A US appeals courtroom on Tuesday reversed a decrease courtroom ruling towards chip provider Qualcomm in an antitrust lawsuit introduced by the Federal Commerce Fee.
The US Ninth Circuit Court docket of Appeals additionally vacated an injunction that will have required Qualcomm to alter its mental property licensing practices.
The choice was a serious vindication for the San Diego-based firm, the biggest provider of chips for cellphones and a key generator of wi-fi communications know-how.
Qualcomm was combating a Might 2019 resolution by US District Choose Lucy Koh in San Jose, California. Koh sided with the FTC, writing that Qualcomm’s apply of requiring cellphone makers to signal a patent license settlement earlier than promoting them chips “strangled competitors” and harmed shoppers.
However the appeals courtroom, in a 3-Zero ruling written by Circuit Choose Consuelo Callahan, dominated that Qualcomm had no obligation to license its patents to rival chip suppliers and that it was not anticompetitive to require cellphone makers to signal a license settlement.
“As a substitute, these features of Qualcomm’s enterprise mannequin are ‘chip-supplier impartial’ and don’t undermine competitors within the related antitrust markets,” Callahan wrote.
Qualcomm praised the choice whereas the FTC known as it “disappointing.”
“The Court docket of Appeals unanimous reversal, completely vacating the District Court docket resolution, validates our enterprise mannequin and patent licensing program and underscores the great contributions that Qualcomm has made to the trade,” Don Rosenberg, Qualcomm’s common counsel, mentioned in assertion.
The FTC’s Bureau of Competitors director, Ian Conner, mentioned in an announcement, that the company “will probably be contemplating our choices.”
The case divided US antitrust regulators with the Justice Division intervening to file a quick in assist of Qualcomm.
The Justice Division didn’t instantly reply to requests for remark.
Qualcomm shares rose about four p.c on the information. The shares have been up from March lows as the corporate continued to indicate progress regardless of a sluggish sensible cellphone market.
Qualcomm had argued that the FTC resolution, if allowed to face, would upend its enterprise mannequin by requiring it for the primary time to license its know-how to rival chipmakers and rework lots of its patent licensing offers with cellphone makers.
Qualcomm received a pause in enforcement of the choice whereas its authorized attraction performed out and voluntarily modified the way it structured a few of its licensing offers for 5G know-how. With the appeals victory and raft of latest agreements signed with clients for the reason that case was determined, Qualcomm is essentially clear to renew conducting enterprise because it had for many years earlier than the FTC case.
Qualcomm’s enterprise mannequin typically prompted battle with cellphone makers, most notably Apple, which supported the FTC’s case and mounted a separate antitrust lawsuit towards Qualcomm.
The cellphone makers bristled at Qualcomm’s insistence that producers license its broad patent portfolio no matter whose chips they selected.
Apple settled its case towards Qualcomm in 2018 and signed a license deal and chip provide settlement. Different main cellphone makers equivalent to Samsung Electronics and Huawei Applied sciences have additionally settled disputes with the chip provider and signed license offers for the reason that FTC case was determined.
© Thomson Reuters 2020