The Ninth Circuit’s recent decision in FTC v.Qualcomm (9th Cir., Aug. 11, 2020) is generally viewed as a resounding victory for Qualcomm. On 5G, Qualcomm’s early foundational inventions drove the standards, with 5G R&D efforts starting more than ten years ago, and that adds up to Qualcomm having invested over $61 billion in R&D, 20+% of revenue every year. As a result, Qualcomm collected large royalties and allegedly violated patent FRAND terms. I was always of the opinion that the FTC never showed any evidence that any of these three conditions met the bar for Qualcomm. Patrick founded Moor Insights & Strategy based on in his real-world world technology experiences with the understanding of what he wasn’t getting from analysts and consultants. Companies like Qualcomm spend a much higher percentage on “R” than, let’s say, Broadcom who trumpets “R&D.”. Patrick founded Moor. I chalk it up as innovation and investment. Reverses FTC Win On Qualcomm Licensing The Ninth Circuit on Tuesday reversed the Federal Trade Commission's win in its case accusing Qualcomm of … 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’s (FTC) petition for a rehearing en banc in its suit against cellular chip manufacturer and telecommunications giant Qualcomm and District Judge Stephen Joseph Murphy, III of the Eastern District of Michigan, sitting by designation, so recommends. I wrote a bit on the company’s orchestrator role here and here. We conclude that the FTC has not met its burden.”. I’ll admit, while I was surprised Qualcomm was even charged by the FTC (see my analysis here), I was even more surprised with the guilty verdict by Judge Koh. It started as a research and tech transfer company 35 years ago and was licensing CDMA wireless tech before it was selling chips. The panel concluded that to the extent Qualcomm breached Should the Ninth Circuit decide along similar lines as the Third Circuit, Qualcomm will point to other circuits (such as the Fifth Circuit) to argue there's a circuit split. The FTC argued that the panel “disregarded precedent” by “elevating patent-law labels over economic substance,” “holding that facially ‘neutral’ fees cannot violate the antitrust laws,” and “holding that harms to Qualcomm’s customers are ‘beyond the scope of antitrust law’ and demanding a showing of ‘direct’ harm to competitors.” Specifically, the FTC claimed that the Supreme Court “repeatedly instructed that the Sherman Act ‘is aimed at substance rather than form’…and that court must look beyond labels to ‘the economic reality of the relevant transactions.’” As a result, the FTC asserted that the appellate court should have determined that the so-called patent royalties were not royalties, but rather to secure its chip monopoly, as Judge Lucy Koh in the Northern District of California found. Unlike other analyst firms, Moorhead held executive positions leading strategy, marketing, and product groups. (CN) – After a long, intense and spirited hearing in the Ninth Circuit on Thursday, a three-judge panel will decide whether the world’s leading chip manufacturer is illegally distorting the market or simply outfoxing the competition. (CN) — A Ninth Circuit panel ruled Tuesday that chipmaker Qualcomm did not engage in antitrust behavior, handing the technology company a major win by reversing a lower court decision with potentially devastating consequences to its business. The company has asserted its economic muscle “with vigor, imagination, devotion, and ingenuity.” Topco Assocs., 405 U.S. at 610. He has nearly 30 years of experience including 15 years as an executive at high tech companies leading strategy, product management, product marketing, and corporate marketing, including three industry board appointments. The Ninth Circuit Court of Appeals was crystal clear on its ruling: Given the court went out of its way to talk about the differences between anticompetitive and hypercompetitive behavior, I thought it best to let you read what the court said about this rather than paraphrase. The regulator asked the U.S. The Ninth Circuit has thrown out an antitrust ruling against Qualcomm, allowing it to continue bundling chips and patents in a way that phone makers and the FTC … And finally, the Ninth Circuit -- or the FTC had alleged that exclusive dealings between Qualcomm and Apple -- exclusive arrangements -- was anticompetitive. 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The recent Ninth Circuit panel decision reversing the district court’s judgment in FTC v. Qualcomm, Inc., has important implications for the role of antitrust in standard essential patent (SEP) licensing. Qualcomm then sued Apple and its ODMs for non-payment. Qualcomm’s stock plummeted to $53 (today $121), which led to a hostile takeover attempt by Broadcom. F.T.C. Moorhead also has significant board experience. As you would expect, Qualcomm was elated. The court unanimously reversed the district court’s judgment (led by Judge Koh) and vacated its global injunction against the company’s business practices, which had forced it to license IP directly to its SOC and modem competitors. Federal Trade Commission v. Qualcomm Incorporated (9th Cir. 2019).. On September 25, the Federal Trade Commission (FTC) requested a rehearing en banc from the Ninth Circuit Court of Appeals in an antitrust case against Qualcomm. Guest post by University of Utah College of Law Professor Jorge L. Contreras.. Lastly, the FTC alleged that the appellate panel “seriously erred” when it dismissed the district court’s “findings about the harm to OEMs – including higher prices that are passed on to retail consumers – because OEMs ‘are Qualcomm’s customers, not its competitors.’” The FTC argued that the Ninth Circuit erroneously believed “that such harm is not cognizable because it ‘falls outside the relevant antitrust markets.’” However, the FTC claimed that this is a misstatement of the law. The United States Court of Appeals for the Ninth Circuit (Ninth Circuit) gave a landmark decision in favor of Qualcomm, on Aug 11 th 2020, in the long running antitrust case brought about by FTC. He is grounded in reality as he has led the planning and execution and had to live with the outcomes. This resulted in the FTC charging Qualcomm for anticompetitive practices, and Apple suing Qualcomm and withholding payments for Qualcomm intellectual property that same week. Qualcomm does and continues to license ODMs and CMs. Specifically, the FTC asserted that Qualcomm used its dominant market position to set forth policies that hindered competition and further solidified its purported monopoly position. The quality of those wireless patents is high, as I researched here. Qualcomm, on the other hand, showed that: Qualcomm showed real data, not imaginary or theoretical data. Qualcomm should not have to directly license its modem competitors like Huawei, Samsung, Intel (at the time), Unisoc (Spreadtrum), or MediaTek. Before Patrick started the firm, he spent over 20 years as a high-tech strategy, product, and marketing executive who has addressed the personal computer, mobile, graphics, and server ecosystems. I write about disruptive companies, technologies and usage models. The district court held that Qualcomm had an antitrust duty to license its patents to direct competitors, however the appellate panel disagreed finding the argument that the purported anticompetitive surcharge as royalty rates did not constitute antitrust violations and that the lower court did not establish “a cogent theory of anticompetitive harm.” The Ninth Circuit also found that the FTC’s argument that Qualcomm violated FRAND terms failed because the FTC did not show harm. “D” as in “development” are the expenditures that productize IP for sale in the form of a chip. Qualcomm also serves as an “orchestrator” across the industry, a role that mostly goes unnoticed. I am not a lawyer, but I have been involved over the past 30 years in some of the largest antitrust cases in technology, given my tenure at some of the top tech companies. Apple then settled with Qualcomm which included paying Qualcomm for the years it had withheld payment. This leaves intact the panel’s unanimous decision which reversed and vacated the district court ruling in its entirety. by Daniel Newman | September 25, 2020. Qualcomm, FTC Spar at 9th Circuit Over What Makes a Monopoly. You may opt-out by. The News: The U.S. Federal Trade Commission on Friday filed a motion to rehear an antitrust lawsuit it lost on appeal against Qualcomm Inc. On August 11, 2020, the US Court of Appeals for the Ninth Circuit reversed the Federal Trade Commission's district court victory in its suit challenging Qualcomm's licensing practices for its... | … Wait, I thought there was no competition (sarcasm added. It has also “acted with sharp elbows—as businesses often do.” Tension Envelope Corp. v. JBM Envelope Co., 876 F.3d 1112, 1122 (8th Cir. This requires implementation innovation  and engineering/tech support to many members of the ecosystem/value chain to ensure that the end-to-end system is optimized to provide power efficiency, performance, and Quality of Service. In August, the Ninth Circuit ruled against the FTC in its decision regarding whether Qualcomm violated the Sherman Act. Qualcomm in October asked the 9th US Circuit Court of Appeals to allow it to appeal Koh's decision. iPhone XS, Pixel 3, OnePlus 6T and 20 other phones without headphone jacks See all photos In particular, the FTC had an issue with Qualcomm’s “no license, no chips” policy, under which it did not sell chips to original equipment manufacturers (OEMs) unless they paid for a separate patent license, typically a standard essential patent. However, the FTC claimed that the Ninth Circuit the “panel declared that because Qualcomm has concealed its surcharge in a ‘patent royalty,’ the entire payment is subject to challenge only ‘in patent law, not antitrust law.’” Moreover, this contradicts the economic substance reasoning.