ACT | The App Association Amicus Brief

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Amanda Tessar (admitted pro hac vice) 

ATessar@perkinscoie.com 

PERKINS COIE LLP 

1900 Sixteenth Street, Suite 1400 

Denver, CO 80202-5255 

Telephone: 303.291.2357 

Facsimile: 303.291.2457 

Sarah E. Fowler, California Bar #264838 

SFowler@perkinscoie.com 

PERKINS COIE LLP

3150 Porter Drive 

Palo Alto, CA 94304-1212 

Telephone: 650.838.4489 

Facsimile: 650.838.4350 

ATTORNEYS FOR AMICUS CURIAE

ACT | THE APP ASSOCIATION

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 

BRIEF OF AMICUS CURIAE ACT | 

THE APP ASSOCIATION IN 

OPPOSITION TO QUALCOMM’S 

MOTION FOR STAY PENDING 

APPEAL 

Dept.: San Jose Courthouse, Courtroom 8 

Judge: Hon. Lucy Koh 

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I. STATEMENT OF INTEREST 

Amicus curiae ACT | The App Association (the “Association”) respectfully offers its 

thoughts and perspectives regarding Qualcomm Incorporated’s (“Qualcomm’s”) Motion for Stay 

Pending Appeal. The Association represents more than 5,000 small business technology 

development companies that create leading software and hardware solutions in both the consumer 

and enterprise context. Today, the ecosystem the Association represents is valued at 

approximately $950 billion and is responsible for 4.7 million American jobs.1 Alongside the 

world’s rapid embrace of mobile technology, our members are responsible for countless 

innovative hardware and software technology solutions that power the growth of the Internet of 

Things (“IoT”).2 On behalf of its members, the Association advocates for an environment that 

inspires and rewards innovation while providing resources to help our members leverage their 

intellectual assets to raise capital, create jobs, and continue innovating. Further information about 

the Association and its activities is available at http://actonline.org. 

Because Members of the Association develop, rely on, use, and innovate to take 

advantage of standardized technologies, including technologies for wireless communication, we 

are deeply interested in ensuring a fair, efficient ecosystem for technical standards. SEP licensing 

(and, ultimately, the ability to efficiently and reliably access and use technical standards) 

significantly impacts small business innovators, particularly during this critical time of 

development and deployment for new “Fifth Generation” (“5G”) cellular and IoT technologies. 

As the leading global representative for the small business innovator community on SEP law and 

policy and related competition law matters, the Association respectfully offers its perspective to 

the Court in evaluating matters relating to Qualcomm’s Motion for Stay Pending Appeal. 

 

1

 Roya Stephens & Adarsh Mahesh, State of the App Economy, ACT | THE APP ASSOCIATION

(2018), available at https://actonline.org/wp-content/uploads/ACT_2018-State-of-the-AppEconomy-Report_4.pdf. 

2

 The IoT involves everyday products that use the internet (and cellular systems specifically) to 

communicate data that the products collect. In every segment of the U.S. economy, from 

agriculture to retail to healthcare and beyond, the rise of IoT is creating efficiencies unheard 

of even a few years ago. See, e.g., Dep’t of Commerce Internet Policy Task Force & Dig. 

Leadership Team, Fostering the Advancement of the Internet of Things (Jan. 2017), available 

at https://www.ntia.doc.gov/files/ntia/publications/iot_green_paper_01122017.pdf. 

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II. PRELIMINARY STATEMENT 

The Association submits this brief to address the severe harm to our industry, the wireless 

ecosystem (including the growing consumer and enterprise verticals we represent), and the public 

interest if the injunction in the Court’s May 21, 2019 Findings of Fact and Conclusions of Law, 

Dkt. 1491 (the “Order”) were stayed pending appeal. The Court’s 233-page Order meticulously 

documents the practices held to be illegal, as well as how those practices have harmed 

competition in the CDMA and 4G markets, successfully removing a series of potential rivals (i.e., 

alternative sources of supply for the Association’s members’ innovations and industry 

ecosystems) from the modem chip business. The Court also addressed the potential harm to 

competition in 5G markets were the conduct held to be illegal permitted to continue during the 

market’s transition from 4G to 5G standards. In particular, the Order notes, Qualcomm’s 

practices of refusing to license rivals and its “no-license no-chips” policy were viewed by 

Qualcomm as integral to its efforts to dominate emerging 5G market. CX 5913-001. To avoid 

substantial harm to development and deployment of 5G devices, to promote innovation in 5G 

markets, and to avoid severe harm to consumer and public interests if the practices addressed in 

the Order were to continue unabated just as the 5G era is poised to explode, the Association 

respectfully requests that Qualcomm’s Motion to Stay be denied.

III. BACKGROUND AND CONTEXT: FRAND’S CRITICAL ROLE IN 

PROTECTING THE TRANSITION TO 5G MARKETS 

The Association’s interest in promoting a competitive FRAND standards ecosystem is 

straightforward: in today’s economy, businesses incorporate, use, and rely on wireless 

communications functionality in all sorts of ways, and it is imperative to a healthy marketplace 

and to fair competition that licenses to those technologies remain available on FRAND terms to 

all market participants. As an Association representing customers (either direct or indirect) for 

telecommunications components, including modem chips; technology developers that need access 

to key technical standards for communication and interoperability that will support new cuttingedge solutions; and also as a representative of patent owners, the Association supports a fair and 

competitive ecosystem for standardized technologies. 

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The Association’s views on these issues are mainstream and have been supported by an 

extensive array of industry, government, and academic stakeholders. For example, we joined 

more than fifty industry leaders and more than seventy governmental and academic thought 

leaders in voicing our support for FRAND practices to the United States Department of Justice,3

the FTC,4 the Department of Commerce, and the USPTO.5 Further, together with another leading 

industry association, we recently co-sponsored a CEN-CENELEC Workshop bringing together 

more than fifty small and large industry companies to document Core Principles and Approaches 

for SEP Licensing, particularly for 5G applications and industries.6 The voices supporting a fair 

 

3

 See Multi-Ass’n Letter to AAG Delrahim, Standards, Licensing, and Innovation: A Response 

to DOJ AAG’s Comments on Antitrust Law and Standard-Setting (letter from six trade 

associations representing more than $3 trillion in GDP, noting that FRAND commitment 

entails that license is available to any implementer) (May 2018), available at

http://www.ccianet.org/wp-content/uploads/2018/05/Multi-Assn-DOJ-White-Paper053018.pdf; see also Industry Letter to DOJ Regarding Standards, Innovation and Licensing

(letter from fifty-eight companies, academics, and SMEs noting that enforcement of 

obligation to license is an expected consequence of FRAND promise) (Jan. 24, 2018), 

available at http://www.ccianet.org/wp-content/uploads/2018/01/Industry-Letter-to-DOJAAG.pdf; Academic and Former Regulator Letter to AAG Delarahim, Speeches on Patents 

and Holdup (letter from seventy-seven academics and former United States agency personnel, 

explaining that the “holder of a standard essential patent voluntarily chooses to license on a 

FRAND basis, receiving in exchange the SSO’s ‘seal of approval’ and the potential for 

significantly increased volume that comes with that seal, which is well worth the FRAND 

promise”) (May 17, 2018), available at https://www.competitionpolicyinternational.com/wpcontent/uploads/2018/05/DOJ-patent-holdup-letter.pdf. 

4

 See FED. TRADE COMM’N, The Role of Intellectual Property and Competition Policy in 

Promoting Innovation #FTC-2018-005-D-0031, (Aug. 20, 2018), comments of Cross-Sectoral 

Multi-Association Group to FTC (public comments from letter from six trade associations 

representing more than $3 trillion in GDP, noting that FRAND commitment entails that 

license is available to any implementer), available at https://www.ftc.gov/policy/publiccomments/2018/08/20/comment-ftc-2018-0055-d-0031. 

5

 See Comments of Cross-Sectoral Multi-Stakeholder Group to Department of Commerce and 

USPTO, Sustainable American Innovation and Standards Policy; Established US Law & 

Policy Supporting Innovation; Concerns with December 7, 2018 DOJ AAG Statements, (letter 

from trade associations and industry stakeholders opposing SEP abuses) (Apr. 22, 2019), 

available at http://actonline.org/wp-content/uploads/Multi-Stakeholder-Letter-re-DOJUSPTO-Policy-Statement-042219.pdf. 

6

 CEN-CENELEC comprises two of the three officially recognized European Standardization 

Organizations. The CWA2 Workshop Agreement is available at 

https://www.cencenelec.eu/news/workshops/Pages/WS-2019-014.aspx. 

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and accessible standards system come not just from technology industries, but from other sectors 

of the economy that are being harmed by SEP abuse, including automotive and retail. As noted in 

our most recent (April 2019) letter to the Department of Commerce, the companies and 

associations that have joined us in efforts to curtail SEP abuses such as those addressed in the 

Order collectively represent over $100B annually in R&D spending across a range of industries, 

own hundreds of thousands of patents including numerous SEPs, employ more than 50 million 

Americans, and contribute trillions of dollars to annual United States GDP.7

Ensuring FRAND behaviors is particularly time-sensitive as the industry is evolving 

toward implementation of these next-generation 5G networks and devices. As explained in the 

CEN-CENELEC Workshop Agreement that the Association co-sponsored: 

A new generation of technological development through the development 

of various technologies associated with [5G] is dawning. According to 

recent European Patent Office estimates, some 25-30 billion devices in the 

home and workplace will be equipped with sensors, processors and 

embedded software. Connecting these devices together with one another 

... will foster automation of business processes. Part of this development is 

the harnessing of standardized technologies for the first time across new 

market segments, including outside of traditional telecommunications and 

wireless industries. ... For proper market functioning as the connected 

economy develops, it will be critical to all market actors that FRAND 

licensing practices are followed and that abusive assertions are 

prevented. The proliferation of standardized technologies outside of the

traditional ICT sector warrants a fair and balanced approach to the 

licensing of standardized technologies, including consideration of the 

dynamic markets interests that constitute the IoT and other advanced 

communication protocols.8

(Emphasis added.) As industry—including countless verticals outside of traditional 

telecommunication businesses—stands on the precipice of this critical transition, protecting fair 

 

7

 See Comments of Cross-Sectoral Multi-Stakeholder Group to Department of Commerce and 

USPTO, Sustainable American Innovation and Standards Policy; Established US Law & 

Policy Supporting Innovation; Concerns with December 7, 2018 DOJ AAG Statements, (Apr. 

22, 2019), available at http://actonline.org/wp-content/uploads/Multi-Stakeholder-Letter-reDOJ-USPTO-Policy-Statement-042219.pdf. 

8

 Core Principles and Approaches for Licensing of Standard Essential Patents, CENCENELEC CWA 9500 (Jan. 2019), available at

https://www.cencenelec.eu/news/workshops/Pages/WS-2019-014.aspx. 

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competition in the 5G marketplace is an immediate imperative. If SEP abuses are permitted to 

distort competition at this critical juncture, even for a matter of months, associated market 

distortions will persist for many years to come. 

IV. HARM TO THE MARKET IF THE ORDER WERE STAYED SUBSTANTIALLY 

OUTWEIGHS (DUBIOUS) ALLEGATIONS OF HARM TO ONE COMPETITOR 

A. The Order Protects Existing 4G and Emerging 5G Markets at a Critical Transition 

The Court’s Order carefully considered the likely effects on 5G markets if the enjoined 

conduct were permitted to continue. For example, referencing 5G, the Court concluded that 

“[w]ith QCT’s monopoly power, though, QTL retains a strong presence in the standards.” Order, 

at 201. And, further, that “[b]y harming rivals’ standing with industry participants, Qualcomm 

suppresses rivals’ ability to generate additional business, develop new products, and win the race 

to market. Instead, Qualcomm wins these opportunities, which further entrenches Qualcomm’s 

monopoly chip power.” Id. at 202. The Court noted that Qualcomm seeks to “replicate its 

market dominance during the transition to 5G, the next generation of modem chips.” Id. at 221. 

And the Court explained that its remedies were, in part, designed to protect against the extension 

of monopolistic behaviors into 5G markets, stating: 

The evidence showed a sufficient risk that Qualcomm will have market 

power in 5G modem chips and could exercise its dominance to extract 

unreasonably high royalties. Therefore, prohibiting Qualcomm from 

cutting off OEMs’ chip supply, technical support, and access to software 

helps “ensure that there are no practices likely to result in monopolization 

in the future.” 

Id. at 228 (quoting United States v. Microsoft Corp., 253 F.3d 34, 50 (D.C. Cir. 2001). The 

Association agrees that entrenchment of monopoly power, and the market distortions that SEP 

abuse engenders, threaten to irreparably harm the marketplace at this critical stage when 5G 

markets are just now developing. 

B. Qualcomm’s Allegations of Harm Are Substantially Overstated 

Qualcomm’s allegations about potential harms to its individual business absent a stay do 

not withstand scrutiny. See Defendant Qualcomm Incorporated’s Motion for Stay Pending 

Appeal, Dkt. 1495 (“Motion”). Indeed, its entire approach of reducing the multi-faceted four-part 

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stay test to focusing primarily on Qualcomm’s own supposed harm, sometimes to the nearexclusion of other factors (such as harm to the marketplace of staying the injunction just as 5G is 

ascending), is misguided.9 On balance, the established harm to competition from Qualcomm’s 

behaviors, as documented in the Order, far outweighs the alleged harm to Qualcomm if the 

Motion is denied. 

Qualcomm argues, for example, that a stay is required to “maintain and advance American 

leadership in the development of cellular systems and 5G standard-setting,” but offers little 

substantive explanation for this position. Motion, at 22. While the Court has adjudicated that 

Qualcomm is a monopolist in the modem chip product market, and while Qualcomm is 

undoubtedly an important player in telecommunications development, the suggestion that 

Qualcomm is the only US company situated to develop and promote 5G is, at best, overstatement. 

5G development is and has been exceedingly collaborative, with hundreds of American and 

foreign companies working together at industry organizations to develop and share their 

technologies. That development will continue (and will continue to include Qualcomm) 

regardless of the Order’s requirements as to Qualcomm’s licensing practices during the course of 

an appeal. Indeed, in addressing similar claims by Qualcomm, a recent U.S. International Trade 

Commission ruling found that protecting and promoting competition around 5G was the much 

greater national security interest. As the decision stated, “competition is necessary for quality, 

innovation, competitive pricing, and, in this case, the preservation of a strong U.S. presence in the 

development of 5G and thus the national security of the United States,” and, furthermore, there is 

 

9

 The case primarily relied upon by Qualcomm in support of this approach, Leiva-Perez v. 

Holder, 640 F.3d 962, 971 (9th Cir. 2011), does not mandate or even approve Qualcomm’s 

elevation of the irreparable harm factor. Instead, that case stands for the proposition that 

Qualcomm’s burden of proving its irreparable harm is higher than its burden on the other 

factors (id. at 968), not for the proposition that the harm factor singlehandedly drives the stay 

decision. 

 Similarly, Qualcomm’s claim that the third (balancing of interests) and fourth (public interest) 

factors here “merge” into a single factor under Leiva-Perez also cannot be correct. That case, 

which related to removal of an illegal alien from the US, has nothing to do with antitrust law. 

Here, where the injunction is primarily designed to protect the 5G market and the competitors 

and customers in it, those entities should not be minimized in the way Qualcomm attempts. 

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“a real and palpable likelihood the National Security interests will be jeopardized” if Qualcomm’s 

competitors are forced to exit the market.10

More importantly, none of Qualcomm’s assertions about 5G are tied to Qualcomm’s 

alleged need for a stay. Nothing in the Court’s Order restricts Qualcomm from developing 5G 

technology, selling its 5G devices for a fair price, or licensing its 5G patents on FRAND terms. 

Qualcomm’s premise that compliance with the Order would somehow prevent Qualcomm’s 

participation in the 5G marketplace is simply false. Qualcomm would remain free to compete, 

develop, and invent. Indeed, given the Court’s factual findings that Qualcomm and other SEP 

holders regularly and repeatedly negotiated exhaustive cross-licenses with component makers 

until more recently changing their licensing practices, Order at 128-130, requiring Qualcomm to 

grant such exhaustive licenses would be unlikely to cause undue harm even in the unlikely event 

that the injunction is overturned in full on appeal.11

Qualcomm also (incorrectly) argues that ceasing the activities found to be illegal in the 

Order would require that Qualcomm “creat[e] a web of new agreements and business 

 

10 In re Certain Mobile Elec. Devices and Radio Frequency and Processing Components 

Thereof, Inv. No. 337-TA-1065, (Oct. 30, 2018) Initial Determination and Recommended 

Determination at 195-196; see also J. Kattan, The Qualcomm Case and U.S. National 

Security, at 6-8, available at https://actonline.org/wp-content/uploads/The-Qualcomm-Caseand-National-Security_Final.pdf (discussing and disputing Qualcomm’s “National Security 

Canard”). 

11 In the Association’s September 17, 2018 amicus brief to the Court, various of Qualcomm’s 

prior public statements on this topic were noted. Dkt. 857-2, n.16, citing Qualcomm’s 

Counterclaims and Affirmative Defense in Case No. 05-3350 (MLC) (JJH) (D.N.J. Feb. 29, 

2008), at ¶¶ 25, 56, 61, 77 (“Qualcomm, which owns a large portion of the intellectual 

property covering CDMA technology, operates a pro-competitive licensing model, in which it 

offers licenses on fair, reasonable and non-discriminatory terms to any interested company.”; 

“Qualcomm has repeatedly offered [a competing chip manufacturer] license terms for 

Qualcomm’s UMTS patents that comply with FRAND and are at least as favorable as the 

terms Qualcomm has offered to other chipset licensees.”) (emphasis added); Qualcomm Opp. 

to Broadcom Motion to Dismiss, Strike or Summary Judgment, Case No. SACV05-0467-JVS 

(RNBx) (C.D. Cal. Jan. 20, 2009), ECF No. 1606 (asserting violation of FRAND based on 

competing chipset manufacturer’s refusal to license Qualcomm). Indeed, in connection with 

prior litigation, the defendant’s current President (then Vice President) publicly stated: 

“Saying [Qualcomm] refuse[s] to license competitors is like saying McDonald’s refuses to 

sell hamburgers [...] It’s nuts. It’s crazy.” See Gittlesohn, J., Battle of Tech Heavyweights, 

Orange County Register (5/1/07) Orange County (Cal.) Reg. 1 2007 WLNR 30244838.)”) 

(emphasis added). 

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relationships” and that “any new agreements that Qualcomm is compelled to enter while the 

appeal is pending would remain effective even if Qualcomm ultimately prevails before the Ninth 

Circuit.” Motion, at 2. But the Order does not require that Qualcomm enter into permanent or 

even long-term relationships during the pendency of an appeal, whether based on new licenses or 

re-negotiation of existing licenses. Rather, Qualcomm could avoid these self-styled harms by 

structuring any new “arrangements” or agreements so as to terminate in the event that the Order is 

overturned (or, for existing licensees, to revert to current licensing terms). In this way, 

Qualcomm could comply with the Order while still ensuring that its business relationships could 

return to the status quo ante in the event the Order is overturned. The alleged hardship of

compliance with the Order is not nearly so onerous as Qualcomm’s Motion suggests, and any 

harm can be mitigated by Qualcomm’s ability to negotiate appropriate termination provisions into 

any new or revised agreements. 

Qualcomm’s suggestion that the Order requires it to parse through its patent portfolio at a 

granular level, including sometimes the claims within each individual patent, to determine which 

claims must be licensed at the component level and which must be licensed at the OEM level is 

similarly hyperbolic and incorrect. Motion, at 7; Declaration of Alex Rogers in Support of 

Motion to Stay, Dkt. 1495-1 (“Rogers Dec.”) at ¶5. In fact, the Order requires no such thing, 

either explicitly or implicitly. Cellular standards are implemented at the chip level,12 and the 

Order addresses patents that Qualcomm itself has declared essential to the LTE and other cellular 

standards. There is therefore no need for Qualcomm to go through the machinations that 

Qualcomm postulates. Regardless of whether some Qualcomm’s patents are drafted at a system 

or network-level, Qualcomm still can grant exhaustive licensing to rival chipmakers for its entire 

SEP portfolio. This is demonstrated, for example, by the exhaustive cross-licenses to 

Qualcomm’s own chip business that Qualcomm requires from its own licensees. It never has 

been the law, and even Qualcomm does not appear to claim otherwise, that only directly 

 

12 See, e.g., GPNE Corp. v. Apple, Inc., No. 12-CV- 02885-LHK, 2014 WL 1494247, at *13 

(N.D. Cal. Apr. 16, 2014) (holding “as a matter of law that in this case [where the asserted 

patents were claimed to be essential to 3G and 4G cellular standards], the baseband processor 

is the proper smallest salable patent-practicing unit”). 

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infringing devices may become licensed; an exhaustive license to any system or network-level 

SEPs in Qualcomm’s portfolio would protect rival chipmakers from claims of indirect 

infringement. The Association respectfully suggests that Qualcomm’s argument on this issue 

should be expressly rejected so as to clarify that it would be a violation of the Order to refuse to 

license some companies to some portion of Qualcomm’s SEPs based on inaccurate positions 

regarding the “level” of some of Qualcomm’s patent claims. 

In a show of concern for other third parties who are not bound by the Order, Qualcomm 

argues that the Order could upend the licensing practices of those third parties. Motion, at 2. But 

the Order does not apply to third parties—and Qualcomm certainly cannot rely on alleged (but 

unproven) harm to third parties to establish that the Order will irreparably harm Qualcomm itself. 

While third parties could (and hopefully, for the sake of the marketplace and the public interest, 

would) take direction from the Court’s findings and cease practices that the Court found to be 

illegal, nothing in the Order binds third parties. Likewise, nothing about a stay of the Order 

would alter the Court’s findings or guidance; the Court’s Order “condemns” (in Qualcomm’s 

words) certain misbehaviors relating to SEPs, and such condemnation will continue to apply 

regardless of whether the resulting remedies ordered against Qualcomm are stayed. In other 

words, third parties will continue to have the choice whether to follow the Court’s guidance or not 

irrespective of whether a stay applies.13 Qualcomm’s suggestion that failing to stay an order 

applicable only to Qualcomm might force third parties involuntarily to alter their practices is 

incorrect and illogical. 

Finally, Qualcomm argues that exhaustive chip sales could not be “unwound.” Motion, at 

3. But nothing in the Order precludes Qualcomm from pricing its chips at fair prices during the 

course of an appeal, including compensation for its patent rights (just as nothing requires 

Qualcomm to repay its licensees for years of illegally-demanded overpayments). While 

exhaustion may apply for any chips sold during the course of an appeal, it is unclear what harm 

 

13 None of the third parties that Qualcomm’s Motion references (Nokia, Ericsson, or 

InterDigital) are chip makers with monopoly power over supply of 3G or 4G modem chips— 

one of the predicate findings underlying the Court’s rulings. 

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would thereby befall Qualcomm, given that the Order permits it to obtain full and fair 

compensation for its products and technologies. And, in the event the Order is overturned, 

Qualcomm could simply revert to its prior practices for any sales thereafter. 

In short, under the Order, Qualcomm retains the right and ability to seek and obtain 

FRAND compensation for its inventions and to price its chips fairly to obtain their full value. 

Even Qualcomm does not argue that it will not be able to “return to its pre-injunction business”—

only that it would be difficult for Qualcomm to do so “in an orderly fashion.” Motion, at 3. 

Qualcomm’s alleged interest in an “orderly” transition of its licensing practices does not 

overcome the substantial public interest in protecting competition during this critical time for 4G 

and 5G markets. 

V. CONCLUSION 

The Court’s Order protects fair competition at a crucial time of industry development. 

The harm to the marketplace and consumers associated with SEP abuse far outweighs any 

asserted risks to one competitor. The Association thanks the Court for its consideration of its 

views and perspectives. 

Dated: June 11, 2019 

By: /s/ Amanda Tessar 

Amanda Tessar (admitted pro hac vice) 

ATessar@perkinscoie.com 

PERKINS COIE LLP 

1900 Sixteenth Street, Suite 1400 

Denver, CO 80202-5255 

Telephone: 303.291.2357 

Facsimile: 303.291.2457 

Sarah E. Fowler, California Bar #264838 

SFowler@perkinscoie.com 

PERKINS COIE LLP

3150 Porter Drive 

Palo Alto, CA 94304-1212 

Telephone: 650.838.4489 

Facsimile: 650.838.4350 

ATTORNEYS FOR AMICUS CURIAE

ACT | THE APP ASSOCIATION

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