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Qualcomm

The South Korean Fair Merchandise Committee (KFTC) has fined Qualcomm $865 million dollars for violations of antitrust law. Qualcomm, as ane might await, strongly disputes the charges. Several of the company's business practices got information technology into trouble with the KFTC, including its practice of charging royalty rates based on the price of the smartphone rather than the SoC or chipset, likewise as diverse royalty rates for Qualcomm patents.

Bloomberg reports that Qualcomm simply licensed its patents to mobile phone manufacturers and didn't properly negotiate license terms. It is as well accused of coercing customers to sign patent licenses, and not paying fairly for the patents held past other phone manufacturers. Smartphone patent litigation tends to exist a blizzard of claims and counter-claims, since any unmarried smartphone contains a huge group of technologies and products. Qualcomm has previously been accused of using financial incentives and predatory pricing to distort the EU market, merely the KFTC agreement appears to rely on a different set up of allegations and problems than the EU's investigation from mid-2015.

Qualcomm, as you might expect, is having a scrap of a meltdown.

"Qualcomm strongly believes that the KFTC findings are inconsistent with the facts, disregard the economical realities of the marketplace, and misapply fundamental tenets of competition law," Don Rosenberg, executive vice president and general counsel for Qualcomm, said. "Importantly, this decision does not take issue with the value of Qualcomm's patent portfolio. Qualcomm'southward enormous R&D investments in cardinal mobile technologies and its wide-based licensing of those technologies to mobile telephone suppliers and others have facilitated the explosive growth of the mobile communications industry in Korea and worldwide, brought immense benefits to consumers, and fostered competition at all levels of the mobile ecosystem."

The reason this conclusion takes no notice of these issues is because the value of Qualcomm's patent portfolio has literally nothing to practice with whether or not Qualcomm properly licensed, charged-for, or cross-licensed the patents within that portfolio. It's like an individual claiming that a huge fine doesn't accept issue with the size and dazzler of his house, or the work he's done helping puppies with crippling cocaine addictions at a local soup kitchen.

As ZDNet reports, the KFTC had already internally decided that Qualcomm's patent licensing terms were an abuse of Standards Essential Patents (SEPs) and in violation of Off-white, Reasonable, and Nondiscriminatory (FRAND) terms. These are rules applied in situations in which a company or companies holds patents that are deemed essential to a given standard. Qualcomm, in this case, has a number of patents related to the implementation of 3G and 4G, and it'south unlikely that a 4G modem tin can be constructed without infringing on Qualcomm'south patents (at to the lowest degree, not without a substantial engineering science effort that would render the final product non-viable in the market). Firms that hold SEPs are generally required by standard-setting organizations like IEEE to license their patents under terms deemed fair, reasonable, and non-discriminatory as part of a condition of working to create a new standard.

FRAND is not a legal term, merely the phrase is by and large defined equally follows: Off-white means the patent licensing terms wouldn't exist judged as existence a violation of antitrust law if applied by a dominant corporation in its dwelling house market. Reasonable ways the licensing rate doesn't dramatically increase the toll of a new technology or make the new technology non-competitive. Not-discriminatory means that individual licensees are treated in a similar manner. Yous can accuse Company A more than Company B if Company B has negotiated a licensing deal based on book discounts or if Company B has better credit, but the underlying eligibility to take a license must be identical for each client. You can't deny a competitor a license but because they want to compete with you using a commonly-divers standard, in other words.

This isn't the get-go time Qualcomm has meet trouble over its licensing and patent practices. Qualcomm agreed to pay $975 million to Chinese regulators earlier this yr, also as to lower its licensing rates. It ran into trouble with the KFTC in 2009 over its patents on CDMA (Lawmaking Division Multiple Access), which were as well ruled to exist SEP. That case remains pending before the Supreme Court. The IEEE itself has called for industry partners to cease relying on handset-pricing when deriving licensing rates and to charge royalties based on chipsets instead.