In a Judgement published on Tuesday, Qualcomm has won its appeal against the US Federal Trade Commission. The court stated that Qualcomm’s licensing policies are not anticompetitive, and the Court of Appeals for the Ninth Circuit vacated the previous judgment, reversing the district court’s permanent worldwide injunction against Qualcomm’s business practices, which required it to renegotiate fees with rivals.
Let’s know everything about it.
Qualcomm Appeal: What was the reason?
In May 2019, Qualcomm appealed the case after District Court ruled in favor of the FTC. The incident began when FTC accused Qualcomm three years ago for forcing customers like Apple to work with it exclusively; and for charging excessive licensing fees for its technology.
San Diego based Qualcomm is the largest supplier of wireless modem chips and earns most of its profits from charging headset makers royalties to use its cellular patent.
Its fierce legal battle with Apple was settled in 2019. It signed a licensing deal that goes through 2025 for modem chips with an option to extend that up to two more years. The FTC argued that Qualcomm’s near-exclusive position in two kinds of chips allowed it to charge excessive royalty rates for its patents. In May 2019, Lucy Koh, district court judge, supported FTC and issued a 233-page decision; that could have forced Qualcomm to renegotiate its licensing contracts with phone makers and license its technology to rival chipmakers.
Disagreement about Qualcomm made a split between FTC and other government agencies that included the Department of Justice, which stated that District Court ruling could undermine Qualcomm’s position in technologies, like 5G, that are essential for national security.
Qualcomm Appeal: What was the ruling?
The ruling was given by the federal judge, who found that Qualcomm had abused its monopoly position in wireless chips, and overcharged phone makers for its patent was reversed by a three-judge panel of the US Court of Appeals.
The Appeal Court panel in a 56-page ruling stated that Qualcomm had no duty under antitrust law to license its competitors. They also ruled that Qualcomm’s policy of not supplying chips to any handset maker; that had not licensed its patent did not work as an illegal charge on chips sold by competitors.
They quoted that “Anticompetitive behavior is illegal under federal antitrust law. Hypercompetitive behavior is not.”
Qualcomm’s general counsel, Don Rosenberg, said that “the ruling validates our business model and patent licensing program and underscores the tremendous contributions that Qualcomm has made to the industry.”