Apple Retail UK Ltd and Others v Qualcomm (UK) Ltd and Others

Hearing dates: 16 th October 2018

Tuesday, 16th October 2018

Ruling by Mr Justice Morgan

I handed down judgment in this case on 22 May 2018. The neutral citation of that judgment is [2018] EWHC 1188 (Pat). I will assume that anyone reading the current judgment will be fully aware of all of the issues considered and the conclusions reached in my earlier judgment.

Accordingly, I will not repeat matters of background, although I will need to refer to certain paragraphs in that judgment in due course.

The issue I am now considering is whether the claimants have done what is required to establish that this is a case where the court should assume jurisdiction in relation to a particular claim against Qualcomm Incorporated, a company incorporated in a state of the United States. In particular, the claim, and the only claim I am considering at the present point, is a claim in tort by the first claimant, a UK company.

The claim in tort is a claim that the US defendant has abused its dominant position, contrary to Article 102 of the Treaty on the Functioning of the European Union.

The gateway for jurisdiction which is relied upon is Gateway 9, and the relevant part of Gateway 9 is paragraph (a), which refers to a claim being made in tort where damage was sustained or will be sustained within the jurisdiction.

The relevant legal test as to whether there is a serious issue to be tried, whether there is a good arguable case that the case comes within the gateway, and as to forum, is described in detail in my earlier judgment, and it suffices to say that at the present time the sole point which divides the parties is whether there is a good arguable case that the first claimant's claim in tort is a claim where damage was sustained within this jurisdiction.

I discussed Gateway 9 in sufficient detail at paragraphs 92 to 116 of my earlier judgment. As it transpired, the application of Gateway 9 was left unresolved in that I made no final determination as to the application of Gateway 9. Instead, in paragraph 116, I indicated I would give directions which, if they had been followed through, would have resulted in the defendant filing evidence relevant to this point and the claimant filing evidence in reply, resulting in a further hearing at which a final determination would be reached.

I was reminded of the order I made on 22 May 2018 following the hand-down of judgment. It is paragraph 5 of the order to which my attention is drawn. I was particularly asked to note that paragraph 5(b) was in these terms:

“The claimants file any further evidence on the issue of loss suffered by the first or second claimant within the jurisdiction, strictly confined to replying to any evidence served pursuant to (a) above by a specified date and time.”

What was contemplated by paragraph 116 of the earlier judgment and what was contemplated by the order did not happen. Instead, the defendant assessed its position and found encouragement in what I had said in paragraph 115 of the judgment, where I had tentatively indicated that on the pre-existing evidence I had come very close to forming the opinion that the claimants had not established what needed to be established.

The defendants took the view that they would rely upon that indication, seek to persuade me to cross the line into reaching a final determination in their favour without putting in further evidence. Whilst I do not pretend to know exactly what the defendants thought, that stance is certainly consistent with them thinking that if they put in further evidence there would be a reply and the claimants might conceivably persuade me that there was a plausible evidential case, albeit contested, for the proposition that damage had been suffered within the jurisdiction.

Accordingly, the defendants invited me, by correspondence in July 2018, to take the view that the matter should be decided in their favour. When they invited me to take that view, I had already received a witness statement of a Mr Roman served on behalf of the claimants, and an application by the claimants for permission to re-amend the particulars of claim. In the light of all that material, I took the view that the hearing which was contemplated by the earlier order should take place and that hearing has taken place today.

At the hearing today, I have been asked to consider the witness statement of Mr Roman, to which I will refer in more detail in a moment, and I have also been asked to consider a witness statement from Ms Prevezer Queen's Counsel served on behalf of the defendant, and indeed two further witness statements of a Ms Harrison served on behalf of the claimants.

Before considering the correct response in accordance with the procedural rules that apply, I will appraise the evidence which is contained in the witness statement of Mr Roman. I will not read out that statement or summarise all of its contents, but I have taken into account everything that is said.

Mr Roman is a finance director for Apple. He makes his statement to reply to a witness statement of Ms Prevezer which had been made and which the defendants were aware of before the hearing in March, which led to the judgment in May of this year. He also makes the statement in order to reply to submissions made at the hearing in March. He refers to a number of matters which perhaps are by way of background and introduction to what follows.

I was invited to look in particular at paragraph 11 where he refers to the relevance of the wholesale cost when fixing a retail price. That continues in paragraphs 12 and 14. Then he moves to discuss a topic under the heading “Counterfactual”, which relates to what Apple would have done if the alleged tort had not been committed.

He explains his thinking in such a case. Inevitably he is dealing with something that has not actually happened, because he is seeking to describe what would have happened. However, it is established that a witness can give evidence as to what he or his company would have done. And, indeed, in my earlier judgment I indicated that I would have expected Apple to have tendered that evidence. So that is the character of the evidence being put forward by Mr Roman.

I think what is of particular importance for present purposes is what Mr Roman says in paragraphs 17 and 18, supplemented perhaps by paragraph 20(c).

Mr Howard Queen's Counsel on behalf of the defendant subjects that statement to critical analysis. He has identified a number of things that the statement does not attempt to deal with, and he submits that the statement could have dealt with those other things, and he goes further and submits that the statement should have dealt with those other things so that, in the absence of it doing so, the statement itself is not adequate to deal with the issue currently before me.

This is an interlocutory stage. It is a stage where the evidence one expects to see is very, very different and certainly much more limited than the evidence that would be expected and predicted at any trial.

In my earlier judgment, citing from paragraph 7 of Brownlie v Four Seasons Holdings Inc [2018] 1 Weekly Law Reports 192, I indicated that what I was required to look for was a plausible evidential basis for the allegation which is to go forward if the court assumes jurisdiction.

I am persuaded that the evidence of Mr Roman, if it is to be considered at this stage, does provide a plausible evidential basis for the case that is to go forward if I assume jurisdiction.

In a sense, I have gone to the evidence before considering the procedural challenges to this evidence being considered, and indeed Mr Howard has put forward formidable arguments as to why the court should not receive this evidence, should not act upon it, and so that the outcome today should not be affected by the existence of that witness statement.

Mr Howard has forcefully reminded me of the procedural history. He has taken me to the pleadings, and the earlier witness statements of Ms Harrison. I have that procedural history well in mind. I went into it in some detail in my earlier judgment and I reached the conclusion then, at paragraph 111, that the way the claimants had gone about seeking to establish what they had to establish for Gateway 9 was “distinctly unimpressive”. I remain of that view.

Mr Howard says in a case where the claimants have done so little to such an inadequate effect all the way up to the hearing in March and...