A US appeals courtroom on Tuesday reversed a decrease courtroom ruling in opposition to chip provider Qualcomm in an antitrust lawsuit introduced by the Federal Trade Commission.
The US Ninth Circuit Court of Appeals additionally vacated an injunction that may have required Qualcomm to vary its mental property licensing practices.
The choice was a significant vindication for the San Diego-based firm, the biggest provider of chips for cell phones and a key generator of wi-fi communications expertise.
Qualcomm was combating a May 2019 choice by US District Judge Lucy Koh in San Jose, California. Koh sided with the FTC, writing that Qualcomm’s follow of requiring telephone makers to signal a patent license settlement earlier than promoting them chips “strangled competition” and harmed shoppers.
But the appeals courtroom, in a 3-Zero ruling written by Circuit Judge Consuelo Callahan, dominated that Qualcomm had no responsibility to license its patents to rival chip suppliers and that it was not anticompetitive to require telephone makers to signal a license settlement.
“Instead, these aspects of Qualcomm’s business model are ‘chip-supplier neutral’ and do not undermine competition in the relevant antitrust markets,” Callahan wrote.
Qualcomm praised the choice whereas the FTC known as it “disappointing.”
“The Court of Appeals unanimous reversal, solely vacating the District Court choice, validates our enterprise mannequin and patent licensing program and underscores the large contributions that Qualcomm has made to the business,” Don Rosenberg, Qualcomm’s general counsel, said in statement.
The FTC’s Bureau of Competition director, Ian Conner, said in a statement, that the agency “will likely be contemplating our choices.”
The case divided US antitrust regulators with the Justice Department intervening to file a brief in support of Qualcomm.
The Justice Department did not immediately respond to requests for comment.
Qualcomm shares rose about 4 percent on the news. The shares have been up from March lows as the company continued to show growth despite a sluggish smart phone market.
Qualcomm had argued that the FTC decision, if allowed to stand, would upend its business model by requiring it for the first time to license its technology to rival chipmakers and rework many of its patent licensing deals with phone makers.
Qualcomm won a pause in enforcement of the decision while its legal appeal played out and voluntarily changed how it structured some of its licensing deals for 5G technology. With the appeals victory and raft of new agreements signed with customers since the case was decided, Qualcomm is largely clear to resume conducting business as it had for decades before the FTC case.
Qualcomm’s business model often prompted conflict with phone makers, most notably Apple, which supported the FTC’s case and mounted a separate antitrust lawsuit against Qualcomm.
The phone makers bristled at Qualcomm’s insistence that manufacturers license its broad patent portfolio regardless of whose chips they chose.
Apple settled its case against Qualcomm in 2018 and signed a license deal and chip supply agreement. Other major phone makers such as Samsung Electronics and Huawei Technologies have additionally settled disputes with the chip provider and signed license offers for the reason that FTC case was determined.
© Thomson Reuters 2020
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