The recent Ninth Circuit panel decision reversing the district court’s judgment in FTC v. Qualcomm, Inc., has important implications for the role of antitrust in standard essential patent (SEP) licensing.
The FTC had argued that Qualcomm had used its monopoly power over chipset supply to coerce OEMs into agreeing to licensing terms for its SEPs that excluded rival chipset suppliers. The panel’s opinion rejects that theory of harm, limiting the role of antitrust remedies where patent holders fail to comply with FRAND commitments that they have made to standard-setting organizations, and is likely to push parties towards contractual and patent remedies.
As a result, companies practicing SEPs will have a harder time seeking redress through antitrust law, while companies that both hold SEPs and sell downstream parts and equipment may have more freedom to craft policies designed to maximize royalty revenue and limit competition from other downstream suppliers. This analysis traces the unusual path the litigation has taken to break down the complex positions taken on all sides. It explains the theory of harm the FTC advocated, the separate rationale adopted the District Court, the DOJ’s intervention to oppose the FTC, and of course the panel’s opinion.
Please click here to read the full analysis.