Exhibit 23

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 1 of 14
·1· · · · · · · · · ·UNITED STATES DISTRICT COURT

· · · · · · · · · ·NORTHERN DISTRICT OF CALIFORNIA

·2

·3· ·FEDERAL TRADE COMMISSION,

·4· · · · · · · · · · · · · · ·Plaintiff,

·5· ·vs.· · · · · · · · · · · · · ·No: 17-cv-00220-LHK-NMC

·6· ·QUALCOMM INCORPORATED,

·7· · · · · · · · · · · · · · Defendant.

·8· ·- - - - - - - - - - - - - - - - - - - - - - - -

·9· ·In Re:

· · · · · · · · · · · · · · · · · ·No: 17-md-02773-LHK-NMC

10· ·QUALCOMM ANTITRUST

· · ·LITIGATION

11

· · ·- - - - - - - - - - - - - - - - - - - - - - - -

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· · · · · · · · · · ·UNITED STATES DISTRICT COURT

14· · · · · · · · ·SOUTHERN DISTRICT OF CALIFORNIA

15

16· ·In Re:· · · · · · · · · · · · No: 3:17-cv-00108-GPC-MDD

17· ·QUALCOMM LITIGATION

18· ·- - - - - - - - - - - - - - - - - - - - - - - -

· · ·In Re:

19· ·CERTAIN MOBILE ELECTRONIC

· · ·DEVICES AND RADIO· · · · · · ·Investigation No: 337-TA1093

20· ·FREQUENCY AND

· · ·PROCESSING COMPONENTS

21· ·THEREOF

22· ·- - - - - - - - - - - - - - - - - - - - - - - -

23· · · · ·HIGHLY CONFIDENTIAL: ATTORNEYS' EYES ONLY

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·1· · · · A.· Yes, we have.· We take our FRAND commitment very

·2· ·seriously.

·3· · · · Q.· So you mentioned a FRAND commitment.· And what is

·4· ·it that you understand to be your FRAND commitment, or

·5· ·Ericsson's FRAND commitment?

·6· · · · A.· So when you declare patents to ETSI you commit to

·7· ·license on fair, reasonable and non-discriminatory terms and

·8· ·conditions in order with the ETSI policy.· So you would need

·9· ·to look at the details of the ETSI policy to be able to

10· ·interpret the commitment itself.

11· · · · Q.· And is there a specific provision within the ETSI

12· ·policy that sets forth these requirements?

13· · · · A.· Obviously you have to look at the full ETSI policy

14· ·as well as the guidelines, but the clause which stipulates

15· ·the FRAND commitments is I believe in section 6.1.

16· · · · Q.· And if you wish to please refer to the exhibit that

17· ·we've premarked as 2776 and if you would just review that

18· ·and confirm whether your recollection is correct?

19· · · · A.· Yes.

20· · · · Q.· Now does in your understanding, or Ericsson's

21· ·understanding, section 6.1 of the ETSI IPR policy require

22· ·you to license all parties that request a license?

23· · · · A.· All parties that request a license and that make

24· ·equipment in accordance with the policy.

25· · · · Q.· And you mentioned or used the word equipment.· What

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 3 of 14
·1· ·is your understanding of the term equipment?

·2· · · · A.· My understanding of the term equipment is that it

·3· ·is a fully compliant product that can be used by the user.

·4· · · · Q.· And can you give us some examples what a fully

·5· ·compliant piece of equipment might be?

·6· · · · A.· A base station.· A mobile phone.

·7· · · · Q.· Would in your understanding of the ETSI policy or

·8· ·Nokia's -- I'm sorry, of Ericsson's understanding of the

·9· ·ETSI policy be that a fully compliant equipment include a

10· ·component that is included for example in a cellular

11· ·handset?

12· · · · A.· No, that would not be my understanding.

13· · · · Q.· And why is that?

14· · · · A.· The component cannot be used by the consumer.· It

15· ·does not have all the functionalities to actually operate in

16· ·the network.· It cannot be tested for compliance testing as

17· ·well.

18· · · · Q.· Has Ericsson in your experience always complied

19· ·with its obligations to license equipment manufacturers

20· ·under the ETSI policy?

21· · · · A.· To my knowledge, yes, we have.

22· · · · Q.· Let me ask you to turn to clause 3 of the ETSI

23· ·policy if you would, titled "Policy Objectives".· Are you

24· ·familiar with this clause of the policy?

25· · · · A.· Yes, I am.

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 4 of 14
·1· · · · Q.· What is your understanding of this clause?

·2· · · · A.· First of all what is incorporated in the standard

·3· ·has to be what is the best technical solution.· There is

·4· ·also balance in the ETSI policy to award those that innovate

·5· ·at the same time as making sure that the standard can be

·6· ·widely spread in the market.

·7· · · · Q.· And consistent with that second policy objective,

·8· ·to allow the standard to be widely spread, do you have an

·9· ·understanding regarding allowing all companies access to the

10· ·technology?

11· · · · A.· Access, yes.· You can only license the same

12· ·functionality for the same product once in the value chain

13· ·for exhaustion purposes.· So yes everyone in the value chain

14· ·should get access.· Not everyone might be able to get a

15· ·direct license so the direct license goes to, in our case,

16· ·the equipment.

17· · · · Q.· You mentioned the value chain.· To what are you

18· ·referring there?

19· · · · A.· The value chain might be very spread.· So in some

20· ·cases, if you look at it historically, most of the handset

21· ·players were virtually integrated.· Nowadays it's common

22· ·that you buy chipsets from a chip supplier, and it might not

23· ·go directly from the chip supplier to the actual end device

24· ·manufacturer but there might be multiple steps in between.

25· · · · Q.· So if you were to give us a -- if you were to

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 5 of 14
·1· ·graphically illustrate what the value chain is starting at

·2· ·the top, how would you define the value chain?· And

·3· ·I understand this is a hard question because you're not

·4· ·going to graphically show us but if you can orally explain

·5· ·what you would put on a diagram?

·6· · · · A.· Yes.· So in a simple world -- I'm not going to go

·7· ·into the details -- but in a simple world you can say you

·8· ·have the chip supplier maybe selling its chipsets to an ODM

·9· ·in very often in Asia.

10· · · · Q.· And an ODM stands for?

11· · · · A.· The company actually producing the hardware but not

12· ·the company that actually brands and sells the product on

13· ·the market.

14· · · · Q.· The acronym ODM stands for what?

15· · · · A.· Original design manufacturer.

16· · · · Q.· And from the ODM what's next in the chain?

17· · · · A.· The OEM.

18· · · · Q.· And OEM stands for?

19· · · · A.· Original equipment manufacturer.

20· · · · Q.· And would that be for example a handset maker?

21· · · · A.· That would be a handset maker, yes.· And in our

22· ·vocabulary that would be the company putting its name on the

23· ·product and selling it on the market.

24· · · · Q.· Apple would be an example?

25· · · · A.· Yes, they would.

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 6 of 14
·1· · · · Q.· And then what's next in the value chain?

·2· · · · A.· Then you have the consumer.· You might have the

·3· ·operator or a retailer in between but then ultimately the

·4· ·consumer.

·5· · · · Q.· And in this value chain when you are granting

·6· ·licenses to Ericsson's SEP, cellular SEP portfolio, who

·7· ·would you be granting a license to?

·8· · · · A.· We would be licensing the company putting its name

·9· ·on the fully compliant equipment and selling that on the

10· ·market.· So it would be Apple, Samsung and those type of

11· ·companies.

12· · · · Q.· These were the companies that you identified as the

13· ·OEM?

14· · · · A.· Yes.

15· · · · Q.· And this has been Ericsson's practice since you've

16· ·been involved in the licensing?

17· · · · A.· It has, yes.

18· · · · Q.· Is this a practice that is unique to Ericsson?

19· · · · A.· No.· As I explained earlier, the industry used to

20· ·be virtually integrated, so already in the '90s the licenses

21· ·were done between -- in those days Ericsson had licenses

22· ·with Nokia, with Siemens, with Philips who were also selling

23· ·final products on the market.

24· · · · 

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Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 8 of 14
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10· · · · Q.· And would it be fair to say during that period of

11· ·time that those licenses related to the 2G cellular

12· ·technologies?

13· · · · A.· Yes, 2G as well as other technologies.· It used to

14· ·be the practice to enter into very broad cross-licenses

15· ·where the definition of technology were more undefined than

16· ·it is today.

17· · · · Q.· But it would include the 2G technology?

18· · · · A.· It would, yes.

19· · · · Q.· And as time moved forward did the same practice

20· ·apply for 3G cellular technologies?

21· · · · A.· Yes, it did.· That's correct.

22· · · · Q.· And even more recently did -- does the same

23· ·practice apply to 4G cellular technologies?

24· · · · A.· It does, yes.

25· · · · Q.· Based on your understanding are there reasons that

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 9 of 14
·1· ·collecting royalty on something that was already licensed

·2· ·further up in the value chain.

·3· · · · Q.· Let me show you a document that we've marked as

·4· ·QX2879.

·5· · · · · ·(Exhibit QX2879 marked for identification.)

·6· · · · · · ·Do you recognize this document?

·7· · · · A.· Yes, I do.

·8· · · · Q.· And what do you recognize it to be?

·9· · · · A.· This is a document that we prepared for showing

10· ·different regulatories.· I believe it was submitted to the

11· ·European Commission when this debate started.· First of all

12· ·the debate started that the industry practice is not to

13· ·license on OEM level, which we certainly do not agree with

14· ·having been in this industry for so long, so we compiled

15· ·this document to try and document all the benefits that we

16· ·saw at that point in time.

17· · · · Q.· So you said this was prepared at the time that the

18· ·debate started.· When do you recall that to be?

19· · · · A.· I believe the debate started -- it's difficult to

20· ·say a particular year but it's not 10 years ago.· It is

21· ·probably less than 5.· I'm not going to speculate exactly

22· ·but I can say that 10 years ago this debate was not

23· ·something that you frequently heard.· That is something that

24· ·has popped up lately.

25· · · · Q.· If you would just turn your attention to page 4.

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 10 of 14
·1· · · · · · ·MR. KRESS:· Of the written submission?

·2· · · · · · ·MR. TAFFET:· Oh yes.· I apologize.

·3· ·BY MR. TAFFET:

·4· · · · Q.· Let me withdraw that question.· That's fine.· But

·5· ·is it fair to say that the ultimate terms that are included

·6· ·within a license for -- that involve granting rights to

·7· ·Ericsson's SEP portfolio are ultimately determined based

·8· ·upon the bilateral negotiations between Ericsson and the

·9· ·licensee?

10· · · · A.· Yes, unless of course a court or arbitration panel

11· ·have stipulated the rates.

12· · · · Q.· Okay.· And when you raised that circumstance has

13· ·that occurred in connection with Ericsson's licensing?

14· · · · A.· Yes.· We've had arbitrations as well as litigation.

15· · · · Q.· And has the court stipulated what the rates would

16· ·be in those circumstances?

17· · · · A.· Yes, they have.

18· · · · Q.· But putting those circumstances aside in

19· ·determining the overall license agreements, is it fair to

20· ·say that the terms are determined through the bilateral

21· ·negotiations of Ericsson and the licensee?

22· · · · · · ·MS. BONN:· Object to form.

23· · · · A.· Yes, you can say that.· Of course we don't -- it's

24· ·always a negotiation between the licensor and the licensee.

25· ·We would have to consider the fact that we have to be nonCase 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 11 of 14
·1· ·discriminatory, so it cannot be all upon the request of the

·2· ·licensee.· We would have to follow the FRAND principle from

·3· ·our perspective.

·4· ·BY MR. TAFFET:

·5· · · · Q.· And if you can explain that a bit more, that in

·6· ·following the FRAND principle I think you suggested that it

·7· ·cannot be all based on what the licensee says.· What do you

·8· ·mean by that?

·9· · · · A.· I mean that you -- within FRAND it means you need

10· ·to be fair and reasonable but also non-discriminatory.

11· ·Non-discriminatory between similarly situated entities has

12· ·to be similar in nature.· So by looking at all the terms and

13· ·conditions and all the value that is exchanged, both from

14· ·the perspective of term, other agreed factors, you need to

15· ·ensure that your program is not discriminating certain

16· ·entities.

17· · · · Q.· And how do you ensure that it is not

18· ·discriminatory?· What do you understand that requirement to

19· ·impose upon Ericsson?

20· · · · A.· You can twist it around and say that we cannot

21· ·treat similarly situated entities in a totally different way

22· ·amongst them.· To put it simple -- of course there are a

23· ·number of factors that goes into discrimination and you

24· ·would need to look at it from a much broader perspective but

25· ·in simple terms you need to ensure that similarly situated

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 12 of 14
·1· ·entities are treated fairly similarly on one particular

·2· ·market under certain particular circumstances.

·3· · · · Q.· With respect to the non-discriminatory factor

·4· ·however, does that compel the terms of each license that

·5· ·Ericsson grants to be the same even if a licensee is

·6· ·similarly situated to another licensee?· Do all the terms

·7· ·have to be identical?

·8· · · · A.· If you mean by "term" all the terms in the actual

·9· ·agreement, I would respond no.· That would -- to explain my

10· ·answer, that would mean that you in all -- if you agree to

11· ·Swedish law as governing law which is beneficial for

12· ·Ericsson, you would need to enforce upon everyone to accept

13· ·Swedish law as the governing law.· So there are a number of

14· ·terms and factors in the agreement that may vary, also

15· ·depending on the requests from the licensee.

16· · · · Q.· And in that regard in your view would it be

17· ·non-discriminatory even if the monetary terms would vary or

18· ·the form of payment would vary from licensee to licensee?

19· · · · A.· That could be non-discriminatory, yes.· It could

20· ·be.· Because you need to at all point in time you need to

21· ·look at it from a much broader perspective and weigh in all

22· ·the factors of the agreement and all the circumstances of

23· ·the agreement.

24· · · · Q.· Is your understanding of the FRAND licensing

25· ·process one that imposes any obligations in connection with

Case 5:17-cv-00220-LHK Document 937-4 Filed 11/28/18 Page 13 of 14
·1· · · · · · · · · CERTIFICATE OF COURT REPORTER

·2

·3· ·I, Chanelle Malliff, an Accredited Real-time Reporter,

·4· ·hereby certify that the testimony of the witness

·5· ·Christina Petersson in the foregoing transcript, numbered

·6· ·pages 1 through 244, taken on this 20th day of April, 2018

·7· ·was recorded by me in machine shorthand and was thereafter

·8· ·transcribed by me; and that the foregoing transcript is a

·9· ·true and accurate verbatim record of the said testimony.

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12· ·I further certify that I am not a relative, employee,

13· ·counsel or financially involved with any of the parties to

14· ·the within cause, nor am I an employee or relative of any

15· ·counsel for the parties, nor am I in any way interested in

16· ·the outcome of the within cause.

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19· ·Signed:· ........................

20· ·Name:· · CHANELLE MALLIFF

21· ·Date:· · April 23, 2018

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