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1 Evan R. Chesler (N.Y. Bar No. 1475722; pro hac vice)

[email protected]
2 CRAVATH, SWAINE & MOORE LLP
825 Eighth Avenue
3 New York, NY 10019
Telephone: (212) 474-1000
4 Facsimile: (212) 474-3700
5 David A. Nelson (Ill. Bar No. 6209623; pro hac vice)
[email protected]
6 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
7 Chicago, Illinois 60661
Telephone: (312) 705-7400
8 Facsimile: (312) 705-7401
9 Karen P. Hewitt (SBN 245309)
[email protected]
10 JONES DAY
12265 El Camino Real, Suite 300
11 San Diego, California 92130
Telephone: (858) 314-1200
12 Facsimile: (858) 314-1150
13 [Additional counsel identified on signature page]
14
Attorneys for Defendant
15 QUALCOMM INCORPORATED
16
UNITED STATES DISTRICT COURT
17
SOUTHERN DISTRICT OF CALIFORNIA
18
19 APPLE INC., No. 17-cv-0108-GPC-MDD
20 Plaintiff, REDACTED MEMORANDUM
OF POINTS AND
21 v. AUTHORITIES IN SUPPORT OF
DEFENDANT QUALCOMM
22 QUALCOMM INCORPORATED, INCORPORATEDS MOTION
FOR PARTIAL DISMISSAL OF
23 Defendant. PLAINTIFFS FIRST AMENDED
COMPLAINT
24
Date: September 29, 2017
25
Time: 1:30 p.m.
26 Courtroom: 2D
27 Judge: Hon. Gonzalo P. Curiel
28

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1 QUALCOMM INCORPORATED,
2 Counterclaim-Plaintiff,
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v.
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APPLE INC.,
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Counterclaim-
6
Defendant.
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1 Defendant Qualcomm, Incorporated (Qualcomm) hereby submits the

2 following memorandum of points and authorities in support of its motion to dismiss
3 Claims For Relief Numbers 32-58 of Plaintiff Apple Inc.s First Amended
4 Complaint (FAC).
5 INTRODUCTION
6 This motion requests dismissal of declaratory counts on the nine additional
7 patents-in-suit, as to which there is no controversy and thus no subject matter
8 jurisdiction. These claims are a product of Apples worldwide strategy against
9 Qualcomm to create vexatious and costly litigation, coupled with an affirmative
10 interference with Qualcomms ability to collect undisputed royalties in the interim.
11 Apples litigation strategy is simply to hold out until Qualcomm acquiesces and
12 agrees to license Apple at below-FRAND royalties for Qualcomms entire cellular-
13 essential patent portfolio and a below-market rate for the rest of its patents. By
14 seeking the functional equivalent of an advisory opinion, Apple invites this Court to
15 indulge its strategy of oppression. Courts are not permitted to provide parties with
16 such advisory opinions, because such decisions waste valuable judicial resources
17 without substantially advancing or resolving the conflict between the parties. This
18 Court should, therefore, decline Apples invitation.
19 The issue here is straightforward. Apples FAC seeks declaratory judgments
20 of invalidity, non-infringement, and FRAND royalties as to nine additional
21 patents-in-suit (in addition to the nine in its original Complaint), despite the fact that
22 the parties have never discussed those patents, and Qualcomm has never accused
23 Apple of infringing those patents. There is therefore no controversy for the court to
24 resolve, and hence no subject matter jurisdiction. As Apples pleading makes clear,
25 the sole basis for Apples claims for declaratory relief is that the additional patents
26 were included on a list of thousands of patents Qualcomm has declared as
27 potentially essential to cellular standards that Apple may or may not practice. After
28 receiving that list, Apple stated that the list did not constitute an infringement

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1 allegation and demanded more detail from Qualcomm. At Apples request,

2 Qualcomm provided Apple with claim charts on some specific patents from the list,
3 and agreed to provide a second batch of claim charts at the parties next meeting.
4 Apple sued Qualcomm before that next meeting occurred. None of the nine
5 additional patents-in-suit were included in the claim charts that Qualcomm
6 provided to Apple.
7 Under well-established law, there is no controversy on these nine patents and
8 no subject matter jurisdiction over Apples declaratory judgment claims related to
9 these patents. Indeed, if declaratory relief in federal court were to exist for every
10 patent simply because it was identified as potentially essential to a standard, that
11 holding would create federal jurisdiction for claims related to every patent declared
12 as potentially essential to any such standard. For the reasons set forth below, that is
13 not, and cannot be, the law.
14 RELEVANT ALLEGATIONS OF THE FAC
15 Rather than summarize Apples entire 158-page FAC, Qualcomm sets forth
16 below only the allegations relevant to the arguments asserted in this motion.
17 Apples FAC asserts, for each of 18 specific patents-in-suit, claims for a
18 declaration of non-infringement, invalidity, and FRAND royalties. (See, e.g., FAC
19 281-95). As to each, Apple seeks a declaration that it does not infringe and has
20 not infringed each patent-in-suit, that one or more claims of [each patent-in-suit]
21 is invalid, and that the Court set[] a FRAND royalty for each. (See FAC 286,
22 291, 295). The FAC divides the patents-in-suit into two groups. Apple calls the
23 first nine patents the Original Patents-in-Suit. (FAC 127). Apples original
24 Complaint asserted declaratory judgment claims as to these nine patents. (Compl.
25 123-131). Apples FAC added declaratory judgment claims relating to nine
26 additional patents, that Apple calls the Additional Patents-in-Suit. (FAC 146).
27 Apples purported basis for the Courts jurisdiction over its claims relating to
28 the Additional Patents-in-Suit is that they appear on the March 18, 2016 list that

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1 Qualcomm sent to Apple as alleged evidence that Apple should pay Qualcomms
2 usurious non-FRAND royalties. (FAC 146). The entire text of the March 18,
3 2016 letter follows:
4 Attached please find charts listing the patents Qualcomm
Incorporated has disclosed to ETSI as potentially
5 containing ESSENTIAL IPR (as that term is used in the
ETSI IPR Policy). The charts also list the portions of the
6 standards to which each of the patents relate [sic].
Please let us know whether any of the listed portions of the
7 standards are not implemented in the Apple products that
are UMTS- or LTE-capable. I look forward to discussing
8 further exchanges of information with you.
9 (Declaration of Nathan Hamstra (Hamstra Decl.) Ex. 1).1 The charts attached
10 thereto consist of 1,975 pages of patent numbers (for over three thousand U.S. and
11 Chinese patent families), titles, abstracts, and identifications of particular
12 specifications of the cellular communication standards for which particular patents
13 were disclosed to the relevant standard setting organization as potentially essential
14 to the standards. The letter conspicuously did not: 1) accuse Apple of infringing any
15 particular patent on the list, 2) state that any particular patent was actually essential
16 to the standard, as opposed to declared potentially essential (according to the
17 policies of the relevant standard settings organizations2), or 3) identify any particular
18
19
1
20 This letter should be considered by the Court because Apples FAC depends on
this letter, it is being submitted herewith, and there should be no dispute over its
21 authenticity. Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Even if it did
22 not satisfy those conditions, on a motion to dismiss for lack of subject matter
jurisdiction, the district court is not restricted to the face of the pleadings, but may
23 review any evidence, such as affidavits and testimony, to resolve factual disputes
24 concerning the existence of jurisdiction, without converting the motion into one for
summary judgment. McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 1988).
25 2
The relevant standards developing organizations request early disclosure of
26 potential intellectual property rights concerning specifications under development.
27 However, the invention that is ultimately patented may in some instances deviate
from the specifications that are ultimately adopted.
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1 jurisdiction. Goodyear Tire & Rubber Co. v. Releasomers, Inc., 824 F.2d 953, 955
2 (Fed. Cir. 1987) (citing Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 239-41
3 (1937)). [T]he question in each case is whether the facts alleged, under all the
4 circumstances, show that there is a substantial controversy, between parties having
5 adverse legal interests, of sufficient immediacy and reality to warrant the issuance of
6 a declaratory judgment. MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127
7 (2007). The dispute must be definite and concrete, touching the legal relations of
8 parties having adverse legal interests, such that the dispute is real and substantial
9 and admi[ts] of specific relief through a decree of a conclusive character, as
10 distinguished from an opinion advising what the law would be upon a hypothetical
11 state of facts. Id. The Federal Circuit has emphasized that [t]here is . . . no facile,
12 all-purpose standard to police the line between declaratory judgment actions which
13 satisfy the case or controversy requirement and those that do not. Matthews Intl
14 Corp. v. Biosafe Engg, LLC, 695 F.3d 1322, 1328 (Fed. Cir. 2012). For this reason,
15 the court must calibrate its analysis to the facts of this particular case to determine
16 whether all the circumstances demonstrate a case or controversy.
17 See MedImmune, 549 U.S. at 127.
18 Declaratory judgment jurisdiction generally will not arise merely on the
19 basis that a party learns of the existence of a patent owned by another or even
20 perceives such a patent to pose a risk of infringement. Organic Seed Growers &
21 Trade Assn v. Monsanto Co., 718 F.3d 1350, 1355 (Fed. Cir. 2013). MedImmune
22 did not hold that a patent can always be challenged whenever it appears to pose a
23 risk of infringement[;] . . . declaratory judgment jurisdiction generally will not arise
24 merely on the basis that a party learns of the existence of a patent owned by another
25 or even perceives such a patent to pose a risk of infringement, without some
26 affirmative act by the patentee. Innovative Therapies, Inc. v. Kinetic Concepts,
27 Inc., 599 F.3d 1377, 1382 (Fed. Cir. 2010) (citations omitted, emphasis added);
28 Prasco, LLC v. Medicis Pharm. Corp., 537 F.3d 1329, 1338 (Fed. Cir. 2008)

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1 (absent action by the patentee, a potential competitor . . . is legally free to market

2 its product in the face of an adversely-held patent.) (emphasis added) (citing Teva
3 Pharm. USA, Inc. v. Novartis Pharm. Corp., 482 F.3d 1330, 1345 (Fed. Cir. 2007)).
4 [A] fear of future harm that is only subjective is not an injury or threat of injury
5 caused by the defendant that can be the basis of an Article III case or controversy.
6 Prasco, 537 F.3d at 1338 (citing City of L.A. v. Lyons, 461 U.S. 95 (1983)); see also
7 Indium Corp. of Am. v. SemiAlloys, Inc., 781 F.2d 879, 883 (Fed. Cir. 1985) (A
8 purely subjective apprehension of an infringement suit is insufficient to satisfy the
9 actual controversy requirement.). [I]t is the reality of the threat of . . . injury that
10 is relevant to the standing inquiry, not the plaintiffs subjective apprehensions.
11 Lyons, 461 U.S. at 107 n. 8.
12 Even if the Court were to find that subject matter jurisdiction exists over these
13 claims, the Court has discretion to dismiss them. [T]he Declaratory Judgment Act
14 has been understood to confer on federal courts unique and substantial discretion in
15 deciding whether to declare the rights of litigants. Wilton v. Seven Falls Co., 515
16 U.S. 277, 286 (1995). If a district courts decision is consistent with the purposes
17 of the Declaratory Judgment Act and considerations of wise judicial administration,
18 it may exercise its discretion to dismiss (or stay) the case. Innovative Therapies,
19 599 F.3d at 138485; see also AstraZeneca LP v. Breath Ltd., 542 F. Appx 971,
20 981 (Fed. Cir. 2013), as amended on rehg in part (Dec. 12, 2013) (The decision
21 whether to accept jurisdiction of a Declaratory Judgment counterclaim is
22 quintessentially left to the discretion of the district court.).
23 B. Apples Declaratory Judgment Claims Regarding the Additional
24 Patents-in-Suit Fail To Establish Subject Matter Jurisdiction.
25 Apples FAC fails to allege facts sufficient to show a definite, concrete
26 dispute over the Additional Patents-in-Suit of sufficient immediacy and reality to
27 warrant issuing declaratory judgment. Qualcomm has never accused Apple of
28 infringing any of the Additional Patents-in-Suit, or any foreign counterpart to them.

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1 subject matter jurisdiction as to every patent in that portfolio. The mere knowledge
2 or identification of a patent does not create a reasonable apprehension of suit.
3 SanDisk Corp., 480 F.3d at 138081. If that were true, there would presently be a
4 justiciable dispute as to literally every patent declared as potentially essential to
5 every standard in the world.
6 Applera v. Michigan Diagnostics, LLC, 594 F. Supp. 2d 150 (D. Mass 2009)
7 is squarely on point, although the plaintiffs position in that case was far less
8 extreme than Apples position here. In that case, the patentee provided to another
9 party a list of sixty-two patents, requesting that the other party review our U.S.
10 patents listed on the enclosure to this letter and proposing a meeting to discuss
11 your relevant products in light of our patents with a view toward entering into
12 licensing discussions. Id. at 159. The parties exchanged several more pieces of
13 correspondence, closing with the accused infringer stating that it had previously
14 asked [patentee] to identify which claims of which of your patents you believe the
15 products of [accused infringer] infringe. Once we know this, we can certainly be in
16 a better position to evaluate your position. Id. at 159-60. The patentee then filed
17 suit alleging infringement of seven of the sixty-two patents. Id. at 155. The accused
18 infringer counterclaimed for declaratory judgment of non-infringement of all sixty-
19 two patents, and the patentee moved to dismiss as to the fifty-five unasserted
20 patents. Id.
21 The Applera court dismissed the declaratory judgment action as to the fifty-
22 five unasserted patents, noting that the patentee merely suggested a review of its
23 entire patent portfolio, but it did not make any specific allegations of infringement
24 except within its pleading in this lawsuit. Id. at 160. The court held that [t]he
25 communications between the parties have not created a case or controversy as to
26 whether the fifty-five additional [] patents not sued upon are infringed by [the
27 accused infringer]. Id. The court found that [t]he correspondence between the
28 parties itself bespeaks the lack of any specific dispute, relying on the

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1 correspondence that stated we can certainly be in a better position to evaluate your

2 position once the accused infringer understands which patents the patentee
3 contended were infringed. Id.
4 The parallels between Applera and this case are compelling. In both cases,
5 the patentee identified numerous patents within a broad portfolio as part of licensing
6 discussions. In both cases, the patentee did not identify any specific patents from
7 within the portfolio as infringed by the declaratory judgment plaintiff. And in both
8 cases, the patentee later identified specific patents it believed read on a particular
9 product or standard. Thus, as in Applera, Apples claims as to patents not subject to
10 any specific infringement charge should be dismissed. See also Samsung Elecs. Co.
11 v. Texas Instruments Inc., 1996 WL 343330, at *4-6 (N.D. Tex. Apr. 18, 1996)
12 (dismissing declaratory judgment claims as to thousands of patents merely discussed
13 during licensing negotiations).
14 As discussed, the Declaratory Judgment Act requires some affirmative act by
15 the patentee to establish jurisdiction. Prasco, 537 F.3d at 1338. The lack of such an
16 affirmative act creates a high barrier to proving that [the plaintiff] faces an
17 imminent risk of injury. Id. at 1340. Here there is no affirmative act that could
18 demonstrate an intent to enforce an Additional Patent-in-Suit, and as a result
19 Apple cannot surmount the high barrier to jurisdiction. As requested by the
20 standards developing organizations, Qualcomm merely declared certain patents as
21 potentially essential to a standard covering a huge swath of technology, from
22 protocols that must be obeyed by a cell phone in an LTE network to protocols that
23 must be obeyed deep in the core routing networks that form the internet, and far
24 from any cell phones. (See FAC 330.) Although some of those technologies may
25 be relevant to Apples products and others may not be, the list was merely an
26 identification of the universe of patents that Qualcomm has declared as potentially
27 essential to cellular standards. Apples position that every patent declared as
28 potentially essential to any standard at any time can be sued upon, merely by virtue

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1 of that declaration, is incorrect as a matter of law because there is no definite and

2 concrete dispute with respect to any of those patents, much less each and every one.
3 MedImmune, 549 U.S. at 127.
4 CONCLUSION
5 For the foregoing reasons, Qualcomm respectfully requests that the Court
6 grant its motion in its entirety.
7
8 DATED: July 21, 2017 Respectfully submitted,
9
10
11
By /s/ David A. Nelson
12 CRAVATH, SWAINE & MOORE LLP
Evan R. Chesler (pro hac vice)
13 (N.Y. Bar No. 1475722)
[email protected]
14 Keith R. Hummel (pro hac vice)
(N.Y. Bar No. 2430668)
15 [email protected]
Richard J. Stark (pro hac vice)
16 (N.Y. Bar No. 2472603)
[email protected]
17 Antony L. Ryan (pro hac vice)
(N.Y. Bar No. 2784817)
18 [email protected]
Gary A. Bornstein (pro hac vice)
19 (N.Y. Bar No. 2916815)
[email protected]
20 J. Wesley Earnhardt (pro hac vice)
(N.Y. Bar No. 4331609)
21 [email protected]
Yonatan Even (pro hac vice)
22 (N.Y. Bar No. 4339651)
[email protected]
23 Vanessa A. Lavely (pro hac vice)
(N.Y. Bar No. 4867412)
24 [email protected]
Worldwide Plaza, 825 Eighth Avenue
25 New York, New York 10019
Telephone: (212) 474-1000
26 Facsimile: (212) 474-3700
27
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1 QUINN EMANUEL URQUHART &

2 SULLIVAN, LLP
David A. Nelson (pro hac vice)
3 (Ill. Bar No. 6209623)
[email protected]
4 Stephen Swedlow (pro hac vice)
(Ill. Bar No. 6234550)
5 [email protected]
500 West Madison St., Suite 2450
6 Chicago, Illinois 60661
Telephone: (312) 705-7400
7 Facsimile: (312) 705-7401

8 Alexander Rudis (pro hac vice)

(N.Y. Bar No. 4232591)
9 [email protected]
51 Madison Ave., 22nd Floor
10 New York, New York 10010
Telephone: (212) 849-7000
11 Facsimile: (212) 849-7100
12 Sean S. Pak (SBN 219032)
13 [email protected]
50 California St., 22nd Floor
14 San Francisco, California 94111
Telephone: (415) 875-6600
15 Facsimile: (415) 875-6700

16 JONES DAY
17 Karen P. Hewitt (SBN 145309)
[email protected]
18 4655 Executive Drive, Suite 1500
San Diego, California 92121
19 Telephone: (858) 314-1200
Facsimile: (858) 345-3178
20 Attorneys for Defendant and
21 Counterclaim-Plaintiff
QUALCOMM INCORPORATED
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1 CERTIFICATE OF SERVICE
2 I hereby certify that on July 21, 2017, the foregoing document was filed
3 electronically on the CM/ECF system, which caused all CM/ECF participants to be
4 served by electronic means.
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6 /s/ David A. Nelson
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