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Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

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 

KEKER, VAN NEST & PETERS LLP 

Robert A. Van Nest (SBN 84065) 

rvannest@keker.com 

Eugene M. Paige (SBN 202849) 

epaige@keker.com 

Justina K. Sessions (SBN 270914) 

jsessions@keker.com

633 Battery Street 

San Francisco, CA 94111-1809 

Telephone: (415) 391-5400 

Facsimile: (415) 397-7188 

Attorneys for Defendant 

QUALCOMM INCORPORATED 

MORGAN LEWIS & BOCKIUS LLP 

Richard S. Taffet (pro hac vice) 

richard.taffet@morganlewis.com 

101 Park Avenue 

New York, New York 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 Ave. NW 

Washington, DC 20004-2541 

Telephone: (202) 739-3000 

Facsimile: (202) 739-3001 

MORGAN LEWIS & BOCKIUS LLP 

Geoffrey T. Holtz (SBN 191370) 

geoffrey.holtz@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. 

NO. 5:17-CV-00220-LHK-NMC 

DECLARATION OF ZACHARY 

ARNER IN SUPPORT OF SEALING 

PORTIONS OF TRIAL EXHIBITS 

JX0006, JX0047, AND JX0122 

CTRM: 8, 4th Floor 

JUDGE: Hon. Lucy H. Koh

 

Case 5:17-cv-00220-LHK Document 1143 Filed 01/06/19 Page 1 of 9
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2 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

I, Zachary Arner, declare as follows: 

1. I am currently Senior Manager, Finance, at Qualcomm CDMA Technologies 

(“QCT”) at Qualcomm Technologies, Incorporated. I received my Bachelor of Arts from 

University of California, San Diego in 2003 and Master of Accounting from University of 

Southern California in 2004. I started working at QCT in 2008. My current responsibilities 

include commercial pricing in the Mobile business unit. When I began working at QCT in 2008, 

my title was Financial Analyst. In 2010 I was promoted to Senior Financial Analyst, in 2013 I 

was promoted to Staff Financial Analyst, and in 2015 I was promoted to Manager, Finance. In 

2017 I was promoted to my current position. Over the course of my employment in QCT, I have 

acquired personal knowledge of QCT’s practices and procedures concerning the maintenance of 

the confidentiality of its contracting and business activities.

2. I submit this declaration in support of sealing portions of trial exhibits JX0006, 

JX0047, and JX0122 (the “Trial Exhibits”). 

3. The contents of this declaration are true and correct to the best of my knowledge, 

information and belief. I have personal knowledge of the facts set forth herein, or my knowledge 

is based upon my review of records kept in the ordinary course of business or conversations with 

other knowledgeable Qualcomm Incorporated (“Qualcomm”) employees. If called upon as a 

witness in this action, I could and would testify competently thereto. 

4. QCT follows a strict practice that requires confidential treatment of all 

negotiations for the sale of chips. All such discussions are undertaken pursuant to non-disclosure 

agreements, which provide that all information exchanged and terms discussed during 

negotiations are to be maintained in confidence by both parties to the negotiations. 

5. Generally, agreements for the supply of chips (Component Supply Agreements, or 

“CSAs”) are entered into by Qualcomm CDMA Technologies Asia-Pacific PTE Ltd. (“QCTAP”) 

and a chip customer. It is QCTAP’s practice to include in its CSAs confidentiality obligations 

that prohibit the disclosure of the agreements themselves or any of their terms, except in limited 

authorized circumstances. These confidentiality obligations survive termination of the CSAs. 

6. Furthermore, strategic relationship agreements are generally between Qualcomm 

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3 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

Technologies Incorporated (“QTI”) and a third party. It is QTI’s practice to include in its 

strategic relationship agreements confidentiality obligations that prohibit the disclosure of the 

agreements themselves or any of their terms, except in limited authorized circumstances. These 

confidentiality obligations survive termination of the strategic relationship agreements. 

7. It is likewise QCT’s practice to require confidential treatment of QCT’s internal 

business analyses, pricing and valuation analyses, revenues, strategy and decision-making. 

QCT’s business analyses, pricing and valuation analyses, revenues, strategy and decision-making 

incorporate highly sensitive and proprietary information and processes that QCT relies upon to 

pursue its commercial interests. 

8. These confidentiality practices are important to QCT and (with respect to 

agreements and communications with third parties) to third parties with which QCT contracts for 

several reasons. Both QCT and prospective contractual counterparties seek to maintain their 

negotiations in confidence to afford each the ability to engage in arm’s-length commercial 

bargaining, each bringing to bear their own unique circumstances and business goals without such 

circumstances and goals being disclosed to their competitors, customers and other actual and 

potential customers. 

9. The disclosure of QCT’s confidential information, such as information contained 

in chip sale negotiations, the terms of CSAs, and QCT’s internal business analyses, pricing and 

valuation analyses, revenues, strategies and decision-making could significantly harm QCT’s 

relationships and ability to conduct business with counterparties and prospective counterparties 

and to compete effectively with other chip manufacturers. 

10. In my experience and to the best of my knowledge, the confidentiality obligations 

specified above have always been strictly followed at QCT. I was informed of QCT’s practices 

and policies described herein when I first joined QCT, and I have informed others at QCT of our 

confidentiality obligations and practices. 

11. QCT also goes to great lengths to ensure that confidential information relating to 

the manufacture of its chips, the terms of CSAs and other agreements, and QCT’s internal 

business analyses, pricing and valuation analyses, strategies and decision-making is well 

Case 5:17-cv-00220-LHK Document 1143 Filed 01/06/19 Page 3 of 9
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4 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

protected. Personnel with access to data storage locations where confidential information is 

stored and maintained are advised of QCT’s practices and policies and are required to 

acknowledge in writing their awareness of and compliance with applicable Qualcomm 

confidentiality policies. The same is true for any QCT personnel who request access to such 

information and all new QCT employees. 

12. In addition, every QCT database and system that contains confidential information 

is access-restricted and requires login by QCT employees. 

13. I have reviewed the information described herein, which is contained in the Trial 

Exhibits to determine whether it includes information that QCT would consider confidential 

under the practices and policies described above. Based on this review, I have determined that 

Exhibit JX0122 of the Trial Exhibits includes confidential QCT information. 

14. The information in JX0122 reflects the type of information concerning the terms 

of CSAs and strategic relationship agreements that QCT maintains as confidential. 

15. Specifically, the following portions of JX0122, which contain an Amended and 

Restated Strategic Relationship Agreement between QTI and Samsung dated January 1, 2018 (the 

“2018 Strategic Agreement”), reflect confidential pricing information: 

 JX0122-036: Third paragraph, Line 2, between “(a) no less than” and “of Core 

Chipset” at JX0122-036; 

 JX0122-036: Third paragraph, Line 3, between “less than” and “of Core Chipset” ; 

 JX0122-037: §2(a), Line 2, between “equal to” and “for such”; 

 JX0122-037: First paragraph after §2(b), Lines 1-2, between “greater of” and 

“(the ‘First Quarter Rebate’)”; 

 JX0122-037: Second paragraph after §2(b), Line 1, between “(a)” and “for the 

second”; 

 JX0122-037: Second paragraph after §2(b), Line 3, between “equals less than” 

and “then”; 

 JX0122-037: Second paragraph after §2(b), Line 4, between “Rebate and” and 

“(the ‘Second”; 

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5 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

 JX0122-037: Third paragraph after §2(b), Line 1, between “year, (a)” and “for the 

third”; 

 JX0122-037: Third paragraph after §2(b), Line 4, between “equals less than” and 

“then QCTAP”; 

 JX0122-037: Third paragraph after §2(b), Line 5, between “Rebate and” and 

“U.S. Dollars”; 

 JX0122-037: Fourth paragraph after §2(b), Line 1, between “year, (a)” and “for 

the fourth”; 

 JX0122-037: Fourth paragraph after §2(b), Line 4 after “equals less than”; 

 JX0122-037: Fourth paragraph after §2(b), Line 7 after “Rebate and”; 

 JX0122-037: First paragraph after §2(c), Line 1, between “greater of” and “for 

such”; 

 JX0122-037: First paragraph after §2(c), Line 2, between “Devices or and “(the 

‘First”; 

 JX0122-037: Second paragraph after §2(c), Line 1, between “(a)” and “of the 

Net”; 

 JX0122-037: Second paragraph after §2(c), Line 3 after “equals less than”; 

 JX0122-037: Second paragraph after §2(c), Line 5, between “Rebate and” and 

“(the ‘Second”; 

 JX0122-037: Third paragraph after §2(c), Line 1, between “(a)” and “for the 

third”; 

 JX0122-037: Third paragraph after §2(c), Line 4, between “less than” and “then 

QCTAP”; 

 JX0122-037: Third paragraph after §2(c), Line 6, between “Rebate and” and “(the 

‘Third”; 

 JX0122-038: First paragraph, Line 1, between “(a)” and “for the fourth”; 

 JX0122-038: First paragraph, Line 5, between “less than” and “then QCTAP”; 

 JX0122-038: First paragraph, Line 8; 

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6 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

 JX0122-038: Second paragraph after §2(d), Line 1, between “greater of” and “for 

such”; 

 JX0122-038: Second paragraph after §2(d), Line 2, between “technology or” and 

“(the ‘First”; 

 JX0122-038: Third paragraph after §2(d), Line 1, between “(a)” and “for the 

second”; 

 JX0122-038: Third paragraph after §2(d), Line 3 after “equals less than”; 

 JX0122-038: Third paragraph after §2(d), Line 5, between “Rebate and” and “(the 

‘Second”; 

 JX0122-038: Fourth paragraph after §2(d), Line 1, between “(a)” and “for the 

third”; 

 JX0122-038: Fourth paragraph after §2(d), Line 4, between “equals less than” and 

“then QCTAP”; 

 JX0122-038: Fourth paragraph after §2(d), Line 6-7, between “Rebate and” and 

“(the ‘Third”; 

 JX0122-038: §2(e), Line 2, between “amount equal to” and “for Connectivity”; 

 JX0122-038: First paragraph after §2(g), Line 1, between “greater of” and “for 

High/Mid/Low”; 

 JX0122-038: First paragraph after §2(g), Line 2, between “quarter or” and “(the 

‘First”; 

 JX0122-039: First paragraph, Line 1, between “(a)” and “for High/Mid/Low”; 

 JX0122-039: First paragraph, Line 3, between “less than” and “then QCTAP”; 

 JX0122-039: First paragraph, Line 4, between “Rebate and” and “(the ‘Second”; 

 JX0122-039: Second paragraph, Line 1, between “(a)” and “for High/Mid/Low”; 

 JX0122-039: Second paragraph, Lines 3-4, between “less than” and “then 

QCTAP”; 

 JX0122-039: Second paragraph, Line 6 before “(the ‘Third”; 

 JX0122-039: Third paragraph, Line 1, between “(a)” and “for High/Mid/Low”; 

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7 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

 JX0122-039: Third paragraph, Line 4, between “less than” and “then QCTAP”; 

 JX0122-039: Third paragraph, Line 7 after “Rebate and”; 

 JX0122-039: First paragraph after §2(h), Line 1, between “greater of” and “for 

such” 

 JX0122-039: First paragraph after §2(h), Line 2, between “Devices or” and “(the 

‘First”; 

 JX0122-039: Second paragraph after §2(h), Line 1, between “(a)” and “for the 

second; 

 JX0122-039: Second paragraph after §2(h), Line 3, between “less than” and “then 

QCTAP”; 

 JX0122-039: Second paragraph after §2(h), Line 5, between “and” and “(the 

‘Second”; 

 JX0122-039: Third paragraph after §2(h), Line 1, between “(a)” and “for the 

third”; 

 JX0122-039: Third paragraph after §2(h), Line 4, between “less than” and “then 

QCTAP”; 

 JX0122-039: Third paragraph after §2(h), Line 6, between “Rebate and” and “(the 

‘Third”; 

 JX0122-039: Fourth paragraph after §2(h), Line 1, between “(a)” and “for the 

fourth”; 

 JX0122-039: Fourth paragraph after §2(h), Lines 4-5, between “less than” and 

“then QCTAP”; 

 JX0122-039: Fourth paragraph after §2(h), Line 7 after “Rebate and”; 

 JX0122-039: §2(i), Lines 1-2, between “SAMSUNG (i)” and “by June 30, 2018”; 

 JX0122-039: §2(i), Line 5, between “(ii)” and “(the ‘Galaxy”. 

The terms and conditions of the 2018 Strategic Agreement, including pricing terms, are subject to 

confidentiality obligations that prohibit disclosure. Public disclosure of this information would 

harm Qualcomm and its affiliates by disclosing internal licensing considerations and may unfairly 

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8 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

benefit actual and potential third parties with respect to contracting activities of Qualcomm and 

its affiliates. This is particularly true here because this is a 2018 document. 

16. The information specified above and contained in the Trial Exhibits reflects terms 

in the agreements contained within the exhibits. The terms and conditions of these agreements 

are subject to confidentiality obligations that prohibit disclosure, and the confidentiality 

provisions survive expiration of the agreements. Furthermore, public disclosure of the 

information described above would harm QCT and unfairly benefit actual and potential third 

parties with respect to contracting activities by disclosing confidential information that may 

disadvantage Qualcomm and its affiliates in ongoing and future contract negotiations. This is 

because counterparties in such situations could use this confidential information to gain an 

advantage that would not otherwise be possible absent disclosure of this information, and would 

thereby compromise QCT’s commercial interests. Information about Qualcomm’s and its 

affiliates’ confidential agreements could also assist Qualcomm's competitors in seeking to win 

business opportunities away from Qualcomm and its affiliates. 

17. This confidential information is not publicly known, and QCT recognizes and 

protects the enormous value of this information through its various policies and procedures 

designed to protect confidential information from disclosure. 

 

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9 Case No. 17-CV-0220-LHK-NMC 

Declaration of Zachary Arner 

I declare under penalty of perjury that the foregoing is true and correct and that I executed 

this declaration on January 6, 2019, in San Diego, California. 

 

/s/ Zachary Arner 

Zachary Arner

Case 5:17-cv-00220-LHK Document 1143 Filed 01/06/19 Page 9 of 9