The Federal Trade Commission (FTC) of the United States has won the first round of litigation against Qualcomm. Judge Lucy H. Koh of the United States District Court for the Northern District of California has just found that the San Diego-based chipset maker violated the FTC Act, and has ordered the following remedies:
(1) Qualcomm must not condition the supply of modem chips on a customer’s patent license status and Qualcomm must negotiate or renegotiate license terms with customers in good faith under conditions free from the threat of lack of access to or discriminatory provision of modem chip supply or associated technical support or access to software.
Qualcomm - SEP - Suppliers - FRAND - Terms
(2) Qualcomm must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory ("FRAND") terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms.
(3) Qualcomm may not enter express or de facto exclusive dealing agreements for the supply of modem chips.
Qualcomm - Ability - Customer - Government - Agency
(4) Qualcomm may not interfere with the ability of any customer to communicate with a government agency about a potential law enforcement or regulatory matter.
(5) In order to ensure Qualcomm's compliance with the above remedies, the Court orders Qualcomm to submit to compliance and monitoring procedures for a period of seven (7) years. Specifically, Qualcomm shall report to the FTC on an annual basis Qualcomm’s compliance with the above remedies ordered by the Court.
Remedies - FTC - FTC - Counts - Victory
Even though some of the remedies requested by the FTC were found too vague, the FTC has practically prevailed on all counts. This is a resounding victory for the U.S. competition enforcement agency over Qualcomm.
The judgment in the narrowest sense is just one paragraph (PDF):
May - Court - Findings - Fact - Conclusions
On May 21, 2019, the Court entered its Findings of Fact and Conclusions of Law, and found that Defendant violated the Federal Trade Commission Act. ECF No. 1490....
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