Qualcomm Wins Appeal in FTC Antitrust Lawsuit

[MacRumors]

Qualcomm today scored a major victory in its ongoing antitrust battle with the FTC, winning an appeal that will prevent the San Diego company from having to renegotiate its licensing agreements with smartphone makers.

Back in May 2019, the Federal Trade Commission won an antitrust lawsuit against Qualcomm, with the court ruling that Qualcomm's "no license, no chips" model that allowed Qualcomm to refuse to provide chips to companies without a patent license, violated federal antitrust laws. The ruling required Qualcomm to renegotiate all of its licensing terms with customers in good faith.

According to Bloomberg, the federal appeals court today said that the judge in the original case was wrong to side with the FTC, and the court vacated the order mandating that Qualcomm re-establish its licensing deals with companies like Apple.

The court said that the original ruling went "beyond the scope" of antitrust law and that Qualcomm's licensing practices are not anticompetitive because Qualcomm is "under no antitrust duty to license rival chip suppliers." If Qualcomm has breached obligations to license patents under fair and reasonable terms (FRAND), the issue needs to be brought up under patent law, not antitrust law.

In a statement, the FTC called the court's ruling "disappointing" and said that it will be considering options going forward. The FTC can appeal the decision, but if it stands, it will end Qualcomm's years-long legal battle over its chip licensing deals.

Qualcomm general counsel and executive vice president Don Rosenberg told Bloomberg that the ruling validates Qualcomm's business model.

"The court of appeals unanimous reversal, entirely vacating the district court decision, validates our business model and patent licensing program and underscores the tremendous contributions that Qualcomm has made to the industry."

Qualcomm's fight with the FTC ran concurrent with its legal battle with Apple. The Qualcomm vs. Apple dispute spanned years, but was resolved last year when the two companies reached a settlement and agreed to drop all litigation.

Apple had accused Qualcomm of unfair licensing deals and overcharging for the iPhone components that it supplied to Apple, but Apple dropped the case because it has no other source for 5G modems for its iPhones. Apple tried using Intel modem chips in its devices and did so successfully for a few years, but Intel ultimately could not produce the chips Apple needed and ended up selling its modem chip business.

Apple purchased Intel's smartphone modem business for $1 billion, and in the future, intends to manufacture its own modem chips. For now, though, Apple continues to be reliant on Qualcomm and this year's iPhone 12 models will be equipped with Qualcomm modem chips.

Article Link: Qualcomm Wins Appeal in FTC Antitrust Lawsuit

 

[cmaier]

Not unexpected, it seems. Wonder if it will be appealed again.

 

[dragoon2745]

So do you just sue again but under patent law and start at the beginning again?

 

[jayducharme]

Apple dropped the case because it has no other source for 5G modems for its iPhones

And yet Congress thinks Apple is a monopoly?

 

[az431]

And yet Congress thinks Apple is a monopoly?

You're quoting an opinion, and opinions are not facts.
[automerge]1597175250[/automerge]

So do you just sue again but under patent law and start at the beginning again?

Why or how would the FTC bring a patent action against Qualcomm?

 

[GeoStructural]

I agree with the court’s decision. I think Qualcomm is entitled to charge royalties and license fees for patents and technologies that they are actively developing and improving.

Apple charges royalties for using the Lightning connector, a proprietary cable that relies on 20-year old usb protocols just for greed... so why defend Apple and condemn Qualcomm? I think the latter has more merit.

And yet Congress thinks Apple is a monopoly?

They are not saying that Apple is a monopoly, they are saying the App Store is.

 

[cmaier]

So do you just sue again but under patent law and start at the beginning again?

Who would sue? The government doesn’t sue for patent infringement.

 

[BuffaloTF]

I agree with the court’s decision. I think Qualcomm is entitled to charge royalties and license fees for patents and technologies that they are actively developing and improving.

Apple charges royalties for using the Lightning connector, a proprietary cable that relies on 20-year old usb protocols just for greed... so why defend Apple and condemn Qualcomm? I think the latter has more merit.




They are not saying that Apple is a monopoly, they are saying the App Store is.

That's not what they were doing though. Apple is the prime example here. To license a cellular modem from Qualcomm, they'd need to license everything the SOC covers, because it isn't ONLY a modem - as a percentage of the MSRP of the device itself and not the components. They don't need the CPU, their A series chips are better. They don't need the GPU, theirs are better. It includes image processing, they have their own. It includes GPS, they have their own. This also includes software licenses that they don't need, such as the fingerprint scanner software Android uses. There's many other patents they've put into their SOC, but Apple only needs the modem, but Apple would have had to pay for everything else that goes unused.

Apple charges royalties for the lightning connector... not some random and fictitious Apple Serial Bus that nobody needs to use because of USB. Just the connector.

 

[jav6454]

Not unexpected, it seems. Wonder if it will be appealed again.

It will. Several other wireless communication companies besides Apple that don't want to be held at gun point by Qualcomm's rather high and invasive royalties.

 

[boast]

I agree with the court’s decision. I think Qualcomm is entitled to charge royalties and license fees for patents and technologies that they are actively developing and improving.

That's like people enjoying new cars being sold only with $200 mats and $500 cargo liners even if you don't want them.

 

[Baymowe335]

They are not saying that Apple is a monopoly, they are saying the App Store is.

Which is completely stupid too.

It’s like saying Disney World is a monopoly because it only has Disney content.

 

[cmaier]

Which is completely stupid too.

It’s like saying Disney World is a monopoly because it only has Disney content.

And McDonald’s stubbornly refuses to let me sell my own hamburgers in their restaurants. They also refuse to allow me to sell Big Macs out of my garage. Monopoly!

 

[farewelwilliams]

I agree with the court’s decision. I think Qualcomm is entitled to charge royalties and license fees for patents and technologies that they are actively developing and improving.

Apple charges royalties for using the Lightning connector, a proprietary cable that relies on 20-year old usb protocols just for greed... so why defend Apple and condemn Qualcomm? I think the latter has more merit.

qualcomm patents are standards essential patents. lightning is not.

 

[CarlJ]

Why or how would the FTC bring a patent action against Qualcomm?

Maybe the USDA could sue them. Or the CPSC, or DOE, or DOT. Government‘s got plenty of other departments/agencies that could try.

 

[Reindeer_Legal]

And yet Congress thinks Apple is a monopoly?

When you purchase an iPhone, you agree to pay for the hardware, the operating system and various Apple services (for example, iCloud). Your property right over your iPhone gives you a right to run whatever apps you see fit that can run on your iPhone, and you did not relinquish that right by purchasing an iPhone in the first place, or by agreeing to the terms of Apple's App Store. Apple's current practices severely infringe your freedom (and developers' freedom). Apple abused its control over App Store to maximize its profits, rather to provide a reasonably-regulated marketplace for users and developers, so you could not have agreed to App Store's restrictions.

Responding to another comment about McDonald's:
You can cook your burger and eat it. In fact, you can cook your burgers and sell them to others across the street McDonald's sits on. You can eat burgers at any other restaurant. McDonald's did not say, if you live in this neighborhood, you cannot cook your own burger, you cannot sell your burger to others, you can only eat McDonald's burgers.

 

[macfacts]

And yet Congress thinks Apple is a monopoly?

Try reading the next sentence, says Intel could produce the chips.

 

[cmaier]

When you purchase an iPhone, you agree to pay for the hardware, the operating system and various Apple services (for example, iCloud). Your property right over your iPhone gives you a right to run whatever apps you see fit ...

No it doesn’t. You own the hardware, but license the software including firmware, boot loader, etc.

 

[Reindeer_Legal]

No it doesn’t. You own the hardware, but license the software including firmware, boot loader, etc.

I did not say you "own" the operating system. I said you pay to use it. No other operating system ever restricts users’ freedom like iOS. On Windows, Linux, macOS, and Android, you can just write an app, compile it and run it (and you can freely distribute it to others). On iOS, you have to pay Apple $99 just to distribute your app, which unreasonably burdens free and open-source softwares (they could have distributed their products with much lower costs (zero cost via GitHub) and no less rigorous review).

 

[cmaier]

I did not say you "own" the operating system. I said you pay to use it. No other operating system ever restricts users’ freedom like iOS. On Windows, Linux, macOS, and Android, you can just write an app, compile it and run it (and you can freely distribute it to others). On iOS, you have to pay Apple $99 just to distribute your app, which unreasonably burdens free and open-source softwares (they could have distributed their products with much lower costs (zero cost via GitHub) and no less rigorous review).

There are many operating systems that restrict your freedom well beyond iOS. Good luck installing apps on the OS in your car. Or installing unblessed apps on your average smart tv.

And $99 is not the charge to distribute your app. The $99 fee includes support, tooling, etc.

In any event your points are off-topic. You don’t have a “right” to install whatever you want on an ios device, because when you bought it and first set it up you agreed to a contract that says otherwise, as a condition of your license to use the software built into the device.

 

[Reindeer_Legal]

1. If the smart TV is Android-based, then it does not prevent me from installing whatever I want.

2. If $99 fee is not the charge to distribute my app, then why do I need to pay $99 to distribute my app? Apparently I don't need to pay anything to use Xcode (the tooling). And "support" is just nominal.

3.

a contract that says otherwise, as a condition of your license to use the software built into the device.

That's just patently false. Apple's license (https://www.apple.com/legal/sla/docs/iOS13_iPadOS13.pdf) does not say I cannot use apps other than those from App Store. If I somehow manage to bypass iOS's restriction (without decompiling or reverse-engineering Apple Software) and installed an app not from App Store, that does not violate Apple's license. To the extent that I am granted "a limited non-exclusive license to use the Apple Software", I am granted a right to use the Apple Software however I see fit and therefore a right to install whatever I want.

 

[cmaier]

1. If the smart TV is Android-based, then it does not prevent me from installing whatever I want.

2. If $99 fee is not the charge to distribute my app, then why do I need to pay $99 to distribute my app? Apparently I don't need to pay anything to use Xcode (the tooling). And "support" is just nominal.

3.
That's just patently false. Apple's license (https://www.apple.com/legal/sla/docs/iOS13_iPadOS13.pdf) does not say I cannot use apps other than those from App Store. If I somehow manage to bypass iOS's restriction (without decompiling or reverse-engineering Apple Software) and installed an app not from App Store, that does not violate Apple's license. To the extent that I am granted "a limited non-exclusive license to use the Apple Software", I am granted a right to use the Apple Software however I see fit and therefore a right to install whatever I want.

Good luck bypassing iOS’s restrictions without violating section 2(d).

As for the $99, it includes distribution, but also all the other things i mentioned (and more, actually).

And not all smart TVs are android-based. And even if they were, it wouldn’t disprove my point that contrary to what was claimed, ios is not “the only” operating system that controls what apps can be installed.

 

[alien3dx]

And yet Congress thinks Apple is a monopoly?

diff segment of business..

 

[alien3dx]

1. If the smart TV is Android-based, then it does not prevent me from installing whatever I want.

2. If $99 fee is not the charge to distribute my app, then why do I need to pay $99 to distribute my app? Apparently I don't need to pay anything to use Xcode (the tooling). And "support" is just nominal.

3.
That's just patently false. Apple's license (https://www.apple.com/legal/sla/docs/iOS13_iPadOS13.pdf) does not say I cannot use apps other than those from App Store. If I somehow manage to bypass iOS's restriction (without decompiling or reverse-engineering Apple Software) and installed an app not from App Store, that does not violate Apple's license. To the extent that I am granted "a limited non-exclusive license to use the Apple Software", I am granted a right to use the Apple Software however I see fit and therefore a right to install whatever I want.

1. Nope.. Install what you heart desire . Some setup box also fixed to some apps thou.

2. 99 is to publish but still you can create an app and use yourself and re-install it when time come. Only distribution via apple store need 99 and 199 distribution to your company /colig company.

3. Be grate to be hacker wannabe or just code monkey but not system analyst. Analyst wouldn't waste time digging nonsense.

 

[Reindeer_Legal]

Good luck bypassing iOS’s restrictions without violating section 2(d).

As for the $99, it includes distribution, but also all the other things i mentioned (and more, actually).

And not all smart TVs are android-based. And even if they were, it wouldn’t disprove my point that contrary to what was claimed, ios is not “the only” operating system that controls what apps can be installed.

AFAIK all smart TV OSs (other than tvOS) are based on Android. But TV OSs are not general-purpose OSs anyway.

 

[Reindeer_Legal]

2. 99 is to publish but still you can create an app and use yourself and re-install it when time come. Only distribution via apple store need 99 and 199 distribution to your company /colig company.

Self-signed apps have some restrictions on functions (network settings and others). And I have no way to distribute it to others (similarly, I have no way to accept distributions from others).