28 June 2017
California
Reporter: Barney Dixon

Qualcomm denied motion to dismiss FTC case


Qualcomm has been denied a motion to dismiss the US Federal Trade Commission’s (FTC) complaint over its licensing of standard-essential patents.

The FTC has accused the semiconductor company of acting in bad faith and using anti-competitive tactics in relation to key patents used in cell phones and other consumer products.

Qualcomm filed a motion to dismiss the case on multiple grounds, including that the FTC’s complaint fails to adequately allege that the royalties charged were above rates deemed to be fair, reasonable and non-discriminatory (FRAND).

Judge Lucy Koh of the US District Court for the Northern District of California denied Qualcomm’s motion to dismiss on 26 June.

The FTC filed its complaint in January, alleging that Qualcomm engaged in “exclusionary conduct that taxes its competitors’ baseband processor sales, reduces competitors’ ability and incentive to innovate and raises prices paid by consumers for cell phones and tablets”.

“Qualcomm withholds its baseband processors unless a customer accepts a licence to standard-essential patents on terms preferred by Qualcomm, including elevated royalties that the customer must pay when using competitors’ processors,” the FTC alleged.

According to the FTC, while Qualcomm was withholding these standard-essential patents, it was entering into exclusive dealing arrangements with Apple.

Apple has since sued Qualcomm for nearly $1 billion, arguing that the semiconductor company “unfairly insisted on charging royalties for technologies they have nothing to do with”.

The App Association, which represents more than 5,000 app makers including Apple, eBay, Facebook and Microsoft, welcomed the decision to deny Qualcomm’s motion to dismiss the litigation, describing it as “an important step for the tech community, particularly small businesses that depend on open standards”.

It said in a statement: “Standards provide the crucial foundation for the technologies we use daily and innovations yet to come. We strongly believe that developers, creators, and manufacturers should be able to rely on FRAND access to standard-essential patents when voluntary FRAND commitments are made.”

“Regardless of the outcome, we hope a merit-based decision by the Ninth Circuit will provide needed clarity on the meaning and scope of a voluntary FRAND promise.”

In April, the association wrote to the White House to raise awareness of Qualcomm’s alleged abuse, asking the new administration to ensure an “impartial and substantive determination” in the litigation.

More news
The latest news from IPPro Patents
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
Baker Botts promotes three in IP
21 November 2017 | Texas | Reporter: Barney Dixon
Baker Botts has promoted three intellectual property attorneys to partner, as part of a round of 11 partner promotions
Alibaba in ITC spotlight
20 November 2017 | Washington DC | Reporter: Barney Dixon
Alibaba will be investigated by the US International Trade Commission over the importation and sale of insulated beverage containers, their labels, and packaging materials
MediaTek partners with Anaqua
20 November 2017 | Boston | Reporter: Barney Dixon
Taiwanese semiconductor company MediaTek has selected Anaqua to manage its intellectual property activities, including its inventions and patents
Brazil and China sign PPH agreement
17 November 2017 | Beijing | Reporter: Barney Dixon
The State Intellectual Property Office of China has signed a patent prosecution highway agreement with the Brazilian National Institution of Intellectual Property
Cozen O’Connor hires ex-DLA Piper litigator
17 November 2017 | Washington DC | Reporter: Barney Dixon
Cozen O’Connor has hired ex-DLA Piper litigator Hugh Marbury as member in its intellectual property department
Mewburn Ellis opens Munich office
16 November 2017 | Munich | Reporter: Barney Dixon
Intellectual property boutique Mewburn Ellis has opened a new office in Munich, its first expansion outside of the UK
EPO faces backlash over scrapping of permanent employment contracts
15 November 2017 | Munich | Reporter: Barney Dixon
In an internal memo, the Staff Union of the European Patent Office described the move as “Kafkaesque”