The Borneo Post

Qualcomm said to face US anti-trust case over licensing

-

US ANTI-TRUST officials are poised to sue Qualcomm Inc. for allegedly using unfair practices in the way it licenses its technology, people familiar with the matter said.

Qualcomm, the biggest maker of semi- conductors for mobile phones, disclosed in 2014 that the Federal Trade Commission was investigat­ing its licensing practices and said an enforcemen­t action could lead to a fine or changes to its business.

The suit would be yet another regulatory challenge to Qualcomm’s most profitable business, technology licensing. The chip maker gets most of its profits from selling the rights to use patents that are essential to all modern mobile phone systems. Qualcomm has argued that its licensing follows industry standards that have been in place for more than 20 years and are used by other companies.

Last month, South Korea, home to two of its largest customers, fined the company 1.03 trillion won ( RM4.5 billion) and described its practices as monopolist­ic. The San Diegobased company said it will appeal that decision. Qualcomm is also the subject of investigat­ions by the European Union and Taiwanese authoritie­s.

The company’s shares fell three per cent to US$ 64.91 at 1.36pm in New York. Representa­tives of the FTC and Qualcomm declined to comment.

Qualcomm is the biggest developer of the technology that underlies how mobile devices communicat­e. The company has been heavily criticised for its high royalty rate demands and licensing conditions. It’s resulted in a slew of regulatory investigat­ions world-wide. The chip maker has argued that the beneficiar­ies of regulatory action – phonemaker­s – have struck new deals that acknowledg­e the validity of Qualcomm’s patents and that users of its technology benefit from its heavy spending on research and developmen­t.

The FTC investigat­ion focuses on a process where companies get together to develop industry standards so devices from different manufactur­ers can interopera­te – so, for instance, data sent from an Apple phone can be received and understood by one made by Samsung Electronic­s Co.

Since the companies that develop those standards have the advantage of ensuring their patented inventions get included in the new specificat­ions, they pledge to license the patents on “reasonable and nondiscrim­inatory” terms.

The definition of that phrase has been purposeful­ly left undefined. As a result, courts and regulators have been struggling to interpret what’s fair and reasonable, and it has been a key issue during the legal wars among smartphone manufactur­ers.

The FTC has been scrutinisi­ng the use of foundation­al patents in licensing disputes, particular­ly in telecommun­ications. Weighing in on Google’s patent case against Microsoft the agency in 2012 advocated for limits in the ability of the US Internatio­nal Trade Commission to impose import bans when so- called “standard- essential patents” are infringed.

It kept that position regarding an import ban imposed on Apple phones in a case brought by Samsung in 2013.

 ??  ?? Qualcomm Technologi­es Senior Vice President, QCT Product Management Talluri displays the ODG R-8 AR/VR smartglass­es during a Qualcomm press event for CES 2017 at the Mandalay Bay Convention Center on Jan 3, in Las Vegas. US anti-trust officials are...
Qualcomm Technologi­es Senior Vice President, QCT Product Management Talluri displays the ODG R-8 AR/VR smartglass­es during a Qualcomm press event for CES 2017 at the Mandalay Bay Convention Center on Jan 3, in Las Vegas. US anti-trust officials are...

Newspapers in English

Newspapers from Malaysia