Replies to post #105838 on Liquidmetal Technologies Inc (LQMT)

[PatentGuy1]

[I am] not a lawyer but attended law school ... Since I do not depend on any income from Apple, what can they stop LQMT/Li/Eontec etc., from doing?

From your law school days, I'm sure that you remember that whatever Apple can do to stop LQMT/Li/Eontec etc., from doing things will depend on the facts.

Your question indirectly raises the interesting point that Li suffers from an enormous conflict of interest. He is the CEO and COB of Liquidmetal and the CEO and COB of Eontec, which according to the cross licensing agreement are competitors. The cross licensing agreement contained a non-compete clause that defined geographical regions where they agreed not to compete against each other.

With regard to what Apple could do consider the following three scenarios:

1) LQMT uses CIP to manufacture or sell Consumer Electronics Products
The MTA, Annex 6, Section 2.3, gives Apple the right to enforce Liquidmetal's IP in the field of Consumer Electronics. So, Apple could sue LQMT for breach of contract (MTA) and for patent infringement. Under U.S. patent infringement, Apple could seek triple damages due to willful infringement because LQMT has irrefutable knowledge of its patents, and Apple could also seek an injunction seeking the end of manufacturing, importing and sales of infringing consumer electronics products.

As a side note, if LQMT licenses Eontec IP while the MTA is in enforce (including during the Capture Period), then the licensed IP is considered LQMT IP under the MTA. (See, MTA section 1.A.i.) In other words, LQMT cannot license Eontec's IP in hopes of getting around the MTA and manufacturing consumer electronics products.

2) Eontec uses CIP to manufacture or sell Consumer Electronics Products

As discussed above, Apple has the right to enforce the CIP. Consequently, Apple sues Eontec for patent infringement. In the U.S., Apple seeks triple damages for willful infringement because Eontec was aware of LQMT's patents by way of the cross licensing agreement between LQMT and Eontec. Apple also seeks an injunction preventing further infringement.

3) Eontec uses non-CIP to produce Consumer Electronics Products
I don't think that there is much that Apple can do legally to prevent Eontec from manufacturing or selling consumer electronic products that are not covered by CIP. However, assuming that Eontec exported consumer electronics products to the U.S. or Europe in violation of the geographical boundaries established in the LQMT-Eontec cross licensing agreement, I feel (IMHO) that Apple would regard LQMT's failure to enforce the non-compete clause as a betrayal of the basic understandings of the LQMT-Apple MTA.

I think that Apple would want to punish LQMT for Eontec's (i.e., Li's) actions. After the long patent war with Samsung, Apple has sought to eliminate Samsung from its supplier chain where possible. Consequently, I think (1) Apple would try to never have LQMT manufacture anything for Apple that is covered by the MTA, and (2) Apple would work reluctantly with Eontec if they had no alternative.

Li's unique situation, CEO and COB of both Eontec and LQMT could poison the well with Apple for both Eontec and LQMT.