Antitrust and Unfair Competition Law

Competition: Spring 2021, Vol 31, No. 1

RECENT DEVELOPMENTS IN FEDERAL ANTITRUST LAW

By Shana Wallace1 and E. Kate Patchen2

I. NOTABLE ANTITRUST CASES

A. FTC v. Qualcomm3

The Ninth Circuit reversed Judge Koh’s decision in the district court that Qualcomm’s conduct related to its cellular standard essential patents (SEPs) and its monopolies in CDMA and premium LTE chips had violated the antitrust laws.4 Qualcomm’s SEPs are crucial to our modern day cellular existence and the manufacturers that make that existence possible. Although Qualcomm’s licensing of its cellular SEPs is profitable, the Ninth Circuit explained that Qualcomm is "no one-trick pony"—which is fortunate for Qualcomm because its ability to charge supracompetitive prices on its SEPs is at least somewhat circumscribed by the fact that they are subject to licensing on fair, reasonable, and nondiscriminatory ("FRAND") terms.5 Qualcomm could, however, arguably shore up its dominant position in chip sales (where it arguably faced at least some competition, even if mostly prospective) by charging all customers a fee for the use of any chips (whether Qualcomm’s or a competitor’s chips) that incorporated its SEPs, which Qualcomm dubbed a "patent royalty."6

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