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At a lawsuit in January, Carl Shapiro, professor of economics at the University of Berkeley, said on behalf of the Federal Trade Commission that Qualcomm had harmed the game of competition. Justice Lucy Koh has ruled in favor of the FTC and Qualcomm has appealed.
Vicki Behringer
Until his appeal is heard, Qualcomm requested a time limit for reforms ordered by a district court, including the requirement for the chip maker to renegotiate licensing agreements with the manufacturers of phones. And that's using the 5G race to help justify a stay.
The company filed a petition Monday at the US Court of Appeals for the Ninth Circuit, asking the court to grant a stay, as the implementation of these actions "would fundamentally change the way it has operated for decades ". If the court of appeal ends up being in favor of Qualcomm, said the chip giant, the company will not be able to cancel the changes made. Qualcomm also filed a request for expedited briefing and hearing for the appeal.
"This court has ruled several times that a stay is warranted when a – as here – an injunction imposes changes to a party's business practices and trading arrangements that can not be rescinded by the subsequent annulment of the judgment of the district court of this court, "said Qualcomm in his report. deposit requesting suspension. "There is no basis for avoiding this established and healthy practice."
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The powerful chip maker Qualcomm is too powerful, judge …
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Qualcomm also cited the global 5G race and the US priority to take the lead in next generation ultra-fast technology.
"If the injunction is not suspended, the injunction will significantly harm an American company, the world's leading developer of cellular technologies, at a critical time in the development of global standards for 5G cellular systems." new generation, thus forgetting foreign interests, "said Qualcomm.
The company said the companies were already trying to renegotiate their contracts with Qualcomm and had indicated that it "will be forced to negotiate under the cloud of an injunction ordering it to agree to terms with which it does not." would not be otherwise.
Court of Appeal files arrive a few days after US District Court Judge Lucy Koh denied Qualcomm's request to delay the implementation of the corrective measures she had ordered after Qualcomm lost an antitrust case and was recognized as a monopoly in wireless chips. The reforms included the renegotiation of license agreements previously concluded with handset manufacturers such as LG and the Federal Trade Commission's bid for control. Qualcomm wanted the injunctions to be put on hold during the processing of the appeal process.
In a ruling last week in the Northern District of California, Koh said that she had rejected Qualcomm's motion to suspend the pending appeal after considering the motion. LG and others have presented amicus briefs against Qualcomm. lawsuits and other documents relevant to the case.
Battle of monopoly
Two years ago, the FTC accused Qualcomm of exercising a monopoly over wireless chips. The FTC said Qualcomm forced customers like Apple to work exclusively with it and charged "excessive" license fees for its technology, partly by applying a "no license, no chips" policy. Qualcomm's practices prevented competitors from entering the market, driving up the price of phones and, in turn, harming consumers, who faced higher prices for handsets, said the company. FTC.
Qualcomm argued that the pursuit of the FTC was based on an "erroneous legal theory" and that customers chose its chips because they were the best. He also argued that competition was fierce in the mobile chip market and that Qualcomm had never stopped providing processors to customers even when they were competing for licenses.
The parties clashed in an 11-day trial in January. In May, Koh ruled in favor of the FTC, saying that Qualcomm was a monopoly that illegally harmed its competitors in the wireless chip market. Decision, who came four months after the end of the trial, m said Qualcomm must change the way it does business and renegotiate licensing agreements with customers. In order to hold the company accountable, the court said Qualcomm was also required to submit compliance and monitoring reports for the next seven years and report back to the FTC on an annual basis.
"Qualcomm's licensing practices have strangled the competition in the high-end CDMA and LTE modem chip markets for years and have hurt competition, OEMs and end consumers," Koh wrote in a statement. returned in May.
This decision was a surprise for Qualcomm and other players in the mobile phone market. For Qualcomm, the verdict questioned the company's complete business model. While selling processors that connect devices to mobile networks, it also generates a significant percentage of its license revenue. If he can not charge royalties based on the value of a handset – which he had done in the past – he will generate less money and may need to rethink entirely. his model. Even if he appealed the decision, Qualcomm's licensees will likely try to modify their contracts.
Koh, in his ruling, said that Qualcomm could not force a customer to sign a license before providing the company with chips. It "shall negotiate or renegotiate license agreements with customers in good faith under conditions free from the threat of insufficient access or discriminatory provision of the provision of a modem chip or other associated technical assistance or access to software ".
As a result of this ruling, Qualcomm stated that it would seek a stay of the District Court's judgment and an expedited appeal to the Court of Appeal. The decision is now in the hands of the court of appeal.
Even though Qualcomm will probably not have to renegotiate its new deal with Apple – both have settled their long-term license and patent disputes while pleadings in a May trial – It will be necessary to offer to other customers the possibility to change their conditions.
The company in a filing Monday said that there were "good reasons" to speed up his appeal. And the FTC has accepted Qualcomm's request for a faster process, Qualcomm said.
"As described in detail in the motion for partial suspension filed simultaneously by Qualcomm, Qualcomm will suffer irreparable harm due to the current injunction, which will require prompt resolution of the call," the company said.
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