In a decision following a 10-day bench trial, Judge Lucy H. Koh ruled on May 21, 2019 in favor of plaintiff U.S. Federal Trade Commission (“FTC”) that defendant Qualcomm, Inc.’s (“Qualcomm’s”) licensing practices relating to its Standard Essential Patents (“SEPs”) violated both U.S. antitrust laws and Qualcomm’s contractual obligations to license its SEPs on fair, reasonable, and non-discriminatory terms (“FRAND”). The Court’s ruling was based on findings that: Qualcomm had market power in the relevant cellular modem chip markets; Qualcomm had acted anti-competitively with respect to both its customers and its competitors in such markets; and Qualcomm’s licensing rates for its modem chip SEPs were unreasonably high.
Consequently, Judge Koh ordered Qualcomm to:
- Renegotiate license terms with affected customers;
- Make SEP licenses available to competitor modem-chip suppliers on FRAND terms;
- No longer make express or de facto exclusive dealing agreements;
- Not interfere with customer communications with governmental agencies; and
- Submit to compliance and monitoring for a period of seven years.
Please read a full analysis of this decision from our anti-trust and IP team here.