Qualcomm Files Motion to Dismiss FTC Patent Antitrust Lawsuit

trademark, registered. FTC

As of April 13, 2017, the Federal Trade Commission (FTC) is at loggerheads with Chipmaker and mobile technology giant Qualcomm over a heated antitrust lawsuit involving Apple. Qualcomm filed a motion to dismiss the January lawsuit, as the FTC tries to speed the case along. The bulk of Qualcomm’s profit comes from patent licensing agreements, the subject of the antitrust lawsuit.

Discovery Phase

The FTC

The FTC asserted that Qualcomm illegally overcharged for its patent chip technology, and on a huge scale. It suggested that Qualcomm abused its market dominance and position.

The FTC also alleged that because Qualcomm supplies baseband chips to much of the cellphone market, it can force companies like Apple to sign expensive licensing deals for technology not even used in its chips. A knowledgeable FTC attorney can provide helpful advice on competition law affairs, at the onset.

The FTC believes it is protecting innovation, competition, and consumer pricing for electronic devices.

During discovery on April 12, 2017, the FTC attorney stated concerns that if discovery (and the rest of the suit) did not move along at a good pace, their ability to obtain equitable and effective relief would be jeopardized.

Qualcomm

One of Qualcomm’s arguments is that Apple allegedly put the FTC up to an unsubstantiated lawsuit. This is something they say Apple has done elsewhere in the world. Apple is presently withholding billions of dollars in royalty payments from Qualcomm.

Qualcomm has been under worldwide scrutiny with fines in South Korea ($854 million), China ($975 million), the EU, and elsewhere. Additionally, Blackberry was awarded $814.89 million in arbitration April 13, 2017, in a similar dispute with Qualcomm.

Qualcomm is maintaining that the FTC has no evidence of any anticompetitive harm to its rivals. The motion to dismiss is based on the fact that competitors have not yet produced a single instance where they have suffered loss as a result of Qualcomm’s patent royalties. After the FTC responds to the motion May 12, 2017, Judge Lucy Koh will decide whether to dismiss.

Conclusion

The early filing of a motion to dismiss is routine. If denied, the antitrust suit could be drawn out. The wild card is whether the change of federal leadership to Republican will affect the longevity and outcome. The FTC’s chairwoman is Republican and dissented from filing the case. The other sitting member is a Democrat, and voted in favor of the lawsuit. There are three out of five vacancies remaining.