with Qualcomm.

2

 Indeed, LGE’s public 

statements directly contradict its submission to this Court: since filing its amicus brief, LGE has 

publicly stated that “[t]here will be no disruption of supplies from Qualcomm”. (Byars Decl. Ex. 

B.) And indeed, contrary to LGE’s insinuation (Lee Decl. (ECF No. 1501-2) ¶ 8), Qualcomm 

continuously supplied chips to LGE, without any interruption, throughout the negotiations. (Han 

Decl. ¶ 15.) Moreover, Qualcomm made a written offer to enter into binding FRAND arbitration 

with LGE to try and resolve the dispute, which included an express guarantee of chip supply 

during the pendency of the arbitration, but LGE declined that offer. (Han Decl. ¶ 17.) 

2. Qualcomm will suffer irreparable harm if it is compelled to sell chips 

to unlicensed OEMs.

Qualcomm also demonstrated in its Motion that it will face irreparable harm if it must sell 

modem chips to unlicensed OEMs while the appeal is pending. (Mot. at 8-9.) OEMs would 

claim that such sales exhaust Qualcomm’s rights to seek royalties for its SEPs, and as a result

Qualcomm would be unable to recover the fair value of its patents from them. (Mot. at 8; see 

Rogers Decl. ¶ 6.) The FTC asserts that Qualcomm can avoid this harm if it “price[s] its modem 

chips to reflect the fair value of its patents”. (Opp. at 5.) 

But the FTC’s argument fails to recognize that, at least so long as other chip makers are 

not licensed and thus do not price into their chip offerings the cost of Qualcomm’s patents, this 

would leave Qualcomm in the untenable position of either charging much more for its chips than 

do its competitors (and therefore likely losing the sales), or reducing its chip prices so that, once 

again, they do not reflect the fair value of Qualcomm’s patents. Whether it is losing chip sales or 

the ability to recover for the value of its SEPs, Qualcomm is irreparably harmed. 

 2 Qualcomm objects to the amicus submission by LGE based on LGE’s refusal to seek 

Qualcomm’s consent before filing and LGE’s refusal to participate in meaningful discovery or to 

be cross-examined by Qualcomm in this case. (See Qualcomm’s pre-trial Motion in Limine 

concerning LGE (ECF No. 944).) LGE should not be permitted to make self-serving statements 

under the guise of an amicus submission while it used its presence outside the United States to 

shield itself from discovery and prevent Qualcomm from making a record.

In addition to the discussion here, the accompanying declaration of John Han corrects the record 

as to other assertions in LGE’s submission.

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

3. Qualcomm will suffer irreparable harm from being required to grant 

exhaustive licenses to chip makers.

Qualcomm also demonstrated in its Motion that, absent a stay, it will suffer irreparable 

harm from the requirement in the injunction to grant exhaustive licenses to chip makers as a result 

of the substantial difficulties inherent in multi-level licensing. (Mot. at 8-9.) Qualcomm has 

maintained throughout the case that its practice of licensing only at the device level is industry 

standard and is justified because it is much more efficient than licensing at multiple levels in the 

supply chain. (See Trial Tr. at 355:15-22 (Moynihan), 805:4-15 (Mollenkopf), 992:15-19 

(Donaldson), 1432:12-24, 1436:3-8, 1439:15-23 (Gonell), 1670:14-1674:17 (Weiler).) The FTC 

asserts that if Qualcomm’s position is correct, it is “implausible” to believe that “chip suppliers 

would nonetheless insist on licensing Qualcomm patents that their OEM customers could license 

more efficiently”. (Opp. at 7.) The FTC ignores basic motivations. The self-interest of chip 

makers is not to promote fair, quick and efficient collection of royalties by Qualcomm, but rather 

to delay and minimize the payment of royalties from those chip makers. Multi-level licensing 

would facilitate obstruction and delay. The OEMs would point to the chip makers and assert that 

most of Qualcomm’s valuable patents are substantially embodied in the modem chips, such that 

chip makers should have to pay the bulk of the royalty. Conversely, the chip makers would point 

to the OEMs and assert that most of Qualcomm’s valuable patents are substantially embodied in 

the complete devices as they communicate with the cellular network, such that OEMs should 

have to pay the bulk of the royalty (a claim they could make even if Qualcomm were to try and 

license to them its entire SEP portfolio, as the ACT brief proposes). (See Rogers Decl. ¶ 5.) This 

would force Qualcomm into negotiations over which portion of Qualcomm’s patent portfolio each 

licensee needs to license—and inevitably disputes over that question—before Qualcomm was 

even in a position to begin addressing the value of those patents. (Trial Tr. at 1432:25-1434:21 

(Gonell).) Licensing at only one level of the supply chain allows Qualcomm to avoid this “delay 

and disagreement among multiple parties”, which “undermine Qualcomm’s ability to obtain fair 

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

value for its intellectual property”. (Rogers Decl. ¶ 5.)3

The serious difficulties in multi-level licensing set forth in the Rogers Declaration are 

confirmed by the brief of amicus ACT, which asserts that “[c]ellular standards are implemented at 

the chip level” and, as a result, Qualcomm will not need to license cellular SEPs to OEMs. (ECF 

No. 1503-2 at 8.) ACT’s bald assertion is entirely unsupported by any technical evidence; there 

is no evidence that all cellular SEPs are practiced by modem chips. To the contrary, Qualcomm 

submitted evidence that cellular standards describe the functionality of complete cellular devices, 

not modem chips. (See ECF No. 912 (Decl. of Lorenzo Casaccia) ¶¶ 5, 8, 10, 19-35).) ACT is an 

organization aligned with the interests of powerful OEMs such as Apple and Samsung, see

https://allthingsfrand.com/about/ (an ACT website listing its members), and its brief illustrates the 

finger-pointing that would inevitably occur under a multi-level licensing regime. 

ACT further claims that its “views on these issues are mainstream and have been 

supported by an extensive array of industry . . . stakeholders”, and as support cites a “Core 

Principles and Approaches for SEP Licensing” proposal that ACT (and others, including Apple

and Lenovo) submitted to a CEN-CENELEC Workshop. (ECF No. 1503-2 at 3-4.) But many of 

the ideas espoused in that document were specifically and opportunistically used by OEMs to 

“devalue SEPs”.

4

 And ACT is not presenting the Court with the whole story. Rather, ACT omits 

the competing proposal submitted at the same CEN-CENELEC Workshop by many other 

industry participants (including Qualcomm) that contradicted ACT’s positions and argued that 

“licensing a product or service at a single point in the supply chain is an efficient approach” to 

ensuring that SEP owners “allow access to [standard-essential] patented technology for 

 3 The FTC miscites Paragraph 5 of the Declaration of Alex Rogers for the proposition that 

“Qualcomm asserts” that “should the injunction become effective, rivals will prove eager to 

conclude licenses with Qualcomm”. (Opp. at 12.) Mr. Rogers made no such assertion in 

Paragraph 5 of his Declaration or anywhere else. To the contrary: he declares that “OEMs will 

contend that all or nearly all cellular SEP claims are practiced or exhausted at the component 

level and that Qualcomm must, under [the] Order, first license at the component level”, causing 

“delay and disagreement among multiple parties”. (Rogers Decl. ¶ 5.)

4 (See, e.g., Byars Decl. Ex. F at 7 (internal Apple document listing strategies to “[d]evalue 

SEPs”, including by setting the royalty base as the “smallest priceable component” and 

“build[ing] favorable, arms-length ‘comp’ licenses”).)

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

implementing and using the standard”. (Byars Decl. Ex. A at 7.) ACT’s amicus submission itself

represents an effort to use arguments about where cellular SEPs are practiced to make it

substantially more difficult for Qualcomm (and other SEP holders) to license its SEPs and obtain 

fair value for its patents.

The irreparable harm is exacerbated by the prospect of inconsistencies between the Order

and foreign regulators. The Taiwan Fair Trade Commission (“TFTC”) and the Chinese National 

Development and Reform Commission (“NDRC”) each recently investigated the same set of

Qualcomm practices and concluded their investigations without ordering Qualcomm to license

component makers. (See, e.g., Byars Decl. Ex. C, Ex. D, Ex. E at 2 (TFTC settlement providing 

that “Qualcomm will not assert any SEP claim against a [chip maker] without first offering them 

a license to such claim on [FRAND] terms and conditions”); Trial Tr. 1982:23-1983:13 (Rogers) 

(Rectification Plan with NDRC does not require Qualcomm to sell chips to unlicensed companies 

or to license at the component level).) Many chip makers (and OEMs) are based in Taiwan or 

China. These deliberate decisions by foreign governments that it is in their respective national 

interests not to impose the requirements in this Court's Order are entitled to adjudicative comity.

See Mujica v. AirScan Inc., 771 F.3d 580, 599 (9th Cir. 2014). 

The irreparable harm facing Qualcomm warrants a stay, and nothing in the FTC’s

Opposition or the amicus briefs undermines that fact. 

B. Qualcomm’s Appeal Presents a Substantial Case on the Merits.

Qualcomm demonstrated that its appeal presents a “substantial case on the merits”, which

means “serious questions” or questions on which Qualcomm has a “fair prospect of success”. 

(Mot. at 6.) None of the FTC’s arguments casts any doubt on the seriousness of the issues 

Qualcomm intends to raise on appeal or its prospect of success. In the interest of space, 

Qualcomm responds here only to the FTC’s misstatements of the legal standards. 

As an initial matter, the FTC asserts that Qualcomm “would have to show a strong 

likelihood of success on appeal to obtain a stay”. (Opp. at 11.) Qualcomm has easily made that 

showing. However, the standard on this motion for a stay is lower, namely “a substantial case on 

the merits”. Leiva-Perez v. Holder, 640 F.3d 962, 967-68 (9th Cir. 2011). 

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

The FTC also asserts that Qualcomm’s argument on appeal that the record lacks the

necessary evidence of current market conditions justifying an injunction is a “case-management 

decision” “entitled to considerable deference on appeal”. (Opp. at 12.) But the Ninth Circuit has 

held that evidence that a violation that is “ongoing or likely to recur” is a necessary element of the 

FTC’s request for injunctive relief. FTC v. Evans Prods. Co., 775 F.2d 1084, 1087 (9th Cir.

1985); see also FTC v. Shire ViroPharma, Inc., 917 F.3d 147, 158 (3d Cir. 2019) (“a court uses 

[the likelihood of recurrence standard] to determine the FTC’s entitlement to an injunction”);

FTC v. AbbVie Inc., 329 F. Supp. 3d 98, 145 (E.D. Pa. 2018) (denying a permanent injunction 

because the record contained “no basis to conclude that” antitrust violations are “likely to 

reoccur”); FTC v. Merch. Servs. Direct, LLC, 2013 WL 4094394, at *3 (E.D. Wash. Aug. 13, 

2013) (concluding that, after “stale” evidence regarding past alleged violations was “excised”, 

“there is little to suggest that the violations . . . are likely to recur” and denying preliminary 

injunction). 

This Court should find that Qualcomm’s appeal presents a substantial case for relief on 

the merits.

C. Staying the Order Pending Appeal Is in the Public Interest. 

All witnesses at trial agreed that chip markets are characterized by falling prices, 

increased output and dynamic innovation. (Mot. at 3-4, 18-19; Trial Tr. at 1695:20-1696:7 

(Chipty), 1797:6-1800:23 (Snyder), 2031:16-24, 2062:20-2064:22 (Shapiro).) 

Nevertheless, the FTC asserts that this motion should be denied because of an alleged 

threat to future modem chip markets, including 5G. (Opp. at 8-9.) There is no record evidence, 

however, supporting the FTC’s contention that 5G modem chips are, or are about to become, a 

properly defined antitrust market, or that Qualcomm will have monopoly power in that market

once the sale of 5G modem chips begins. Nor has the FTC presented any evidence that should 

Qualcomm gain a leadership position in 5G, such position would be based on anything but a 

legitimate time-to-market advantage or superior chips. See United States v. Grinnell Corp., 384 

U.S. 563, 570-71 (1966) (distinguishing between exclusionary conduct and “growth or 

development as a consequence of a superior product, business acumen, or historic accident”). 

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

The FTC also asserts that Qualcomm has not shown that allowing the injunction altering 

its business practices threatens harm to its technology leadership and therefore the national 

security of the United States. The FTC acknowledges that the Committee on Foreign Investment 

in the United States (“CFIUS”) blocked a foreign acquisition of Qualcomm by Broadcom, but 

asserts that CFIUS’s letter “does not endorse, or even mention, the Qualcomm practices the Court 

has enjoined”. (Opp. at 10.) That is incorrect. The CFIUS letter states explicitly that CFIUS

considered Broadcom’s criticisms of Qualcomm’s “licensing structure” and Broadcom’s

statement that it would “reset [Qualcomm’s] business model”. (ECF No. 1495-2 at 3.) CFIUS 

concluded that “[c]hanges to Qualcomm’s business model would likely negatively impact the 

core R&D expenditures of national security concern”. (Id.) And CFIUS identified Qualcomm as 

the “current leading company in 5G technology development and standard setting”. (Id. at 2.) 

Thus, the CFIUS letter supports the public interest in maintaining the structure of Qualcomm’s 

licensing business pending appeal.

A stay pending appeal would not harm competition but would protect the national security 

of the United States. It is therefore in the public interest.

CONCLUSION

For the foregoing reasons, and the reasons in Qualcomm’s Motion, the Court should stay 

the Order pending appeal or, in the alternative, stay its Order while Qualcomm seeks a stay from 

the Court of Appeals for the Ninth Circuit.

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

Dated: June 18, 2019 

Respectfully submitted,

CRAVATH, SWAINE & MOORE LLP,

/s/ Yonatan Even ___________ 

Gary A. Bornstein 

Yonatan Even 

Worldwide Plaza

825 Eighth Avenue 

New York, NY 10019 

Tel: (212) 474-1000 

Fax: (212) 474-3700 

gbornstein@cravath.com 

yeven@cravath.com

Robert A. Van Nest

Eugene M. Paige 

Justina K. Sessions

KEKER, VAN NEST & PETERS LLP

633 Battery Street

San Francisco, CA 94111-1809 

Tel: (415) 391-5400 

Fax: (415) 397-7188 

rvannest@keker.com 

epaige@keker.com

jsessions@keker.com

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QUALCOMM’S REPLY IN SUPPORT OF MOTION FOR STAY PENDING APPEAL

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

Richard S. Taffet 

MORGAN, LEWIS & BOCKIUS LLP

101 Park Avenue

New York, NY 10178-0060

Tel: (212) 309-6000

Fax: (212) 309-6001

richard.taffet@morganlewis.com

Willard K. Tom

MORGAN, LEWIS & BOCKIUS LLP

1111 Pennsylvania Ave. NW

Washington, DC 20004-2541

Tel: (202) 739-3000

Fax: (202) 739 3001 

willard.tom@morganlewis.com

Geoffrey T. Holtz

MORGAN, LEWIS & BOCKIUS LLP

One Market, Spear Street Tower

San Francisco, CA 94105-1126

Tel: (415) 442-1000

Fax: (415) 442-1001

geoffrey.holtz@morganlewis.com

Attorneys for Qualcomm Incorporated

 

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