Other Barks & Bites, Friday May 24: Coons Requests Info on Alexa Privacy, Congress Pushes 101 Reform, and Qualcomm Will Appeal Its Loss to the FTC

This week in Other Barks & Bites: Chinese state media pushes back on the United States’ claims of intellectual property theft; a bipartisan coalition from both houses of Congress releases a draft proposal of Section 101 patent law reform; Senator Coons seeks more information on Amazon’s privacy practices for Alexa devices; the city of Baltimore files a lawsuit over a scheme to delay market entry of a generic to the Zytiga prostate cancer treatment; the USITC institutes a patent…

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  • Knowledge@Wharton Segment on FTC v. Qualcomm

    This morning at 10 a.m. Central Time, Knowledge@Wharton will be broadcasting a live, call-in radio segment on FTC v. Qualcomm.  They’ll be interviewing Professor Herb Hovenkamp and me.  From Knowledge@Wharton’s webpage:
    Knowledge@Wharton is a daily, call-in business interview program, broadcasting live from The Wharton School’s historic Ivy League campus. Host Dan Loney goes behind the headlines with world-renowned Wharton professors, distinguished alumni and expert guests. Listen to Knowledge@Wharton Monday through Friday, 10AM-Noon Eastern on SiriusXM 132. We’d love to take your calls at 1-844-WHARTON (1-844-942-7866).

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  • タイミングで

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    タイミングで

    –>at a(the) time when;

    $$ In order to provide the desired timing of the release of the aerosol generating agent, different encapsulation materials may be used or different encapsulation approaches. / エアロゾル発生剤を所望のタイミングで放出するために、種々のカプセル化材料を用いてもよく、また種々のカプセル化法を使用してもよい。(USP8893724): timing

    $$ Positioning the journals for the exhaust and intake pistons 180° apart would result in the both pistons reaching their maximum and minimum excursions at the same time (symmetric timing). / 180°離れた排気および吸気ピストンに関するジャーナルの位置決めは、双方のピストンが同時に(対称のタイミングで)最大および最小偏位に到達することに帰着する。(USP8499726): timing

    $$ In other embodiments it would be possible to cause the first and second transmitters to generate sonic pulses at different times. / 他の実施形態においては、第1および第2の送信器に異なるタイミングで音波パルスを発生させることが可能である。(USP8274860): time

    $$ Thus, by conjunction with rotation and position sensing and light pulsing within the optical fibres at correct timings it will be appreciated different display patterns, different colours and strobing within the fibres will be identifiable to the human eye and can be utilised in order to determine component operational state. / かくして、回転及び位置の感知及び光を光ファイバ内で正しいタイミングでパルス状にすることと関連することによって、ファイバ内の様々な表示パターン、様々な色、及びストロボを肉眼で確認でき、構成部品の作動状態を確認するためにこれを使用できるということは理解されよう。(USP8260093): timing

    $$ The shutter varies the effective area cyclically in a timed relationship to the reciprocal motion of the piston within the cylinder. / このシャッタは、シリンダ内のピストンの往復運動に連動するタイミングで周期的に有効領域を変動させる。(USP8225754): time

    $$ Where the protection signal added is more complicated, such as where pulses which vary in their timing, or a pure sine wave is added, models of the likely copy protection signal, or assumptions about parameters of the likely copy protection signal, are used to make the identification more accurate. / 付加される防止信号がさらに複雑である場合、例えば、独自のタイミングで変動するパルスや、純正弦波が付加される場合は、適当なコピー防止信号のモデル、または適当なコピー防止信号のパラメータに関する仮説を用いることによって、より正確に特定することができる。(USP8160423): timing

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  • Thoughts on Judge Koh’s Findings of Fact and Conclusions of Law in FTC v. Qualcomm

    As noted yesterday, Judge Lucy Koh has now entered her 233-page Findings of Fact and Conclusions of Law in FTC v. Qualcomm, concluding that Qualcomm violated U.S. antitrust law.  Now that I’ve had a chance to read through the Findings of Fact and Conclusions of Law, here are my thoughts.  (For conciseness, from here on I’ll call the Findings of Fact and Conclusions of Law an opinion.)
    1.  Overall, I think the opinion is quite impressive.  Judge Koh’s analysis of the evidence seems thorough, and she bases her legal conclusions on that evidence.  In several portions of the opinion, she indicates how contemporaneous documents contradicted what Qualcomm witnesses said at trial (e.g., about the firm not actually threatening to cut off OEMs’ supply of chips).  I suspect that Judge Koh’s detailed factual analysis will make it very hard for Qualcomm to prevail on appeal.  (As for the appeal, I wonder if the DOJ will weigh in again at the appellate level?  Very odd to have the two federal antitrust enforcers taking different views about the role of antitrust in policing FRAND breaches, as discussed here . . . .)

    2.  Among the key factual conclusions are that Qualcomm had market power in the markets for CDMA and premium LTE modem chips; that Qualcomm imposed de facto exclusivity requirements on OEMs and on Apple (through, e.g., rebates,  threats of cutting off supply, and agreements that purchasers/licensees wouldn’t challenge Qualcomm’s patents or other licensing practices; see summary at pp. 113-14, 151); and that the royalties Qualcomm charged for its SEPs were above-FRAND (pp. 157 et seq.).  In reaching this last conclusion, Judge Koh finds, among other things, that Qualcomm earned $7.7 billion in licensing revenue in 2016, which “exceeded the combined 2016 licensing revenue of twelve other patent licensors, including Ericsson, Nokia, and Interdigital” (pp. 8-9)–even though other firms’ patents contribute more value to the standards by which end devices operate (pp. 165-66).  Judge Koh also appears to be of the view that FRAND licenses generally must be based on the smallest saleable patent practicing unit (SSPPU), in order to conform to Federal Circuit precedent (pp. 172-73).

    3.  The key legal conclusion, in my view, is that Qualcomm excluded competitors in the markets for CDMA and premium LTE chipsets by means of (1) its “no license, no chips” policy, and (2) its imposition of de facto exclusive dealing requirements on the OEMs and Apple.  In an article I published in Law360 a couple of months ago, I explained how the no license, no chips policy could lead to this result.  Since (in the short term, at least) all the OEMs care about is the “all-in” price–that is, the price Qualcomm charges for the combination of chips + license–Qualcomm can manipulate the price of the license to put its rivals at a competitive disadvantage.  E.g., if the all-in price Qualcomm charges an OEM, taking into account discounts, rebates, etc., is $20, consisting of $10 for a license and $10 for a chip, a rival could charge the OEM no more than $10 for a chip.  (These numbers I’m using are for illustrative purposes only.)  Suppose further that a FRAND royalty would be $5 and that the marginal cost of producing a comparable chip, not including the FRAND royalty, is $12.  On these hypothetical facts, however, the OEM could not charge more than $10 for its comparable chip, and thus Qualcomm’s circumvention of its FRAND commitment would be a direct cause of the rival’s inability to compete.  That would be the economic theory, at any rate, and I believe that is what Judge Koh has in mind at pages 153-54, 185 in her discussion of why the no license, no chips policy enables Qualcomm to maintain its chip monopolies.  Such a scheme might also involve rebating back some portion of the all-in price when the OEM buys chips from Qualcomm and not from a rival.

    4.  Further, Qualcomm’s imposition of de facto exclusivity requirements on OEMs and on Apple puts competitors at an obvious disadvantage, particularly given the high costs of entry into the chipset market (and thus the need for some prospect of a significant customer base to make that investment worthwhile).  Judge Koh appears to provide a substantial evidentiary basis for her conclusion that Qualcomm’s conduct contributed to the inability of Intel and other potential rivals to gain a foothold in the chipset market during the time period in question.

    Judge Koh also concludes that, in view of her summary judgment ruling from last fall, Qualcomm’s FRAND commitment required it to license its competitors, and thus amounted to an antitrust duty to deal.  Under Judge Koh’s analysis of the Aspen Skiing case, Qualcomm’s breach of this antitrust duty itself amounted to a violation of Sherman Act section 2 (see pp. 134-31).   

    5.  By these means, Judge Koh concludes, Qualcomm was able to foreclose potential rivals and maintain its monopolies in the CDMA and premium LTE modem chip markets.  This diminished competition resulted in the OEMs (and, ultimately, consumers) paying higher prices and having fewer alternatives from which to choose.

    Some portions of the opinion, in isolation, might be read as resting on the premise that Qualcomm’s breaches of its FRAND commitments (e.g., charging above-FRAND royalties), standing alone, caused competitive harm and thus violated the antitrust laws (see, e.g., p.183).  In my view, this would be a more tenuous claim under U.S. antitrust law, which generally doesn’t make it illegal for a monopolist merely to charge a monopoly price.  Nevertheless, I think there is enough in the opinion to support the conclusion that Qualcomm’s circumvention of its FRAND commitments enabled it to distort competition in the chip markets and thus to maintain its monopoly power (which is a standard sort of antitrust offense under U.S. law).  The harm is then measured by the higher prices consumers pay and, possibly, by the loss of whatever the foreclosed rivals would have contributed to longer-term innovation in the chip markets.  On the latter harm, see, e.g., pp. 124, 196-98; Judge Koh would appear implicitly to reject arguments that penalizing Qualcomm will have a negative impact on innovation.

    6.  As for remedy, Judge Koh asserts that “Qualcomm’s anticompetitive conduct is ongoing,” in that it “continues to refuse to provide patent exhaustion, refuse to sell modem chips to an OEM until the OEM signs a license, and engage in chip supply threats and cutoffs” (p.218).  The resulting injunction has five provisions (pp. 227-33):

     (1) Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software.
    (2) Qualcomm must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms.
    (3) Qualcomm may not enter express or de facto exclusive dealing agreements for the supply of modem chips.
    (4) Qualcomm may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter.
    (5) In order to ensure Qualcomm’s compliance with the above remedies, the Court orders Qualcomm to submit to compliance and monitoring procedures for a period of seven  (7) years. Specifically, Qualcomm shall report to the FTC on an annual basis Qualcomm’s compliance with the above remedies ordered by the Court.

    Judge Koh thus rejects the DOJ’s suggestion from a few weeks back that there should be some further briefing or hearing on remedies (pp. 226-27).  

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  • Draft Text of Proposed New Section 101 Reflects Patent Owner Input

    A group of Senators and Representatives have just released the draft text of a bipartisan, bicameral proposal to reform Section 101 of the Patent Act. Senators Thom Tillis (R-NC) and Chris Coons (D-DE), Chair and Ranking Member of the Senate Judiciary Subcommittee on Intellectual Property; Representative Doug Collins (R-GA-9), Ranking Member of the House Judiciary Committee; Hank Johnson (D-GA-4), Chairman of the House Judiciary Subcommittee on Intellectual Property and the Courts; and Steve…

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  • More Patent Packages Sold in 2018 Than Any Other Market Year

    When discussing potential patent purchases with buyers, we continue our push to end the use of the phrase “low quality” to broadly characterize rejected patents. We often hear that there are junk, low quality or weak patents on the patent market. Clearly, there are some patents that we can objectively agree are low quality, just as there are in most portfolios. However, buyers with an efficient buying program should never test the majority of patents for “quality” metrics (e.g. enforceability)…

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  • Determining When a Printed Publication is Publicly Accessible

    Twice during the last year, the Federal Circuit found itself clarifying the meaning of public accessibility of a printed publication for the purposes of prior art under 35 USC §102. In one case, the court affirmed, and in the other, reversed the ruling of the lower tribunal. Each ruling originated from decisions of the Patent Trial and Appeal Board (PTAB). The factual contexts of the two cases are quite different. One relates to whether the relevant public had access to a catalog distributed at…

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  • Patent Trends Study Part Thirteen: Building Materials

    This is the last in a 13-part series of articles authored by Kilpatrick Townsend. The series examined industry-specific patent trends across 12 key patent-intensive industries. In this 13-part series, we introduced our patent trends study (performed in a collaboration between Kilpatrick Townsend and GreyB Services) and provided high-level data across 12 industries. Today’s article pertains to the Building Materials industry and its enabling technology. Innovation in this space is motivated by…

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  • Athena Diagnostics v. Mayo Collaborative Services: a Paradigm of Patent Eligibility Meriting En Banc Review

    In Ariosa Diagnostics, Inc. v. Sequenom, Inc., 788 F.3d 1371, 1376 (Fed. Cir. 2015) the Federal Circuit belittled pioneering work at Oxford University, indisputably one of the world’s leading research institutions. In the Athena Diagnostics v. Mayo Collaborative Services decision handed down early in 2019, the Federal Circuit surpassed itself by belittling pioneering work representing the combined efforts of Oxford University and the Max-Plank Gesellschaft, two of the world’s leading research…

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  • Why Creators Like Me Are Lining Up in Support of the CASE Act

    I have heard it said that a right without a remedy isn’t really a right. This saying completely and accurately sums up my experience with copyright infringement in the modern age. I am not an attorney, let alone a copyright lawyer. I am a small business owner whose livelihood is constantly affected by the lack of reasonable avenues for pursuing infringement of my work. For more than a decade, I have been making my living as a commercial photographer and filmmaker. During that time I have…

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  • 大部分

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    大部分

    –>部分

    (MOST)
    $$ However for most applications it will be necessary to resolve the ambiguity. / しかし、大部分の用途の場合、曖昧さを解決する必要があることになる。(USP7589825)

    $$ Most known W3 clients (Mosaic.TM. and Netscape.TM. for example) provide some means of storing information about pages of interest to the user. / 大部分の既知のW3クライアント(MosaicTMとかNetscapeTMなどがその例である)はユーザにとって関心のあるページについての情報を記憶するための若干の手段を用意している。(USP6353827)

    $$ Most non-PVC adhesive tapes have no flame retardant properties. / 非PVC接着テープの大部分は難燃性ではない。(USP6200677)

    (MOST OF)
    $$ Most of the customers connected to the access network by optical fibre are commercial entities. / 光ファイバによりアクセスネットワークに接続された顧客の大部分は商業的なエンティティである。(USP7599597)

    $$ On the other hand a large value of T may lead to most of the displayed images being replaced. / 他方、Tの大きな値は、表示される画像の大部分が置換されることにつながる。(USP7593602)

    (MAJORITY OF)
    $$ The majority of cannabinoids are present in the plant as the corresponding carboxylic acids. / カンナビノイドの大部分は、対応するカルボン酸として、植物中に存在する。(USP7622140)

    $$ Therefore, the vast majority of residual His.sup.+ cells generated in yku70 strains result from integrase-mediated events. / 従って、yku70株に生じた大部分の残りのHis+細胞はインテグラーゼ介在事象から生じた。(USP6242175)

    $$ Ideally the locating sound comprises a majority of frequencies in the human hearing range and ideally broadband noise. / 理想的には、位置推定音は、人間の可聴範囲内の大部分の周波数、理想的には広帯域ノイズを含む。(USP6201470)

    $$ This dc sub-band will contain the majority of the dc luminance information of the original video signal. / このdcサブバンドは、原ビデオ信号のdc輝度情報の大部分を含んでいる。(USP5353059)

    (MUCH)
    $$ Consequently, much of the gas supplied to the process chamber is exhausted from the chamber with the by-products from the deposition process, and conveyed by a conduit to a vacuum pump used to evacuate the process chamber. / その結果、プロセスチャンバに供給されたガスの大部分は、堆積プロセスからの副生成物と共にチャンバから排気され、プロセスチャンバを真空排気するのに使用される真空ポンプに導管を介して搬送される。(USP8684031)

    $$ Moreover, by tilting the rear of the seat pan upwards (relative to the front of the seat pan), this advantageously enables the user to adopt a leaning or partially standing posture, enabling the user to stretch his legs, and transferring much of the user’s bodyweight to the legs. / さらに、座部の後部を(座部の前部に対して)上向きに傾けることにより、ユーザは傾斜姿勢又は部分的に立った姿勢をとることを可能にし、ユーザが脚を伸ばすことを可能にし、ユーザの体重の大部分を脚に移動させることができる。(USP8157326)

    (SIGNIFICANT PART)
    $$ Recent advances in engine management and exhaust gas aftertreatment have led to the realisation of engines capable of operating lean of stoichiometric over a significant part of their drive cycle. / エンジン管理及び排ガス後処理における最近の進歩により、走行サイクルの大部分にわたって化学量論的にリーンで作動し得るエンジンが実現している。(USP8127537)

    $$ Although low cost fibre and electro-optical components can be used in the D2B Optical system, nevertheless the cost of these is a significant part of the cost of the network / 低コストのファイバおよび電気光学部品は、D2B光システムにおいて使用できるが、これらの部品コストはネットワークコストの大部分を占める。(USP6473469)

    (LARGELY)
    $$ Said first end of the housing 406 is largely enclosed by a substantially planar end wall 412. / このハウジング406の第1の端部は、実質的に平坦な端壁412によって大部分が閉じられている。(USP8607804)

    $$ The product was largely 2-acetyl-4,6,8,10,12-pentanitrohexaazaisowurtzitane, with approx. 15% CL-20. / 生成物は、大部分、2-アセチル-4,6,8,10,12-ペンタニトロへキサアザイソウルチタンであり、約15%がCL-20であった。(USP7592448)

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  • Judge Koh Delivers Qualcomm Brutal Defeat Despite Apple’s Proven Manipulation

    In a 233-page Order issued yesterday, Judge Lucy Koh of the United States Federal District Court for the Northern District of California handed Qualcomm a stinging defeat in the case brought by the Federal Trade Commission (FTC) alleging that Qualcomm engaged in unlawful licensing practices. It was just three weeks ago that Apple and Qualcomm entered into a peace treaty. The revelations about Apple’s coordinated efforts to manipulate the licensing market by shrewdly challenging inferior patents…

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  • 代表

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    代表

    (TYPICAL/TYPICALLY)
    $$ The drill module 15 includes a motorised drill bit 60 capable of drilling a hole through the pipe, but more typically throug…

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  • House Drug Pricing Hearing Goes Off Script

    Most Congressional hearings are morality plays designed to reach a predetermined outcome. It wasn’t hard to predict how the second hearing on drug pricing by the House Committee on Oversight and Reform was supposed to go. If the title, “HIV Prevention Drug: Billions in Corporate Profits after Millions in Taxpayer Investments” wasn’t enough of a clue,  when Chairman  Elijah Cummings (D-MD) said it was because of the “phenomenal leadership” of freshman Rep. Alexandria Ocasio-Cortez (D-NY)  that…

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  • 帯電

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    帯電

    (ANTISTAT)
    $$ US 2002/0011566 discloses an antistatic phase plate for use in phase-contrast electron microscopy, the phase plate being made of a th…

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