Back in May 2019, Judge Lucy H. Koh of the United States District Court for the Northern District of California ruled that Qualcomm was in violation of the FTC Act for unlawfully suppressing competition and extracting excessive licensing fees. Qualcomm was sued by the FTC for forcing customers who wanted to buy their chips to also pay patent licensing fees for those chips.
The Appeals Court disagreed with Koh saying:
First, Qualcomm's practice of licensing its SEPs exclusively at the OEM level does not amount to anticompetitive conduct in violation of § 2, as Qualcomm is under no antitrust duty to license rival chip suppliers. To the extent Qualcomm has breached any of its FRAND commitments, a conclusion we need not and do not reach, the remedy for such a breach lies in contract and patent law. Second, Qualcomm's patent-licensing royalties and "no license, no chips" policy do not impose an anticompetitive surcharge on rival's modem chip sales. Instead, these aspects of Qualcomm's business model are "chip-supplier neutral' and do not undermine competition in the relevant antitrust markets. Third, Qualcomm's 2011 and 2013 agreements with Apple have not had the actual or practical effect of substantially foreclosing competition in the CDMA modem chip market. Furthermore, because these agreements were terminated years ago by Apple itself, there is nothing to be enjoined.
We there REVERSE the district court's judgment and VACATE its injunction as well as its partial grant of summary judgment.
“The court’s ruling is disappointing and we will be considering our options,” FTC Bureau of Competition Director Ian Conner said in a statement.
“The court of appeals unanimous reversal, entirely vacating the district court decision, validates our business model and patent licensing program and underscores the tremendous contributions that Qualcomm has made to the industry,” Don Rosenberg, executive vice president and general counsel for Qualcomm, said in an email.
More details at the link below...