It’s been over three years because the United States FTC had charged Qualcomm with antitrust violations over mobile modem patents and enterprise practices. That go well with in the end acquired a ruling in May of 2019 towards Qualcomm, leading to an injunction for Qualcomm to renegotiate its licensing agreements with its prospects. Qualcomm had subsequently appealed the ruling, placing the order on maintain, and as we speak, a bit over a 12 months later, the Ninth Circuit Court of Appeals has lastly issued an opinion, reversing and vacating the injunction, leading to a win for Qualcomm at this second in time.
The appeals court docket’s opinion centres across the FTC’s use of anti-trust legislation to carry Qualcomm accountable for a few of its controversial enterprise practices in the way it handles licensing of its patent portfolio and its “no license, no chip” mode of operation. The opinion assaults the unique judgment in that the arguments introduced don’t fall underneath the umbrella of anti-trust legislation violations, and as an alternative it being a matter of contract and patent legislation.
The unique cost revolved round Qualcomm’s supposed refusal to license mobile patents to competitor chip distributors, with the corporate countering this accusation that its patents solely apply to OEM merchandise, not the chips of elements themselves:
“Qualcomm argues that it has no antitrust duty to deal with its rivals, and in any case OEM-level licensing is consistent with Qualcomm’s SSO commitments because only OEM products (i.e., cellphones, tablets, etc.) “practice” or “implement” the requirements embodied in Qualcomm’s SEPs. Furthermore, Qualcomm argues that it considerably complies with the TIA and ATIS necessities by not asserting its patents towards rival chipmakers.”
The appeals panel has upheld Qualcomm’s notion and point-of-view of the observe, stating that there isn’t any antitrust legislation which prohibits the corporate from making use of licensing preparations on this manner.
More exactly, the matter of Qualcomm amassing royalties from OEMs is alleged to be due a change in patent legislation, that pressured the corporate to cease giving non-exhaustive licenses to different chip distributors:
“… Qualcomm claims that it never granted exhaustive licenses to rival chip suppliers. Instead, as the 1999 email suggests, it entered into “non-exhaustive, royalty-bearing agreements with chipmakers that explicitly did not grant rights to the chipmaker’s customers.” Appellant’s Opening Br. at 45. According to Qualcomm, it ceased this observe in response to developments in patent legislation’s exhaustion doctrine, see, e.g., Quanta Comput., 553 U.S. at 625 (noting that “the initial authorized sale of a patented item terminates all patent rights to that item”), which made it more durable for Qualcomm to argue that it might present “non-exhaustive” licenses within the type of royalty agreements.”
Because Qualcomm applies this observe equally between all OEMs, and there’s no historical past of the corporate ever granting exhaustive licenses to a chip vendor, the appeals panel additionally failed to find out any anticompetitive behaviour on the a part of the corporate, calling Qualcomm’s enterprise mannequin “chip-supplier neutral”, and doesn’t undermine competitors within the antitrust market.
“… Qualcomm’s practice of licensing its SEPs exclusively at the OEM level does not amount to anticompetitive conduct in violation of § 2, as Qualcomm is under no antitrust duty to license rival chip suppliers.”
As Qualcomm is seen as not having carried out any anticompetitive behaviour when it comes to its willingness to license patents to OEMs, and the truth that it offers a “CDMA ASIC” waiver license to chip distributors without spending a dime to ensure that them to internally train the know-how earlier than they promote it onto…
