The legal battle between Qualcomm and the Federal Trade Commission is set to drag on after U.S. District Court Judge Lucy Koh shot down a motion for dismissal floated by the chip giant.
Qualcomm EVP and General Counsel Don Rosenberg indicated the company is prepared to move on to the next phase of the fight.
“In deciding Qualcomm’s motion to dismiss, the Court was required to accept all of the FTC’s factual allegations as true and construe the complaint in the light most favorable to the FTC. We respect the Court’s decision, which is based on the legal standards that apply at this early stage of the case,” Rosenberg commented. “We look forward to further proceedings in which we will be able to develop a more accurate factual record and the FTC will have the burden to prove its claims which we continue to believe are without merit.”
First pointed out by the Wall Street Journal, the decision means Qualcomm will have to continue defending its patent practices on two fronts: both in the FTC case and a similar lawsuit filed by Apple.
The FTC complaint was filed in January and accuses Qualcomm of utilizing sales and licensing practices that “hamper Qualcomm’s competitors and threaten innovation in mobile communications.” Specifically, the FTC accused Qualcomm of maintaining a monopoly on baseband processors for mobile devices and alleged the company has used its dominant position to “impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.” These practices have stifled competitors’ ability and incentive to innovate and increased the prices consumers have to pay for phones and tablets, the FTC claimed.
The FTC’s case was backed up by briefs filed by Qualcomm competitors Intel and Samsung in May. The former indicated it was “ready, willing, and able” to challenge Qualcomm’s dominance, but was unable to do so thanks to Qualcomm’s business practices.
“These practices have coerced mobile phone manufacturers into purchasing the chipsets they need from Qualcomm and Qualcomm alone,” Intel wrote. “Qualcomm’s behavior has inflicted and continues to inflict precisely the harms that the antitrust laws seek to protect against: harm to the competitive process, to consumer welfare, and to innovation and progress.”
Qualcomm has vigorously defended itself from these allegations, calling them simply “wrong.” Rosenberg has also noted previously that Qualcomm “has never withheld or threatened to withhold chip supply in order to obtain agreement to unfair or unreasonable licensing terms.”
But Qualcomm is also facing a similar – though perhaps more high-profile – lawsuit from major smartphone vendor Apple. That complaint was filed just two days after the FTC’s own, and alleges Qualcomm has been “charging royalties for technologies they have nothing to do with.” More on the Qualcomm-Apple fight here, here, and here.
Filed Under: Industry regulations
