By Stephen Nellis
(Reuters) – Qualcomm (NASDAQ:) Inc on Tuesday, a federal judge asked not to enforce its 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.
In a filing at the federal court in San Jose, California, Qualcomm said it believes it can succeed in appealing on May 21
Qualcomm argued that Koh & # 39; s decision claimed "serious legal issues" because, among other things, she excluded evidence after a date of extinction in March 2018 – including that Apple Inc. (NASDAQ 🙂 dropped Qualcomm in favor of the competition game supplier  Intel Corp (NASDAQ :), showing that Qualcomm did not have a string 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.
Qualcomm said Koh's decision will force it to rework its license agreements and even offer offers to competing chip suppliers, 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 business in an orderly fashion," the company said. "Nor will it be able to relax licensing agreements that it has renegotiated in the shadow of an order that later is overturned. "
FTC officials did not immediately return a request for comment. Hours before filing, FTC Commissioner Christine Wilson, appointed by President Donald Trump, wrote a comment in the Wall Street Journal, which calls Koh's decision" alarming "and asking for it to be revised.
" I am talking about myself, and not for the FTC or any other commissioner, I urge higher courts to reconsider the wisdom of the judge's conclusions, "wrote Wilson." To make it clear to businesses, other antitrust enforcement overseas, and law students my opinion that this decision is both bad law and bad policy. "
San Diego-based Qualcomm makes mobile phone processors and modem chips, but generates most of the profits by licensing the technology of mobile makers.
Koh states that Qualcomm's patent licensing practice had" tightened competition "and led the company to renegotiate licensing agreements with customers to reasonable prices without threatening to cut supplies.
She also ruled that Qualcomm must offer to license its patents on fair terms to competing chip makers such as MediaTek Inc. Qualcomm is currently licensing patents to device manufacturers. 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 (KS 🙂 Co Ltd. Koh required Qualcomm to be monitored t for seven years to ensure that it complied 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 expires.
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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