Qualcomm asks US judge to suspend antitrust decision while chip maker calls Reuters

By Stephen Nellis

(Reuters) – Qualcomm (NASDAQ 🙂 Inc. on Tuesday urged a federal judge not to enforce its illegal exit decision from rivals in the smartphone chip market, as it plans to form a call likely to take more 39, a year to sift. courts.

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 concerns only the question of whether the provisions of the decision will be temporarily suspended as it unfolds.

Qualcomm argued that Koh's decision raised "serious legal issues", in part because it excluded the evidence after a deadline of March 2018, including the fact that Apple Inc. (NASDAQ 🙂 had Abandoned Qualcomm for the benefit of a competing chip supplier. Intel Corp (NASDAQ :), showing that Qualcomm had no stranglehold 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 that Koh's decision would require it to rework its licensing agreements and even to offer contracts to rival chip suppliers, thus blurring its business in a way that would make it impossible to solve if his call was won. Shares of Qualcomm climbed 23 percent in April after the resolution of a legal dispute with Apple, but then declined 15 percent after Koh's decision.

"After a radical restructuring of its trading relationships, Qualcomm will not be able to resume its pre-injunction activities in an orderly manner," the company said. "Nor will he be able to terminate the license agreements he has renegotiated in the shadow of an order that will be canceled afterwards."

The FTC officials did not immediately return a request for comment. A few hours before the complaint was filed, FTC Commissioner Christine Wilson, nominated by President Donald Trump, wrote a commentary in The Wall Street Journal, calling Koh's decision "alarming" and calling for a review.

"Speaking for myself, and not for the FTC or any other commissioner, encourages the higher courts to reconsider the wisdom of the judge's findings," writes Wilson. "In the meantime, I write to clearly inform companies, other antitrust supervisors abroad, and law students, I feel that this decision is both a bad law and a 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 felt 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. Switching to a license from 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 makers such as Apple and Samsung Electronics (KS 🙂 Co Ltd. Koh demanded that Qualcomm be monitored for seven years to ensure that she respected her 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 Appeals to do the same. The company's appeal on the legal basis of the decision will continue 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.