On May 21, 2019, District Judge Lucy H. Koh of the Northern District of California ruled that Qualcomm, Inc.’s standard essential patent licensing practices were anticompetitive. FTC v. Qualcomm, No. 5:17-cv-002200, 2019 U.S. Dist. WL 2206013 (N.D. Cal. May 21, 2019). Judge Koh found that Qualcomm possessed monopoly power in the markets for CDMA and premium-LTE modem chips. Qualcomm in turn used this monopoly power to (a) force SEP licensees into anticompetitive licensing agreements, (b) refuse to license its SEPs to rival modem chip manufacturers, (c) extract supra-competitive royalties from customers, (d) push competitors out of the market, and (e) secure exclusive deals. This anticompetitive behavior harmed original equipment manufacturers (“OEMs”) and Qualcomm’s rivals in the CDMA and premium-LTE modem chip markets. Indeed, Qualcomm had required OEMs to sign a patent license agreement before they could purchase their model chips (i.e., the no license/no chip policy), a practice which the court deemed anticompetitive.
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