Qualcomm vs. Apple: Who’s The Real Bully?

Apple bully Shutterstock/Tang Yan Song

Kristen Jakobsen Osenga Professor, University of Richmond School of Law
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Qualcomm’s patent infringement lawsuit against Apple recently concluded in the International Trade Commission, with other lawsuits in the United States and abroad set to begin over the next few months. While judges and juries will decide the merits of these various legal cases, Apple is attempting to win in the court of public opinion, characterizing Qualcomm as a bully. What is Qualcomm doing to earn this moniker? Enforcing its patent rights.

Qualcomm, in exercising its patent rights, is simply saying that it owns the technology and can decide who else can use it. If you own a piece of property that the government recognizes as yours, which is essentially what a patent is, are you a bully if you ask a trespasser to leave? For most of us, that is clearly a no. And rather than try to stop the trespasser on its own, Qualcomm is using the legal system as it was designed, to get a judge to tell Apple to stop taking its technology without permission.

We all know what bullying is: making fun of others, wrongfully excluding them, calling them names, hurting them. And there is no doubt that bullying is wrong. In fact, if we look behind Apple’s media playground shenanigans that are happening in the lead up to these legal cases, it is pretty clear that the bully in this dispute is Apple.

In January 2017, over the objections of one of its own commissioners, the Federal Trade Commission filed suit against Qualcomm, alleging anticompetitive behavior. Shortly thereafter, Apple filed a lawsuit against Qualcomm. But Apple was not content to let the legal system work. Apple also contacted its contract manufacturers, many of whom had been long time licensees of Qualcomm’s patented technology, and told them to stop paying royalties on these licenses. In playground terms, Apple told Qualcomm’s friends to stop playing with it.

Apple then began to paint Qualcomm as a bad actor, a bully. Rather than focus on the legal issues, including whether Apple’s products infringe Qualcomm’s patents, Apple’s strategy instead rests on convincing judges, juries, and the public that Qualcomm is a bad company, is engaging in bad behavior, and thus doesn’t deserve patent protection. This is name calling and essentially making fun of, or trying to humiliate, Qualcomm to make Apple look better.

And just like with playground bullies, the deeper harms are those that are more subtle. Here, Apple’s efforts are cutting at the very core of Qualcomm as a company. Qualcomm has invested countless hours and many resources to develop the technology that Apple now wants to use. Apple wants to use the technology because consumers like it – these are very valuable inventions that have been patented. But rather than pay for it, Apple is hoping that, by bullying Qualcomm, it will be able to use Qualcomm’s technology for free, whenever and however it wants to. Qualcomm, on the other hand, just wants to have Apple stop stealing its technology. The losses to Qualcomm, if Apple is allowed to continue stealing its technology, will be very costly and may prevent them from developing technology going forward.

To continue the playground motif, consider this: A family designs a brand new treehouse in their backyard. Other kids have seen the treehouse and are very impressed – they want treehouses too. The family who designed the treehouse draws up a set of blueprints and instructions and is willing to sell them to any family who wants to build a treehouse in their own backyard. The family who designed the treehouse isn’t obligated to share the information; however, they know that others will benefit from their innovation. However, one family wants the same treehouse but this family isn’t willing to pay for it, nor are they willing to invest in designing their own treehouse. Instead, they steal the blueprints and instructions. They tell the other families in the neighborhood to avoid the family who first designed the treehouse. And they run up and down the street calling that family names. It’s pretty easy to see the bully in this story.

The problem with the playground metaphor that Apple has invoked is that it masks the seriousness of the situation. Qualcomm develops technology that the industry finds incredibly valuable – in fact, many manufacturers have licensed technology from Qualcomm for a long time. Qualcomm patented the technology, giving it a right to exclude others from using it. Because the patents at issue in the ITC case are not standard essential patents, Qualcomm is under no obligation to license the patented technology to Apple…or to anyone. Qualcomm’s claims that Apple is using its patented technology without paying are not just empty accusations. The staff attorneys at the ITC, who represent the public’s interest and aid the judge in these trials, recommended last week that the ITC find that Apple is infringing at least one of Qualcomm’s patents. Qualcomm is not just crying wolf in these cases.

Apple’s shenanigans, although aimed squarely at Qualcomm, have a much broader potential reach. If one company wants to use someone else’s technology but doesn’t feel like paying for it, the company just needs to call the innovative company a bully and then they can use the technology for free. If this type of behavior prevails, we will end up with a lot more companies that call names than companies that develop technology, and that’s not a good thing for anyone. It’s time to call for a time-out. Patent enforcement is NOT bullying.

Kristen Osenga is a law professor at the University of Richmond.

The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.