Judge sanctions Apple for failing to turn over documents in FTC case vs. Qualcomm

AppleInsider · December 23, 2017 1:43AM

A U.S. judge has approved sanctions against Apple, ordering the iPhone maker pay $25,000 for every day it doesn't produce requested documents in a Federal Trade Commission lawsuit against Qualcomm.

Magistrate Judge Nathanael Cousins ordered Apple to produce evidence starting Dec. 16, Bloomberg said on Friday. If it's still non-compliant after Dec. 29, the company will face even stiffer penalties.

In a filing earlier this month, Apple said that it had already produced over 2.6 million documents by a Dec. 15 deadline, and that Qualcomm would be jumping the gun with any complaint. The company echoed that sentiment today in a statement to Bloomberg.

"We have already produced millions of documents for this case and are working hard to deliver the millions more which have been requested in an unprecedented time frame," said spokesman Josh Rosenstock. "We plan to appeal this ruling."

The FTC lawsuit was first launched in January, accusing Qualcomm of forcing Apple into an exclusive baseband chip deal in exchange for lower patent royalties. That deal expired last year.

Since then, Apple and Qualcomm have launched a number of lawsuits and other legal actions against each other. Further complicating the matter is the potential of Broadcom buying out Qualcomm, though the latter has been resistant so far.

anantksundaram · December 23, 2017 2:16AM

Wtf is wrong is Apple’s legal team!? Judging by results in high-profile cases (e.g, Samsung, iBooks, Qualcomm), they seem to be muddling through a lot.

Apple can, however, hope that Broadcom’s bid for Qualcomm succeeds.

brakken · December 23, 2017 4:21AM

What these idiots fail to understand is, that if they succeed in destroying Apple, then they won’t be able to keep using their iPhones.

I expect we’ll now have to enact bills on how many documents can be ordered in ehat timeframe.

saltyzip · December 23, 2017 9:14AM

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

Soli · December 23, 2017 9:41AM

saltyzip said:

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

For Apple's fiscal 4th quarter in 2017 the ASP was $618 USD (£462.50, unadjusted).) That would be an increase in per device cost of $2,054.44 (assuming you mean the sale price and not what it costs Apple to produce an iPhone) to get to £2000.

With a cost per day for not producing the requested documents at $25,000 (£18,709.50) and 46.7 million iPhones sold Apple would be able to hold out on supplying those documents for over 3.8 million days (46.700.000 × 2,054.44 ÷ 25,000) or 10.5 thousand years (3,837,693.92 ÷ 365). To put that into perceptive, the oldest cuneiform script is only about that half that age.

Note, that's only for one quarter of sales, and one of their weakest quarters for for the year.

tl:dr: This won't affect the sale price in any noticeable way.

Rayz2016 · December 23, 2017 1:10PM

saltyzip said:

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

And it’ll still sell by the trainload.

quadra 610 · December 23, 2017 1:18PM

saltyzip said:

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

Probably sarcasm on your part, but in case it isn’t, Apple’s legal fees are negligible compared to the vast sums in their coffers.

Additionally, the goal isn’t always to win cases outright or quickly, or even to win at all. Stalling, settling, or simply losing and paying the problem away, are all available tactics for Apple that in most cases have no effect on their bottom line or on their prices.

macxpress · December 23, 2017 3:43PM

quadra 610 said:

saltyzip said:

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

Probably sarcasm on your part, but in case it isn’t, Apple’s legal fees are negligible compared to the vast sums in their coffers.

Additionally, the goal isn’t always to win cases outright or quickly, or even to win at all. Stalling, settling, or simply losing and paying the problem away, are all available tactics for Apple that in most cases have no effect on their bottom line or on their prices.

You mean like Samsung did in the Apple vs Samsung case? I have to think that Samsung was purposely stalling and dragging the case out to waste as much time and money from Apple's as possible.

cloudmobile · December 23, 2017 6:03PM

brakken said:

What these idiots fail to understand is, that if they succeed in destroying Apple, then they won’t be able to keep using their iPhones.

I expect we’ll now have to enact bills on how many documents can be ordered in ehat timeframe.

No one is trying to destroy Apple. Qualcomm is merely trying to get Apple to pay the same for their IP for the iPhone 7, 8 and X as Apple paid for the 3G, 4, 5 and 6. The difference between what Apple wants to pay and what Qualcomm wants Apple to pay is a fraction of the licensing costs that Apple tried to use to drive Samsung from the mobile business, and ultimately succeeded in driving HTC from the mobile business because where HTC agreed to Apple's licensing demands Samsung fought back in court and wound up paying Apple far less as a result, even though they sold many times more devices than HTC ever did. In other words, it was Apple who was trying to use the courts and trade commissions to destroy the competition. In contrast, Qualcomm wants Apple to make and sell as many iPhones as possible because that is more money for Qualcomm. Realize this: Apple sold far fewer iPhone 3Gs than they will iPhone 8/X and they charged much less for the iPhone 3G than they do for the 8 and X. To pretend that this lawsuit poses any sort of threat to Apple's bottom line is hilarious. Even if Apple loses, Apple will either 1) raise the price of the iPhone accordingly or 2) find someone else in their supply chain to squeeze to make up the difference. And if Apple wins, no, they aren't going to lower the cost of iPhones or do anything else to pass that money onto consumers. It will just go into their coffers. Meaning you won't benefit unless you are a stockholder, and even if you are a stockholder, this lawsuit amounts to pennies compared to Apple's $850 billion valuation so you won't see much action on that front either. And finally: Qualcomm's IP is based on obsolete 2G/3G/CDMA tech. Within 5 years and possibly within 3 years, no one is going to be using that stuff anymore anyway. Verizon, for instance, will turn off their 2G and CDMA networks by the end of 2019. (Sprint still uses CDMA too, but who knows whether they will still be in business by then.) So by the time the final appeals are heard on this case, it will be a moot point, and the battle will be over how much Apple has to pay Qualcomm for their IP in Apple devices sold in the past. Something that both Apple and Qualcomm know by the way. Qualcomm is trying to maximize how much they can get for their IP while it still has some value. Apple wants to drag this out until the 2G/3G/CDMA patents are economically worthless and then use that as leverage to get Qualcomm to settle for as little as possible.

SpamSandwich · December 23, 2017 6:08PM

Counter-sue!

sflocal · December 23, 2017 9:18PM

cloudmobile said:

brakken said:

What these idiots fail to understand is, that if they succeed in destroying Apple, then they won’t be able to keep using their iPhones.

I expect we’ll now have to enact bills on how many documents can be ordered in ehat timeframe.

No one is trying to destroy Apple. Qualcomm is merely trying to get Apple to pay the same for their IP for the iPhone 7, 8 and X as Apple paid for the 3G, 4, 5 and 6. The difference between what Apple wants to pay and what Qualcomm wants Apple to pay is a fraction of the licensing costs that Apple tried to use to drive Samsung from the mobile business, and ultimately succeeded in driving HTC from the mobile business because where HTC agreed to Apple's licensing demands Samsung fought back in court and wound up paying Apple far less as a result, even though they sold many times more devices than HTC ever did. In other words, it was Apple who was trying to use the courts and trade commissions to destroy the competition. In contrast, Qualcomm wants Apple to make and sell as many iPhones as possible because that is more money for Qualcomm. Realize this: Apple sold far fewer iPhone 3Gs than they will iPhone 8/X and they charged much less for the iPhone 3G than they do for the 8 and X. To pretend that this lawsuit poses any sort of threat to Apple's bottom line is hilarious. Even if Apple loses, Apple will either 1) raise the price of the iPhone accordingly or 2) find someone else in their supply chain to squeeze to make up the difference. And if Apple wins, no, they aren't going to lower the cost of iPhones or do anything else to pass that money onto consumers. It will just go into their coffers. Meaning you won't benefit unless you are a stockholder, and even if you are a stockholder, this lawsuit amounts to pennies compared to Apple's $850 billion valuation so you won't see much action on that front either. And finally: Qualcomm's IP is based on obsolete 2G/3G/CDMA tech. Within 5 years and possibly within 3 years, no one is going to be using that stuff anymore anyway. Verizon, for instance, will turn off their 2G and CDMA networks by the end of 2019. (Sprint still uses CDMA too, but who knows whether they will still be in business by then.) So by the time the final appeals are heard on this case, it will be a moot point, and the battle will be over how much Apple has to pay Qualcomm for their IP in Apple devices sold in the past. Something that both Apple and Qualcomm know by the way. Qualcomm is trying to maximize how much they can get for their IP while it still has some value. Apple wants to drag this out until the 2G/3G/CDMA patents are economically worthless and then use that as leverage to get Qualcomm to settle for as little as possible.

Seriously... are you making this stuff up? It's been reported countless times what Qualcomm is doing, and here you are spinning it from a completely different field.

Qualcomm is demanding royalties based on the price of the PHONE, not the chips/IP it's selling. Huge difference. You so conveniently hide the truth by implying that Qualcomm "only want Apple to pay what they were paying for the 3G, 4, 5, and 6" which was the double-dipping fiasco that got Qualcomm in trouble. Apple just had enough of that.

Qualcomm's loss in Korea and other lawsuits by other companies for monopolistic behavior is quite damning to Qualcomm and shows that they are up to no good.

Stop making stuff up.

gatorguy · December 23, 2017 10:00PM

sflocal said:

cloudmobile said:

brakken said:

What these idiots fail to understand is, that if they succeed in destroying Apple, then they won’t be able to keep using their iPhones.

I expect we’ll now have to enact bills on how many documents can be ordered in ehat timeframe.

No one is trying to destroy Apple. Qualcomm is merely trying to get Apple to pay the same for their IP for the iPhone 7, 8 and X as Apple paid for the 3G, 4, 5 and 6. The difference between what Apple wants to pay and what Qualcomm wants Apple to pay is a fraction of the licensing costs that Apple tried to use to drive Samsung from the mobile business, and ultimately succeeded in driving HTC from the mobile business because where HTC agreed to Apple's licensing demands Samsung fought back in court and wound up paying Apple far less as a result, even though they sold many times more devices than HTC ever did. In other words, it was Apple who was trying to use the courts and trade commissions to destroy the competition. In contrast, Qualcomm wants Apple to make and sell as many iPhones as possible because that is more money for Qualcomm. Realize this: Apple sold far fewer iPhone 3Gs than they will iPhone 8/X and they charged much less for the iPhone 3G than they do for the 8 and X. To pretend that this lawsuit poses any sort of threat to Apple's bottom line is hilarious. Even if Apple loses, Apple will either 1) raise the price of the iPhone accordingly or 2) find someone else in their supply chain to squeeze to make up the difference. And if Apple wins, no, they aren't going to lower the cost of iPhones or do anything else to pass that money onto consumers. It will just go into their coffers. Meaning you won't benefit unless you are a stockholder, and even if you are a stockholder, this lawsuit amounts to pennies compared to Apple's $850 billion valuation so you won't see much action on that front either. And finally: Qualcomm's IP is based on obsolete 2G/3G/CDMA tech. Within 5 years and possibly within 3 years, no one is going to be using that stuff anymore anyway. Verizon, for instance, will turn off their 2G and CDMA networks by the end of 2019. (Sprint still uses CDMA too, but who knows whether they will still be in business by then.) So by the time the final appeals are heard on this case, it will be a moot point, and the battle will be over how much Apple has to pay Qualcomm for their IP in Apple devices sold in the past. Something that both Apple and Qualcomm know by the way. Qualcomm is trying to maximize how much they can get for their IP while it still has some value. Apple wants to drag this out until the 2G/3G/CDMA patents are economically worthless and then use that as leverage to get Qualcomm to settle for as little as possible.

Seriously... are you making this stuff up? It's been reported countless times what Qualcomm is doing, and here you are spinning it from a completely different field.

Qualcomm is demanding royalties based on the price of the PHONE, not the chips/IP it's selling. Huge difference.

Charging royalties based on the price of a finished device is pretty common, and something even Apple themselves does. It's not illegal.

SpamSandwich · December 23, 2017 10:08PM

gatorguy said:

sflocal said:

cloudmobile said:

brakken said:

What these idiots fail to understand is, that if they succeed in destroying Apple, then they won’t be able to keep using their iPhones.

I expect we’ll now have to enact bills on how many documents can be ordered in ehat timeframe.

No one is trying to destroy Apple. Qualcomm is merely trying to get Apple to pay the same for their IP for the iPhone 7, 8 and X as Apple paid for the 3G, 4, 5 and 6. The difference between what Apple wants to pay and what Qualcomm wants Apple to pay is a fraction of the licensing costs that Apple tried to use to drive Samsung from the mobile business, and ultimately succeeded in driving HTC from the mobile business because where HTC agreed to Apple's licensing demands Samsung fought back in court and wound up paying Apple far less as a result, even though they sold many times more devices than HTC ever did. In other words, it was Apple who was trying to use the courts and trade commissions to destroy the competition. In contrast, Qualcomm wants Apple to make and sell as many iPhones as possible because that is more money for Qualcomm. Realize this: Apple sold far fewer iPhone 3Gs than they will iPhone 8/X and they charged much less for the iPhone 3G than they do for the 8 and X. To pretend that this lawsuit poses any sort of threat to Apple's bottom line is hilarious. Even if Apple loses, Apple will either 1) raise the price of the iPhone accordingly or 2) find someone else in their supply chain to squeeze to make up the difference. And if Apple wins, no, they aren't going to lower the cost of iPhones or do anything else to pass that money onto consumers. It will just go into their coffers. Meaning you won't benefit unless you are a stockholder, and even if you are a stockholder, this lawsuit amounts to pennies compared to Apple's $850 billion valuation so you won't see much action on that front either. And finally: Qualcomm's IP is based on obsolete 2G/3G/CDMA tech. Within 5 years and possibly within 3 years, no one is going to be using that stuff anymore anyway. Verizon, for instance, will turn off their 2G and CDMA networks by the end of 2019. (Sprint still uses CDMA too, but who knows whether they will still be in business by then.) So by the time the final appeals are heard on this case, it will be a moot point, and the battle will be over how much Apple has to pay Qualcomm for their IP in Apple devices sold in the past. Something that both Apple and Qualcomm know by the way. Qualcomm is trying to maximize how much they can get for their IP while it still has some value. Apple wants to drag this out until the 2G/3G/CDMA patents are economically worthless and then use that as leverage to get Qualcomm to settle for as little as possible.

Seriously... are you making this stuff up? It's been reported countless times what Qualcomm is doing, and here you are spinning it from a completely different field.

Qualcomm is demanding royalties based on the price of the PHONE, not the chips/IP it's selling. Huge difference.

Charging royalties based on the price of a finished device is pretty common, and something even Apple themselves does. It's not illegal.

My advice to Tim: Qualcomm hostile takeover time.

quadra 610 · December 23, 2017 10:09PM

macxpress said:

quadra 610 said:

saltyzip said:

Apples next iPhone to cost £2000 to pay for all the cockups and legal issues they have gotten themselves into this year.

Probably sarcasm on your part, but in case it isn’t, Apple’s legal fees are negligible compared to the vast sums in their coffers.

Additionally, the goal isn’t always to win cases outright or quickly, or even to win at all. Stalling, settling, or simply losing and paying the problem away, are all available tactics for Apple that in most cases have no effect on their bottom line or on their prices.

You mean like Samsung did in the Apple vs Samsung case? I have to think that Samsung was purposely stalling and dragging the case out to waste as much time and money from Apple's as possible.

Sure. It’s all part of the game. They can do whatever they like in court, but it’s the products that speak for themslves, and the particular reptuations that both tech giants have earned as a result.

rotateleftbyte · December 24, 2017 8:11AM

gatorguy said:

Charging royalties based on the price of a finished device is pretty common, and something even Apple themselves does. It's not illegal.

Is it indeed not illegal. However if the royalties that are based upon the value of the finished device is the ONLY royalty due then I don't have an issue with that.
QC is double dipping. Charging for the product to be put into the phone and then another charge based upon the sale price of the phone.

I first came upon the term 'Double Dipping' in 2004/2005. It was extensively covered at the time on Groklaw and even some very well respected patent lawyers found the practive abhorrent.
QC should just charge one fee and be done with it.

gatorguy · December 24, 2017 4:44PM

rotateleftbyte said:

gatorguy said:

Charging royalties based on the price of a finished device is pretty common, and something even Apple themselves does. It's not illegal.

Is it indeed not illegal. However if the royalties that are based upon the value of the finished device is the ONLY royalty due then I don't have an issue with that.
QC is double dipping. Charging for the product to be put into the phone and then another charge based upon the sale price of the phone.

I first came upon the term 'Double Dipping' in 2004/2005. It was extensively covered at the time on Groklaw and even some very well respected patent lawyers found the practive abhorrent.
QC should just charge one fee and be done with it.

You and I agree.

Judge sanctions Apple for failing to turn over documents in FTC case vs. Qualcomm

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