17-07-18 Contract Manufacturers' Opposition To PI Motion

Case 3:17-cv-01010-GPC-MDD Document 72 Filed 07/18/17 PageID.
1289 Page 1 of 38
1 THEODORE J. BOUTROUS, JR. (SBN 132099)

tboutrous@gibsondunn.com
2 DANIEL G. SWANSON (SBN 116556)
3 dswanson@gibsondunn.com
NICOLA T. HANNA (SBN 130694)
4 nhanna@gibsondunn.com
JASON C. LO (SBN 219030)
5 jlo@gibsondunn.com
JENNIFER J. RHO (SBN 254312)
6 jrho@gibsondunn.com
7 MELISSA PHAN (SBN 266880)
mphan@gibsondunn.com
8 GIBSON, DUNN & CRUTCHER LLP
333 South Grand Avenue
9 Los Angeles, CA 90071
10 Tel: (213) 229-7000
Fax: (213) 229-7520
11
CYNTHIA E. RICHMAN (DC Bar No. 492089; pro hac vice pending)
12 crichman@gibsondunn.com
GIBSON, DUNN & CRUTCHER LLP
13 1050 Connecticut Avenue, N.W.
14 Washington, DC 20036
Tel: (202) 955-8500
15 Fax: (202) 467-0539
16 Attorneys for Defendants, Counterclaimants, and
Third-Party Plaintiffs Compal Electronics, Inc.,
17 FIH Mobile Ltd., Hon Hai Precision Industry Co., Ltd.,
Pegatron Corporation, and Wistron Corporation
18
19 (Additional counsel listed below signature line)
20 UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA
21
QUALCOMM INCORPORATED, Case No. 3:17-CV-01010-GPC-MDD
22
Plaintiff, DEFENDANT-
23 COUNTERCLAIMANTS
v. OPPOSITION TO QUALCOMM
24 INCORPORATEDS MOTION FOR
COMPAL ELECTRONICS, INC., FIH PRELIMINARY INJUNCTION
25 MOBILE LTD., HON HAI
PRECISION INDUSTRY CO., LTD., Date: August 15, 2017
26 PEGATRON CORPORATION, and Time: 1:00 p.m.
WISTRON CORPORATION, Courtroom: 2D
27 Judge: Hon. Gonzalo P. Curiel
Defendants.
28 PUBLIC REDACTED VERSION
DEFS. OPP. TO QUALCOMMS MTN. FOR PRELIM. INJ. CASE NO. 3:17-CV-01010-GPC-MDD
Case 3:17-cv-01010-GPC-MDD Document 72 Filed 07/18/17 PageID.1290 Page 2 of 38
1 COMPAL ELECTRONICS, INC., FIH

MOBILE LTD., HON HAI
2 PRECISION INDUSTRY CO., LTD.,
PEGATRON CORPORATION, and
3 WISTRON CORPORATION,
4 Counterclaimants,
5 v.
6 QUALCOMM INCORPORATED
7 Counter Defendant.
8
COMPAL ELECTRONICS, INC., FIH
9 MOBILE LTD., HON HAI
PRECISION INDUSTRY CO., LTD.,
10 PEGATRON CORPORATION, and
WISTRON CORPORATION,
11
Third-Party Plaintiffs,
12
v.
13
APPLE INC.
14
Third-Party Defendant.
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2
1 TABLE OF CONTENTS
2 Page
3 INTRODUCTION ....................................................................................................... 1
4 FACTS ......................................................................................................................... 3
5
A. The Relationship between Qualcomm, Defendants, and
6 Apple ............................................................................................. 3
7
B. Qualcomm Breached Its Obligation to License Its
8 Standard Essential Patents on FRAND Terms. ............................ 5
9 C. Qualcomm Faces Legal Challenges Around the Globe for
10 Breach of Its FRAND Commitments. .......................................... 6
11 1. The U.S. Federal Trade Commission ................................. 6

12 2. Worldwide Investigations and Actions .............................. 7
13
3. Qualcomm Withholds Payments From Apple After
14 Apple Cooperates with Law Enforcement. ........................ 8
15 ARGUMENT ............................................................................................................... 9
16
I. Qualcomm Seeks Mandatory Injunctive Relief, Which is
17 Particularly Disfavored in this Circuit............................................... 10
18 II. Qualcomm Has Failed To Establish Irreparable Harm. ........................ 12
19
A. The Money Damages Qualcomm Seeks Are Not
20 Irreparable Injury. ....................................................................... 13
21 B. Qualcomms Irreparable Harm Arguments Fail. ........................ 13
22
1. Qualcomm Does Not Face Repetitive Litigation
23 with Defendants. ............................................................... 13
24 2. Qualcomms Claimed Damage to Goodwill,
25 Reputation, and Customer Relations Is Not
Irreparable Injury. ............................................................. 14
26
27 3. The Claimed Loss of R&D Funds Does Not
Constitute Irreparable Injury. ........................................... 17
28
i
1 4. There Is No Risk that Qualcomm Will Be Unable to

2 Collect on a Damages Award. .......................................... 18
3 III. Qualcomm Has Failed to Establish Its Likelihood of Success

on the Merits, Let Alone that the Law and the Facts Clearly
4
Favor It. ................................................................................................. 19
5
A. The Royalty Provisions Are Unenforceable Because, As
6 Antitrust Authorities Around the Globe Have Concluded,
7 They Are Anticompetitive. ......................................................... 19
8 B. Qualcomm Is Seeking Royalties on Exhausted Patents. ............ 20

9 C. The SULAs Cannot be Enforced Because They Violate
10 Qualcomms FRAND Commitments. ........................................ 21
11 D. Qualcomm Is Seeking Royalties on Patents that Are

Invalid, Not Infringed, and Unenforceable. ................................ 23
12
13 IV. The Preliminary Injunction Would Require Constant
Supervision. ........................................................................................... 23
14
V. An Injunction Will Harm the Public Interest by Allowing
15
Qualcomm to Perpetuate its Anticompetitive and Unfair
16 Practices. ............................................................................................... 24
17 VI. The Balance of Equities Tips in Defendants Favor. ............................ 25
18
CONCLUSION .......................................................................................................... 25
19
20
21
22
23
24
25
26
27
28
ii
1 TABLE OF AUTHORITIES
2 Page(s)
Cases
3
4 Allen v. Hylands Inc.,
2015 WL 12720304 (C.D. Cal. Aug. 20, 2015) ................................................... 20
5
Alliance for the Wild Rockies v. Cottrell,
6
632 F.3d 1127 (9th Cir. 2011) .............................................................................. 25
7
Am. Passage Media Corp. v. Cass Commcns, Inc.,
8 750 F.2d 1470 (9th Cir. 1985) ........................................................................ 14, 16
9
Anderson v. United States,
10 612 F.2d 1112 (9th Cir. 1979) ........................................................................ 10, 13
11 Animal Legal Def. Fund v. United States Dept of Agriculture,
12 2017 WL 2352009 (N.D. Cal. May 31, 2017)...................................................... 11
13 Apple, Inc. v. Motorola Mobility, Inc.,

886 F. Supp. 2d ..................................................................................................... 22
14
15 Arcamuzi v. Contl Air Lines, Inc.,
819 F.2d 935 (9th Cir. 1987) ................................................................................ 13
16
Arcsoft, Inc. v. Cyberlink Corp.,
17
153 F. Supp. 3d 1057 (N.D. Cal. 2015) ................................................................ 17
18
Bassidji v. Goe,
19 413 F.3d 928 (9th Cir. 2005) ................................................................................ 21
20
Blonder-Tongue Labs., Inc. v. Univ. of Illinois Found.,
21 402 U.S. 313 (1971).............................................................................................. 23
22 Bowers Mfg. v. All-Steel Equip.t, Inc.,
23 275 F.2d 809 (9th Cir. 1960) ................................................................................ 10
24 Braintree Labs., Inc. v. Citigroup Global Mkts., Inc.,
25 622 F.3d 36 (1st Cir. 2010)................................................................................... 17
26 Bristol Locknut Co. v. SPS Techs., Inc.,

677 F.2d 1277 (9th Cir.1982) ............................................................................... 23
27
28 Brocade Commcns Sys., Inc. v. A10 Networks, Inc.,
2013 WL 557102 (N.D. Cal. Feb. 12, 2013) ........................................................ 25
iii
1 Brulotte v. Thys.Co.,
2 379 U.S. 29 (1964)................................................................................................ 21
3 Champion-Cain v. MacDonald,
2015 WL 4393303 (S.D. Cal. July 15, 2015) ....................................................... 13
4
5 Champion-Cain v. Macdonald,
2016 WL 7188242 (S.D. Cal. Dec. 12, 2016) ...................................................... 14
6
Chemular, Inc. v. Ford,
7
2017 WL 1510025 (Cal. Super. Ct. Apr. 6, 2017) ............................................... 18
8
Chromalloy Am. Corp. v. Fischmann,
9 716 F.2d 683 (9th Cir. 1983) ................................................................................ 23
10
Cochran Firm, P.C. v. Cochran Firm Los Angeles, LLP,
11 2015 WL 12656954 (C.D. Cal. May 12, 2015) .................................................... 10
12 Commonwealth Sci. & Indus. Research Org. v. Buffalo Tech., Inc.,
13 492 F. Supp. 2d 600 (E.D. Tex. 2007).................................................................. 17
14 ConWest Res., Inc. v. Playtime Novelties, Inc.,

2006 WL 3346226 (N.D. Cal. Nov. 17, 2016) ..................................................... 13
15
16 Cordelia Lighting, Inc. v. Zhejiang Yankon Grp. Co.,
2015 WL 12656241 (C.D. Cal. Apr. 27, 2015) .................................................... 18
17
CTIA-The Wireless Assoc. v. City of Berkeley, Cal.,
18
854 F.3d 1105 (9th Cir. 2017) .............................................................................. 25
19
Ctr. for Food Safety v. Vilsack,
20 636 F.3d 1166 (9th Cir. 2011) .............................................................................. 12
21
Dahl v. HEM Pharm Corp.,
22 7 F.3d 1399 (9th Cir. 1993) .................................................................................. 10
23 Davenport v. Blue Cross of California,
24 60 Cal. Rptr. 2d 641 (Ct. App. 1997) ................................................................... 11
25 Dimare Fresh, Inc. v. Sun Pac. Mktg. Coop., Inc.,
26 2006 WL 2686969 (E.D. Cal. Sept. 19, 2006) ..................................................... 14
27 Dominguez v. Andrew Corp.,

2007 WL 4259480 (N.D. Cal. Dec. 4, 2007) ....................................................... 11
28
iv
1 Donahue Schriber Realty Grp., Inc. v. Nu Creation Outreach,

2 181 Cal. Rptr. 3d 577 (Ct. App. 2014) ................................................................. 14
3 Dotster, Inc. v. Internet for Assigned Names & Numbers,

296 F. Supp. 2d 1159 (C.D. Cal. 2003) ................................................................ 14
4
5 E. St. Louis Laborers Local 100 v. Bellon Wrecking & Salvage Co.,
414 F.3d 700 (7th Cir. 2005) ................................................................................ 14
6
Eli Lilly & Co. v. Am. Cyanamid Co.,
7
82 F.3d 1568 (Fed. Cir. 1996) .............................................................................. 17
8
Ethyl Gasoline Corp. v. United States,
9 309 U.S. 436 (1940).............................................................................................. 20
10
Freedom Holdings, Inc. v. Spitzer,
11 408 F.3d 112 (2d Cir. 2005) ................................................................................. 12
12 FTC v. Qualcomm Incorporated,
13 2017 WL 2774406 (N.D. Cal. June 26, 2017).............................................. 6, 7, 23
14 Garcia v. Google,
786 F.3d 733 (9th Cir. 2015) .......................................................................... 10, 11
15
16 Gen. Talking Pictures Corp. v. W. Elec. Co.,
305 U.S. 124 (1938).............................................................................................. 20
17
General Motors LLC v. West Covina Motors, Inc.,
18
2015 WL 12762063 (C.D. Cal. Apr. 13, 2015) .................................................... 12
19
Goldies Bookstore, Inc. v. Superior Court of State of Cal.,
20 739 F.2d 466 (9th Cir. 1984) .......................................................................... 13, 15
21
Hardie v. Nat'l Collegiate Athletic Ass'n,
22 2013 WL 12072530 (S.D. Cal. June 21, 2013) .............................................. 10, 12
23 Huawei Techs. Co. v. T-Mobile US, Inc.,
24 2017 WL 957720 (E.D. Tex. Feb. 22, 2017) ........................................................ 22
25 iCall, Inc. v. Tribair, Inc.,
26 2012 WL 5878389 (N.D. Cal. Nov. 21, 2012) ..................................................... 16
27 Impression Products, Inc. v. Lexmark International, Inc.,

137 S. Ct. 1523 (2017).......................................................................................... 20
28
v
1 In re Innovatio IP Ventures, LLC Patent Litig.,

2 2013 WL 5593609 (N.D. Ill. Oct. 3, 2013) .......................................................... 22
3 Kashani v. Tsann Kuen China Enter. Co.,

13 Cal. Rptr. 3d 174 (Ct. App. 2004) ................................................................... 21
4
5 Kimble v. Marvel Entertainment, LLC,
135 S. Ct. 2401 (2015).......................................................................................... 21
6
Lafortune v. Ebie,
7
102 Cal. Rptr. 588 (Ct. App. 1972) ...................................................................... 19
8
Lear, Inc. v. Adkins,
9 395 U.S. 653 (1969).............................................................................................. 23
10
Los Angeles Memorial Coliseum Commn v. Natl Football League,
11 634 F.2d 1197 (9th Cir. 1980) .............................................................................. 16
12 Mailtand v. Burckle,
13 572 P.2d 1142 ( Cal. 1978) ................................................................................... 19
14 Melridge, Inc. v. Heublein,

125 B.R. 825 (D. Or. 1991) .................................................................................. 20
15
16 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,
518 F. Supp. 2d 1197 (C.D. Cal. 2007) ................................................................ 14
17
Mikes Train House, Inc. v. Lionel, LLC,
18
472 F.3d 398 (6th Cir. 2007) ................................................................................ 20
19
Minn. Mining & Mfg. v. Alphapharm Pty. Ltd.,
20 2002 WL 1299996 (D. Minn. Mar. 8, 2002) ........................................................ 17
21
Morey v. Paladini,
22 203 P. 760 (Cal. 1922) .......................................................................................... 19
23 Mytee Prods., Inc. v. Shop Vac Corp.,
24 2013 WL 5945060 (S.D. Cal. Nov. 4, 2013) ........................................................ 16
25 N. Cty. Commcns Corp. v. Sprint Commcns Co., L.P.,
26 2012 WL 12882889 (S.D. Cal. Sept. 27, 2012) ................................................... 14
27 Natural Res. Def. Council, Inc. v. EPA,

966 F.2d 1292 (9th Cir. 1992) .............................................................................. 23
28
vi
1 Oakland Tribune, Inc. v. Chronicle Publg. Co.,

2 762 F2d 1374 (9th Cir. 1985) ......................................................................... 12, 14
3 Pharmacia & Upjohn Co. v. Ranbaxy Pharm., Inc.,

85 F. Appx 205 (Fed. Cir. 2003) ......................................................................... 18
4
5 PPG Indus., Inc. v. Guardian Indus. Corp.,
75 F.3d 1558 (Fed. Cir. 1996) .............................................................................. 25
6
Rite-Nail Packaging, Corp. v. Berryfast, Inc.,
7
706 F.2d 933 (9th Cir. 1983) ................................................................................ 23
8
Sampson v. Murray,
9 415 U.S. 61 (1974)................................................................................................ 13
10
Semiserve, Inc. v. Semicon Servs., LLC,
11 2016 WL 7655795 (C.D. Cal. Feb. 24, 2016) ...................................................... 10
12 Silvas v. G.E. Money Bank,
13 2011 WL 3916073 (9th Cir. 2011) ....................................................................... 10
14 Spark Indus., LLC v. Kretek International, Inc.,

2014 WL 12600262 (C.D. Cal. July 29, 2014) .................................................... 12
15
16 Spiralledge, Inc. v. Seaworld Ent., Inc.,
2013 WL 3467435 (S.D. Cal. July 9, 2013) ......................................................... 16
17
St. Regis Paper Co. v. Royal Indus.,
18
552 F.2d 309 (9th Cir. 1977) ................................................................................ 23
19
Stanley v. Univ. of S. California,
20 13 F.3d 1313 (9th Cir. 1994) ................................................................................ 10
21
Studiengesellschaft Kohle, m.b.H. v. Shell Oil Co.,
22 112 F.3d 1561 (Fed. Cir. 1997) ............................................................................ 23
23 Suja, Life, LLC v. Pines Intl, Inc.,
24 2016 WL 6157950 (S.D. Cal. Oct. 24, 2016) ......................................................... 9
25 Telephia, Inc. v. Cuppy,
26 2005 WL 5884441 (N.D. Cal. Mar. 11, 2005) ..................................................... 13
27 The Fansler Found v. Am. Realty Invrs, Inc.,

2007 WL 1302742 (E.D. Cal. May 2, 2007) ........................................................ 11
28
vii
1 United States v. Grady,

2 544 F.2d 598 (2d Cir. 1976) ................................................................................. 20
3 Vanda Pharm. Inc. v. Roxane Labs, Inc.,

203 F. Supp. 3d 412 (D. Del. 2016) ..................................................................... 18
4
5 Weinberger v. Romero-Barcelo,
456 U.S. 305 (1982).............................................................................................. 12
6
Winter v. Natural Res. Def. Council,
7
555 U.S. 7 (2008).............................................................................................. 9, 12
8
Zenith Radio Corp. v. Hazeltine Research, Inc.,
9 395 U.S. 100 (1969).............................................................................................. 20
10
Zila, Inc. v. Tinnell,
11 502 F.3d 1014 (9th Cir. 2007) .............................................................................. 21
12 Statutes
13
Cal. Bus. & Prof. Code 16700 ................................................................................ 19
14
Cal. Bus. & Prof. Code 16722 ................................................................................ 19
15
Cal. Bus. & Prof. Code 16726 ................................................................................ 19
16
17 Cal. Civ. Code 1550 ................................................................................................ 19
18 Cal. Civ. Code 1607 ................................................................................................ 19
19 Cal. Civ. Code 1667 ................................................................................................ 19
20
Rules
21
Fed. R. Evid. 803(8)................................................................................................... 20
22
Treatises
23
24 15 Corbin on Contracts
(2003) 79.9 ......................................................................................................... 21
25
26
27
28
viii
1 Defendants Compal Electronics, Inc. (Compal), FIH Mobile Ltd. and Hon
2 Hai Precision Industry Co., Ltd., (Foxconn), Pegatron Corporation (Pegatron), and
3 Wistron Corporation (Wistron) (collectively, Defendants), by undersigned
4 counsel, respectfully submit this Opposition to Plaintiff Qualcomm Inc.s Motion for
5 a Preliminary Injunction.
6 Defendants are all contract manufacturers that manufacture products, including
7 Apple devices assembled under contracts with Apple, that incorporate, in most cases,
8 Qualcomms baseband processor chips. Each Defendant separately entered into a
9 chip supply contract with Qualcomm, along with a license agreement required by
10 Qualcomm. These agreements are at the center of a related case filed by Apple that
11 alleges that Qualcomms licensing scheme and business practices violate antitrust
12 laws, U.S. patent law, public policy, and Qualcomms commitment to license on fair,
13 reasonable, and nondiscriminatory (FRAND) terms. Defendants have asserted
14 similar challenges to Qualcomms illegal business model in their defenses and
15 counterclaims to the Qualcomm complaint here. Defendants have impleaded Apple
16 as an additional defendant in this case, and Apple will move to consolidate this case
17 with its earlier filed and related action against Qualcomm. As a result, there are now
18 multiple lawsuits before this Court challenging the enforceability, legality, and
19 validity of Qualcomms license agreements, as well as other aspects of Qualcomms
20 business practices. By its motion, Qualcomm seeks to short circuit and disregard all
21 of those challenges, and enforce immediate compliance with the license agreements,
22 including payment of disputed licensing royalties. The motion should be denied.
23 INTRODUCTION
24 This case is not a simple breach of contract action between Qualcomm and the
25 Defendants, as Qualcomm suggests. Rather, it is about Qualcomms illegal and
26 abusive business practices that stifle competition and extort billions of dollars in
27 unearned royalties from Defendants and others. Qualcomms anticompetitive
28 conduct has prompted numerous enforcement actions and lawsuits across the globe.
1
1 As the Court is aware, Apple previously filed a related case (which Apple will move
2 to consolidate with this action) challenging the royalty rates and other licensing
3 provisions imposed by Qualcomm as a violation of antitrust laws, patent law, and the
4 obligation to license certain patents on FRAND terms. As direct licensees of
5 Qualcomm and purchasers of Qualcomms modem chips, Defendants also are victims
6 of Qualcomms anticompetitive scheme and they have filed defenses and
7 counterclaims raising similar challenges. The FTC has filed an antitrust enforcement
8 action against Qualcomm, which has been consolidated with various consumer class
9 actions, before Judge Koh in the Northern District of California. Apples primary
10 competitor, Samsung, has come forward in the FTCs case to explain how
11 Qualcomms non-FRAND royalties and licensing practices have caused
12 anticompetitive harm. Intel, Qualcomms competitor, has done the same. Law
13 enforcement authorities around the globe have also challenged Qualcomms licensing
14 practices and royalties. The Korea Fair Trade Commission, for example, has
15 concluded that Qualcomms licensing agreements are anticompetitive, its royalties
16 are not FRAND, and that contract manufacturers, to the extent they sell in or into
17 Korea, should be given the opportunity to renegotiate them. The license agreements
18 and royalty payments that Qualcomm seeks to enforce by its motion are at the heart
19 of all of these challenges to Qualcomms licensing practices.
20 Qualcomms motion for a preliminary injunction is yet another attempt by
21 Qualcomm to protect its anticompetitive practices and non-FRAND royalties.
22 Qualcomm asks this Court to preemptively enforce license agreements that
23 Defendants contend violate the antitrust and other laws, are unenforceable, and have
24 resulted and are resulting in compensable damages to Defendants. Qualcomms
25 proposed injunction would require Defendants (and Apple as their indemnifier) to pay
26 billions in disputed royalties, pay ongoing royalties at the same or higher rates, and
27 comply with all terms (whether express or allegedly implied) of the disputed license
28 agreements between Qualcomm and Defendants. Despite the extraordinary nature of
2
1 the relief sought, Qualcomm does not even define for this Court the exact amount of
2 money it seeks through this motion.
3 Qualcomm has publicly stated that it brought this case to get our money.1
4 This alone justifies denial of Qualcomms motion. To meet its high burden for a
5 preliminary injunction seeking monetary relief, Qualcomm must establish, among
6 other things, that any delay in payment will cause it irreparable harm. Monetary
7 damage is fully compensable after a decision on the merits, and it therefore does not
8 constitute the irreparable harm required for preliminary injunctive relief. Moreover,
9 Qualcomm has publicly stated that any delay in payment of disputed licensing monies
10 will not adversely affect its business, demonstrating no significant ongoing harm,
11 much less irreparable harm.
12 In addition, given the mounting consensus by antitrust regulators around the
13 world that the very provisions that Qualcomm seeks a preliminary injunction to
14 enforce are non-FRAND and anticompetitive, Qualcomm has not establishedand
15 cannot establishthat it is likely to prevail on the merits.
16 FACTS
17 Defendants are contract manufacturers that help source components and
18 supplies for, as well as assemble, products such as Apples iPhone and iPad.
19 Defendants purchase baseband processor chipsets from Qualcomm for inclusion in
20 certain iPhones, iPads, and other devices that they manufacture. Baseband processor
21 chipsets provide connectivity between a cellular device and a cellular network. As a
22 condition of obtaining these chipsets, Qualcomm also required Defendants to enter
23 into patent licensing agreements. (Liu Decl. 25; Chong Decl. 10).
24 A. The Relationship between Qualcomm, Defendants, and Apple
25 Qualcomm has entered into a complex web of agreements related to
26 components used in Apple and other devices, including separate agreements with each
27
1Ex. 5, Susan Decker and Ian King, Qualcomm Sues Apples Contract
28 Manufacturers, BLOOMBERG (May 17, 2017).
3
1 Defendant, as well as multiple agreements with Apple. For example, Defendants and
2 Qualcomm have agreements regarding the purchase and supply of baseband chips as
3 well as license agreements with exorbitant royalties required by Qualcomm on various
4 devices manufactured by Defendants, whether or not they contain Qualcomm chips.
5 (E.g., Exs. 1-3, Liu Decl.; Exs. 1-3, Chong Decl.). Each agreement between a
6 Defendant and Qualcomm is confidential, including from Apple. (Liu Decl. 20,
7 26; Chong Decl. 13; Wu Decl. 20; Chang Decl. 10; Lam Decl. 23).
8 The patent licenses at the center of Qualcomms illegal business model are the
9 same licenses Qualcomm is seeking to enforce by way of its current motion.
10 Qualcomms patent licenses with each Defendant are called a Subscriber Unit License
11 Agreement (SULA). (Exs. 1-5, Pl.s Mot. for Prelim. Inj. (Pl.s Mot.), Case No.
12 17-cv-01010-GPC-MDD, ECF No. 35). In general, the SULA requires that patent
13 royalties be assessed on a variety of products
14 after the components have been assembled, and after the finished
15 goods have been transferred to customers such as Apple. (E.g., Lam Decl. 27-28,
16 33). The royalty is based on the net selling price of the final device (e.g., iPhone),
17 and typically amounts to that price. (Liu Decl. 32; Wang Decl. 19; Lam
18 Decl. 27; Lee Decl. 4).
19
20 (E.g. Chong Decl. 20).
21 Apple has described in its Complaint its own agreements with Qualcomm
22 related to the same baseband components. (Apple Am. Compl. 94118, Case No.
23 17-cv-0108-GPC-MDD, ECF No. 83). These include agreements rebating royalty
24 payments made by Apple to Defendants, which are initially paid to Qualcomm. (Id.
25 9496, 101103, 112, 114115). Apple negotiates these rebates because it
26 exercises broad oversight over product design, component selection, and strategic
27 sourcing decisions. (E.g., Wang Decl. 5; Lam Decl. 11). The agreements between
28 Qualcomm and Apple are confidential, including from Defendants. (Liu Decl. 16;
4
1 Wang Decl. 11; Lam Decl. 16; Wu Decl. 12).

2
3 . (Liu Decl.
4 14-17; Wang Decl. 10-12; Lam Decl. 14-19; Wu Decl. 10-13.
5
6 . (Liu Decl. 21; Wang Decl. 14; Chang Decl. 14; Lam Decl. 20).
7 Qualcomm typically does not receive a royalty payment for a device from Defendants
8 until after a Defendants customer, such as Apple, has authorized payment for the
9 finished device. (Wu Decl. 24; Lam Decl. 33; Liu Decl. 40-41; Wang Decl.
10 20-21).
11 B. Qualcomm Breached Its Obligation to License Its Standard Essential
12 Patents on FRAND Terms.
13 For a cellular network to operate, and for the components that make up the
14 network to work together, it is necessary for there to be common technological
15 standards applicable to carriers, baseband station manufacturers, mobile wireless
16 device manufacturers, and baseband processor chipset manufacturers. (Qualcomms
17 Answer, Case No. 5:17-cv-00220, ECF No. 145 21). Standardization is only
18 beneficial if those holding intellectual property related to the standard make that
19 intellectual property widely available on terms that fairly compensate the holder of
20 the intellectual property while recognizing the monopoly power that comes with such
21 standardization. (Qualcomm Am. Counterclaims 93-95, Case No. 17-cv-0108-
22 GPC-MDD, ECF No. 70). To ensure that such monopoly power is not abused,
23 standard setting organizations require the holders of such intellectual property
24 known as standard essential patents (SEPs)to identify and disclose their potential
25 SEPs publicly and request that they promise (as Qualcomm has) to offer licenses to
26 their SEPs either royalty-free or on FRAND terms. (Id. at 93-96).
27 The royalty rate that Qualcomm charges Defendants breaches Qualcomms
28 obligation to charge a FRAND rate. In its patent licenses, Qualcomm collects a
5
1 royalty of of the net selling price of the entire device. (Exs. 1-5,
2 Pl.s Mot.). As explained by the FTC, Among SEP holders, Qualcomm garners an
3 outsized share of licensing revenues paid by OEMs, and OEMs pay Qualcomm far
4 more in royalties than [OEMs] pay other SEP licensors, even those with comparable
5 portfolios of cellular SEPs. FTC v. Qualcomm Incorporated, 2017 WL 2774406,
6 at *5 (N.D. Cal. June 26, 2017).
7 Purchasers have no choice but to accept Qualcomms onerous licensing terms.
8 Essentially, unless OEMs agree to take out a separate SEP licensing agreement with
9 Qualcomm on Qualcomms preferred terms, that covers all of the handsets that the
10 OEMs sell, Qualcomm will not supply the OEM with any Qualcomm modem chips.
11 Id. The FTC refers to this as Qualcomms no licenseno chips policy. Id.
12 Qualcomm also has breached its FRAND commitment by refusing to license its SEPs
13 to its chipset competitors, such as Intel. Id. at *6. According to the FTC, if
14 Qualcomm licensed its modem chip competitorsas opposed to only OEMs
15 Qualcomm would not be able to use the threat of a disruption in supply of its modem
16 chips to induce OEMs to agree to Qualcomms preferred royalty terms. Id.
17 C. Qualcomm Faces Legal Challenges Around the Globe for Breach of
Its FRAND Commitments.
18
1. The U.S. Federal Trade Commission
19
20 After an extensive multi-year investigation, the FTC filed an antitrust suit
21 against Qualcomm on January 17, 2017 in the Northern District of California, alleging
22 that Qualcomms business model is anticompetitive, exclusionary, and unlawful.
23 (Complaint, F.T.C. v. Qualcomm Incorporated, No. 5:17-cv-00220 (N.D. Cal. Jan.
24 17, 2017), ECF No. 1).
25 Qualcomm moved to dismiss the FTCs Complaint, and in a 50-page opinion,
26 Judge Lucy Koh denied Qualcomms motion, finding that the FTC had pled viable
27 claims for illegal monopolization and unlawful restraint of trade. FTC v. Qualcomm,
28 Inc., 2017 WL 2774406, at *25. Judge Koh also explained that Qualcomms practice
6
1 over the years has been to collect the same 5% royalty on the total value of a handset
2 and that this supports, rather than contradicts, the FTCs allegations that
3 Qualcomms royalty is above FRAND. Id. (emphasis in original). Judge Koh
4 concluded, at the motion to dismiss stage, that Qualcomms legal defenses were
5 without merit if Qualcomms practicespractices defended and not denied by
6 Qualcommwere shown to injure competition.
7 Judge Koh also held that the FTC properly alleged that: Qualcomm possesses
8 monopoly power in the markets for CDMA and premium-LTE modem chips, id. at
9 *19; Qualcomms challenged agreements (including the SULAs here) and conduct
10 are monopolistic and anticompetitive, id. at *19-25; Qualcomm uses its monopolistic
11 chokehold on baseband chips to compel its customers (which include Defendants) to
12 license its cellular SEPs, id. at *15-17; Qualcomm imposes royalties in excess of
13 FRAND levels, id. at *13-14; Qualcomm refuses to deal with its rivals and denies
14 them the FRAND licenses that would permit them to compete, id. at *19-23; and
15 Qualcomm altogether closed off competition for Apple devices (manufactured by
16 Defendants) by trading partial relief from its monopolistic overcharges in exchange
17 for exclusivity, id. at *23-25.
18 Samsung, Apples primary competitor in the manufacture of handsets, and
19 Intel, Qualcomms only remaining competitor in the premium LTE chipset market,
20 both filed briefs in the FTCs case outlining the competitive harm arising from
21 Qualcomms anticompetitive practices. (Br. of Intel Corp. as Amicus Curiae, FTC v.
22 Qualcomm, Inc., No. 5:17-cv-00220 (N.D. Cal. May 12, 2017), ECF No. 92; Br. of
23 Samsung Elec. Co. & Samsung Semiconductor, Inc. as Amici Curiae, FTC v.
24 Qualcomm, Inc., No. 5:17-cv-00220 (N.D. Cal. May 15, 2017), ECF No. 99).
25 2. Worldwide Investigations and Actions
26 The Korea Fair Trade Commission (KFTC) opened a broad investigation into
27 Qualcomms abusive chipset licensing practices by 2015. (Ex. 6 (Qualcomms 2016
28
7
1 Annual Report and Form 10-K at F-26)). After seven evidentiary and remedy
2 hearings, which raised serious concerns about the royalty provisions in Qualcomms
3 license agreementsthe provisions that Qualcomm seeks to enforce against
4 Defendants herethe KFTC concluded that the royalty provisions were an abuse of
5 monopoly power and breached Qualcomms FRAND commitments (Ex. 1 (KFTC
6 Press Release, Dec. 28, 2016)). The agency imposed a fine of approximately $850
7 millionthe largest fine the agency has ever imposed. The KFTCs remedies
8 included the right of every mobile phone maker, including Defendants, to renegotiate
9 their licenses with Qualcomm to the extent they sell in or into Korea. (Id.).
10 The KFTCs actions followed other regulatory condemnation of Qualcomm.
11 In 2015, the Directorate General for Competition for the European Commission
12 issued two Statements of Objection to Qualcomm, one of which was based on the
13 predatory pricing of chipsets. (Ex. 2 (European Commission Press Release, Dec. 8,
14 2015)). The matter is now before the European Commission for a decision. (Ex. 6
15 (Qualcomms 2016 Annual Report and 10-K at F-27)).
16 In 2015, Chinas National Development and Reform Commission fined
17 Qualcomm for abusing its dominant position in essential cellular patents by charging
18 high licensing fees and royalties, as well as other abusive practices. (Id. at 12). In
19 2016, the Taiwan Fair Trade Commission informed Qualcomm that it was
20 investigating whether the Companys royalty charges are reasonable. (Id. at F-27).
21 3. Qualcomm Withholds Payments From Apple After Apple
Cooperates with Law Enforcement.
22
23 Apples Complaint explains that Qualcomm stopped providing Apple royalty
24 rebates in the second quarter of 2016 in response to a presentation that Apple made to
25 the KFTC concerning Qualcomms licensing practices. (Apple. Am. Compl. 42,
26 214280). Qualcomm has withheld approximately $1 billion in rebates from Apple,
27 and demanded that Apple change its testimony to competition agencies. Id.
28 Since then, Apple has informed Defendants that because Qualcomm was
8
1 withholding money that Apple claimed properly belonged to it, Apple would stop
2 providing Defendants with funds for royalty payments to Qualcomm. (Liu Dec. 42;
3 Lam Decl. 36; Wang Decl. 22; Wu Decl. 25). Subsequently, Apple also informed
4 Defendants that it would continue to withhold royalty payment funds while its suit
5 against Qualcomm was pending because Qualcomms royalty arrangement violate
6 Qualcomms FRAND commitment, and extend to exhausted patents.2 (Id.).
7 In the midst of these disputes between Apple and Qualcomm, on May 17, 2017,
8 Qualcomm sued Defendants for breach of contract, despite knowing that it is Apple
9 not Defendantswhich ultimately funds the royalty payments. To further increase
10 pressure on Defendants, on May 24, 2017, Qualcomm filed this motion seeking,
11 pending the outcome of these lawsuits, enforcement of the SULAs, and payment of a
12 large but undefined amount of disputed licensing royalties.
13 ARGUMENT
14 To obtain a preliminary injunction, the moving party must show: (1) a
15 likelihood of success on the merits; (2) a likelihood of irreparable harm; (3) the
16 balance of equities tips in the moving partys favor; and (4) an injunction is in the
17 public interest. Suja, Life, LLC v. Pines Intl, Inc., 2016 WL 6157950, at *3 (S.D.
18 Cal. Oct. 24, 2016) (citing Winter v. Natural Res. Def. Council, 555 U.S. 7, 20
19 (2008)). A preliminary injunction is an extraordinary remedy that may only be
20 awarded upon a clear showing that the plaintiff is entitled to such relief. Id. The
21 moving party bears the burden of meeting all four Winter prongs. Id. Where, as
22 here, the party seeking preliminary injunctive relief has unclean hands, its request for
23 injunctive relief also should be denied. Silvas v. G.E. Money Bank, 2011 WL
24 3916073, at *2 (9th Cir. 2011) (affirming denial of preliminary injunction based on
25
26 2 Defendants object to paragraphs 16 and 21 of the Samimi Declaration (and
27 referenced exhibits) detailing Apples communication to Qualcomm regarding its
payment of funds to Defendants for royalties. These statements constitute hearsay
28 not subject to any hearsay exception.
9
1 unclean hands).3
2 I. Qualcomm Seeks Mandatory Injunctive Relief, Which is Particularly
3 Disfavored in this Circuit.
4 Qualcomms burden is particularly demanding here because it seeks a
5 mandatory injunction ordering Defendants to now and into the future - make
6 ongoing disputed royalty payments and otherwise comply with the challenged license
7 agreements. Because Qualcomm seeks to compel Defendants to take action, Garcia
8 v. Google, 786 F.3d 733, 740 (9th Cir. 2015) (citation omitted), by complying with
9 undesignated provisions of a contract and making repeated future contractual
10 payments, the requested injunction is mandatory in nature. See Dahl v. HEM Pharm
11 Corp., 7 F.3d 1399, 1403 (9th Cir. 1993) (describing a preliminary injunction
12 requiring Defendants to comply with their contractual promise as mandatory
13 preliminary relief); Bowers Mfg. v. All-Steel Equip.t, Inc., 275 F.2d 809, 810 (9th
14 Cir. 1960) (describing order for future payment of royalties under a patent license
15 agreement as a mandatory injunction).
16 A mandatory injunction goes well beyond simply maintaining the status quo
17 pendente lite [and] is particularly disfavored. Stanley v. Univ. of S. California, 13
18 F.3d 1313, 1320 (9th Cir. 1994) (quoting Anderson v. United States, 612 F.2d 1112,
19 1114 (9th Cir. 1979)). Mandatory injunctions should not be granted unless extreme
20 or very serious damage will result. Hardie v. Nat'l Collegiate Athletic Ass'n, 2013
21 WL 12072530, *3 (S.D. Cal. June 21, 2013) (Curiel, J.) (quoting Anderson, 612 F.2d
22 at 1115). A court must deny a mandatory injunction unless the facts and law clearly
23 favor the moving party. Garcia, 786 F.3d at 740 (quoting Anderson, 612 F.2d at
24 1115). In seeking a mandatory injunction, Qualcomms burden is doubly
25
26 3Semiserve, Inc. v. Semicon Servs., LLC, 2016 WL 7655795, at *3 (C.D. Cal. Feb.
24, 2016)(denying preliminary injunction by Counterclaimants after finding that
27 Plaintiffs raised sufficient evidence of a meritorious unclean hands defense); Cochran
Firm, P.C. v. Cochran Firm Los Angeles, LLP, 2015 WL 12656954, at *6-9 (C.D.
28 Cal. May 12, 2015) (dissolving preliminary injunction based on unclean hands
defense), affd, 641 F. Appx 749 (9th Cir. 2016).
10
1 demanding; such a request should be denied unless the law and facts clearly favor
2 [its] position, not simply that [it] is likely to succeed. Garcia v. Google, 786 F.3d at
3 740.
4 Qualcomm suggests that its proposed injunction is prohibitory by describing
5 the relief as merely enjoining Defendants from violating the terms and conditions of
6 their license agreements. (Pl.s Mot. at 5). Qualcomms formulation is incorrect; its
7 requested injunction is, in fact, mandatory because it requires specific performance of
8 license agreements, including payment of billions of dollars. No semantic sleight of
9 hand can distract from the obvious conclusion that an order requiring future payments
10 of varying amounts is in every sense, mandatory. The Fansler Found v. Am. Realty
11 Invrs, Inc., 2007 WL 1302742, at *4 (E.D. Cal. May 2, 2007) (plaintiff is seeking
12 renewed payment of dividends and payment of over $5 million in dividends. The
13 preliminary injunction, which would require the surrender of property, is
14 mandatory).4
15 Further, the relevant status quo to be maintained is measured from the time
16 the complaint was filed. Animal Legal Def. Fund v. United States Dept of
17 Agriculture, 2017 WL 2352009, at *3 (N.D. Cal. May 31, 2017). But the injunction
18 request here seeks to compel Defendants to do something they are not currently
19 doingi.e., to make royalty payments (including back payments). Id. At the time
20 Qualcomms complaint was filed, Qualcomm had stopped receiving royalties for
21 Apple-related products due to Qualcomms anticompetitive licensing practices,
22 excessive royalties, and its improper withholding of royalty rebates to punish Apple
23 for cooperating with law enforcement. Moreover, even before the complaint was
24 4 Accord Dominguez v. Andrew Corp., 2007 WL 4259480, at *4 (N.D. Cal. Dec. 4,
25 2007) (Plaintiffs state that the injunction sought would prohibit Defendant from
taking any further action that would interfere with the agreed-upon Operating
26 Agreement . . . While this is phrased as negative injunction, Plaintiffs actually seek
the remedy of specific performance); Davenport v. Blue Cross of California, 60 Cal.
27 Rptr. 2d 641, 647 (Ct. App. 1997) (Blue Cross argues the preliminary injunction in
this case, though framed in prohibitory language, was mandatory because it required
28 Blue Cross to perform affirmative acts authorizing and paying for the treatment,
thereby changing the status quo. . . . We agree with Blue Cross).
11
1 filed, the long-standing status quo was for Qualcomm to receive Apple-related royalty
2 payments after Defendants customers had authorized payment. (Wu Decl. 24; Lam
3 Decl. 33; Liu Decl. 40-41; Wang Decl. 20-21).
4 Qualcomms motion is subject to the heightened standard of mandatory
5 injunctions, but as described below, even under the standards applicable to prohibitory
6 injunctions, Qualcomms motion must be denied.
7 II. Qualcomm Has Failed To Establish Irreparable Harm.
8
Irreparable harm is the single most important prerequisite for a preliminary
9
injunction. Spark Indus., LLC v. Kretek International, Inc., 2014 WL 12600262
10
(C.D. Cal. July 29, 2014) (quoting Freedom Holdings, Inc. v. Spitzer, 408 F.3d 112,
11
114 (2d Cir. 2005)). The Supreme Court has repeatedly held that the basis for
12
injunctive relief in the federal courts has always been irreparable injury and the
13
adequacy of legal remedies. General Motors LLC v. West Covina Motors, Inc.,
14
2015 WL 12762063, *14 (C.D. Cal. Apr. 13, 2015) (quoting Weinberger v. Romero-
15
Barcelo, 456 U.S. 305, 31112 (1982)).
16
It is Qualcomms burden to present non-speculative, concrete evidence of
17
irreparable injury. Issuing a preliminary injunction based only on a possibility of
18
irreparable harm is inconsistent with our characterization of injunctive relief as an
19
extraordinary remedy that may only be awarded upon a clear showing that the plaintiff
20
is entitled to such relief. Winter, 555 U.S. at 22.
21
Qualcomms failure to establish any irreparable injury, much less the extreme
22
or very serious damage required for a mandatory injunction, is alone fatal to its
23
request, and it is unnecessary for the Court to consider the other requirements for
24
preliminary injunctive relief.5
25
5 E.g., Hardie, 2013 WL 12072530, at *4 (Curiel, J.) (Because the Court finds
26 Plaintiff has failed to establish irreparable harm, the Court will not address the
27 remaining preliminary injunction prongs); see also Ctr. for Food Safety v. Vilsack,
636 F.3d 1166, 1174 (9th Cir. 2011) (same); Oakland Tribune, Inc. v. Chronicle
28 Publg. Co., 762 F2d 1374, 1376 (9th Cir. 1985) (we need not decide whether it is
likely to succeed on the merits).
12
1 A. The Money Damages Qualcomm Seeks Are Not Irreparable Injury.
2 Qualcomms General Counsel has stated in regard to this action: We are suing
3 to get our money. (Ex. 5 (Susan Decker and Ian King, Qualcomm Sues Apples
4 Contract Manufacturers, BLOOMBERG (May 17, 2017)). Purported financial injury
5 of this type does not constitute irreparable injury. Goldies Bookstore, Inc. v. Superior
6 Court of State of Cal., 739 F.2d 466, 471 (9th Cir. 1984) (Mere financial injury,
7 however, will not constitute irreparable harm if adequate compensatory relief will be
8 available in the course of litigation).6 For this reason, a preliminary injunction will
9 not issue based on a breach of contract claim. ConWest Res., Inc. v. Playtime
10 Novelties, Inc., 2006 WL 3346226, *8 (N.D. Cal. Nov. 17, 2016); see also Telephia,
11 Inc. v. Cuppy, 2005 WL 5884441, *3 (N.D. Cal. Mar. 11, 2005) (a claim for breach
12 of contract can be compensated by money damages, and does not warrant the issuance
13 of a preliminary injunction). This logic carries particular force in the context of
14 mandatory injunctions, which are not issued . . . where the injury complained of is
15 capable of compensation in damages. Anderson, 612 F.2d at 1115 (internal citation
16 omitted).
17 B. Qualcomms Irreparable Harm Arguments Fail.
18 In the face of this known and established law, Qualcomm tries to manufacture
19 irreparable harm that does not exist.
20 1. Qualcomm Does Not Face Repetitive Litigation with Defendants.
21
Qualcomm argues preliminary injunctive relief is necessary to avoid repeated
22
. . . non-payment of royalties, and the multiplicity of lawsuits that inevitably would
23
follow against Defendants after every future demanded royalty payment. (Pl.s Mot.
24
at 17). But that concern is unfounded, as claims for unpaid ongoing contractual
25
26 6Accord Sampson v. Murray, 415 U.S. 61, 90 (1974) (the temporary loss of income,
ultimately to be recovered, does not usually constitute irreparable harm); Arcamuzi
27 v. Contl Air Lines, Inc., 819 F.2d 935, 938 (9th Cir. 1987) (temporary economic
loss alone generally is not a basis for injunctive relief); Champion-Cain v.
28 MacDonald, 2015 WL 4393303, at *9 (S.D. Cal. July 15, 2015) (Curiel, J.) (internal
citation omitted) (monetary injury is not normally considered irreparable).
13
1 payments may be resolved in the cases before this Court. If Qualcomm claims more
2 damages as the case proceeds, it may do so at trial, as happens in any case. See E. St.
3 Louis Laborers Local 100 v. Bellon Wrecking & Salvage Co., 414 F.3d 700, 704 (7th
4 Cir. 2005) (Thus, even repeated and ongoing violations of a CBA do not warrant a
5 preliminary injunction if each violation may be remedied by a monetary award).
6 The cases Qualcomm cites to support its argument (Pl.s Mot. at 16-17) involve
7 barring ongoing conduct causing noneconomic injury that cannot be adequately
8 compensated by money damagesnot ongoing payment of money.7
9
2. Qualcomms Claimed Damage to Goodwill, Reputation, and
10 Customer Relations Is Not Irreparable Injury.
11 Qualcomm next claims that intangible injuriessuch as damage to goodwill
12 and reputation, and dissatisfaction among customersconstitute irreparable harm.
13 (Pl.s Mot. at 1718). But [a]llegations of loss of goodwill and reputation cannot
14 constitute an irreparable injury without credible and admissible evidence that such
15 loss actually threatens plaintiffs business with termination. N. Cty. Commcns
16 Corp. v. Sprint Commcns Co., L.P., 2012 WL 12882889, *5 (S.D. Cal. Sept. 27,
17 2012);8 see also Am. Passage Media Corp. v. Cass Commcns, Inc., 750 F.2d 1470,
18 1473 (9th Cir. 1985) (Without a sufficient showing that these contracts threatened
19 APs existence, any loss in revenue due to an antitrust violation is compensable in
20 damages); Oakland Tribune, Inc. v. Chronicle Publg. Co., 762 F.2d 1374, 1377 (9th
21 Cir. 1985) (No evidence shows that the Tribune verges on bankruptcy); Champion-
22 Cain v. Macdonald, 2016 WL 7188242, at *8 (S.D. Cal. Dec. 12, 2016) (Curiel, J.)
23 (finding plaintiffs d[id] not show that any loss of goodwill was irreparable or
24
7 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1219-
25 20 (C.D. Cal. 2007) involved the proliferation of copyrighted material and Donahue
26 Schriber Realty Grp., Inc. v. Nu Creation Outreach, 181 Cal. Rptr. 3d 577, 58788
(Ct. App. 2014) involved ongoing trespass.
8 Accord Dotster, Inc. v. Internet for Assigned Names & Numbers, 296 F. Supp. 2d
27 1159, 116364 (C.D. Cal. 2003) (same); Dimare Fresh, Inc. v. Sun Pac. Mktg. Coop.,
28 Inc., 2006 WL 2686969, *3 (E.D. Cal. Sept. 19, 2006) (irreparable harm only if
damages are so great as to threaten the existence of an ongoing business concern).
14
1 imminent because plaintiffs provided insufficient evidence that their businesses were
2 threatened with extinction).
3 Qualcomm has never claimed that its business existence is at risk. In its recent
4 SEC Form 10-Q, for example, Qualcomm states that it is flush with $7.124 billion in
5 cash and cash equivalents. (Ex. 7 (Qualcomm Apr. 19, 2017 10-Q filing)). And right
6 after Apple filed its lawsuit, Qualcomm publicly brushed off the financial impact of
7 lost royalties, stating that part of why we have a strong balance sheet is, so that when
8 events like this happen, we are able to not only sustain ourselves and the investments
9 that required but were able to fund acquisitions and other key initiatives of the
10 Company. So, we feel were in a very strong position to continue to execute going
11 forward and under almost any circumstance. (Ex. 3 (January 25, 2017, Qualcomm
12 Q1 2017 Earnings Call George Davis Q&A Response)).
13 Further, the disputed payments at issue in this case are for royalties on alleged
14 patent rights, and are not the amounts specifically paid for Qualcomm chips.
15 Defendants continue to purchase and pay for Qualcomm chips, including those used
16 in Apple products. (Liu Decl. 23; Wang Decl. 15; Wu Decl. 15; Lam Decl.
17 21).
18 Qualcomm also cites cases that it says show irreparable harm where damages
19 were not easily calculable or compensable. (Pl.s Mot. at 18). These cases are
20 inapposite, however, because Qualcomm is seeking to collect monies under specific
21 license agreements. Although Qualcomm will not tell Court the amount owed, and
22 the parties dispute the amount owed, this Court will be able to resolve all of those
23 issues after trial on the merits. Once the legal and factual disputes are adjudicated,
24 there is no such thing as unpaid contractual payments that are not easily calculable
25 or compensable to justify a preliminary injunction. See Goldies Bookstore, Inc.,
26 739 F.2d at 471 (9th Cir. 1984) (reversing grant of preliminary injunction when
27 financial harm was easily calculable and compensable in damages).
28 Qualcomms alleged goodwill impairment is not only speculative, but
15
1 contrary to the facts. Speculative injury does not constitute irreparable injury, Id.
2 at 472. The declaration of Alex Rogers, Executive Vice President and President of
3 Qualcomm Technology Licensing, asserts what may or could happen. Rogers
4 Decl. 10 (other licensees may use Defendants non-payment as leverage); id. 11
5 (Defendants continued non-payment also may harm Qualcomms ability to enter
6 into new agreements). As such, the declaration is inherently speculative. Pointedly,
7 Qualcomm presents no evidence that other licensees have altered their behavior, or
8 communicated that they will alter their behavior, based on Defendants non-payment.
9 In fact, the evidence is to the contrary as Qualcomms own Complaint loudly
10 proclaims that each of the Defendants continue to pay Qualcomm royalties for non-
11 Apple products. (Qualcomm Compl., Case No. 17-cv-01010-GPC-MDD, ECF No.
12 1 4 (emphasis and italics in original)).
13 So too, Qualcomms claim of irreparable harm based on the mere possibility
14 of irreparable harm will not suffice for preliminary injunctive relief. Mytee Prods.,
15 Inc. v. Shop Vac Corp., 2013 WL 5945060, at *6 (S.D. Cal. Nov. 4, 2013)). Because
16 Qualcomm has presented nothing more than mere possibilities, it has failed to
17 establish irreparable injury. Am. Passage Media Corp., 750 F.2d at 1473 (discounting
18 conclusory declarations submitted by movants executives to support irreparable
19 injury).9 In Champion-Cain, this Court rejected a similar claim regarding loss of
20 goodwill, stating that a finding of reputational harm may not be based on
21 pronouncements [that] are grounded in platitudes rather than evidence. 2015 WL
22 4393303, at *9 (internal citation omitted); see also Los Angeles Memorial Coliseum
23 Commn v. Natl Football League, 634 F.2d 1197, 1202-3 (9th Cir. 1980) (no factual
24 showing that the alleged harmthe Oakland Raiders being forced into a long-term
25 9 See also Spiralledge, Inc. v. Seaworld Ent., Inc., 2013 WL 3467435, at *4 (S.D.
26 Cal. July 9, 2013) (The statements of [plaintiffs] CEO . . . are conclusory and
without citation to specific evidence; accordingly, these statements are insufficient to
27 support a finding of irreparable injury. ); iCall, Inc. v. Tribair, Inc., 2012 WL
5878389, at *14 (N.D. Cal. Nov. 21, 2012) (plaintiff failed to establish irreparable
28 injury where it simply offered the conclusory declaration of its CEO in support).
16
1 commitment to Oaklandwould occur).

2 Even if Qualcomm had come forward with evidence that other licensees had
3 altered their behavior, Qualcomm would still have an adequate remedy at law against
4 those licensees in the form of money damages. E.g., Arcsoft, Inc. v. Cyberlink Corp.,
5 153 F. Supp. 3d 1057, 1075 (N.D. Cal. 2015) (ArcSoft fails to offer any persuasive
6 explanation of how the decreases in downloads, users, and advertising sales are not
7 properly characterized as economic injuries that can be remedied by monetary
8 damages).
9 3. The Claimed Loss of R&D Funds Does Not Constitute Irreparable
Injury.
10
11 Qualcomms assertion that lost opportunities for research and development
12 constitute irreparable harm (Pl.s Mot. at 22) is contrary to law and logic, to say
13 nothing of Qualcomms own assertions (as previously noted):
14 If a claim of lost opportunity to conduct research and development were

sufficient to compel a finding of irreparable harm, it is hard to imagine a
15 manufacturer with a research and development program that could not make
the same claim and thus be equally entitled to preliminary injunctive relief.
16 Such a rule would convert the extraordinary relief of a preliminary
injunction into a standard remedy, available whenever a plaintiff has shown a
17 likelihood of success on the merits.
18 Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568, 1578 (Fed. Cir. 1996); see also
19 Braintree Labs., Inc. v. Citigroup Global Mkts., Inc., 622 F.3d 36, 41 (1st Cir. 2010)
20 (rejecting plaintiffs argument that without an injunction, it would suffer irreparable
21 harm in the form of incalculable losses from missed opportunities, including . . .
22 research and development programs); Minn. Mining & Mfg. v. Alphapharm Pty. Ltd.,
23 2002 WL 1299996, at *5 (D. Minn. Mar. 8, 2002) (following Eli Lilly). The case
24 Qualcomm principally relies on, Commonwealth Sci. & Indus. Research Org. v.
25 Buffalo Tech., Inc., 492 F. Supp. 2d 600, 604 (E.D. Tex. 2007), is easily
26 distinguishable because it involved a permanent injunction and was brought by a
27
28
17
1 scientific organization that would be unable to fund identified R&D projects.10

2 Qualcomm has offered no evidence demonstrating how reduced royalty
3 payments would impact its funding of R&D. Indeed, Qualcomm appears to have
4 plenty of funds for other matters that easily could be redirected to R&D. In 2016
5 alone, Qualcomm paid $2.99 billion in dividends to its shareholders. (Ex. 6 (2016
6 Form 10-K, at 47, 48)). Moreover, Qualcomm repurchased 306.5 million shares of
7 stock in Fiscal Years 2014 through 2016, at a cost of $19.8 billion. (Id. at 48). As of
8 September 2016, it was authorized to purchase nearly $3 billion more. (Id. at 4748).
9 Shortly before filing its motion, Qualcomm assured its shareholders that it will
10 continue to invest in R&D that will drive the leading edge of mobile computing and
11 connectivity for decades to come focusing on areas where our technologies will
12 have the most impact and generate the best returns. (Ex. 4 (Qualcomm, Second
13 Quarter Fiscal 2017 Earnings)).
14 4. There Is No Risk that Qualcomm Will Be Unable to Collect on a
Damages Award.
15
16 Qualcomm alleges that Defendants status as foreign corporations creates
17 irreparable harm to Qualcomm because of the risk of non-payment of any future
18 judgment. This makes little sense as the requested injunction, like a judgment, would
19 order payments by Defendants. In any event, Qualcomms own motion acknowledges
20 that Apple will indemnify Defendants for any payments, and characterizes Apple as
21 the wealthiest company in the world. (Pl.s Mot. at 8.). Apple (which is being
22 impleaded into this action) has not only agreed to indemnify Defendants, but also has
23 10 Qualcomm also relies on Vanda Pharm. Inc. v. Roxane Labs, Inc., 203 F. Supp. 3d
24 412, 436 (D. Del. 2016) involving a permanent injunction, and Pharmacia & Upjohn
Co. v. Ranbaxy Pharm., Inc., 85 F. Appx 205, 215 (Fed. Cir. 2003), in which the
25 Federal Circuit simply noted that the trial court had relied on several factors in
finding irreparable harm, including the loss of current research opportunities, without
26 addressing the extent to which the loss off current research opportunities was relevant
to irreparable harm. The remaining cases Qualcomm cites involved parties losing a
27 competitive advantage or market share through either introduction of an infringing
product (Cordelia Lighting, Inc. v. Zhejiang Yankon Grp. Co., 2015 WL 12656241,
28 at *8 (C.D. Cal. Apr. 27, 2015) or the misappropriation of trade secrets and clients
(Chemular, Inc. v. Ford, 2017 WL 1510025, at *2 (Cal. Super. Ct. Apr. 6, 2017).
18
1 obtained and offered Qualcomm bank guarantee (Apples view of the

2 cost to Apple of a one-year reciprocal FRAND license to Qualcomms SEPs) from
3 Deutsche Bank, which can be used to cover a royalty awarded against the Defendants.
4 (Ex. Z, Apple. Am. Compl.). Thus, there is no risk of non-payment of any final
5 judgment.
6 Unlike the defendants in the Aevoe and Pharmacia cases relied on by
7 Qualcomm (Pl.s Mot. at 23), each Defendant here has subsidiaries as well as
8 substantial assets in the United States. (Liu Decl. 6; Chong Decl. 5; Wu Decl.
9 5; Lam Decl. 7). Each Defendant also is headquartered in Taiwan, which has an
10 explicit statutory provision that recognizes foreign judgments.11 (Liu Decl. 3;
11 Chong Decl. 4; Wu Decl. 3; Lam Decl. 3).
12 III. Qualcomm Has Failed to Establish Its Likelihood of Success on the
13 Merits, Let Alone that the Law and the Facts Clearly Favor It.
14 A. The Royalty Provisions Are Unenforceable Because, As Antitrust
Authorities Around the Globe Have Concluded, They Are
15 Anticompetitive.
16
Contract provisions, such as the royalty provisions here, that are part of an
17
illegal or anticompetitive scheme are unenforceable. Cal. Civ. Code 1550 (lawful
18
object is essential element of a contract), 1607 (consideration for a contract must be
19
lawful), 1667 (contract terms are unlawful when (1) contrary to an express provision
20
of law; (2) contrary to the policy of express law, though not expressly prohibited; or
21
(3) otherwise contrary to good morals).12
22
Apple, various third parties, and multiple antitrust authorities around the globe
23
have all concluded that the licensing provisions that Qualcomm seeks to enforce are
24
25 11Ex. 8, Taiwan Code of Civil Procedure Article 402.
12Cal. Bus. & Prof. Code 16700, 16726, 16722 (agreements in restraint of trade
26 are void and not enforceable at law or in equity); Lafortune v. Ebie, 102 Cal. Rptr.
588, 589 (Ct. App. 1972) (A breach of state or federal antitrust law may provide a
27 valid defense in an action for breach of contract); Mailtand v. Burckle, 572 P.2d
1142, 1148, 1152( Cal. 1978) (invalidating contract provision that constitute unlawful
28 price-fixing); Morey v. Paladini, 203 P. 760, 764 (Cal. 1922) (declaring entire
contract void for unlawfully restraining trade).
19
1 anticompetitive. (E.g., Ex. 9 (KFTC Decision, Jan. 20, 2017)). The findings by
2 foreign regulatory bodies are admissible pursuant to Rule 803(8) of the Federal Rules
3 of Evidence, as public records. Fed. R. Evid. 803(8); e.g., Mikes Train House, Inc. v.
4 Lionel, LLC, 472 F.3d 398, 412-413 (6th Cir. 2007) (Korean notices of arrest,
5 complaint, and investigative report admissible under Fed. R. Evid. 803(8)).13
6 B. Qualcomm Is Seeking Royalties on Exhausted Patents.
7 It is black letter law that a patentee who licenses a patent must respect
8 established limits . . . in employing the leverage of his patent to control or limit the
9 operations of the licensee. Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S.
10 100, 136 (1969). The Supreme Court has long recognized that a patentee must ensure
11 any license restrictions and conditions it imposes are reasonably within the reward
12 which the patentee by the grant of the patent is entitled to secure. Gen. Talking
13 Pictures Corp. v. W. Elec. Co., 305 U.S. 124, 127 (1938). [B]y attaching a condition
14 to his license [a patentee] may not enlarge his monopoly and thus acquire some other
15 [missing word] which the statute and the patent together did not give. Ethyl Gasoline
16 Corp. v. United States, 309 U.S. 436, 456 (1940).
17 Qualcomms SULAs are accordingly unenforceable under U.S. patent law
18 because they violate patent exhaustion principles most recently enunciated by the
19 Supreme Court in Impression Products, Inc. v. Lexmark International, Inc., 137 S. Ct.
20 1523 (2017). The Patent Acts right to exclude just ensures that the patentee receives
21 one rewardof whatever amount the patentee deems to be satisfactory
22 compensation,for every item that passes outside the scope of the patent
23 monopoly. Id. at 1537 (internal citation omitted). [E]xhaustion is triggered by the
24 patentees decision to give that item up and receive whatever fee it decides is
25
26 13 United States v. Grady, 544 F.2d 598, 604 (2d Cir. 1976) (Irish police records
admissible under Rule 803(8)); Allen v. Hylands Inc., 2015 WL 12720304, at *13
27 (C.D. Cal. Aug. 20, 2015) (official government reports on homeopathy from the
UK House of Commons and Australian National Health Counsel admissible pursuant
28 to Rule 803(8)); Melridge, Inc. v. Heublein, 125 B.R. 825, 829 (D. Or. 1991) (Swiss
police report admissible under Rule 803(8)).
20
1 appropriate for the article and the invention which it embodies. Id. (internal
2 citation omitted).
3 Under Lexmark, the sale of Qualcomm chipsets to Defendants exhausted all of
4 Qualcomms patent rights substantially embodied in the purchased chipsets. Thus,
5 Qualcomm is fully compensated for its patents embodied in the chipsets at the time
6 of sale to Defendants. Yet through the SULA, Qualcomm unlawfully double dips
7 by charging, on top of the chip purchase price, a patent royalty. Moreover, to the
8 extent Qualcomm is demanding that customers take a license for a portfolio that
9 includes both exhausted and non-exhausted patents, Qualcomm is forcing its
10 customers to pay for a license to exhausted patents in order to obtain a license to non-
11 exhausted patents.
12 This double dipping offends the same principle as if Qualcomm were requiring
13 royalties in its license agreements past the term of the patent. See Brulotte v. Thys.Co.,
14 379 U.S. 29, 32 (1964) (a patentees use of a royalty agreement that projects beyond
15 the expiration date of the patent is unlawful per se.).14 The SULAs are also void as
16 a matter of public policy because they have the unlawful purpose of charging royalties
17 on exhausted patents.15
18 C. The SULAs Cannot be Enforced Because They Violate Qualcomms
FRAND Commitments.
19
20 Qualcomm also is precluded from enforcing the royalty rates expressed in the
21
22 14 Accord Kimble v. Marvel Entertainment, LLC, 135 S. Ct. 2401, 2413 (2015)
(patent (not antitrust) policy gave rise to the Courts conclusion that post-patent
23 royalty contracts are unenforceable) (quoting 1 Hovenkamp 3.2d, at 310); Zila,
Inc. v. Tinnell, 502 F.3d 1014, 1023 (9th Cir. 2007) (Brulotte renders unenforceable
24 only that portion of a license agreement that demands royalty payments beyond the
expiration of the patent for which the royalties are paid).
15 Kashani v. Tsann Kuen China Enter. Co., 13 Cal. Rptr. 3d 174, 179 (Ct. App. 2004)
25 ((As one authority has noted, [t]he law has a long history of recognizing the general
26 rule that certain contracts, though entered into in all other respects, will not be
enforced, or at least will not be enforced fully, if found to be contrary to public
27 policy.) (citing 15 Corbin on Contracts (2003) 79.9, 1); see also Bassidji v. Goe,
413 F.3d 928, 93637 (9th Cir. 2005) (internal citation omitted) (Under California
28 law, the general rule [is] that the courts will deny relief to either party who has
entered into an illegal contract or bargain which is against public policy).
21
1 SULAs because they are excessive, unreasonable and thus not FRAND compliant.16
2 Defendants Counterclaims assert a valid breach of Qualcomms FRAND contract
3 with standard setting organizations, and when proven at trial, this will preclude
4 Qualcomm from enforcing the SULAs as currently drafted. Apple, Inc. v. Motorola
5 Mobility, Inc., 886 F. Supp. 2d at 1087 (FRAND commitment required [licensor] to
6 license its essential patents to third parties on fair, reasonable and nondiscriminatory
7 terms and licensee has a right to enforce this commitment). Qualcomms proposed
8 injunction thus seeks to enforce illegal rates that breach Qualcomms FRAND
9 covenant.
10 As discussed more fully in Defendants Counterclaims, Qualcomm has
11 violated, and continues to violate, its agreement to license on FRAND terms. For
12 example, Qualcomm demands royalties based on a percentage of the final selling price
13 of the finished product, including for feature-rich smart phones even though
14 Qualcomms SEPs connectivity contribution is the same. (Exs. 1-5, Pl.s Mot.). This
15 violates the non-discriminatory aspect of Qualcomms FRAND obligation. See In
16 re Innovatio IP Ventures, LLC Patent Litig., 2013 WL 5593609, at *39 (N.D. Ill. Oct.
17 3, 2013) (FRAND licensor cannot discriminate between licensees on the basis of
18 their position in the market). Similarly, Qualcomms setting of royalties based on
19 the price of the finished product violates its obligation to offer royalties based not on
20 the entire product, but instead on the smallest salable patent-practicing unit. Id. at
21 *13. Moreover, Qualcomms refusal to license to its competitors is a breach of its
22 commitment to license on non-discriminatory terms to anyone who requests a
23 license. Apple, Inc. v. Motorola Mobility, Inc., 2011 WL 7324582, at *1 (W.D. Wis.
24
25 16As licensees, Defendants are third-party beneficiaries of Qualcomms agreement
with the SSOs and can therefore assert claims against Qualcomm for the breach of its
26 promise to offer licenses on FRAND terms. Huawei Techs. Co. v. T-Mobile US, Inc.,
2017 WL 957720, at *1 (E.D. Tex. Feb. 22, 2017) (licensee could file a breach of
27 contract action as a third-party beneficiary of licensors promise to offer licenses on
FRAND terms); Apple, Inc. v. Motorola Mobility, Inc., 886 F. Supp. 2d 1061, 1085
28 (W.D. Wis. 2012) ([Prospective licensee] is a third party beneficiary of the
agreements between [licensor] and [SSOs]).
22
1 June 7, 2011). In total, Qualcomm has offered above-FRAND royalty rates that are
2 significantly higher than those of other cellular-SEP licensors. FTC v. Qualcomm,
3 2017 WL 2774406, at *14 (FTC adequately alleged that Qualcomms royalty rates
4 are above FRAND).
5 D. Qualcomm Is Seeking Royalties on Patents that Are Invalid, Not
Infringed, and Unenforceable.
6
7 Apple and Defendants have challenged the enforceability and validity of certain
8 of Qualcomms SEPs. (Apple Am. Compl. Counts VLVIII; CM Counterclaims
9 Counts XIII-LXVI). Qualcommin either this motion or in response to Apples
10 Complainthas not identified a single patent that is actually essential to a cellular
11 standard for which it believes Apple products manufactured by Defendants infringe.
12 The only infringement actions Qualcomm has brought are for patents it deems non-
13 essential to a standard. (Qualcomm Compl., Case No. 17-cv-1375-JAH-AGS, ECF
14 No. 1). It is well-settled that an accused infringer may cease paying royalties under a
15 license agreement as soon as it challenges the validity of the licensed patents. Lear,
16 Inc. v. Adkins, 395 U.S. 653, 673 (1969); Blonder-Tongue Labs., Inc. v. Univ. of
17 Illinois Found., 402 U.S. 313, 346 (1971). Both the Federal Circuit and the Ninth
18 Circuit have held, in accordance with Lear, that the obligation to pay royalties on an
19 invalid patent ceases when a licensee takes affirmative steps aimed at adjudication of
20 the patents invalidity.17
21 IV. The Preliminary Injunction Would Require Constant Supervision.
22 Injunctive relief may be inappropriate where it requires constant supervision.
23 Natural Res. Def. Council, Inc. v. EPA, 966 F.2d 1292, 1300 (9th Cir. 1992). For
24
25 17See Studiengesellschaft Kohle, m.b.H. v. Shell Oil Co., 112 F.3d 1561, 1568 (Fed.
Cir. 1997) (to invoke Lear doctrine, licensee must (i) actually cease payment of
26 royalties, and (ii) provide[] notice to the licensor that the reason for ceasing payment
of royalties is because it has deemed the relevant claims to be invalid.); see also Rite-
27 Nail Packaging, Corp. v. Berryfast, Inc., 706 F.2d 933, 936 (9th Cir. 1983) (per
curiam); St. Regis Paper Co. v. Royal Indus., 552 F.2d 309, 314 (9th Cir. 1977);
28 Bristol Locknut Co. v. SPS Techs., Inc., 677 F.2d 1277, 1282-1283 (9th Cir.1982);
Chromalloy Am. Corp. v. Fischmann, 716 F.2d 683, 685 (9th Cir. 1983).
23
1 similar reasons, a court will not order specific performance of a long term contract
2 requiring ongoing supervisions and oversight by the court. Dominguez, 2007 WL
3 4259480, at *4. Here, to grant Qualcomms request for an injunction to enforce its
4 license agreements would put the Court in the position of constantly monitoring
5 royalty payments, resolving multiple audit disputes, determining whether Qualcomm
6 has provided appropriate rebates and refunds to Apple and Defendants, and resolving
7 any number of contractual issues. Qualcomm does not even state for the Court how
8 much money Defendants would be required to pay if injunctive relief were ordered.
9 Qualcomm and each of the Defendants are engaged in numerous ongoing and
10 complex audit disputes over the actual amount of royalties owed. (Liu Decl. 53-
11 59; Chong Decl. 31-37; Lee Decl. 5-7; Lam Decl. 46-52). These audit
12 disputes date back to as early as
13 . (E.g., Liu Decl. 56; Lam Decl. 48). And, as set forth in
14 the attached declarations, they relate to foundational aspects of the agreements at issue
15 here, including the appropriate royalty base against which royalty rates are applied.
16 (Liu Decl. 57-59; Chong Decl. 33-36; Lee Decl. 7; Lam Decl. 48-51).
17 For example, in ongoing audit disputes, Qualcomm contends that it is entitled
18 to royalties on
19 . (Liu Decl. 57; Chong Decl. 33; Lee Decl. 7; Lam Decl. 49) .
20 Qualcomm also claims it is entitled to royalties on
21
22 . (Chong Decl.
23 35; Lam Decl. 51).
24 V. An Injunction Will Harm the Public Interest by Allowing Qualcomm to
25 Perpetuate its Anticompetitive and Unfair Practices.
26 Courts will not grant a preliminary injunction . . . unless those public interests
27 [in favor of an injunction] outweigh other public interests that cut in favor of not
28 issuing the injunction. Alliance for the Wild Rockies v. Cottrell, 632 F.3d 1127,1138
24
1 (9th Cir. 2011). The public interest inquiry primarily addresses impact on non-
2 parties rather than parties. CTIA-The Wireless Assoc. v. City of Berkeley, Cal., 854
3 F.3d 1105, 1125 (9th Cir. 2017) (internal citation omitted).
4 Qualcomm claims that an injunction would be in the public interest because it
5 would protect intellectual property rights. (Pl.s Mot. at 25). But Qualcomm does
6 not establish a prima facie case, either in the Motion or in its 50-page complaint, that
7 Apple or the Defendants have infringed on any specific Qualcomm patent. Instead,
8 Qualcomm alleges only contractual causes of action. (Qualcomm Compl. Counts I
9 IX.). The cases cited to by Qualcomm which all involve suits where the plaintiff
10 actually asserted violations of intellectual property rights are inapplicable.18
11 If anything, a grant of a preliminary injunction would injure the publics strong
12 interest in the preservation of market competition. The injunction would achieve an
13 end run around the pending FTC and other antitrust actions by having this Court order
14 licensing payments that are being challenged by the FTC, consumer class actions,
15 Apple and others.
16 VI. The Balance of Equities Tips in Defendants Favor.
17
The balance of equities tips in the Defendants favor. If injunctive relief were
18
granted, Defendants would be forced to continue to make illegal and anticompetitive
19
royalty payments to Qualcomm, and Qualcomm would be able to retain the royalty
20
rebates that Apple claims it withheld in retaliation for responding to requests from
21
antitrust authorities investigating Qualcomms anticompetitive licensing practices.
22
CONCLUSION
23
For the foregoing reasons, Qualcomms motion for a preliminary injunction
24
should be denied.
25
26
27 18PPG Indus., Inc. v. Guardian Indus. Corp., 75 F.3d 1558 (Fed. Cir. 1996) (plaintiff
asserting patent infringement claims); Brocade Commcns Sys., Inc. v. A10 Networks,
28 Inc., 2013 WL 557102 (N.D. Cal. Feb. 12, 2013) (plaintiff asserting patent
infringement and trade secrets claims).
25
Dated: July 18, 2017 By: /s/ _Theodore J. Boutrous_____

1
THEODORE J. BOUTROUS JR. (SBN 132099)
2
tboutrous@gibsondunn.com
3 DANIEL G. SWANSON (SBN 116556)
dswanson@gibsondunn.com
4 NICOLA T. HANNA (SBN 130694)
5 nhanna@gibsondunn.com
JASON C. LO (SBN 219030)
6 jlo@gibsondunn.com
JENNIFER J. RHO (SBN 254312)
7
jrho@gibsondunn.com
8 MELISSA PHAN (SBN 266880)
mphan@gibsondunn.com
10 333 South Grand Avenue
Los Angeles, CA 90071
11 Tel: (213) 229-7000
Fax: (213) 229-7520
12
13 CYNTHIA E. RICHMAN (DC Bar No. 492089;
pro hac vice pending)
14 crichman@gibsondunn.com
1050 Connecticut Avenue, N.W.
16 Washington, DC 20036
Tel: (202) 955-8500
17 Fax: (202) 467-0539
18
Attorneys for Defendants, Counterclaimants,
19 and Third-Party Plaintiffs Compal Electronics,
Inc., FIH Mobile Ltd., Hon Hai Precision
20 Industry Co., Ltd., Pegatron Corporation, and
Wistron Corporation
21
22
HUGH F. BANGASSER (Pro Hac Vice)
23 hugh.bangasser@klgates.com
CHRISTOPHER M. WYANT (Pro Hac Vice)
24 chris.wyant@klgates.com
25 J. TIMOTHY HOBBS (Pro Hac Vice)
tim.hobbs@klgates.com
26 K&L GATES LLP
925 Fourth Avenue, Suite 2900
27 Seattle, Washington 98104
Telephone: +1 206 623 7580
28 Facsimile: +1 206 370 6371
26
1 CAITLIN C. BLANCHE (SBN 254109)

2 caitlin.blanche@klgates.com
K&L GATES LLP
3 1 Park Plaza Twelfth Floor
Irvine, CA 92614
4 Telephone: +1 949 253 0900
5 Facsimile: +1 949 253 0902
6 Attorneys for Defendant, Counterclaimant, and

Third-Party Plaintiff Wistron Corporation
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1 CERTIFICATE OF SERVICE
The undersigned hereby certifies that a true and correct copy of the above and
2
foregoing document has been served on July 18, 2017 to all counsel of record who
3
are deemed to have consented to electronic service via the Courts CM/ECF system
4
per Civil Local Rule 5.4. Any other counsel of record will be served by electronic
5
mail, facsimile and/or overnight delivery.
6
Dated: July 18, 2017
7
/s/ Theodore J. Boutrous
8
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17-07-18 Contract Manufacturers' Opposition To PI Motion

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17-07-18 Contract Manufacturers' Opposition To PI Motion

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Case 3:17-cv-01010-GPC-MDD Document 72 Filed 07/18/17 PageID.

1 THEODORE J. BOUTROUS, JR. (SBN 132099)

20 UNITED STATES DISTRICT COURT

1 COMPAL ELECTRONICS, INC., FIH

11 1. The U.S. Federal Trade Commission ................................. 6

1 4. There Is No Risk that Qualcomm Will Be Unable to

3 III. Qualcomm Has Failed to Establish Its Likelihood of Success

8 B. Qualcomm Is Seeking Royalties on Exhausted Patents. ............ 20

11 D. Qualcomm Is Seeking Royalties on Patents that Are

13 Apple, Inc. v. Motorola Mobility, Inc.,

26 Bristol Locknut Co. v. SPS Techs., Inc.,

14 ConWest Res., Inc. v. Playtime Novelties, Inc.,

27 Dominguez v. Andrew Corp.,

1 Donahue Schriber Realty Grp., Inc. v. Nu Creation Outreach,

3 Dotster, Inc. v. Internet for Assigned Names & Numbers,

27 Impression Products, Inc. v. Lexmark International, Inc.,

1 In re Innovatio IP Ventures, LLC Patent Litig.,

3 Kashani v. Tsann Kuen China Enter. Co.,

14 Melridge, Inc. v. Heublein,

27 Natural Res. Def. Council, Inc. v. EPA,

1 Oakland Tribune, Inc. v. Chronicle Publg. Co.,

3 Pharmacia & Upjohn Co. v. Ranbaxy Pharm., Inc.,

14 Spark Indus., LLC v. Kretek International, Inc.,

27 The Fansler Found v. Am. Realty Invrs, Inc.,

1 United States v. Grady,

3 Vanda Pharm. Inc. v. Roxane Labs, Inc.,

1 Wang Decl. 11; Lam Decl. 16; Wu Decl. 12).

26 214280). Qualcomm has withheld approximately $1 billion in rebates from Apple,

1 A. The Money Damages Qualcomm Seeks Are Not Irreparable Injury.

1 commitment to Oaklandwould occur).

13 nothing of Qualcomms own assertions (as previously noted):

14 If a claim of lost opportunity to conduct research and development were

20 (rejecting plaintiffs argument that without an injunction, it would suffer irreparable

21 harm in the form of incalculable losses from missed opportunities, including . . .

26 distinguishable because it involved a permanent injunction and was brought by a

1 scientific organization that would be unable to fund identified R&D projects.10

17 irreparable harm to Qualcomm because of the risk of non-payment of any future

19 order payments by Defendants. In any event, Qualcomms own motion acknowledges

1 obtained and offered Qualcomm bank guarantee (Apples view of the

Dated: July 18, 2017 By: /s/ _Theodore J. Boutrous_____

1 CAITLIN C. BLANCHE (SBN 254109)

6 Attorneys for Defendant, Counterclaimant, and

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