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Apple, Qualcomm girding for the next phase of the patent battle after mixed U.S. statements

(Reuters) – Split decisions on Tuesday by the U.S. government panel in fierce patent disputes between iPhone maker Apple and the chip supplier Qualcomm their battle lines largely unchanged for U. S Federal Trade Commission ruling and a great test of the following month.

A Qualcomm sign is seen during the China International Import Expo (CIIE), at the National Exhibition and Convention Center in Shanghai, China, November 7, 2018. REUTERS/Aly Song

The International Trade Commission, a government agency which is competent to take cognizance of disputes over patented technology, issued a final judgment in a case that went in Apple’s favor, while an ITC administrative law judge a non-binding opinion that is supported by Qualcomm in the other.

In both cases, Qualcomm Inc sought to the imports of Apple Inc iPhone 7, 8, and X-models using chips made by Intel Corp, is prohibited. Because iPhones are made in foreign countries, a ban on the import of choke Apple selling the phones in the United States.

The two American companies have been locked for two years, in a vast legal disputes that Apple has accused Qualcomm of unfair patent licensing practices. Qualcomm has, in turn, Apple accused of patent infringement.

“Qualcomm is using these cases to lead to have an answer for the real problems, their monopolistic practices,” Apple said in a statement.

After the prices of the first decision in its favor, Qualcomm did not immediately comment after the second ruling. The company has argued that iPhones with Intel chips to take advantage of the patents of Qualcomm and Apple underpays royalties.

Gaston Kroub, a patent lawyer in New York not involved in the cases, said Qualcomm’s strategy in the ITC was to use the threat of an import ban to pressure Apple to reach a settlement of all patent and antitrust claims between the companies.

“Qualcomm will be happy they got at least something, but at the end of the day, with this latter provision, Apple will be encouraged to think that it can continue to fend off Qualcomm’s attacks,” Kroub said. “I don’t see anything here that would affect Apple’s defense strategy.”

The focus now for the coming skirmishes that are likely to be more important. A ruling is expected soon in an antitrust case brought by the U.S. Federal Trade Commission accused Qualcomm of abusing a monopoly on mobile chip technology.

A case brought by Apple making similar claims to test in April in California, claims Qualcomm is looking for inflated royalties for the licensing of the technology in violation of the antitrust laws.

After the non-binding decision in Qualcomm’s favor, it was announced on Tuesday, Apple shares closed 1 percent to $186.79 in the mainstream market, and Qualcomm closed up 2.4 percent to $58.

But stocks reversed direction in late trading after the announcement of the binding decision that the preference of Apple. Apple shares were up .73 percent, and Qualcomm shares down .69 percent.

Qualcomm has filed lawsuits in the United States, China, Germany and other countries alleging the iPhone makes use of the technology without permission.

Qualcomm has won a sales ban against Apple in China and Germany, although China has not been enforced, and Apple resumed sales of phones in Germany, by shipping phones with only Qualcomm chips.

But Apple has also racked up victories by having a lot of Qualcomm’s patents declared invalid, at least on a provisional basis. And the chip supplier is dealt with setbacks in her FTC trial, where a pre-trial ruling forced it to license the technology to other chip companies.

Of the two cases decided on Tuesday by the ITC, the ruling favorable to Apple can only be appealed to a federal court. The ruling is beneficial for Qualcomm faces review by the full six-member ITC, which has a final decision.

Reporting by Jan Wolfe and Stephen Nellis; Editing by Cynthia Osterman

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