July 20, 2017

Ms. Lisa Barton
Secretary of the Commission
United States International Trade Commission
500 E Street, SW
Washington, District of Columbia 20436

RE: Certain Mobile Electronic Devices and Radio Frequency and Processing
Components Thereof, Docket No. 3235

Dear Ms. Barton:

In response to the call for comments on public interest issues1 raised by the complaint
filed by Qualcomm Incorporated issued on February 6, 2017, ACT | The App Association2
hereby submits comments to the United States International Trade Commission (USITC).

The App Association represents more than 5,000 application, or app, companies and
information technology firms in the $143 billion mobile economy.3 Organization
members leverage the connectivity of smart devices to create innovative solutions that
make our lives better. The App Association advocates for an environment that inspires
and rewards innovation while providing resources to help our members leverage their
intellectual assets to raise capital, create jobs, and continue innovating. For example,
the App Association’s All Things FRAND initiative is a leading resource and advocate
regarding the intersection of technical standards, patents, and competition law.4

Notice of Receipt of Complaint; Solicitation of Comments Relating to the Public Interest, 82
Fed Reg 32199 (Jul 12, 2017).
See http://actonline.org.
Brian Scarpelli, Nick Miller, & Roya Stephens, State of the App Economy, ACT | THE APP
ASSOCATION (5th ed., Apr. 21, 2017), at http://actonline.org/2017/04/20/state-of-the-app-
See http://www.allthingsfrand.com.
As a global industry association with significant experience in patents and related
competition law matters, the App Association respectfully offers our perspective to the
USITC in evaluating the important public interest issues raised in this case and urges
careful consideration of our views and how the USITC’s next steps will impact the United
States’ small business innovators during this critical time of development and deployment
for new fifth generation (5G)5 and internet of things (IoT)6 technologies.

Thousands of our members reach their customers through the ubiquitous mobile
communications devices manufactured by Apple which are the articles at issue in the
complaint at hand. App Association members rely on a competitive environment in the
information and communications technology hardware space, without which our
members would have no means to provide countless Americans (both in the consumer
and enterprise context) with new and innovative software products and services that
require an increasing amount of bandwidth and computing power.

Mobile technology’s rise in introducing new innovations and efficiencies across consumer
and enterprise contexts is, and will be, highly use case-dependent. For example, in
healthcare, a miniaturized and embedded connected medical device must be able to
automatically communicate bidirectionally in real-time. This capability enables a
healthcare practitioner to monitor a patient’s biometric data as well as for the patient to
be able to communicate with a caregiver in the event of a medical emergency. Other
uses, such as sensors deployed to alert security of an unauthorized presence, may only
require the ability to send data to security professionals with minimal (or even no)
capability to receive communications. Further uses are imminent, such as the rise of
mobile technology and software apps in enabling America’s first responders in a new
planned national public safety broadband network.

While there is no universal definition for a “fifth generation” (5G) mobile network, the term
encompasses the future wave of interoperable mobile networks being driven through various
technical standards bodies today. 5G networks are expected to utilize a wide range of spectrum
bands, both licensed and unlicensed, through new and innovative spectrum efficiencies and
spectrum sharing arrangements. Standard bodies such as the 3GPP and the Institute of
Electrical and Electronics Engineers (IEEE), among many others, continue to develop the
requirements by early 2017. See Dino Flore & Balazs Bertenyi, Tentative 3GPP Timeline for 5G,
3GPP THE MOBILE BROADBAND STANDARD (Mar. 17, 2015), at http://www.3gpp.org/news-
events/3gpp-news/1674-timeline_5g; see also IEEE Standards Association, Internet of Things,
at http://standards.ieee.org/innovate/iot/.
Similar to 5G, IoT will involve everyday products that use the internet to communicate data
collected through sensors. IoT is expected to enable improved efficiencies in processes,
products, and services across every sector. In key segments of the U.S. economy, from
agriculture to retail to healthcare and beyond, the rise of IoT is demonstrating efficiencies
unheard of even a few years ago. See, e.g., Department of Commerce Internet Policy Task
Force and Digital Leadership Team, Fostering the Advancement of the Internet of Things (Jan.
2017), available at

Apple products and the software apps they enable are increasingly being leveraged
across public health and safety contexts in the United States. If such devices were to be
excluded from import into the United States, the countless consumers and enterprise
users who rely on these products being available at competitive prices would find
themselves facing higher prices and less choice in the market. We believe that such an
effect would threaten public health, safety, and welfare.

The exclusion of Apple products that do not utilize Qualcomm chips – the effective result
of an exclusion order should the USITC agree with Qualcomm’s request – is not in the
public interest and would have a detrimental impact on competition, both in today’s
marketplace and in the developing 5G ecosystem,7 having an amplified effect on the
emerging app economy. Ultimately, Americans will bear this burden as they face less
choice in the technology marketplace and higher prices.

Further, while the complaint before the USITC does not include SEPs, the USITC will best
serve the public interest by understanding where the complaint fits into broader patent
disputes. These disputes are very much existential to the complainant in the robust
marketplace for LTE chips through abusive practices in the patent licensing context. The
Federal Trade Commission has brought an enforcement case against Qualcomm for just
such behavior, namely its “no license, no chips” policy, as well as other violations of
voluntary FRAND obligations made on SEPs.8 By omitting SEPs from the complaint at
hand, Qualcomm seeks to intentionally (and inappropriately) subvert the FTC in its
pending district court case. Should the USITC evaluate the complaint without appreciating
its linkage to this broader area, it will find its process used as yet another tool in efforts to
propagate anticompetitive behavior. Moreover, should the USITC refuse to grant an
exclusion order, it would not leave the complainant without adequate recourse in the U.S.
courts. That is, the complainant would still be able to maintain its parallel district court
action involving the patents at issue.

Respectfully, the USITC should decline to institute the requested investigation. An
exclusion order would cause significant harm to the vibrant and competitive mobile
technology-enabled app ecosystem. A public hearing on the public interest factors would
undoubtedly yield a determination that an exclusion order would distort competition not
only in the mobile handset and tablet markets today, but also in future IoT markets.
However, if the USITC chooses to institute an investigation, the App Association
respectfully requests that the USITC instruct the Administrative Law Judge to take
evidence, make findings of fact, and issue a recommended determination on the issue of
the public interest.

For example, market analysts estimate that Apple is likely to shift over 70% if its baseband
chip orders to other suppliers by 2018. MacRumors, Intel Gaining Larger Foothold in iPhone
LTE Chip Supply Chain as Apple Distances Itself From Qualcomm (Jun 1, 2017), available at
https://www.macrumors.com/2017/06/01/intel-iphone-lte-apple-qualcomm/ (last accessed July
20, 2017).
Federal Trade Commission v. Qualcomm Incorporated, Case No. 5:17-cv-00220 (N.D. Cal.).

The App Association appreciates the opportunity to submit these public interest comments to
the Commission’s investigation.


Brian Scarpelli
Senior Policy Counsel

Joel Thayer
Associate Policy Counsel

ACT | The App Association
1401 K St NW (Ste 501)
Washington, DC 20005


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