Qualcomm urges US judge to suspend anti-trust decision as chip maker appeals

(Reuters) – Qualcomm Inc. on Tuesday urged a federal judge not to enforce its decision to illegally rival rivals in the smartphone chip market, as it planned to form a call likely to take more money. 39, one year before being sent to court.

In a lawsuit filed in federal court in San Jose, California, Qualcomm stated that it could successfully appeal the May 21 decision of US District Judge Lucy Koh in an antitrust case brought by the US Federal Trade Commission in January 2017. not yet appealed; Tuesday's filing only concerns the possibility of temporarily suspending the provisions of the decision as it is implemented.

Qualcomm argued that Koh's decision raised "serious legal issues", in part because it excluded the evidence after a March 2018 deadline, including the fact that Apple Inc. had abandoned Qualcomm at the time. rival Intel Corp. chip supplier, which showed that Qualcomm did not have a grip on the market. Qualcomm also stated that the FTC theory in the lawsuit – that Qualcomm's patent licensing practices amounted to a "tax" on smartphone manufacturers, generating profits that Qualcomm then put to use to reduce its competitors – was unprecedented in antitrust law.

Qualcomm said Koh's decision would require him to rework his license agreements and even offer contracts to competing chip suppliers, which would make his business impossible to resolve if he wins a call. Shares in Qualcomm climbed 23 percent in April when they resolved a legal dispute with Apple and then dropped 15 percent after Koh's decision.

"After the radical restructuring of its commercial relations, Qualcomm will not be able to resume its pre-injunction activities in an orderly manner," the company said. "It will also not be able to terminate the license agreements that it has renegotiated in the shadow of an order that will be canceled afterwards."

The FTC officials did not immediately return a request for comment. Just hours before the filing of the complaint, FTC Commissioner Christine Wilson, nominated by President Donald Trump, wrote a comment in The Wall Street Journal, calling Koh's decision "alarming" and asking it is reconsidered.

"Speaking for myself, and not for the FTC or any other commissioner, I encourage higher jurisdictions to reconsider the wisdom of the judge's findings," Wilson wrote. "In the meantime, I write for companies, other foreign antitrust supervisors and law students to be clear: this decision is both a bad law and a bad one. bad policy. "

Qualcomm, based in San Diego, manufactures mobile phone processors and modems chips, but generates the bulk of its profits by selling its technology to mobile phone manufacturers.

Koh considered that Qualcomm's patent licensing practices had "strangled the competition" and ordered the company to renegotiate licensing agreements with customers at fair prices without threatening to cut supplies.

It also decided that Qualcomm should offer its rival chipmakers such as MediaTek Inc. licenses on fair terms and conditions on a fair basis. Qualcomm currently licenses its patents to device manufacturers. Licensing other chip vendors could reduce Qualcomm's royalties from $ 20 per phone to a few dollars per device.

The judge also said that Qualcomm could not enter into exclusive agreements preventing its competitors from selling chips to smartphone manufacturers such as Apple and Samsung Electronics Co. Ltd. Koh has asked Qualcomm to be monitored for seven years to ensure compliance with his appeals.

If Koh rejects Qualcomm's request to suspend the decision during the appeal process, Qualcomm will then ask the Ninth Circuit US Court of Appeal to do the same. The company's appeal on the legal basis of the decision will be continued even if it loses its request for suspension of its provisions as the process unfolds.

Qualcomm had claimed at a 10-day no-jury trial in front of Koh in January that it had become dominant in the smartphone chip market thanks to its technological leadership, instead of freezing its rivals.