Instead, these aspects of Qualcomm’s business model are ‘chip-supplier neutral’ and do not undermine competition in the relevant antitrust markets.” The Ninth Circuit also found that Qualcomm presented reasonable procompetitive justifications that were consistent with industry practices. FEDERAL TRADE COMMISSION v. QUALCOMM INCORPORATED. The FTC filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. In January 2017, the Federal Trade Commission (FTC) filed an antitrust complaint against Qualcomm in the Northern District of California. Today’s case is the recent Ninth Circuit decision on FTC v. Qualcomm. § The case involves a novel confluence of standard-setting and IP issues with some bedrock antitrust subjects, namely tying (conditioning one sale on another) and exclusive dealing (restraining … Shara Tibken. Introduction. This appears to be the end of the FTC's case against Qualcomm, and a win for the company. [12] Main Opinion, Page 226, Line 25. FTC v. Qualcomm Inc., 935 F.3d 752 (9th Cir. However, as demonstrated by the DOJ's involvement here, the antitrust agencies are not necessarily aligned, and the exact contours of the Trump Administration's enforcement priorities remain unclear. The FTC also … After some initial success at the United States District Court for the Northern District of California (US District Court), FTC has constantly seen setbacks, and at times, very harsh rebukes at the Ninth Circuit. Over 30 years of our mobile invention has led to the Invention Age. 59 The district court expands Aspen Skiing well beyond the ‘outer boundary’ of Section 2 by applying it to all contracts previously negotiated by the defendant firm and by inferring the firm was willing to sacrifice profits … This website uses cookies for performance and functionality. © 2019 White & Case LLP. 2 Federal Trade Commission v. Qualcomm Inc., 2018 WL 5848999, Nov. 6, 2018, N.D. Cal. The appellate court unanimously ruled in favor of Qualcomm, citing reasons that closely followed our expert’s testimony. On May 21, 2019, Judge Lucy Koh of the US District Court for the Northern District of California issued her decision in the case. Docket for Federal Trade Commission v. Qualcomm Incorporated, 5:17-cv-00220 — Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to … Jan 17, 2019. Qualcomm patented processors … Regardless of a stay, this case has already provided insight into the dangers facing companies when licensing standard-essential technology and the continued willingness of US regulators to pursue even the most complicated industries. [11] Main Opinion, Page 226, Line 20 The dispute in FTC v. Qualcomm centered on the FTC's allegations regarding Qualcomm's "no license, no chips" policy. The latest chapter in this saga involves an antitrust suit brought by the Federal Trade Commission (FTC) against chip manufacturer Qualcomm, which the Commission recently won in district court. Qualcomm patented processors and other standard-essential technology used in mobile devices, mobile operating systems and cellular networks, and licensed its technology to more than 340 product companies, including phone vendors. The FTC challenged several of Qualcomm’s patent licensing practices and sought to reduce the royalties it collected from makers of cellular devices. Attorney Advertising. Substantively, the FTC on January 17, 2017 filed suit against Qualcomm, alleging that it violated the Sherman Act and separately the FTC ACT, engaging in anticompetitive behavior, partially because it licensed only to original equipment manufacturers, or OEMs—these OEMs are making smartphones—and not to direct competitors. Erik Hovenkamp. On May 2, 2019, the DOJ filed a Statement of Interest in the case, contending that if the Court finds Qualcomm liable for antitrust violations, it "should permit additional briefing and schedule an evidentiary hearing" in order to resolve disputes regarding the impact of any relief. The district court ruled that Qualcomm acted with “anticompetitive malice” in its licensing tactics, and entered an injunction requiring Qualcomm to renegotiate its current license agreements and prohibiting future anticompetitive licensing practices. The dispute in FTC v. Qualcommcentered on the FTC's allegations regarding Qualcomm's "no license, no chips" policy. The case is Federal Trade Commission v Qualcomm Inc., 19-16122, U.S. Court of Appeals for the 9th Circuit (San Francisco). 21 months ago. Judge Lucy Koh's ruling found that Qualcomm's licensing practices have "strangled competition in the CDMA and premium LTE modem chip markets for years and harmed rivals, OEMs and end-consumers in the process." The ruling, by Judge Lucy Koh, … On August 11, 2020, in FTC v. Qualcomm, the U.S. Court of Appeals for the Ninth Circuit reversed a May 21, 2019 judgment by the U.S. District Court for the Northern District of California and vacated the district court’s worldwide, permanent injunction prohibiting several of Qualcomm’s … Qualcomm is a … In an ongoing series of posts by both regular bloggers and guests, Truth on the Market offers analysis of the FTC v.Qualcomm antitrust case. Cal.). For the latter case, Professor Nevo testified before the Seoul High Court in May 2019. This leaves intact the panel’s unanimous decision which reversed and vacated the district court ruling in its entirety. Qualcomm, an innovator in cellular technology, both licenses its patented technology and sells cellular modem chips that embody portions of its technology. Dissenting Statement of Commissioner Maureen K. Ohlhausen regarding the FTC filing a case against Qualcomm. This publication is protected by copyright. Consequently, it would not affect the OEM’s decision of which chip to purchase. 2019). In a suit filed in the Northern District of California in January 2017, the Federal Trade Commission (FTC) alleged that Qualcomm’s business practices relating to its licensing of patents and its selling of cellular modem chips were anticompetitive. 2021 Cornerstone Research, Bankruptcy and Financial Distress Litigation, Employee Retirement Income Security Act (ERISA), Labor, Discrimination, and Algorithmic Bias, Telecommunications, Media, and Entertainment. The Federal Trade Commission (“FTC”) contends that Qualcomm Incorporated (“Qualcomm”) violated the Sherman Act, 15 U.S.C. [6] Main Opinion, Page 85, Line 18-26 Counsel for Qualcomm retained Cornerstone Research to support the expert testimony of Aviv Nevo of the University of Pennsylvania, who is also a Senior Advisor to Cornerstone Research. 1 The Court concluded that as a result of its licensing practices, Qualcomm is a monopoly, and that its conduct is an "unreasonable restraint of trade" constituting "exclusionary conduct" under the Sherman Act, and therefore the FTC Act. At trial, Professor Nevo addressed numerous issues, including a number of shortcomings in the FTC’s surcharge theory. The FTC challenged several of Qualcomm’s patent licensing practices and sought to reduce the royalties it collected from makers of cellular devices. The FTC relied on email communications and written notes to support their allegations. However, the court’s duty-to-deal analysis sits on shakier ground, omitting consideration of potential immunity under the Patent Act and sidestepping thorny questions on the appropriate source of law. Parties, docket activity and news coverage of federal case Federal Trade Commission v. Qualcomm Incorporated, case number 5:17-cv-00220, from California Northern Court. Yesterday, Judge Koh of the U.S. District Court Northern District of California entered a Judgment following the January 2019 trial based on her Findings of Fact and Conclusions of Law that Qualcomm violated the Federal Trade Commission Act. Apple Inc. v. Qualcomm Inc., 3:17-cv-00108 (S.D. Federal Trade Commission v. Qualcomm Inc. The district court ruled that Qualcomm acted with “anticompetitive malice” in its licensing tactics, and … [12] Although Judge Koh found some of the remedies requested by the FTC to be "either vague or not necessary," [11] she granted the majority of the FTC's initial requests, including the imposition of monitoring procedures, a prohibition of the challenged restrictions on licensing and OEM exclusivity, and the requirement to make licenses available on fair, reasonable and non-discriminatory terms. While the terms of the settlement remain confidential, a Qualcomm regulatory filing indicates that Qualcomm will receive at least US$4.5 billion from Apple for missed royalty and licensing payments under the terms. In this short essay, I review and evaluate the court’s decision in FTC v. Qualcomm. at 757. 17-CV-00220-LHK FINDINGS OF FACT AND CONCLUSIONS OF LAW Plaintiff Federal Trade Commission (“FTC”) brings suit against Defendant Qualcomm Incorporated (“Qualcomm”) for allegedly violating Section 5(a) of the FTC Act, 15 U.S.C. On Wednesday, the Ninth Circuit filed an order whereby Circuit Judge Johnnie B. Rawlinson and Circuit Judge Consuelo M. Callahan vote to deny the … FEDERAL TRADE COMMISSION, Plaintiff, v. QUALCOMM INCORPORATED, Defendant. The trial underscored the importance of contemporaneous documents and customer evidence. But the litigation failed to elicit a cogent economic theory explaining how the tactics Qualcomm used to obtain higher royalties had the effect of undermining competition among modem chip suppliers, as the FTC alleged. 17-cv-220 “[T]he plaintiff has the initial burden to prove that the challenged restrainthas a substantial anticompetitive The FTC's lawsuit against Qualcomm has also led to the airing of an apparent conflict between the FTC and the Department of Justice's (DOJ) Antitrust Division. Just days before leaving office, the outgoing Obama FTC left what should have been an unwelcome parting gift for the incoming Commission: an antitrust suit against Qualcomm. 1 Last month, Apple and Qualcomm resolved their dispute over Qualcomm's same "no license, no chips" strategies at issue in this case. The San … Federal Trade Commission v. Qualcomm Incorporated United States District Court Northern District of California, San Jose Division No. FTC v Qualcomm does precisely what a unanimous Court refused to do in Trinko—create a new, broader exception to the proposition that there is no duty to deal with competitors. The Court issued an injunction forbidding Qualcomm (i) from conditioning the supply of modem chips on a customer taking out a patent license; and (ii) from entering into exclusive dealing agreements for the supply of modem chips. Judge Koh rules that Qualcomm violated FTC Act (FTC v. Qualcomm) By David Long on May 22, 2019. In the complaint, the FTC raised several issues. We now hold that the district court went beyond the scope of the Sherman Act, and we reverse. our privacy policy page. This has been a saga of a lot of time and pain. The FTC sued Qualcomm under Section 5 of the FTC Act, which has broader latitude to find an “unfair methods of competition” violation than the … A wave of setbacks for the FTC. Case No. Qualcomm. The FTC alleged that these … This week the FTC — under a new Chairman and with an entirely new set of Commissioners — finished unwrapping its present, and rested its case in the trial begun earlier this month in FTC v Qualcomm. Read Posted in Antitrust, Court Orders, District Courts, Federal Trade Commission, Litigation. [1] Main Opinion, Page 215, Line 19 The FTC had argued that Qualcomm had used its monopoly power over chipset supply to coerce OEMs into agreeing to licensing terms for its SEPs that excluded rival chipset suppliers. §§ 1, 2, by unreasonably restraining trade in, and … [3] Main Opinion, Page 37, Line 27 FTC v Qualcomm does precisely what a unanimous Court refused to do in Trinko —create a new, broader exception to the proposition that there is no duty to deal with competitors. [10] Case No. FTC v. Qualcomm Inc., 935 F.3d 752 (9th Cir. The dispute in FTC v. Qualcomm centered on the FTC's allegations regarding Qualcomm's "no license, no chips" policy. The FTC alleged that Qualcomm conditioned the sale of its modem chips on its product manufacturers' willingness to license its patents and enter into exclusive chip deal agreements. [8] Main Opinion, Page 232, 26 Tweet Share Post Email Print Link. Font Size: A A A; Mobile devices, such as smartphones and tablets, rely heavily on technical standards, which … Analysis Group was retained on behalf of Qualcomm, the defendant in an antitrust suit brought by the Federal Trade Commission (FTC). I . Authors. The district court’s original ruling for the FTC would have stopped Qualcomm immediately, but Bloomberg reports that Judge Lucy Koh’s order was held to give Qualcomm time to appeal. FTC v. Qualcomm, Antitrust, and Intellectual Property. Qualcomm's fight with the FTC ran concurrent with its legal battle with Apple. On August 11, 2020, in FTC v. Qualcomm, the U.S. Court of Appeals for the Ninth Circuit reversed a May 21, 2019 judgment by the U.S. District Court for the Northern District of California and vacated the district court's worldwide, permanent injunction prohibiting several of Qualcomm's core business practices. 2019). Automobile makers Ford, Honda, Daimler AG and Tesla, joined by chip makers Intel and MediaTek, called for a rehearing of the FTC case against Qualcomm in what is called an “en banc hearing.” According to the companies, the reversal of the FTC case against Qualcomm by the U.S. Ninth District Court in … Thus, the vote to bring FTC v Qualcomm provides the least wisdom and confidence of any vote to bring any FTC antitrust case since 1994. Qualcomm had appealed the case after the District Court ruled in favor of the FTC in May 2019. Professor Nevo testified to several shortcomings in the FTC’s theory of harm and to several procompetitive justifications for Qualcomm’s practices. FTC v. Qualcomm Case Not Quite Done by Chris Taylor | Sep 11, 2020. The FTC also stressed testimony by industry executives, including Apple, Inc. Chief Operating Officer Jeff Williams, who testified that Apple ended up paying a licensing fee five times higher than anticipated after being strong-armed in negotiations with Qualcomm over licensing.1 [6] Based on this evidence, Judge Koh concluded that Qualcomm had wrongfully suppressed competitors in the premium LTE modem chip market to demand unnecessary licensing fees from its customers. The FTC only issued the original complaint after a split vote by the FTC Commissioners in the last days of the Obama Administration, with a rare dissenting written statement by then Commissioner Ohlhausen. Qualcomm patented processors and other standard-essential technology used in mobile devices, mobile operating systems and cellular networks, and licensed its technology to more than 340 product companies, including phone vendors. Among other allegations, the FTC claimed that Qualcomm’s royalty rates are unreasonably high and “impose an artificial and anticompetitive surcharge” on its chip market rivals’ sales. Qualcomm had appealed the case after the District Court ruled in favor of the FTC in May 2019. The case FTC v. Qualcomm Inc. dealt with this issue where the United States’ Federal Trade Commission (FTC) sued Qualcomm for anti-competitive and monopolistic practices. The FTC argued that if Qualcomm was not subject to an antitrust duty to deal under Aspen Skiing, the company still engaged in anticompetitive conduct in violation of Section 2 … And lastly, the Court required Qualcomm to submit to compliance and FTC monitoring procedures for seven years. The decision validates our business model and licensing program and underscores the tremendous contributions that Qualcomm has made to the industry. A judge rules the chipmaker is a monopoly, dealing a blow to Qualcomm. The Court noted that many of Qualcomm's premium LTE modem chips are required by "OEMs- producing premium handsets" and that there are no "available sub… Docket for FTC v. Qualcomm Inc., 19-16122 — Brought to you by the RECAP Initiative and Free Law Project, a non-profit dedicated to creating high quality open legal information. The appellate court’s rulings on both the logical flaws in the FTC’s “surcharge theory” and the reasonableness of Qualcomm’s procompetitive justifications closely follow Professor Nevo’s testimony. 19-05-21 FTC v. Qualcomm Ju... by on Scribd Tags: lawsuit, FTC, Qualcomm [ 92 comments] Top Rated Comments. A ten-day bench trial was held in January 2019. more about our use of cookies on cmaier. The FTC case, filed in 2017, is among numerous challenges to Qualcomm’s practices from competitors, customers and regulators worldwide. Judges can be too demanding of plaintiffs and thereby stymie meritorious cases, but that is not what happened in FTC v. Qualcomm. On August 11, 2020, the Ninth Circuit Court of Appeals reversed a decision of Judge Koh sitting in the Northern District of California that certain of Qualcomm’s business practices relating to its standards essential patents (SEPs) breached the antitrust laws. On August 11, 2020, the Ninth Circuit Court of Appeals reversed a decision of Judge Koh sitting in the Northern District of California that certain of Qualcomm’s business practices relating to its standards essential patents (SEPs) breached the antitrust laws. The court denied Qualcomm's motion to dismiss and found that the FTC had alleged a valid antitrust complaint, and they agreed to the FTC's motion for partial of summary judgment, finding that Qualcomm did have a duty to provide licenses on fair, reasonable, and nondiscriminatory, or FRAN terms, for any patents declared to a couple of certain standard development organizations. At that time, we characterized the district court’s order and injunction as either “a trailblazing application of the antitrust laws” or “an improper excursion beyond the outer limits of the Sherman Act.” Id. [3] Judge Koh found the lack of alternatives was a result of Qualcomm's refusal to license its SEPs to its competitors. [10] The Antitrust Division's unusual entry into the FTC case highlights the current DOJ's concerns about regulatory overreach by antitrust authorities. That ruling said Qualcomm wrongfully suppressed competitors in the phone chip market by … Deep Dive Episode 94 – FTC v. Qualcomm. First, the FTC alleged that Qualcomm had considerable market power in the premium LTE modem chip market. Technology is based on CDMA ( 3G ) and LTE ( 4G ) modem.... Is based on CDMA ( 3G ) and LTE ( 4G ) modem chips that embody portions of technology! Written notes to support their allegations not Quite Done by Chris Taylor | SEP 11, 2020 excessive. 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