In re Qualcomm Inc.

162 F. Supp. 3d 1029
CourtDistrict Court, N.D. California
DecidedFebruary 18, 2016
DocketCase No. 5:16-mc-80002-PSG; Case No. 5:16-mc-80003-PSG, Case No. 5:16-mc-80004-PSG, Case No. 5:16-mc-80005-PSG, Case No. 5:16-mc-80006-PSG, Case No. 5:16-mc-80007-PSG, Case No. 5:16-mc-80008-PSG
StatusPublished
Cited by15 cases

This text of 162 F. Supp. 3d 1029 (In re Qualcomm Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Qualcomm Inc., 162 F. Supp. 3d 1029 (N.D. Cal. 2016).

Opinion

ORDER DENYING APPLICATIONS FOR LEAVE TO OBTAIN DISCOVERY FOR USE IN FOREIGN PROCEEDINGS

(Re: Docket No. 1)

PAUL S. GREWAL, United States Magistrate Judge

A few months back, Applicant Qual-comm Incorporated received an Examiner’s Report from the Korean Fair Trade Commission. The news was not good: the Examiner charged Qualcomm and its licensing of standard-essential patents with violating South Korean antitrust law. The KFTC has set a date for Qualcomm to respond, but Qualcomm must do so without access to any materials the Examiner considered or even cited that were supplied by third parties. Deprived of this access in Korea, Qualcomm now turns to this court for help pursuant to 28 U.S.C. [1032]*1032§ 1782.1 Constrained in its discretion by the factors set forth by the Supreme Court,2 the court must DENY Qualcomm’s application, as set forth below.

I.

A curious quirk of our law is that American courts are not limited to American disputes. If foreign tribunals and parties to their proceedings need evidence from third parties located in the United States, they may take discovery of such evidence through a court-supervised procedure enacted by Congress. If the third party is willing to turn over the evidence, no problem. United States law “does not preclude a person within the United States from voluntarily giving his testimony or statement, or producing a document or other thing, for use in a proceeding in a foreign or international tribunal before any person and in any manner acceptable to him.”3 But if the third party is not so eager, relief is available from the federal courts in the form of an order authorizing the issuance of a subpoena.4

To that end, Section 1782(a) holds that “[t]he district court of the district in which a person resides or is found may order him to give his testimony or statement or to produce a document or other thing for use in a proceeding in a foreign or international tribunal, including criminal investigations conducted before formal accusation.” The statute adds that “[t]he order may be made.. .upon the application of any interested person and may direct that the testimony or statement be given, or the document or other thing be produced, before a person appointed by the court.” A further provision adds that “[t]he order may prescribe the practice and procedure, which may be in whole or part the practice and procedure of the foreign country or the international tribunal, for taking the testimony or statement or producing the document or other thing. To the extent that the order does not prescribe otherwise, the testimony or statement shall be taken, and the document or other thing produced, in accordance with the Federal Rules of Civil Procedure.”

The KFTC is an administrative agency that enforces compliance with the Republic of Korea’s Monopoly Regulation and Fair Trade Act.5 MRFTA investigations are led by Examiners from the KFTC’s administrative staff and case teams from the KFTC’s Anti-Monopoly Bureau.6 When conducting an investigation, the KFTC is empowered to request production of documents and materials and interview individuals associated with both the target of the investigation or any interested parties.7 Like many of its international counterparts, the KFTC often depends on the cooperation of third parties when investigating alleged antitrust violations.8 To encourage third parties to provide complete submissions and protect their sensitive [1033]*1033and confidential information, Article 62 of the MRFTA mandates that third party-submissions be kept confidential.9 If a preliminary investigation shows that there is reason to believe that an examinee’s conduct violated the MRFTA, an Examiner’s Report is sent to the KFTC General Counsel’s office and the examinee.10 The General Counsel then dockets the case for hearing before the KFTC Committee, which makes the final ruling on whether there has been an antitrust violation.11

The Examiner’s Report is akin to a statement of charges, and it must include what is known as appended data, or evidence supporting the Examiner’s position.12 Although the examinee receives a copy of the Examiner’s Report, it does not automatically receive all of the appended data. The KFTC Case Handling Procedures allow an examinee to request access to any withheld exhibits, but they also allow appended data exhibits to be redacted or withheld from the examinee to prevent the disclosure of a third party’s confidential or competitively sensitive information.13 Even if the exhibits contain confidential information, the examinee may nonetheless ask the KFTC to allow it access.14 Following such a request, the Lead Commissioner will weigh the countervailing interests to determine whether to allow such access or the copying of such materials.15 Confidential materials also may be delivered to the examinee with the consent of the submitting party.16 An Examiner’s Report’s appended data does not necessarily contain all of the third-party documents acquired by the Examiner during an investigation, since only documents supporting the Examiner’s position are included in appended data.17 In other words, it is possible for a third party to give the Examiner documents exculpating the examinee and for these documents1 to not be provided to the examinée or the Committee.18

After the Report is issued, the examinee may present a written response and defend itself at a hearing.19 The KFTC Committee oversees these hearings, and both the Examiner and the examinee present their positions.20 At the hearing, the Examiner and the examinee are in adversarial roles.21 The Committee then makes a final determination whether the examinee violated antitrust regulations, and if necessary, issues a binding order imposing monetary sanctions or remedial measures.22 The Committee’s written ruling is appeal-able to the Seoul High Court and then to the Supreme Court of Korea.23

[1034]*1034Qualcomm is in the business of selling chips used in mobile phone and other devices that run on cellular networks. Qual-comm also licenses its vast portfolio of cellular-related patents to others who make these phones and other devices. Late last year, KFTC Examiner Gyu-Ha Chai, who serves as Director General of the Anti-Monopoly Bureau, issued an Examiner’s Report against Qualcomm.24 The Report alleges that Qualcomm’s practices regarding standard-essential patent licensing25 violate MRFTA, and recommends that the KFTC impose monetary penalties and order Qualcomm to modify its business practices,26 based on statements and documents either obtained from or concerning Respondents.27 Qualcomm initially received a portion of the Report’s appended data, requested access to the material it had not received and received some more of the appended data, but with re-dactions.28

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Bluebook (online)
162 F. Supp. 3d 1029, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-qualcomm-inc-cand-2016.