The high-stakes FRAND licensing dispute between Apple and Qualcomm took another turn last week when the chipmaker filed a subpoena against Philips Electronics North America demanding that the Dutch company produce information on its licensing practices deemed relevant to the litigation that is currently gripping the patent world.
According to the subpoena, which was filed in Massachusetts district court, Philips does not dispute that the documents are relevant but has so far declined to make them available because of concerns that the protective order put in place by district court in Southern California, where Apple filed its suit against Qualcomm, does not have adequate confidentiality provisions. Philips has demanded that both companies and any of their counsel who have access to the information should be barred from acting adversely to the Dutch company — such as in a litigation case against it — for two years following the conclusion of Apple v Qualcomm.
Qualcomm claims that Philips’ request is unwarranted and that it has “no reasonable basis for its attempt to disqualify numerous law firms and lawyers from adversity in unrelated matters for years to come”. The San Diego-based company lists 10 law firms which it says are involved in some way in the Apple litigation and therefore would be affected.
According to the court filing, others — including Ericsson, HTC, Google and Verizon — have had no difficulty in handing over confidential information, which is deemed relevant to the dispute and have not made the same confidentiality request as Philips.
The litigation between Qualcomm and Apple revolves around the former’s licensing practices, which the latter claims are not FRAND. The iPhone maker has alleged that some of Qualcomm’s contractual provisions are not “industry standard” and are “anticompetitive”; it insists in its subpoena that: “Whether Philips and others in the industry enter into similar agreements — and under what conditions they do so — is relevant to whether the same types of provisions are monopolistic as employed by Qualcomm.”
Qualcomm originally filed a subpoena against Philips last November and the two companies entered into negotiations around document production and the scope of Qualcomm’s requests. Those talks subsequently broke down over Philips’ confidentiality demands.
This spat shows that while Apple v Qualcomm is a game of high-stakes litigation for the two companies involved, it has ramifications that extend much further. The latest chapter in the dispute comes after the chipmaker made its pitch to shareholders on why they should decline Broadcom’s $130 billion takeover offer and cited ”expected value upside from resolution of current licensing disputes” among the reasons. A settlement still appears to be the most likely outcome to this dispute, but the stakes for the litigants – and for others, it seems – are getting higher.