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Setback for Qualcomm: It has to license modem tech to competitors

FTC antitrust lawsuit due for trial next year

A US district judge has made a preliminary ruling that Qualcomm is obliged to license its technologies to its rivals.

Judge Lucy Koh of the US District Court for the Northern District of California published her judgement yesterday as part of an ongoing lawsuit brought in 2017 by the Federal Trade Commission.

Judge Koh's ruling, that Qualcomm must license some of its technologies to other companies pitching modems at the mobile market, included a denial of the request for a delay by the company and the FTC while they pursue settlement talks in the lawsuit.

The FTC has accused the chip maker of anticompetitive behaviour in its patent licensing practices, which have put it in hot water in China, South Korea, Taiwan, and the European Union.

The commission argued that Qualcomm had voluntarily committed to the FRAND (free and non-discriminatory) licensing requirements of the Telecommunications Industry Association (TIA) and the Alliance for Telecommunications Industry Solutions (ATUS), and those agreements required it to offer licences to competitors where patents covered standards-essential technology.

The FTC alleged that from 2011 to 2016, Qualcomm had offered Apple discounted licensing on the basis that Cupertino exclusively used its modems, which breached its FRAND commitments.

In the case, Qualcomm argued the TIA/ATUS agreements applied only to mobile device-makers and other OEMs, not to silicon vendors.

Judge Koh wasn't having any of it, noting that: “If a SEP holder could discriminate against modem chip suppliers, a SEP holder could embed its technology into a cellular standard and then prevent other modem chip suppliers from selling modem chips to cellular handset producers.”

Moreover, she wrote, Qualcomm has in the past argued against discriminatory licensing to fend off a patent infringement lawsuit with Ericsson, and in financial presentations has emphasised licences it has secured from other, unnamed, vendors.

The lawsuit is scheduled to go to trial in early 2019. ®

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