05 September 2017
Reporter: Barney Dixon

Qualcomm loses KFTC appeal

Qualcomm has lost its bid to overturn an order issued by the Korea Fair Trade Commission (KFTC) that could change the way it licenses its standard-essential patents.

The Seoul High Court denied the semiconductor company’s appeal against the KFTC’s order in December 2016 that it must engage in good-faith negotiations with chip companies seeking a licence and negotiate possible amendments with current licensees upon request.

The KFTC ordered Qualcomm to pay $853.4 million for violating anti-trust laws when licensing standard-essential patents for mobile communications

The semiconductor company was accused of refusing to licence to its competitors, as well as entering into unfair and unbalanced licensing agreements for its standard-essential patents.

Qualcomm immediately appealed against the order in the Seoul High Court, which denied the semiconductor company on the basis that it would not suffer irreparable harm if the KFTC’s order remains in effect.

The court said the order does not invalidate any existing agreements, prohibit Qualcomm from entering into licenses for its standard-essential patents and does not limit the royalties that Qualcomm can seek or collect under current and future licences.

Qualcomm said this decision does not affect its appeal against the underlying KFTC decision, which the Seoul High Court is yet to consider.

“Qualcomm continues to believe that the KFTC’s decision is not supported by the facts and law, and was the product of a hearing and investigation that denied Qualcomm fundamental due process rights,” the company said in a statement.

It added that it plans to “preserve and pursue its arguments that the KFTC’s underlying decision exceeds its authority and principles of international law by inappropriately seeking to regulate intellectual property rights arising under the laws of other nations, including the US”.

The KFTC’s decision led to a downward spiralof anti-competitive lawsuits against Qualcomm, including a complaint from the Federal Trade Commission and a $1 billion lawsuit from Apple over the same licensing strategies.

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