Qualcomm asks US judge to put anti-trust roll on hold in the middle of appeals

Front page of the Qualcomm office on November 1, 2017 in San Jose, California.

Justin Sullivan | Getty Images News | Getty Images

Qualcomm on Tuesday asked a federal judge not to enforce his decision that it illegally pushed out rivals in the smartphone chips market as it plans to file a complaint that may take more than a year to go through the courts. [19659002] In a filing in the federal court in San Jose, California, Qualcomm said it believes it can succeed in appealing on May 21[ads1], US District Judge Lucy Koh's decision in an antitrust case brought by the US Federal Trade Commission in January 2017.

The company has not yet filed that appeal; Tuesday's submission only applies if the decision's provisions will be put on hold temporarily when it plays out.

Qualcomm argued that Koh & # 39; s decision claimed "serious legal issues" because, among other things, she excluded evidence after a cutoff date in March 2018 – including that Apple dropped Qualcomm for the benefit of competing chip provider Intel Corp, which showed that Qualcomm did not have a love team on the market.

Qualcomm also said that the FTC's theory in the lawsuit – that Qualcomm's patent licensing practice constituted a "tax" on smartphone makers, generating profits that Qualcomm then set to undermine its rivals – was outstanding in antitrust law. [19659008] Qualcomm said Koh & # 39; s decision would force it to rework its license agreements and even offer deals to competing chip vendors, distorting its business in a way that would be impossible to relax if it wins on appeal.

Qualcomm shares shot up 23% in April when it resolved a legal conflict with Apple, but then denied 15% after Koh's decision.

"After radical restructuring of business relations, Qualcomm will not be able to return to its ordinance in an orderly manner," the company said. "Nor will it be able to relax licensing agreements that it has renegotiated in the shadow of an order that later becomes overturned. "

FTC officials did not immediately return a request for comment.

San Diego-based Qualcomm makes mobile phone processors and modem chips, but generates most of the profits by licensing the technology of mobile phone makers.

Koh stated that Qualcomms patent licensing practices had "tightened competition" and steered the company to renegotiate licensing agreements with customers at affordable prices without threatening to cut supplies.

She also ruled that Qualcomm must offer to license its patents on fair terms to rival chip makers such as MediaTek. Currently patents to manufacturers Switching to licensing to other chip providers can reduce Qualcomm's royalties from as much as $ 20 per phone to just a few dollars per unit.

The judge also said that Qualcomm could not enter into exclusivity agreements that block rivals from selling chips to smartphone manufacturers such as Apple and Samsung Electronics.

Koh required Qualcomm to be monitored for seven years to ensure that it came with its remedies.

If Koh rejects Qualcomm's request to put the decision on hold during the complaint process, Qualcomm will then ask the US Ninth Circuit Court of Appeals to do the same. The company's appeal for legal benefits of the judgment will continue even if it loses its request to put its provisions on hold while the process is over.

Qualcomm had argued during a 10-day non-jurisdiction before Koh in January that it became dominant in the market for smartphone chips through technological leadership and did not freeze rivals.

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