Professional Documents
Culture Documents
In the Matter of
TABLE OF CONTENTS
Page
I. INTRODUCTION ........................................................................................................... 1
QUESTION A ................................................................................................................. 1
QUESTION B ................................................................................................................. 7
QUESTION C ............................................................................................................... 10
QUESTION D ............................................................................................................... 17
QUESTION E ............................................................................................................... 18
QUESTION F................................................................................................................ 19
QUESTION G ............................................................................................................... 21
QUESTION H ............................................................................................................... 22
QUESTION I ................................................................................................................ 26
QUESTION A ............................................................................................................... 29
QUESTION B ............................................................................................................... 32
QUESTION C ............................................................................................................... 36
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QUESTION D ............................................................................................................... 43
QUESTION E ............................................................................................................... 45
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TABLE OF AUTHORITIES
Page(s)
Federal Cases
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In re Huai-Hung Kao,
639 F.3d 1057 (Fed. Cir. 2011)............................................................................................ 28
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PUBLIC VERSION
I. INTRODUCTION
337. Administrative Law Judge Pender’s findings regarding infringement, technical prong, and
validity for the ’490 patent were incorrect. As set forth in Section II in response to Questions A-I, the
Administrative Law Judge erred in both claim construction and application of the claims to the facts,
and his determination regarding the technical prong of the domestic industry requirement rests on
erroneous legal conclusions. Apple respectfully requests that the Commission find no violation.1
But, if the Commission affirms the Administrative Law Judge’s finding of a violation with
regard to the ’490 patent, Apple submits that, for the reasons described below in Section III in response
to Questions A-E and those set forth in the Administrative Law Judge’s Initial and Recommended
Determination, issuing an exclusion order poses grave harms to the public interest. The Administrative
Law Judge correctly found that “an exclusionary order will leave only one premium baseband chip
maker in the merchant market,” and “competition is necessary for quality, innovation, competitive
pricing, and … the preservation of a strong U.S. presence in the development of 5G and thus the
QUESTION A. With regard to the ʼ490 patent, please explain the plain and ordinary
meaning of the term “hold” in the context of claim 31 of this patent. In
1
On January 15, 2019, the Patent Trial and Appeal Board of the U.S. Patent and Trademark Office
issued a decision instituting inter partes review (IPR) for claim 31 of the ’490 patent. IPR2018-01261,
Paper 8. In that decision, the Board concluded “there is a reasonable likelihood” that claim 31 is
unpatentable as obvious in view of the Heinrich and Balasubramanian prior art references discussed
below, id. at 2, 37—including because (1) a person of ordinary skill in the art would have been
motivated to combine Heinrich and Balasubramanian, which are “analogous art” and “in the same field
of endeavor as the ’490 patent—namely, power saving techniques in computing devices,” id. at 26-30,
31-32, and (2) “the ordinarily skilled artisan would have been motivated to add Balasubramanian’s
disclosure of pulling data to Heinrich’s disclosures to achieve the benefits of Balasubramanian and
thereby arrive at the claimed invention.” Id. at 30-31, 32-37. Although the Board’s IPR decision
addressed and departed from the Administrative Law Judge’s substantive analysis in certain key
respects, Apple has not relied on the IPR decision in responding to the specific questions below per
the Commission’s guidance to limit those responses to the hearing record.
PUBLIC VERSION
At the hearing, Apple demonstrated that, in the context of claim 31 of the ’490 patent, the term
“hold” should be given its plain and ordinary meaning: i.e., to store, buffer, or accumulate data in a
memory.2 By contrast, there is no proper basis to construe “hold” as meaning “to prevent data from
travelling across the bus,” as the Administrative Law Judge incorrectly found—based on Qualcomm’s
flawed arguments that the “processor configured to hold” limitations can be met if data is stored by
any component located anywhere on the same side of the bus as the processor. (APre-HB at 56-58;
AIPost-HB at 30-32; ARespPost-HB at 30-32; APet at 45-50; RX-7C [Yalamanchili] at Q.52-61, 177-
89, 228; RX-1607C [Yalamanchili] at Q.94-106.) Even if the Commission determines that the “hold”
limitations of claim 31 should be construed to include a “to prevent data from traveling across the bus”
requirement, any such construction should also include the plain meaning “to store, buffer, or
Specifically, claim 31 of the ’490 patent requires “a modem processor … configured to hold
modem processor to application processor data until expiration of the modem timer,” and “an
application processor … configured to hold application processor to modem processor data.” (JX-3
[’490 patent] at claim 31.) As used in that context, the plain and ordinary meaning of “hold” requires
the application processor to be configured to store, buffer, or accumulate uplink data in its own
memory, and for the modem processor to be configured to store, buffer, or accumulate downlink data
in its own memory.3 In other words, the processor is what holds the data, just as claim 31 specifies.
2
Because the terms “store,” “buffer,” and “accumulate” are synonyms, in certain instances, Apple has
used the term “store” as a shorthand in this brief to refer to all three terms.
3
As the Administrative Law Judge found, a processor includes components for logic processing. (ID
at 76 (“[I]n the context of the ’490 patent, ‘processor’ refers to the system components responsible for
logic processing….”).) Processor circuitry can also include internal memory (such as SRAM) that can
store, buffer, or accumulate data, and claim 31 requires each processor to “hold” (i.e., store, buffer, or
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That same conclusion is reinforced by other language in claim 31 requiring the modem processor to be
“further configured [to] pull data from the application processor”—i.e., data is pulled “from the
application processor” because that is where it is stored. (Id.; RX-7C [Yalamanchili] at Q.177-89; RX-
The ’490 specification also uses the term “hold” consistently with the plain meaning that Apple
identified. For example, the patent attributes the power savings supposedly resulting from the claimed
invention to “holding or accumulating the data at a source processor.” (JX-3 [’490 patent] at 2:12-
15, 5:32-35; id. at 2:16-20 (describing “accumulated data transfer”); id. at 4:24-29 (referring to
“receipt of the accumulated data from the application processor”); id. at 10:50-53 (“the application
processor 34 may buffer uplink data packets into local memory”).) These references to “holding or
accumulating data at a source processor” and having the processor “buffer [data] into local memory”
Applying the plain meaning of “hold” also is supported by the extrinsic evidence. For instance,
on cross-examination, ’490 named inventor Murali Krishna and Qualcomm’s expert Dr. Jacob Baker
both conceded that “hold” as used in the ’490 patent refers to storing, accumulating, or buffering data
memory”); Tr. [Baker] at 790:14-17 (agreeing “it’s possible to hold data on chip with a processor …
Despite this intrinsic and extrinsic evidence, and without addressing it, the Administrative Law
Judge incorrectly adopted Qualcomm’s argument that “hold” merely means “to prevent data from
First, the Administrative Law Judge cited a sentence in the ’490 specification that uses
accumulate) data in this internal memory. (APre-HB at 7-8, 56-58; AIPost-HB at 30-32; ARespPost-
HB at 30-32; APet at 49-50.)
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“holding” as a synonym for “accumulating”: “By holding or accumulating the data at a source
processor in this fashion, unnecessary transitions between low power states and active states on the
PCIe bus are reduced and power is conserved.” (Id. (citing JX-3 [’490 patent] at 2:12-15, 5:32-35.)
But that statement in the patent is (1) consistent with Apple’s reading of claim 31 as requiring storing,
buffering, or accumulating data at the processors, i.e., the modem and application processors, and
(2) inconsistent with Qualcomm’s argument that the patent is agnostic as to where uplink and
Second, the Administrative Law Judge relied on the patent’s statement that “as data is received
by a modem processor in a computing device, the data is held until the expiration of a modem timer.
The data is then passed to an application processor in the computing device over a peripheral
component interconnect express (PCIe) interconnectivity bus.” (ID at 75 (citing JX-3 [’490 patent] at
1:65-2:3).) But that description—which explains that downlink data is “held” as it “is received by a
modem processor”—only reinforces that the requirement for a processor to “hold” data refers to
storing the received data at the processor (until the modem timer expires). The other aspects of that
sentence concerning how the held data is “then passed” from the modem processor to the application
processor relates to the separate requirement of claim 31 involving “transmission of the modem
Third, the Administrative Law Judge found that Qualcomm’s “to prevent data from traveling
across the bus” construction was warranted based on statements in the ’490 patent that held data is
“released,” including in the following sentence: “After arrival of the modem data at the application
processor 34, the application processor 34 releases any application data that has been held at the
application processor 34.” (ID at 75 (citing JX-3 [’490 patent] at 9:61-64).) But nothing in that passage
suggests that use of the word “releases” was intended to transform the plain meaning of “hold” into a
new “prevent” requirement. Rather, if anything, that passage confirms that data is first “held” (i.e.,
stored) at a processor—as Apple has proposed—and later “released” (i.e., transmitted). In other words,
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the sentence treats holding and releasing data as two separate concepts, consistent with the
requirements in claim 31 for a processor configured to hold data at the processor that later transmits
the held data across the bus (upon expiration of the modem timer).
The Administrative Law Judge also cited the specification’s related statements that: (1) for the
embodiment of Figure 4, “[i]f modem data is present, the modem data is released by the modem
processor 44 through the interconnectivity bus 36 to the application processor 34 (block 82)” (id. at
9:37-40); and (2) for the embodiment of Figure 6, “[i]f application data is present, the application data
is released by the application processor 34 through the interconnectivity bus 36 to the modem processor
44 (block 122).” (Id. at 11:12-14; ID at 75). But neither sentence bears on how (or where) uplink or
downlink data is “held.” That is because, as shown in Figure 4 below, the steps in which data is “held”
occur in block 76 (for the application processor) and block 78 (for the modem processor), while the
passage in column 9 that the Administrative Law Judge cited (about how data is “released”) involves
a different, later step in block 82 where data is “sent” after the modem timer expires:
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(Id. at Fig. 4; id. at 9:27-40 (“The application data is held at the application processor 34 (block 76),
and the modem data is held at the modem processor 44 (block 78) while the timers are running. …
The modem timer expires (block 80). If modem data is present, the modem data is released by the
modem processor 44 through the interconnectivity bus 36 to the application processor 34 (block
82).”).)4
It would be improper to re-define the “hold” limitations based on how the specification uses a
4
The same is true for the “released” reference that the Administrative Law Judge cited in column 11,
which involves a similar disclosure in connection with Figure 6. (Id. at 11:3-14 (“The application data
is held at the application processor 34 (block 116), and the modem data is held at the modem processor
44 (block 118) while the timers are running. … The application timer expires (block 120). If
application data is present, the application data is released by the application processor 34 through the
interconnectivity bus 36 to the modem processor 44 (block 122).”); id. at Fig. 6 (describing steps in
which data is “held” in blocks 116 and 118, and step to later “send” data in block 122).)
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different word (“released”) concerning an entirely different step from the “holding” steps. See Augme
Techs., Inc. v. Yahoo!, Inc., No. C 09-05386 JCS, 2011 WL 6048817, at *15 (N.D. Cal. Sept. 27, 2011)
(rejecting patentee’s “reliance on two unrelated portions of the specification” for proposed
construction), aff’d, 755 F.3d 1326 (Fed. Cir. 2014); Neopost Industrie B.V., Neopost, Inc. v. PFE Int’l,
Inc., No. 04 C 5047, 2005 WL 6266289, at *5 (N.D. Ill. Apr. 26, 2005) (rejecting proposed construction
“based entirely on an unrelated portion of the written description”); Schering Corp. v. Amgen Inc., 18
F. Supp. 2d 372, 398 (D. Del. 1998) (rejecting reliance upon portions of the specification “unrelated
Nevertheless, to the extent the Commission determines that the “hold” limitations of claim 31
should be construed to include a “to prevent data from traveling across the bus” requirement, any such
construction should also include the “to store, buffer, or accumulate” construction that Apple has
proposed—which is a necessary component of any proper plain meaning definition of “hold” for the
To the extent the Commission construes “hold” to mean “to store, buffer, or accumulate data”
and “to prevent data from traveling across the bus,” there would be no infringement or domestic
industry with respect to the ’490 patent for the following reasons.
First, if “hold” requires “to store, buffer, or accumulate data,” the “modem processor
configured to hold modem processor to application processor data” limitation of claim 31 only can be
met by a modem processor that stores, buffers, or accumulates downlink data in its own internal
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memory.5 At the hearing, Apple offered undisputed evidence that: (1) in the Apple iPhone products
accused of infringing the ’490 patent (“the Accused ’490 Products”), the Intel modem processor does
not store downlink data in its own internal memory (instead, a DRAM memory external to the
processor holds the downlink data), and (2) in the Qualcomm test phones that Qualcomm alleged as
infringement or domestic industry for this reason alone. (APre-HB at 56-69; ARespPost-HB at 22-35,
Second, for the same reasons, construing “hold” to impose a “store, buffer, or accumulate data”
limitation also would mean that the “application processor configured to hold application processor to
modem processor data” limitation can only be met by an application processor that stores, buffers, or
accumulates uplink data in a memory within the application processor. The hearing record confirms
that requirement would not be met by: (1) the Accused ’490 Products,
construction for this reason as well. (APre-HB at 56-69; ARespPost-HB at 22-35, 45-46; APet at 39-
51, 60-61.)
Third, modifying the construction of “hold” to mean “to store, buffer, or accumulate data” and
“to prevent data from traveling across the bus” would require proof that, after the uplink or downlink
data is stored, buffered, or accumulated, the claimed modem and application processors also must be
5
Claim 31 expressly requires the storing of downlink and uplink data to occur at the “processor,” and
not in some component external to the processor. (APre-HB at 56-69; ARespPost-HB at 22-35, 45-
46; APet at 39-51, 60-61.)
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configured to take steps to stop (i.e., “prevent”) the stored uplink and downlink data from
crossing the PCIe bus. In each of the Accused ’490 Products, for example,
but the application processor never takes any additional steps to “prevent” that stored uplink data from
57-58.) At the hearing, however, Qualcomm maintained that this limitation was met simply because
. For this reason, there is no infringement or domestic industry technical prong under the
Finally, Qualcomm cannot overcome the failures of proof detailed above under a doctrine of
equivalents theory. As an initial matter, Qualcomm waived any equivalents theory for the “hold”
limitations: (1) by failing to raise any such a theory in its Ground Rule 7.4 disclosures (for either its
infringement or domestic industry contentions); and (2) by failing to petition for review after the
Administrative Law Judge did not accept Qualcomm’s equivalents arguments under the “hold”
limitations (for either the Accused ’490 Products or Alleged ’490 Domestic Industry Products). See
Certain Ink Cartridges and Components Thereof, Inv. No. 337-TA-565, Comm’n Op. at 7 (Sept. 24,
2009); ALJ Pender Ground Rule 7.4. (APre-HB at 61, 68 n.11, 12; ARespPost-HB at 33; APet at 50
n.21, 51 n.22.)
6
The Commission is not required to accept Qualcomm’s interpretation of its own “prevent”
construction. See MEMS Tech. Berhad v. Int’l Trade Comm’n, 447 F. App’x 142, 151, 153 (Fed. Cir.
2011) (rejecting argument that it was “improper for the Commission to adopt a construction that the
parties did not propose,” further finding “the fact that neither party advanced the claim construction
adopted by the Commission is not legal error”); Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1323-24
(Fed. Cir. 2008) (“Because the court has an independent obligation to construe the terms of a patent,
we need not accept the constructions proposed by either party[.]”).
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Any equivalents argument also would fail on the merits because applying claim 31 such that
uplink and downlink data can be held anywhere and by anything would read “application processor
configured to hold” and “modem processor configured to hold” out of claim 31—which would
improperly vitiate those limitations. See Asyst Techs., Inc. v. Emtrak, Inc., 402 F.3d 1188, 1195 (Fed.
Cir. 2005) (“[D]octrine of equivalents does not apply if applying the doctrine would vitiate an entire
claim limitation.”). Likewise, Qualcomm has never explained how claim 31 could be met (for either
its infringement or domestic industry allegations) under a doctrine of equivalents theory if “hold” is
construed to mean both “to store, buffer, or accumulate” data and “to prevent data from traveling across
At the hearing, Apple established that claim 31 of the ’490 patent is obvious in view of a
combination involving U.S. Patent No. 9,329,671 (“Heinrich”) and U.S. Patent No. 8,160,000
(“Balasubramanian”)—both under the plain meaning of “hold” as proposed by Apple (“to store, buffer,
or accumulate”) and alternatively under Qualcomm’s application of its proposed construction (“to
prevent data from traveling across the bus”). In general terms, (1) Heinrich discloses an inter-processor
communication system and power-saving scheduling techniques that meet all elements of claim 31,
with the possible exception of the “pull … after transmission” limitation; and (2) Balasubramanian
discloses this “pull … after transmission” limitation (along with all other limitations of claim 31, except
a “modem processor” and an “application processor”). Thus, in light of this combination, it would
have been obvious to have a modem processor hold downlink data until expiration of a timer and an
application processor hold uplink data until the modem processor “pulls data from the application
processor after transmission of the modem processor to application processor data”—just as claim 31
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For the reasons below, claim 31 would still be obvious in view of those same references if the
Commission construes “hold” to mean “to store, buffer, or accumulate” data and “to prevent data from
“to store, buffer, or accumulate”: Heinrich and Balasubramanian each renders the “hold”
limitations of claim 31 obvious to the extent those limitations are interpreted to require the claimed
modem and application processors “to store, buffer, or accumulate” data. Specifically, as shown in
Figure 1 below, within mobile device 102, Heinrich teaches baseband processor 104 (the claimed
“modem processor,” highlighted in blue) and application processor 102 (the claimed “application
processor,” highlighted in red) coupled by an “IPC” bus (the claimed “interconnectivity bus,”
highlighted in yellow):
(Heinrich [RX-1146] at Fig. 1 (highlighting added); id. at 4:18-50 (user device 102 may be a “mobile
“application processor,” and a bus coupling the processors); RX-7C [Yalamanchili] at Q.307-08; ID at
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Just like the ’490 patent, Heinrich teaches a power-saving technique in which: (1) data received
by one of the processors that is intended for the other processor is stored in memory for a period of
time, rather than sending the data as soon as it is received over the IPC bus to the other processor—to
reduce the number of times the receiving processor (and the bus coupled to it) has to transition to an
active state to handle the data; and (2) under the control of scheduler 120 on the baseband processor,
the stored data is later transmitted “in both directions” upon expiration of a “lazy timer.” (RX-1146
[Heinrich] at 12:52-55 (“A scheduler may implement the same scheduling techniques as those
described above [for downlink data], but configured to schedule [uplink] IPC activities from the
application processor 106 to the baseband processor 104.”); id. at 7:19-21 (“The scheduler 120 may
control the scheduling of IPC activities in both directions between the processors 104 and 106.”); id.
at 3:29-42, 7:8-21, 5:18-39, 8:7-32, 9:1-21, Figs. 1, 3; Tr. [Baker] at 1386:9-16 (admitting “[t]he
baseband processor in Heinrich can hold downlink data for later transmission to the application
processor” and “the application processor in Heinrich can hold uplink data for later transmission to the
baseband processor”); id. at 1387:1-12 (admitting “yes, it does mention there would be scheduling in
both directions”); id. at 1387:20-1388:2 (agreeing “when the lazy timer [in Heinrich] expires, the
baseband processor will transmit its aggregated downlink data to the application processor”); RX-7C
[Yalamanchili] at Q.304-19.)
In light of this disclosure, Heinrich alone discloses or renders obvious the portion of the
construction presented in Question C that requires the modem and application processors “to store,
buffer, or accumulate” data in memory. Heinrich discloses this limitation under Qualcomm’s incorrect
argument that claim 31 can be met if data is “held” anywhere on the processor’s side of the bus—given
Heinrich’s disclosure of a memory external to the baseband processor that stores held data. And the
limitation is obvious under the plain meaning of the claim as proposed by Apple, which requires the
processor itself to store the downlink data (which Heinrich does not explicitly disclose, but would have
been obvious). (Tr. [Baker] at 805:6-11 (“All we care about is holding data on each side of the bus. It
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doesn’t matter where it’s held….”); RX-1146 [Heinrich] at 4:42-43 (“[U]ser device 102 also includes
a memory 108 for storing data.”); id. at 11:57-58 (“[T]o delay file write accesses they are stored in a
cache memory of the baseband subsystem.”); id. at 11:58-66 (describing storage of data “in baseband
memory”); id. at Fig. 1 (showing external memory 108); RX-7C [Yalamanchili] at Q.360-69, 382-90.)7
extent they are construed to include a “to store, buffer, or accumulate” data requirement. Figure 1 from
(RX-106 [Balasubramanian] at Fig. 1.) Balasubramanian explains that transceiver 110 (highlighted in
blue and found within user device 102) and network interface 112 (highlighted in red) can
7
The Administrative Law Judge’s findings about Heinrich confirm this conclusion. (ID at 88
(“Heinrich discloses the use of an IPC scheduler (computer program product) that may be used at a
first processor for delaying and grouping information … for sending to a second, remote processor at
a subsequent time period when the second processor will be in an active state, in order to allow the
second, remote processor to spend more time in a low power, sleep state where it does not process such
information”); id. at 88-89 (“By aggregating non real-time IPC activities at the first processor in this
manner, Heinrich’s device provides power savings by reducing the frequency with which the second,
remote processor must be woken up from a sleep mode where it is not able to receive remote processor
information.”); id. at 89 (“Heinrich teaches that delaying and grouping of non real-time sensitive IPC
activities can be done at either or both of the processors….”).)
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communicate with each other over communication link 116 (highlighted in yellow)—which the patent
explicitly states can be a wired bus. (RX-106 [Balasubramanian] at 4:43-57; Tr. [Baker] at 1388:25-
connected by a communication link and “teaches that the communication link … can be a wired
“portion of the apparatus” may be placed in a “reduced-power state.” When the processing node is in
that state, data packets are “queue[d]” (i.e., stored) in memory on both sides of the IPC bus when the
bus is not accessible, and upon expiration of a timer, the aggregated data is later transmitted in both
directions across the bus “during a single wake state.” (RX-106 [Balasubramanian] at 5:47-54 (“To
increase the amount of time the transceiver 110 is in the suspended state (and thereby conserve more
power), the user equipment 102 and/or the network interface 112 may be adapted to queue packets
while the transceiver 110 is in the suspended state. The equipment 102 and the interface 112 may be
adapted to group … the queued packets for transmission over the communication link 116 when the
transceiver 110 is in the active state.”); id. at 1:52-62, 6:46-57, 9:4-13; Tr. [Baker] at 1389:9-24
(conceding “Balasubramanian teaches that user equipment 102 can hold or store packets for later
transmission” and that “user interface 112 can hold or store packets for later transmission to the user
equipment 102”; id. at 1389:25-1390:14 (agreeing “when the transceiver 110 is transitioned to an
awake state, the network interface 112 can send its held packets to the transceiver,” and “transceiver
110 can transmit its stored data to the network interface after a configurable amount of time”; “a timer
Thus, to the extent Qualcomm argues that a requirement “to store, buffer, or accumulate” data
is missing from Heinrich, then Heinrich in combination with Balasubramanian would render the
limitation obvious. Balasubramanian discloses this limitation under Qualcomm’s incorrect argument
that claim 31 can be met if data is “held” anywhere on the processor’s side of the bus—given
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Balasubramanian’s disclosure that user equipment 102 and network interface 112 may be adapted to
group data for later transmission across communication link 116. The limitation also is obvious under
Apple’s correct reading of the claim, which requires the processor itself to store the downlink data
(which is not explicitly disclosed, but would have been an obvious thing to do). Indeed, it would be
nothing more than practical common sense to have a processor store in a memory data intended for
another processor while the bus between the two processors is not active—and, thus, at a time when
the data cannot be transmitted across the bus. (RX-7C [Yalamanchili] at Q.383, 391-98.)
“to prevent data from traveling across the bus”: As noted in response to Question B above,
acceptance of Qualcomm’s “prevent” construction would require the claimed modem and application
processors each to take affirmative steps to stop (i.e., “prevent”) data from traveling across the bus
after the data is stored in the processor’s memory and until the modem timer expires—which simply
does not happen in Apple’s or Qualcomm’s products. Accordingly, Apple does not infringe and there
is no domestic industry under such a claim interpretation, as discussed above for Question B.
Perhaps for that reason, in connection with its infringement and domestic industry allegations,
Qualcomm argued that its “prevent” requirement can be met merely by proof that held uplink and
downlink data do not travel across the inter-processor bus until the modem timer expires. (QRespPet
at 47-48 n.19; CX-19C [Baker] at Q.73-100, 178-192.) But Heinrich and Balasubramanian both
explicitly teach that same requirement. As discussed above, both references describe how incoming
data received by a processor (in Heinrich) or a processing node (in Balasubramanian) is stored in a
memory until a timer expires—and only then does the stored data travel across the bus to the other
processor (in Heinrich) or processing node (in Balasubramanian). These disclosures meet the “to
prevent data from traveling across the bus” requirement under Qualcomm’s application of the claims.
Indeed, after adopting Qualcomm’s “to prevent data from traveling across the bus” meaning of
“hold,” the Administrative Law Judge did not identify the “processor configured to hold” limitations
as missing from Heinrich in combination with Balasubramanian. (ID at 75 (“I have determined to
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construe ‘hold’ in accordance with Qualcomm’s proposal, i.e., in the context of the ’490 Patent, ‘hold’
means to prevent data from traveling across the bus.”); id. at 87-90 (identifying allegedly missing
limitations from the prior art).) Rather, in applying Qualcomm’s construction, the Administrative Law
Judge made explicit findings that Heinrich’s modem processor and application processor each can
“group” or “aggregate” data intended for the other processor, such that transmission of that data across
the IPC bus is “delayed” until a “lazy timer” expires. (ID at 87 (“Heinrich discloses a modem processor
(“Heinrich discloses the use of an IPC scheduler (computer program product) that may be used at a
first processor for delaying and grouping information … for sending to a second, remote processor at
a subsequent time period when the second processor will be in an active state….”); id. at 88-89 (“By
aggregating non real-time IPC activities at the first processor in this manner, Heinrich’s device
provides power savings by reducing the frequency with which the second, remote processor must be
woken up from a sleep mode where it is not able to receive remote processor information.”); id. at 89
(“Heinrich teaches that delaying and grouping of non real-time IPC activities can be done at either or
Thus, the Administrative Law Judge’s analysis confirms that Heinrich teaches having the
modem and application processors “prevent data from traveling across the bus,” as Qualcomm applied
the “prevent” aspect of that construction for its infringement and domestic industry arguments.
“Balasubramanian is not directed to inter-processor communications within a mobile device and thus
does not disclose any of the claim 31 limitations,” he correctly found that the reference teaches
“conserving device power by queueing transmission packets while transceiver components in the user
device remain in a suspended state (power save mode), and then transmitting the queued packets during
a single wake state for the transceiver.” (ID at 90; id. at 91 (“Balasubramanian teaches that the remote
‘network interface 112 may [] be adapted to queue packets destined for the user equipment 102 when
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the transceiver is in a suspend state. In this case, when the transceiver 110 is transitioned to an active
state, the network interface 112 may [] send the queued packets to the transceiver 110.”).)
This too confirms that both Heinrich and Balasubramanian disclose the “to prevent data from
traveling across the bus” limitation as Qualcomm has applied this “prevent” requirement. Accordingly,
in view of Heinrich in combination with Balasubramanian, claim 31 would have been obvious to a
QUESTION D. The Heinrich patent, supra, explains that a scheduler may be implemented
either through software or hardware to control interprocessor
communications in both directions across a bus. See Heinrich at 4:44-50,
7:8-21, 8:1-5. Heinrich further teaches that the scheduler can monitor the
active state of the receiving processor by monitoring the active state of the
IPC bus. See id. at 9:50-62. Explain whether the active state of the bus
connecting the two processors in Heinrich coincides with or is otherwise
related to the active state(s) of the processor(s) receiving the transmission
across the bus. If so, explain whether monitoring the active state of the
receiving processor (by monitoring the bus) and timing data transmissions
to coincide with the active state of the receiving processor(s) will directly,
indirectly or inherently cause the transmissions to coincide with the active
state of the bus.
hardware on baseband processor 102 (a modem processor) that (1) can control inter-processor
communications in both directions across an IPC bus (e.g., Heinrich [RX-1146] at 7:8-21), and (2) can
determine the active state of the receiving processor by monitoring the active state of the IPC bus (e.g.,
id. at 9:50-62).
With respect to the first portion of this question, the active state of the bus in Heinrich
“coincides with or is otherwise related to the active state(s) of the processor(s) receiving the
transmission across the bus.” If one of Heinrich’s processors is receiving transmissions from the other
processor across the bus, then the bus connecting the processors necessarily must be in the active
state—otherwise transmission across the bus would not be possible. Further, an active bus state
indicates that at least portions of each processor are in the active state as well. (E.g., Heinrich [RX-
1146] at 5:30-37 (“Every time a quantum of data is sent over the IPC from the baseband processor 104
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to the Application Processor 106, the Application Processor 106 needs to be in, or enter into, a state
which allows for that communication to happen. If the Application Processor 106 is in the sleep mode
when the IPC activity is initiated then it is ‘woken up’, i.e. switched to operate in an awake mode in
order to process the IPC activity.”); RX-7C [Yalamanchili] at Q.420, 422 (explaining a communication
bus must be in the active state for data to flow over it and that Heinrich recognizes that both processors
and the bus need to be in active states to transmit and receive data across the bus); APet at 63-64, 73-
With respect to the second part of the question, monitoring the state of the receiving processor
(by monitoring the bus) and timing data transmissions to coincide with the active state of the receiving
processor will necessarily and inherently cause the transmissions to coincide with the active state of
the bus. As detailed above, this is the case for two reasons: (1) if monitoring indicates that the bus is
in an active state, then at least portions of each processor coupled to the bus also must be in an active
state (because they power the bus); and (2) if transmissions across a bus to a receiving processor are
timed to coincide with the active state of the receiving processor (as determined by the active state of
the bus), then it is inherent that the transmissions will coincide with both the active state of the receiving
processor and the active state of the bus. (E.g., Heinrich [RX-1146] at 5:30-37; RX-7C [Yalamanchili]
at Q.44, 420, 422; APet at 63-64, 73-74; AIPost-HB at 34-35; APre-HB at 6-7, 82.)
transmission of data to a receiving processor and the state of the bus over which the data is sent: i.e.,
the bus must be in an active state for data to be transmitted across the bus and received at the processor.
It therefore follows that the more frequently a receiving processor transitions from an active state to an
inactive state, the more frequently the bus coupled to the processor must transition between active and
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inactive states as well (because the bus cannot remain active if one or both of the processors powering
Heinrich addresses this correlation between data transmission and the power state of the bus
by having a transmitting processor hold data intended for a receiving processor, rather than waking the
receiving processor as soon as the data is ready to send. By “grouping” data in this manner, and then
scheduling transfer of the held data at a later time (when a lazy timer expires), Heinrich saves power
in part by minimizing the number of times that the receiving processor must switch between sleep and
active states (which also reduces the number of times the bus must switch between its sleep and active
states given the dependency between the state of the bus and processor(s)). (Heinrich [RX-1146] at
4:6-11 (“By grouping … IPC activities together and scheduling them for communicating to the second
processor … the number of times that the second processor enters and exits the second mode (e.g. sleep
mode) is reduced”); id. at 7:16-19 (“The scheduler 120 aims to reduce the power consumption
associated with the IPC activities by reducing the number of times that the remote processor enters and
exits the sleep mode.”); id. at 8:25-32 (explaining how “[t]he grouped IPC activities in the group are
then scheduled for communicating to the application processor 106 during a single awake phase”);
RX-7C [Yalamanchili] at Q.53, 310-11, 314, 431; APet at 31, 62-64, 75; AIPost-HB at 25-26, 35;
APre-HB at 82-83.)
Given a scheduler that monitors the active states of an application processor and a baseband
processor coupled together by a bus and that also controls transmissions in both directions across the
bus to coincide with the active state of each receiving processor, a person of ordinary skill in the art at
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the time of the ’490 patent filing would have found it obvious to have a modem processor initiate
transmission of its held downlink data and then pull held uplink data from the application processor.
In this arrangement, there are only three possibilities to transmit data between the processors:
(1) each processor can transmit its own data to the other processor (a “push” by both processors); (2)
each processor could receive data from the other processor in response to a request for the data (a
“pull” by both processors); or (3) one processor could push its data to the other processor, and pull the
other processor’s data. All three common-sense options were well known in the prior art, and all would
As the Commission notes in Question D, Heinrich discloses that a single scheduler on the
modem processor can group and schedule data transmissions “in both directions” between an
application processor and a modem processor coupled by a bus. (Heinrich [RX-1146] at 7:19-21.)
Because the scheduler resides on the modem processor, a natural way for the scheduler to carry out
these transmission functions “in both directions” would involve having the modem processor both
(1) transmit its held downlink data to the application processor (using a push), and (2) request held
uplink data from the application processor (using a pull). (RX-7C [Yalamanchili] at Q.399-412, 414-
16, 432-40; APet at 63-64, 72-76; AIPost-HB at 25-26, 33-36; APre-HB at 77-83.)
If a processor both transmits data to and pulls data from another processor during the same
active state of a bus, there are only three options for the ordering of those transactions: (1) starting to
push data before starting to pull data; (2) starting to pull data before starting to push data; and (3)
starting to pull and push data at the same time. Given this limited menu of choices, each of which was
a known and common-sense option with known and predictable results, a person of ordinary skill
would have considered using the first option—a push/pull scheme—in connection with Heinrich’s
In sum, given Heinrich’s express disclosure of a scheduler residing on a modem processor that
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controls data transmissions “in both directions” with an application processor, and given the limited
possibilities for how and when those transmissions can occur, a person of ordinary skill in the art would
have found it obvious to have Heinrich’s modem processor pull uplink data from the application
processor after initiating transfer of held downlink data to the application processor, just as in claim 31
(under the Administrative Law Judge’s construction of the “after transmission” limitation). (APet at
QUESTION G. Explain whether the scheduler and/or lazy timers in Heinrich may
comprise a “modem timer” and perform the functions of a modem
processor in claim 31.
The lazy timer disclosed in Heinrich (as implemented by scheduler 120) comprises a “modem
timer” and performs the same function as the modem timer of claim 31. (APre-HB at 77-79; AIPost-
In particular, as shown in Figure 1 below, Heinrich discloses a “centralized scheduler 120” that
(RX-1146 [Heinrich] at Fig. 1, 7:8-21.) Scheduler 120 “control[s] the scheduling of IPC activities” to
be transmitted from baseband processor 104 to application processor 106 (via the “IPC” bus), including
8
At the hearing, it was undisputed that Heinrich’s baseband processor is a “modem processor.” (APre-
HB at 25-26, 29-30; APet at 67-68; RX-1146 [Heinrich] at 4:30-33 (“The baseband processor 104 acts
as a Radio Frequency (RF) modem to process data for communication between the user device 102
and the network 110.”); QRespPost-HB at 33 (describing Heinrich’s baseband processor as a “modem
processor”); id. at 40-45; Tr. [Baker] at 1385:24-1386:1 (admitting “[t]he baseband processor of
Heinrich is a modem processor”); ORespPost-HB at 29.)
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certain types of data that the patent calls “non real-time sensitive IPC activities.” (Id. at 7:8-21, 9:2-
6.)
To save power, scheduler 120 does not permit non real-time sensitive IPC activities to travel
across the IPC bus as soon as a processor receives them. Instead, scheduler 120 allocates a “lazy timer”
to each of the received non real-time sensitive IPC activities, which it stores in a memory until one of
the lazy timers expires. Because the “firing” of one lazy timer causes all lazy timers to expire, and
because Heinrich teaches that the same scheduler and lazy timer techniques can be implemented on
both baseband processor 104 and application processor 106, the expiration of any lazy timer will cause
all held non real-time sensitive IPC activities to be sent over the IPC bus, and this can occur “in both
directions.” (Id. at 5:18-39, 7:8-21, 8:7-32, 9:1-21, 12:52-55, Figs. 1, 3; APre-HB at 77-79; AIPost-
As confirmed by this disclosure, Heinrich’s lazy timer (as implemented by scheduler 120) is a
“modem timer” that performs the same function as claim 31’s modem timer—i.e., data intended for
transmission from the baseband processor to the application processor is held while the lazy timer is
running, and that held data is then transmitted across the IPC bus to the application processor when the
lazy timer expires. (JX-3 [’490 patent] at claim 31 (“the modem processor configured to hold modem
processor to application processor data until expiration of the modem timer”).) Indeed, Qualcomm
does not dispute that Heinrich discloses the claimed “modem timer.” (QRespPost-HB at 40-43; Tr.
[Baker] at 1387:17-1388:2 (agreeing “when the lazy timer expires, the baseband processor will
transmit its aggregated downlink data to the application processor”).) Nor did the Administrative Law
Judge conclude in his Initial Determination that any aspect of the “modem timer” limitation was
missing from Heinrich. (ID at 88-90 (identifying limitations allegedly missing from Heinrich).)
analyzing the obviousness of claim 31. In fact, Balasubramanian teaches every element of claim 31,
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except that it does not expressly disclose a modem processor or application processor, and instead
discloses two processing nodes (a transceiver and network interface) coupled by a bus. (APre-HB at
between the power state of a processor receiving data across the IPC bus from another processor and
the power state of the bus itself—which it does for the reasons above (i.e., because at least portions of
a receiving processor and a transmitting processor must be active for the bus between them to be active,
and for the receiving processor to receive data over the bus, at least portions of each processor thus
will necessarily need to be active). The same relationship exists in Balasubramanian, as shown in
Figure 1 below—in which a first processing node (transceiver 110, in blue) controls the power state of
the bus (communication link 116, in yellow) coupling the transceiver to a second processing node
transceiver drives the state of the bus (i.e., data can be transmitted over the bus only when the
transceiver is powered and “awake,” and not when the transceiver is powered down and “suspended”),
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the bus being powered and active will necessarily coincide with the transceiver being powered and
active (and when the network interface 112 is also active). (RX-7C [Yalamanchili] at Q.426; RX-106
“when the transceiver 110 is transitioned to an awake state, the network interface 112 can send its held
to minimize the frequency that a processor transitions between active and sleep states will also
minimize the frequency that the IPC bus transitions between active and sleep states—which it does, as
explained above. Balasubramanian similarly teaches (1) having the transceiver and network interface
processing nodes each hold data on their respective sides of the bus for a period defined by a timer
associated with the transceiver, during which the processing node(s) (and bus) are kept in a “reduced-
power state,” and (2) upon expiration of the timer, transitioning the processing nodes (and bus) to an
“awake state” when all held data is transmitted. (RX-106 [Balasubramanian] at 1:52-62, 5:47-54, 6:46-
57, 9:4-13; Tr. [Baker] at 1389:9-24 (conceding “Balasubramanian teaches that user equipment 102
[which includes transceiver 110] can hold or store packets for later transmission” and “user interface
112 can hold or store packets for later transmission to the user equipment 102”); id. at 1389:25-1390:14
(agreeing “when the transceiver 110 is transitioned to an awake state, the network interface 112 can
send its held packets to the transceiver” and “that transceiver 110 can transmit its stored data to the
By grouping incoming data in this manner—rather than waking the processing nodes each time
data is ready for transmission to the other processing node—Balasubramanian saves power by reducing
the number of power state transitions for the processing nodes. And because the bus will need to
transition from an active state to an inactive state each time a transmitting processing node transitions
from an active to an inactive state (because the node powers the bus), this approach also reduces the
frequency of power state changes for the bus connecting the two processing nodes. (RX-106
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[Balasubramanian] at 5:47-54 (“To increase the amount of time the transceiver 110 is in the suspended
state (and thereby conserve more power), the user equipment 102 and/or the network interface 112
may be adapted to queue packets while the transceiver 110 is in the suspended state. The equipment
102 and the interface 112 may be adapted to group … the queued packets for transmission over the
communication link 116 when the transceiver 110 is in the active state.”); RX-7C [Yalamanchili] at
Q.323, 328-35, 396-98; APre-HB at 77, 80-82; AIPost-HB at 28-29, 32-33; APet at 64-67, 71-75.)
In Question F, the Commission inquired whether a scheduler that monitors the active state of
application and baseband processors and controls transmissions in both directions to coincide with the
active state of the receiving processor will “directly, indirectly, or inherently” result in a pull “after”
the scheduler initiates transmission of downlink data from the modem processor. Balasubramanian
confirms that this type of scheme was well known in the prior art—by disclosing that, during the same
awake state, transceiver 110 can (1) transmit packets to network interface 112 (via the communication
link) that had been “queued” while the transceiver and link were inactive (i.e., a “push” of held data),
and (2) later receive packets from the network interface (in response to a message sent by the
transceiver) that the network interface had “queued” while the bus was inactive, (i.e., a “pull”):
[T]he transceiver 110 then transmits the queued uplink packets over the
communication link 116. Advantageously, the queued packets may be grouped for
transmission such that all of the packets are transmitted during a single wake state of
the transceiver 110…. [D]uring the same single wake state the transceiver 110 also
receives any downlink packets queued in the network interface 112…. [T]he
transceiver 110 may send a message to the network interface 112 requesting
transmission of all queued packets.
In Question G, the Commission asked about Heinrich’s disclosure of a scheduler and lazy timer
which, as discussed above, along with Heinrich’s baseband processor, teaches the limitation of claim
31 requiring a “modem processor configured to hold modem processor to application processor data
until expiration of the modem timer.” Balasubramanian further confirms that the “modem timer”
requirement was obvious. In the context of two processing nodes (rather than a modem processor and
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application processor), Balasubramanian discloses a scheme in which incoming packets on both sides
of the bus are held for a period defined by a timer associated with the first processing node (transceiver
110), and then transmitted to the second processing node (network interface 112) when the timer
expires. (RX-106 [Balasubramanian] at 1:52-62, 5:47-54, 9:4-13, 6:46-7:11 (disclosing how a “timer”
associated with transceiver 110 expires “once the configurable amount of time has elapsed”); Tr.
[Baker] at 1389:25-1390:14 (“[T]ransceiver 110 can transmit its stored data to the network interface
Balasubramanian’s timer therefore performs the same function as the “modem timer” in claim 31
(except the timer is associated with a first processing node rather than a modem processor).
In sum, Heinrich’s inter-processor communication system and scheduling techniques teach all
elements of claim 31, with the possible exception of the “pull … after transmission” limitation. But
as discussed above, Balasubramanian explicitly discloses this “pull … after transmission” limitation,
and also discloses all other limitations of claim 31 (including a timer) except for a “modem processor”
and an “application processor.” Thus, a person of ordinary skill in the art would understand from
Balasubramanian’s disclosure, in light of Heinrich, that it would have been obvious to have a modem
processor (e.g., a first processing node) hold data until expiration of a timer, and an application
processor (e.g., a second processing node) hold data until the modem processor “pulls data from the
application processor after transmission of the modem processor to application processor data”—just
as claim 31 requires. (APre-HB at 77, 81-82; AIPost-HB at 33-34; APet at 64-67, 72-75; ARespPost-
QUESTION I.9 Explain whether there is a long-felt but unmet need for the invention of
the ʼ490 patent, focusing particularly on evidence of a nexus between the
9
Although the Notice identifies this question under a heading labelled “F,” Apple assumes the
Commission intended to label it as question “I.”
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must consider whether Qualcomm established a long-felt but unmet need for the claimed invention of
the ’490 patent. Graham v. John Deere Co., 383 U.S. 1, 18 (1966). The hearing record confirms that
Qualcomm failed to make that required showing for several reasons. See Prometheus Labs., Inc. v.
Roxane Labs., Inc., 805 F.3d 1092, 1101-02 (Fed. Cir. 2015) (explaining a “patentee has the burden of
going forward with rebuttal evidence” regarding secondary considerations “once a challenger has
First, to establish this secondary consideration, Qualcomm needed to prove at the hearing that
an “unmet need” existed in the prior art for the alleged invention of claim 31—i.e., for a way (1) to
have two processors hold data intended for the other processor while the bus between them was inactive
(i.e., at a time when no data could flow across the bus), and then (2) to synchronize a transfer of the
held data in both directions when the bus returned to an active state. See Texas Instruments Inc. v. U.S.
Int’l Trade Comm’n, 988 F.2d 1165, 1178 (Fed. Cir. 1993) (explaining evidence regarding long-felt
but unmet need “is analyzed as of the date of an articulated identified problem and [includes] evidence
Patent Litig., 676 F.3d 1063, 1082 (Fed. Cir. 2012) (“Longfelt need is closely related to the failure of
others. Evidence is particularly probative of obviousness when it demonstrates both that a demand
existed for the patented invention, and that others tried but failed to satisfy that demand.”).
Yet Qualcomm offered no evidence that, before the ’490 patent, anyone had ever identified
that type of capability as involving an unsolved “problem” or ever taken any steps in an effort to “solve”
such a problem, or that anyone had even expressed a wish for such a feature. The reason for this lack
of proof is simple: as the hearing record confirms, it was already well known in the prior art that
bidirectional buses like PCIe (which was developed in the early 2000s and is used in the Accused ’490
Products and Alleged ’490 Domestic Industry Products today) specifically enable the simultaneous
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transfer of data in both directions between two processors. (Tr. [Krishna] at 62:24-66:22, 660:20-
661:4, 661:5-8, 661:15-662:1, 663:24-664:6, 664:12-15, 670:4-13, 670:18-21; Tr. [Baker] at 777:8-12,
In his Initial Determination, the Administrative Law Judge stated “that there was a long-
standing need in the art for technologies that provide power savings and improve the battery life for
mobile devices.” (ID at 95.) But this finding—directed to a generic supposed “need” for any
“technologies” that can improve battery life in mobile devices—lacks the required nexus to the specific
solution claimed by the ’490 patent (which, as discussed above, did not constitute an unmet need in
the prior art). See Perfect Web Techs., Inc. v. InfoUSA, Inc., 587 F.3d 1324, 1332 (Fed. Cir. 2009)
to show that alleged problems with the prior art approach “constituted a long-felt, unmet need
alleviated by the patent”); Merck & Cie v. Gnosis S.P.A., 808 F.3d 829, 837 (Fed. Cir. 2015) (“For
objective evidence of secondary considerations to be accorded substantial weight, its proponents must
establish a nexus between the evidence and the merits of the claimed invention.” (internal citation
omitted)); In re Huai-Hung Kao, 639 F.3d 1057, 1068 (Fed. Cir. 2011) (same).
Second, beyond the absence of any evidence of an unmet need, Qualcomm also failed to
establish that any supposed need for the claimed invention of the ’490 patent was “long-felt.” There
is no record evidence regarding a nexus as to when a need allegedly arose for the approach of the
claimed invention, or that such a need persisted without resolution for a long time. See Perfect Web
Techs., 587 F.3d at 1332 (affirming finding of no long-felt but unmet need where plaintiff “provided
no evidence to explain how long this need was felt, or when the problem first arose”); Purdue Pharm.
Prod. L.P. v. Actavis Elizabeth LLC, No. CIV.A. 12-5311 JLL, 2015 WL 5032650, at *49 (D.N.J. Aug.
25, 2015) (finding asserted need was “hardly long felt” where just four years passed between the “prior
art’s teaching of the ‘as needed’ treatment and the eventual preparation of a successful composition”);
Auxilium Pharm., Inc. v. Watson Labs., Inc., No. 12-3084 JLL, 2014 WL 9859224, at *28 (D.N.J. Dec.
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16, 2014) (concluding alleged need “was not ‘long-felt’” where only “two years passed” between the
In fact, the hearing record confirms just the opposite. When first developing a mobile device
that would couple an application processor and a modem processor with a power-hungry bidirectional
PCIe bus, engineers from Qualcomm, Apple, and Intel all independently developed their own version
data was synchronized, such that uplink and downlink data was transmitted in both directions during
the same active state of the PCIe bus. (RDX-18.152C (showing timeline of Apple’s and Intel’s
design work); CX-12C [Baker] at Q.234-35 (confirming Apple’s feature was developed before
Qualcomm first gave a “sneak peak” of its feature); Tr. [Baker] at 868:16-869:22 (same).)
This simultaneous and independent development only further reinforces that there was never a
long-felt, but unmet need for the claimed invention of the ’490 patent. See Regents of Univ. of Cal. v.
Broad Institute, Inc., 903 F.3d 1286, 1295 (Fed. Cir. 2018) (noting “simultaneous invention . . .
constitutes objective evidence that persons of ordinary skill in the art understood the problem and a
QUESTION A. Assuming the Commission were to affirm the ALJ’s finding that only
claim 31 of ’490 patent is infringed and not invalid, please explain the
likelihood that Apple or Intel could design around the claimed invention
to avoid infringement and, if so, approximately how long it would take to
implement such a design-around in Apple’s accused products (if known).
Qualcomm’s presentation at the hearing crystallized its theories regarding the scope and
coverage of claim 31 of the ’490 patent. Against that backdrop, Apple recently changed its software
(i.e., iOS) to remove the functionality that Qualcomm has accused of infringing claim 31, by
implementing a design change that Qualcomm’s own witnesses conceded would fall outside the scope
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of the patent. Thus, although Apple’s Accused ’490 Products with Intel baseband chipsets and the
previous software do not infringe, products implementing the software change (included in iOS
As set forth in response to Question D in this section below, Apple respectfully requests that,
in the event the Commission issues any exclusion or cease-and-desist order, the Commission should
delay the implementation of any such order for six months to allow Apple to seek review of the new
design from U.S. Customs and Border Protection. Further, Apple expects that it will take at least six
months to complete its roll-out of the new design via software updates and to sell existing inventory
of pre-design-change iPhones. However, the Commission need not reach these issues at all, given that
the finding of a violation with respect to the ’490 patent was incorrect, as explained in Section II above.
Before the hearing in this Investigation, Qualcomm had never suggested that any of the asserted
patents could be designed around—to the contrary, Qualcomm issued a press release characterizing
each of the patents as “vital to iPhone functions.” And in other contexts, Qualcomm has highlighted
the challenges with product changes, warning that if Qualcomm itself were found in litigation to
infringe intellectual property, it may be “required to redesign our products or services, which could be
The hearing evidence highlighted the challenges typically associated with making design
changes to complex products such as the accused iPhones, as well as the serious public interest risks
posed by an exclusion order absent such a design change. (E.g., Tr. [Leucht-Roth] at 750:21-751:10
(Intel engineer Ulrich Leucht-Roth explaining that even removing unimportant functionality can
present significant challenges because of the strict requirement for careful “align[ment]” of
communications between components in the iPhone: “[T]he design and any bit of pieces of design of
interprocessing communication done between application processor and modem is something which
needs to be carefully aligned.”); Tr. [Evans] at 1066:15-19 (“I mean, I’m an engineer with infinite time,
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resources and assuming our market window, I suppose so.”); ID at 195 (“[I]f the Commission does
issue an exclusion order as Qualcomm requests, it will do so with the near certainty there will be real
harm to the United States on a potentially very broad basis”).) Yet late in the hearing and in post-
hearing briefing, Qualcomm and its Chief Technology Officer James Thompson began suggesting that
design-around options were readily available, including specifically for the ’490 patent. With regard
to claim 31 of the ’490 patent, Qualcomm argued that removing the accused functionality would be
“relatively simple” (Tr. [Thompson] at 1570:17-1571:12) and that Apple and Intel could avoid any
infringement of claim 31 by “simply remov[ing]” the accused uplink (UL) / downlink (DL)
The ultimate feasibility of a design-around with respect to the ’490 patent thus stands in stark
contrast to other patents, for which design-around options may be infeasible. This is especially true
where asserted patents implicate hardware—such as the patents at issue in the companion case between
Qualcomm and Apple, Investigation No. 337-TA-1093—changes to which might be either impossible
or practically infeasible. Qualcomm itself has acknowledged that in certain cases if it were found to
infringe, it may be “unable to redesign our products.” (RX-1130 [Qualcomm 2017 10-K] at 32.)
This fall, after the close of the hearing record, Apple implemented a new software-based design
for its Accused ’490 Products that removed the accused UL/DL synchronization feature that
Qualcomm emphasized could be “simply remove[d]” to avoid infringement of the ’490 patent. To be
clear, the pre-change versions also do not infringe the ’490 patent, and thus there is no legal need to
“design around” it. But to moot any possible allegation of infringement from Qualcomm, Apple
changed its products to do precisely what Qualcomm’s own witnesses testified would not infringe the
’490 patent.
Accordingly, in the event the Commission concludes that a Section 337 violation has occurred
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with respect to the ’490 patent and that an exclusion order should issue, Apple will seek review of that
new design from U.S. Customs and Border Protection. Moreover, although Apple is now
implementing this new software design in products manufactured today, due to existing inventory
previously manufactured without this new software design, Apple expects that it will likely take an
additional six months before all accused iPhone products sold by Apple in the United States implement
the new design via software updates. Apple thus requests that any Commission order allow the
requisite time for U.S. Customs and Border Protection to assess Apple’s new software design and for
QUESTION B. Explain whether and to what extent Intel supplies the same chipsets used
in the accused Apple iPhones to any other U.S. merchant for use in any
other products that are made, used, or sold in the United States or
imported into the United States.
(Tr. [Evans] at 1112:16-1114:3.) The Intel XMM 7360 and XMM 7480 are “thin”
baseband chipsets, as opposed to the systems on a chip (SOC)—integrating a cellular modem and
applications processor—that other original equipment manufacturers (OEMs) use for some or all of
their premium smartphones. (See RX-8C [Evans] at Q.49-52, 74; Tr. [Blevins] at 636:19-25.) Apple
is the largest customer for premium thin baseband chipsets, with other OEMs requiring SOCs for some
or all of their baseband chipset purchases and/or self-supplying their own baseband chipsets for some
(Samsung) or all (Huawei) of their needs. Outside of smartphones, the current demand for premium
baseband chipsets is limited, with few sales opportunities. Given these dynamics,
10
Apple addresses additional requested carve-outs from any exclusion or cease-and-desist order in
response to Question C.
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PUBLIC VERSION
(RX0271C [Strategy Analytics Report] (compare “SP,” “Tablet,” and “other” tabs); see also RDX-
10.1C [Eisenach]. RDX-11.2-6C [Scott Morton], Tr. [Scott Morton] 1298:3-16.) Of those purchasers,
the market is divided primarily between Apple and Samsung. (See Tr. [Thompson] at 1538:4-9; see
also RX-1461C [Amon] at 36-37 (“[I]n how we describe the premium segments, the share of Apple
and Samsung is disproportionately large versus every other OEM. So the market is highly concentrated
even higher proportion of premium LTE baseband merchant market demand than its share of premium
smartphone sales would imply, as Samsung self-supplies a portion of its own premium LTE baseband
chipsets requirements. (RX-8C [Evans] at Q.11; RX-10C [Eisenach] at Q.20, 28; RX-11C [Scott
Intel’s ability to sell to Samsung or to pursue the remaining 10% of premium smartphone sales
is also limited because those OEMs often purchase SOCs instead of the thin baseband chipsets that
11
Intel granted Apple permission to include in this submission sales data Intel produced in the 1093
Investigation, which is more recent than the sales data Intel produced in this Investigation. (1093 RX-
0997C [IMC sales data through Q4 2017].)
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at Q.74
The difficulty that Intel faces in winning smartphone sales outside of Apple is demonstrated
below. RDX-28.4 shows that for each of the representative products Qualcomm identified as
competitors of the accused iPhones, Qualcomm is the only third-party supplier of baseband chipsets
(as denoted by the Qualcomm logo beside each list of models from the competing OEMs; Qualcomm
also supplies the iPhone models listed and, accordingly, Qualcomm logos could also appear beside
those models):
(RDX-28.4; see also RX-1483C [Kressin] at 82; Tr. [Thompson] at 1541:5-1542:4, 1556:11-17; Tr.
[Sidak] at 515:9-516:5; Tr. [Mulhern] at 1456:25-1458:13; Tr. [Evans] at 1112:8-1114:3; Tr. [Scott
Morton] at 1329:4-1330:3.)
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Imposing an exclusion order without a period of delay to ensure that the new design described
potential smartphone customers of Intel, furthering limiting Intel’s ability to pursue new business. As
Dr. Eisenach explained, if an exclusion order enters that costs Intel its business with Apple, “market
participants would rationally consider the persistent pattern of anticompetitive conduct in which
Qualcomm has already engaged … [and] Qualcomm’s demonstrated willingness to use its patent
portfolio as a club with which to coerce OEMs into buying chipsets from Qualcomm” and be “forced
to add a ‘risk premium’ to any deals with Intel to reflect the potential for supply disruption.” (RX-10C
[Eisenach] at Q.106.)
Non-smartphone uses of premium baseband chipsets are currently minimal, and many of the
opportunities that may arise for broader use of baseband chipsets in 5G or the Internet of Things will
only be realized over the next 30 years. (See Tr. [Evans] at 1056:3-1057:6 (testifying about future
broader uses of 5G chips over the next 30 years).) Thus, Aicha Evans, formerly Intel’s Chief Strategy
opportunities to sell baseband chipsets for non-smartphone applications are also dependent on Intel
selling premium baseband chipsets for smartphones: “[T]he baseband chipset is really what we call a
gateway chipset. So it’s a base chipset that then we make some modification or some derivatives from
to take into different markets. And therefore, if we don’t have that socket, it would be kind of difficult.”
(Id. at 1084:19-24.) Thus, even if Intel could survive the loss of Apple’s business through an exclusion
order, not having Apple as a customer would further undermine the viability of Intel pursuing non-
Based on these facts, losing the ability to sell premium baseband chipsets to Apple for use in
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iPhones sold in the United States is nearly certain to be fatal to Intel’s business. As Ms. Evans testified,
Intel is nearly certain to abandon the market for LTE and future development of
5G chipsets if an exclusion order issues that costs Intel its sales to Apple. (See Tr. [Evans] at 1091:14-
21.) Without sales to Apple for the United States, Intel could not maintain sufficient scale and achieve
other essential benefits of being engaged in the U.S. cellular ecosystem and from working with Apple.
(RX-10C [Eisenach] at Q.17, 38-42, 90; RX-11C [Scott Morton] at Q.68-73, 80-82.) Indeed, as Dr.
QUESTION C. Explain whether the “carve-outs” proposed by the Office of Unfair Import
Investigations would be practicable, feasible, and would effectively
balance enforcement of Qualcomm’s ʼ490 patent rights against the interest
of avoiding Intel’s exit from the relevant market for premium baseband
chipsets.
The Office of Unfair Import Investigations (“OUII”) proposed two carve-outs in this
Investigation: (A) an exemption for “any future versions of the iPhone that incorporate 5G
technologies”; and (B) an exemption for iPhones imported for research, development, and testing of
prototypes.12 (OIPost-HB at 71-74.) Absent a determination that the design change described in
exit from the market for premium baseband chipsets, leading to the same public interest harms that an
12
OUII also proposed “a certification provision allowing Apple to certify that particular imports are
not subject to an exclusion order and should be permitted entry.” (OIPost-HB at 74.) For the reasons
explained in Section IV.A below, any remedial order should include a standard certification provision.
However, a certification provision alone would not avoid public interest concerns, and must be coupled
with an appropriate delay to allow issuance of a ruling that the new design addressed in response to
Question A removes the functionality the Administrative Law Judge found to be infringing.
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OUII first proposes that an exclusion order be tailored to exempt “any future versions of the
iPhone that incorporate 5G technologies.” (OIPost-HB at 71-72.) This proposal reflects OUII’s
concern that Intel’s exit from 5G would endanger U.S. national security and the national interest, and
OUII offered this proposal in an effort to “preserve Intel’s ongoing role in 5G development.” (Id. at
71.) But absent a determination that the design change described in response to Question A is non-
infringing, OUII’s proposed 5G carve-out would not alleviate the harms to the public interest that the
Administrative Law Judge correctly identified. The viability of Intel’s baseband chipset business is
but with a 5G carveout would still cause Intel to lose Apple’s 4G business and deprive Intel of a path
A 5G carve-out would not prevent a global suspension of Intel’s baseband chipset sales to
Apple. Because of the need for testing and real-world feedback based on sales in the United States, if
Apple could not use Intel 4G chipsets for iPhones sold in the United States, it would be unable to use
those chipsets for new iPhone models sold in any global markets. Tony Blevins, Apple’s Vice
President of Procurement, confirmed that “[i]f Apple could no longer use chipsets from Intel for
iPhones in the United States,” “[p]ractically speaking, Apple would likely not be able to use Intel
baseband chipsets for any of its iPhones on a going-forward basis.” (RX-1C [Blevins] at Q.164.)
When Mr. Blevins was asked whether Apple could use Intel chips in other markets outside of the
United States if an exclusion order issues, he confirmed that “from a practical standpoint, we absolutely
could not.” (Tr. [Blevins] at 591:20-24.) In other words, a 5G carve-out would not protect Intel from
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The loss of those sales would not be fleeting. Instead, Intel would be shut out of the market
for at least a year. Although Intel has publicly announced its intent to commercially release a 5G
13
(Id. [Evans] at 1132:12-25, 1127:11-1128:9,
Faced with the disruption of losing Apple’s 4G business, Intel would not be able to generate
the kind of innovation and revenues necessary for durable success in the market for 5G chipsets. OUII
First, Intel would be unable to develop and market competitive 5G chipsets without a
continuous presence in the market for premium 4G baseband chipsets. As Ms. Evans testified, “one
cannot be successful in 5G without being successful in [the] 4G [] market.” (Tr. [Evans] at 1115:8-
13
Mr. Blevins
(Tr. [Blevins] at 590:2-6.)
14
The reference to a delay of corresponds to the estimated time between imposition
of an exclusion order in January 2019 and
(Tr.
[Evans] at 1127:8-1128:9.)
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PUBLIC VERSION
14.) Similarly, Steven Bowers, who helped to execute Intel’s 5G strategy, testified that Intel relies on
towards 5G. (Tr. [Bowers] at 1153:13-15.) Indeed, OUII credited this testimony in its post-hearing
briefing, noting that 4G and 5G at Intel are “inextricably linked” and that “there is evidence that Intel’s
5G innovation relies on its success in 4G.” (OIPost-HB at 61-63.) Accordingly, as OUII concluded,
“[w]ithout a solid foundation of 4G wireless baseband sales to build on, it would be very difficult for
Intel to continue to make progress in its 5G efforts.” (Id. at 62.) Qualcomm’s own CEO, Steve
Mollenkopf, has spoken publicly about the need to participate in 4G to succeed in 5G:
I see the 5G transition being similar to what we did in 4G. 4G was a very good
transition for us. I think a lot of people thought Qualcomm wouldn’t be successful in
4G. That was the time when we were transitioning from being known so much for our
CDMA expertise and—but would we be successful in OFDMA. Would we have the
scale? And obviously, we did very well both in the chip business as well as in the
licensing business. We think it’s a similar transition occurring on 5G.
What’s interesting is just like in the 4G transition, I don’t think you’re going to be a
strong 5G player unless you were already a strong 4G and 3G player.
(Steve Mollenkopf, Citi 2017 Global Technology Conference (Sept. 8, 2017) (emphasis added).)15
Even a short absence from the baseband chipset market would deprive Intel of the hands-on, real-world
For these reasons, the Administrative Law Judge explained that “[s]ince
the premium base band chip is a ‘gateway’ product, Intel will disengage from 5G development and
Second, Intel’s chipset business would not survive the loss of revenues from sales of premium
4G chipsets to Apple. The record makes clear, and the Administrative Law Judge agreed, that the
15
Transcript available at https://seekingalpha.com/article/4105481-qualcomms-qcom-ceo-steve
-mollenkopf-citi-2017-global-technology-conference-transcript?page=2.
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PUBLIC VERSION
1128:13.) Because
(ID at 190.)
Given these facts, Apple’s and Intel’s witnesses did not equivocate when explaining that the
proposed 5G carve-out would not prevent Intel’s market exit. In response to OUII’s proposal, Ms.
exit even if an exclusion order included a carve-out for future 5G chipsets, Ms. Evans testified, “I’m
nearly certain we would exit also, because I’ve explained that there is a link—one cannot be successful
economic expert, Dr. Fiona Scott Morton, agreed that Intel’s exit from the baseband chipset market
would occur even if the carve-out reduced the amount of time Intel was out of the market, because 5G
is intertwined with the 4G standards and “those 4G standards keep improving. … [I]t’s not really
possible to stay abreast of 5G unless you’re also right on the frontier of 4G.” (Tr. [Scott Morton] at
1335:20-1336:6.)
For these reasons, the Administrative Law Judge saw “the Staff’s recommended tailored
exclusion order as being a guarantee: (1) of a Qualcomm monopoly; (2) of harm to everyone
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PUBLIC VERSION
(especially the economy of the United States) involved but Qualcomm; and (3) of harm to the National
Security of the United States.” (ID at 197.) Such a carve-out, without a six-month delay of the type
described in response to Question A, would therefore not mitigate the harms to the public interest.
OUII’s second proposed carve-out—an exemption for iPhones imported for research,
development, and testing of prototypes—would similarly not protect the public interest absent the six-
month delay described in response to Question A. This arrangement would not be viable for Apple or
Intel, both of which rely on U.S. sales—not merely U.S. research and testing—to improve their
products and generate demand in other global markets. Such a carve-out would be insufficient to
prevent the same harms to the public interest described above and recognized by the Administrative
Law Judge.
For Apple,
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Apple’s need for access to the U.S. market is not merely about testing in a laboratory
environment—it also relates to Apple’s need for real-world feedback, in collaboration with leading
U.S. carriers, as well as the credibility that U.S. sales generate for products offered in foreign markets.
(RX-1C [Blevins] at Q. 164-65.) And during the evidentiary hearing in the related 1093 Investigation,
in which Qualcomm requested an identical exclusion order, Mr. Blevins further explained how
(1093 Tr.
[Blevins] at 1399:6-9.)
(Tr. [Evans] at 1132:11-22.) Those cellular operators do not test new equipment or otherwise operate
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PUBLIC VERSION
their businesses on a charitable basis—they are interested in certifying and improving Intel chipsets
based on the expectation that iPhones with such chipsets will be sold in the United States for use on
their networks. (See ID at 196 (“[T]he Staff did not appreciate the importance of the U.S. sales as
For these reasons, a carve-out permitting the importation of iPhones only for research,
development, and testing purposes would not mitigate the harm to the public interest.
A delay of six months, during which the new design described in response to Question A could
be determined as non-infringing and Apple could sell existing inventory of pre-design-change iPhones,
would be sufficient to avoid the adverse consequences on the public interest of an exclusion order or
cease-and-desist order.
The Commission has similarly tailored exclusion orders to avoid public interest harms in other
cases. For example, in Certain Baseband Processor Chipsets, Inv. No. 337-TA-543, the Commission’s
exclusion order included a “grandfather” provision to permit importation of cell phone models that
were already being imported. Certain Baseband Processor Chips and Chipsets, Transmitter and
Receiver (Radio) Chips, Power Control Chips, and Products Containing Same, Including Cellular
Telephone Handsets, Inv. No. 337-TA-543, Limited Exclusion Order (June 7, 2007). And in Certain
Personal Data Devices, Inv. No. 337-TA-710, the Commission delayed the exclusion order by four
months to allow wireless carriers to replace infringing smartphones with non-infringing devices from
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PUBLIC VERSION
other manufacturers, and also permitted the importation of refurbished models to satisfy service
contracts with consumers who already owned the infringing models. Certain Personal Data and
Mobile Communications Devices and Related Software, Inv. No. 337-TA-710, Comm’n Op. at 79-84
Here, a delay of six months would similarly protect the public interest by allowing sufficient
time for a determination that Apple’s new design described in response to Question A does not infringe
the ’490 patent. Such a delay would ensure that the harms that an immediate exclusion order would
Apple denies that it has ever infringed the ’490 patent—neither the prior design that was
addressed by the Administrative Law Judge nor the new design addressed in response to Question A
infringes the ’490 patent. Accordingly, Apple respectfully submits that the Commission need not
address how to “effectively balance enforcement of Qualcomm’s patent rights” against harms to the
public interest. But, to the extent that the Commission disagrees and affirms the Administrative Law
Judge’s finding of infringement of the ’490 patent, a delay of six months in the issuance of an exclusion
or cease-and-desist order would not undermine enforcement of Qualcomm’s patent rights. As the
exclusionary order against the accused products is necessary to protect its domestic industry, its
incentive to innovate, or profitability.” (ID at 194.) Indeed, Qualcomm’s Chief Technology Officer,
Dr. James Thompson, testified at the hearing that Qualcomm’s global litigation strategy against Apple
Q. And you know Qualcomm has sued Apple many times in Germany and China,
for example, seeking to shut down iPhones containing Intel chipsets?
A. Yeah. What I know is we have this global IP battle because they’re not paying.
Q. And I think what you said is you want money; is that right?
A. Well, they’re not paying us, yeah. I mean, it’s hurting our company a lot.
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A. Right.
If the Commission delays an exclusion order (or even denies it outright as against the public
interest), Qualcomm will not be left without a remedy. To the contrary, Qualcomm is asserting the
’490 patent (and others asserted in this Investigation) in district court and, if it prevails at trial beginning
March 4, 2019—a trial that is expected to conclude before the Commission’s March 26, 2019 target
date—it can obtain the very monetary damages that are motivating its litigation. (Qualcomm Inc. v.
Apple Inc., 3:17-cv-01375 (S.D. Cal.); Tr. [Sidak] at 508:25-509:10.) A bipartisan group of members
of Congress who submitted letters to the Commission supporting the Administrative Law Judge’s
public interest findings also emphasized that, if the Commission declined to issue an exclusion order,
Qualcomm would not be without a remedy because of the ongoing litigation in federal district court.
(Letter from Congressman Andy Biggs (R), AZ, Dec. 10, 2018; Letter from Congressman Darrell Issa
(R), CA, Dec. 18, 2018; Letter from Congresswoman Zoe Lofgren (D), CA et al., Jan. 10, 2019.)
For these reasons, a delay of six months would be sufficient to safeguard the public interest
from the harms that would be caused by immediate implementation of exclusion and cease-and-desist
orders. But absent some delay to allow for a determination of non-infringement, for the reasons
explained in response to Questions B and C, Intel is nearly certain to exit the baseband chipset business
given its dependence on sales to Apple for the United States. Apple is not aware of any other “carve
out” or limitation (other than those tied specifically to the recent design change) that would serve the
purpose of keeping Intel in the baseband chipset business—as discussed in the response to Question
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PUBLIC VERSION
The Commission can and should consider national security concerns when analyzing the public
interest, and those concerns strongly weigh in favor of a six-month delay in an exclusion order, as
denial of an exclusion order as against the public interest. If Intel exited the premium chipset baseband
market because of an exclusion order issued without delay, it would undermine U.S. competitiveness
in 5G, which has critical national security concerns. Intel’s exit would create a void—in
It is entirely appropriate for the Commission to weigh national security concerns when
evaluating the public interest—and it should do so here. Consistent with its statutory mandate, the
Commission has previously determined that concerns about national security and competitiveness can
be central to the public interest inquiry. In Certain Inclined-Field Acceleration Tubes, for example,
the Commission determined that public interest considerations warranted denial of an exclusion order
of inclined-field acceleration tubes used for nuclear weapons development at Los Alamos National
Laboratory. See Certain Inclined-Field Acceleration Tubes & Components Thereof, Inv. No. 337-TA-
67, Comm’n Op. at 29 (Dec. 29, 1980). Similarly, in Certain Personal Data Devices, the Commission
delayed the imposition of an exclusion order for four months based on concerns about “competitive
Presidential statements about the national interest in building out high-speed wireless coverage.
Certain Personal Data and Mobile Communications Devices and Related Software, Inv. No. 337-TA-
If an exclusion order is issued without any delay to allow for a determination of non-
infringement or after the new design described in response to Question A is not determined to be non-
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infringing, Intel remains nearly certain to exit the baseband chipset market and its absence would create
national security concerns. The United States has the benefit of having the only two merchant market
suppliers of premium baseband chipsets, a critical component for the development and deployment of
5G technology. An exclusion order in this case would reduce U.S. competitiveness in the adoption of
this next generation wireless standard. U.S. leadership in the race to 5G is critical to national security,
a fact acknowledged by the U.S. government, OUII, and the Administrative Law Judge.
U.S. leadership in 5G is critical to national security because 5G will represent a vast increase
in the speed, frequency, and volume of data being carried on cellular networks for increasingly
sensitive applications. Thus, while 5G will present new opportunities for using cellular technology, it
will also present significantly more opportunities to exploit vulnerabilities in those communications.
When Intel’s Ms. Evans was asked to identify why U.S. leadership in 5G technologies is important,
she emphasized how fundamental wireless communications have become and will continue to be to
17.) Dr. Eisenach similarly explained that 5G is not simply about cell phone communication: 5G will
be at the nexus of the digital and tangible world. (Tr. [Eisenach] at 1268:5-21.) As a result, 5G will
implicate not just the communication of digital information, but “as digital technologies have moved
more deeply into the economy and into the Internet of Things,” cellular communication is increasingly
connecting and potentially controlling “our electric grids, our hospitals, our cars, our drones, [and]
The United States is, of course, not alone in pursuing 5G. The risk that U.S. companies will
be outpaced by foreign companies that either would act against the United States or, at least, would
not have U.S. interests in mind raises national security concerns. Influence over emerging 5G
technologies has become a “national priority” in other nations, particularly China, where the
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PUBLIC VERSION
government is directing efforts to lead and develop 5G. (Tr. [Thompson] at 1546:14-1547:6; see also
For these reasons, the U.S. government has already identified 5G as a critical national security
• In his February 6 State of the Union speech, President Trump stressed the need “to
deliver new and important infrastructure investment, including investments in the
cutting-edge industries of the future. This is not an option. This is a necessity.”16 As
the Wall Street Journal reported, this reference “foreshadows a larger effort” aimed at
“boosting the U.S. strength in advanced technology.” In particular, these efforts
include “looking to encourage new corporate competitors into the 5G race, fearful that
Chinese competitors could gain an insurmountable global lead in the years to come.”17
16
Remarks by President Trump in State of the Union Address, Feb. 6, 2019, available at
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-state-union-address-2/.
17
Trump Preparing Plan to Boost AI, 5G Technology, WALL STREET JOURNAL, Feb. 6, 2019,
available at https://www.wsj.com/articles/trump-preparing-plan-to-boost-ai-5g-technology-
11549474459.
18
Protecting Against National Security Threats to the Communications Supply Chain Through FCC
Programs, Notice of Proposed Rulemaking, 33 FCC Rcd 4058 (6), FCC18-42 (Apr. 18, 2018).
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PUBLIC VERSION
• In a recent order, the President stated that “it is imperative that America be first in fifth-
generation (5G) wireless technologies.”20
emphasizing the national security concerns posed by an exclusion order and expressing support for
Administrative Law Judge Pender’s findings on the public interest. (Letter from Congressman Andy
Biggs (R), AZ, Dec. 10, 2018 (“As with our economic interests, our national security interests also
benefit from two U.S. baseband chipset suppliers engaged in the process of setting 5G standards and
making trusted 5G chipsets.”); Letter from Congressman Darrell Issa (R), CA, Dec. 18, 2018 (“5G is
a matter of national security . . . .The vacuum created by Intel’s absence would invite greater American
dependence on foreign suppliers that have no stake in promoting out interests.”); Letter from Senator
Ron Wyden (D) OR, et al., Dec. 21, 2018 (agreeing with the Administrative Law Judge’s assessment
that “5G is crucial to U.S. national security. . . and thus Intel’s exit would harm the national interests
of the United States.”); Letter from Congressman Ken Buck (R), CO, et al., Jan. 22, 2019 (“Continued
U.S. leadership in 5G technology advancement . . . raises critical national security risks, especially as
The United States is not alone in its concern about efforts by foreign government-controlled
entities providing equipment for 5G. In August, the Australian government banned Huawei and ZTE
from providing 5G technology for the country’s wireless networks.21 In December, German
telecommunications carrier Deutsche Telekom announced that it was reevaluating its purchasing
19
See Pub. L. 115-91, 131 Stat. 1283, 1762, Sec. 1656.
20
Donald J. Trump, “Presidential Memorandum on Developing a Sustainable Spectrum Strategy for
America’s Future” (Oct. 25, 2018), https://tinyurl.com/ya7mfmon (emphasis added).
21
Huawei and ZTE handed 5G network ban in Australia, BBC NEWS, August 23, 2018, available at
https://www.bbc.com/news/technology-45281495.
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PUBLIC VERSION
strategy amid growing security concerns regarding Huawei.22 The head of Britain’s intelligence
agency has urged British lawmakers to consider whether to ban Huawei equipment.23
Contrary to Qualcomm’s arguments here, concerns about Huawei and other foreign 5G leaders
are not limited to infrastructure: in early 2018, the heads of six major U.S. intelligence agencies warned
U.S. citizens not to use consumer cellular products and services made by Huawei and ZTE because the
government was “deeply concerned about the risks of allowing any company or entity that is beholden
to foreign governments … to gain positions of power inside our telecommunications networks,” which
would provide “the capacity to maliciously modify or steal information … [a]nd … conduct undetected
espionage.”24 These domestic and global concerns regarding foreign-government control and potential
for abuse in cellular communication are magnified in the context of 5G, where both the breadth of the
technology and the potential for interference at the foundation phase of standard development pose
C. The Loss Of Intel As A Baseband Chipset Supplier Would Harm U.S. National
Security Interests.
Intel is an important 5G chipset innovator, and its exit would undermine U.S. competitiveness.
Intel is currently working on commercializing a 5G baseband chipset. (Tr. [Evans] at 1059:7-18.) Intel
is also a leader in standard-setting organizations developing the specifications and parameters of 5G,
Intel has actively contributed to 5G standard-setting efforts and has made many
technical contributions to 5G standard specifications under development, culminating
in the release of 3GPP Release 15 last year. Intel also has developed and deployed new
hardware prototypes to promote rapid 5G adoption, including 5G-specific Mobile Trial
22
Stefan Nicola, Deutsche Telekom to Review Purchases in Wake of Huawei Concern, BLOOMBERG,
December 13, 2018, available at https://www.bloomberg.com/news/articles/2018
-12-13/deutsche-telekom-re-evaluates-purchasing-after-huawei-s-troubles.
23
Id.
24
Sara Salinas, Six top U.S. intelligence chiefs caution against buying Huawei phones, CNBC,
February 13, 2018, available at https://www.cnbc.com/2018/02/13/chinas-hauwei-top-us-intelligence-
chiefs-caution-americans-away.html.
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(RX-9C [Bowers] at Q.10-14, 29.) Outside of formal standards, Intel has also been a leading
contributor in 5G development efforts in collaboration with other industry participants, such as through
the Verizon 5G Technology Forum. (RX-10C [Eisenach] at Q.126-34; RX-11C [Scott Morton] at
Q.161-65; RX-9C [Bowers] at Q.24-55.) As Ms. Evans explained, Intel is uniquely positioned to
contribute to 5G because “Intel has significant experience across almost the full range of technologies
that are relevant to 5G.” (RX-8C [Evans] at Q.79.) Intel’s position as an “end to end” company makes
it a unique and valuable potential contributor to the developing 5G ecosystem. (Tr. [Evans] at 1085:23-
1086:12.)
An exclusion order without a delay of six months for Apple to obtain a determination that the
new design discussed in response to Question A is not infringing would undermine Intel’s 5G
contribution and leadership. Declining baseband chipset revenues, lack of access to the critical U.S.
ecosystem, the destruction of customer relationships, and engineering impediments would force Intel
from the baseband chipset market and impact Intel’s overall 5G contribution. (See Tr. [Bowers] at
1153:8-1158:21; RX-8C [Evans] at Q.83.) Without Intel, the U.S. market would be dominated by a
single U.S. premium baseband chipset supplier: Qualcomm. A Qualcomm monopoly in the market
for premium baseband chipsets would harm the baseband chipset market directly, and accordingly
Intel and Qualcomm are both focused on developing 5G technologies, standards, and
components and competition drives innovation. (RX-9C [Bowers] at Q.25-55, 61-63; RX-8C [Evans]
at Q.78-81.) Mr. Bowers explained that in the event of an exclusion order causing Intel to exit, “[t]he
pace of 5G innovation would slow down considerably, and the United States would lose a key domestic
5G innovator.” (RX-9C [Bowers] at Q.78; see also Tr. [Evans] at 1119:3-7.) Dr. Scott Morton testified
that without another U.S. innovator, “Qualcomm would face less competition and would have reduced
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incentives to continue to innovate at the current pace, including on 5G.” (RX-11C [Scott Morton] at
Q.166.) As Dr. Eisenach put it: “[O]ne runner in a race … has the luxury of loping along. Put a
second runner in the race, and all of a sudden, they both run faster.” (Tr. [Eisenach] at 1269:13-19.)
Further, the harm to the market for baseband chipsets would not be limited to the premium tier: while
the market for 5G chipsets is broader than the premium tier, other technologies will “waterfall” from
those premium chipsets. (Tr. [Evans] 1084:16-24, 1106:13-22 (premium baseband chipsets for
smartphones are the locus of cellular innovation and the “gateway” to developing other 5G products).)
And while the market for chipsets is global, the United States is the proving ground for chipset
innovation.
An exclusion order without a six-month delay for a determination that the new design described
in response to Question A is non-infringing, would imperil U.S. leadership in 5G, and pose a national
security threat. OUII agrees that an exclusion order causing Intel’s exit could cause the United States
to lose its competitive edge in 5G, raising national security concerns. (OIPost-HB at 56, 62-65.)
Qualcomm’s Dr. Thompson also agreed that it is “important to have United States leadership as we
move into 5G” (Tr. [Thompson] at 1545:21-25), while acknowledging that Intel and Qualcomm are
the only U.S. premium chipset makers. (Id. at 1550:17-19.) Based on this evidence, the Administrative
Law Judge was correct to conclude that “5G is crucial to U.S. national security and competitiveness in
the national economy and thus Intel’s exit would harm the national interests of the United States.” (ID
at 193.)
* * *
In sum, if the Commission concludes that Apple infringed the ’490 patent based on the
functionality at issue before the Administrative Law Judge and issues an exclusion order—though it
should not—Apple respectfully requests that the Commission delay its imposition for six months. This
period of delay would be sufficient for the Commission, an Administrative Law Judge, or Customs to
determine that Apple’s new design described in response to Question A does not infringe (and would
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PUBLIC VERSION
also allow Apple to sell inventory that predates the new design described in Question A) and,
consequently, to avoid the significant public interest harms that the Administrative Law Judge correctly
identified would occur if Intel were driven from the baseband chipset market by an exclusion order.
In addition to the remedy issues addressed in Apple’s responses to public interest Questions A
and C-D, Apple submits that, if a violation is found and a remedial order issues, any remedy should
include (1) a certification provision, (2) an exemption for imported spare parts and replacement
devices, and (3) an exemption for sales of existing inventory to allow installation of the redesigned
software. Further, no bond should be required during the Presidential review period
In his Initial and Recommended Determination, the Administrative Law Judge concluded that
neither an exclusion order nor a cease and desist order should issue because the statutory public interest
factors weighed against the imposition of any remedy. (ID at 199-200.) The Administrative Law
Judge therefore had no occasion to address Apple’s separate request (ARespPost-HB at 69) that any
remedial order that does issue should contain both a certification provision and an exemption for
imported spare parts and replacement articles. Notably, neither Qualcomm nor OUII opposed Apple’s
request on these points in their reply briefs. (QRepPost-HB passim; ORepPost-HB passim.)
Apple’s iPhones are sold with a standard warranty providing for repair or replacement of
articles with manufacturing defects, and consumers may purchase an extended warranty through the
us.html; https://www.apple.com/legal/sales-support/applecare/applecareplus/docs/
applecareplusnaen.html. Under these warranty programs, consumers expect repair or replacement with
Apple parts or products. Id. The Commission has recognized in prior cases involving iPhones and
other mobile devices that the public interest weighs in favor of a service and repair exception to protect
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PUBLIC VERSION
consumers and to prevent disruption to the domestic business operations of innocent third parties. See
Certain Electronic Devices, Including Wireless Communication Devices, Inv. No. 337-TA-794,
Comm’n Op. at 114-15 (July 5, 2013) (adopting an exception for imports of refurbished iPhone
handsets as replacement products for previously purchased, identical infringing handsets); Certain
Mobile Devices, Associated Software, and Components Thereof, Inv. No. 337-TA-744, Comm’n Op.
at 21-22 (June 5, 2012) (providing exemption for service and replacement parts); see also Certain
Liquid Crystal Display Devices, Inv. No. 337-TA-631, Comm’n Op. at 27 (July 14, 2009) (“the public
interest weighs in favor of an exemption to allow importation of service and replacement parts”).
Accordingly, any remedial order should except service parts or replacement articles imported for use
in servicing, repairing, or replacing the accused Apple products for an identical article that was
purchased prior to the effective date of the remedial order. See Certain Electronic Devices, Inv. No.
Any cease and desist order (CDO) should also permit the sale of products in existing inventory
with a software update to be downloaded upon initial use by a consumer. See Certain Audio Processing
Hardware, Software, And Products Containing Same, Inv. No. 337-TA-1026, ID at 95 (Oct. 26, 2017)
(recommending CDO with exception for sales of products with software update upon first use by the
customer). As the Administrative Law Judge recognized in the 1026 Investigation, no purpose would
process of unwrapping, unboxing, updating, reboxing, and rewrapping each product to install the
update before the sale to the consumer. This limited exception would mitigate harm to the public
while—if the Commission affirms the Administrative Law Judge’s finding of infringement—still
Finally, where practice of a patent is not easily determined by visual inspection, the
Commission’s exclusion orders normally authorize U.S. Customs and Border Protection (CBP) to
accept a certification that the importer’s products are not covered by the order. Certain Mobile
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PUBLIC VERSION
Devices, Inv. No. 337-TA-744, Comm’n Op. at 21 (June 5, 2012) (“it has been Commission practice
for the past several years to include certification provisions in its exclusion orders to aid CBP”).
Practice of the patents asserted in this Investigation is not readily determined by visual inspection, and
therefore any remedy should contain a certification provision. A certification provision would also
assist CBP in the administration of the exemption for repair and replacement articles. Certain Mobile
The Administrative Law Judge appropriately recommended that a zero bond be set during the
Presidential review period, finding that (1) “Qualcomm does not seek a bond,” (2) Qualcomm does not
sell products that directly compete with Apple’s accused iPhone products, (3) there is no evidence in
the record of what “a reasonable royalty rate would be for Qualcomm’s patented technology,” and (4)
“Apple and Staff agree that no bond should be required.” (ID at 201.) As the complainant, Qualcomm
bears the burden of demonstrating both the need for and amount of a bond. Certain Rubber
Antidegradants, Components Thereof, and Products Containing Same, Inv. No. 337-TA-533, Comm’n
Op. at 39-49 (July 21, 2006); Certain Electronic Devices, Inv. No. 337-TA-794, Comm’n Op. at 117
(July 5, 2013). Qualcomm has expressly waived the imposition of a bond, and it presented no evidence
to meet its burden of demonstrating both the need for and amount of any bond. Accordingly, no bond
should be required.
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PUBLIC VERSION
Respectfully submitted,
Nina S. Tallon
Michael D. Esch
WILMER CUTLER PICKERING
HALE AND DORR LLP
1875 Pennsylvania Ave., NW
Washington, DC 20006
Telephone: (202) 663-6000
Facsimile: (202) 663-6363
James M. Dowd
WILMER CUTLER PICKERING
HALE AND DORR LLP
350 South Grand Avenue
Suite 2100
Los Angeles, CA 90071
Telephone: (213) 443-5300 (t)
Facsimile: (213) 443-5400 (f)
Ruffin B. Cordell
Lauren A. Degnan
Thomas S. Fusco
FISH & RICHARDSON P.C.
901 15th Street, NW, 7th Floor
Washington, DC 20005
Telephone: (202) 783-5070
Facsimile: (202) 783-2331
Betty H. Chen
FISH & RICHARDSON P.C.
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PUBLIC VERSION
Benjamin C. Elacqua
FISH & RICHARDSON P.C.
One Houston Center, 28th Floor
1221 McKinney Street
Houston, TX 77010
Telephone: (713) 364-5300
Facsimile: (713) 3652-0109
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UNITED STATES INTERNATIONAL TRADE COMMISSION
WASHINGTON, DC
Before the Honorable Thomas B. Pender
Administrative Law Judge
CERTIFICATE OF SERVICE
I, Lanta M. Chase, hereby certify that on February 8, 2019, copies of the foregoing,
RESPONDENT APPLE INC.’S WRITTEN SUBMISSION REGARDING THE
COMMISSION’S QUESTIONS ON THE ISSUES UNDER REVIEW, AND ON
REMEDY, BONDING, AND THE PUBLIC INTEREST (Public Version), were filed and
served on the following as indicated: