Qualcomm’s “No License, No Chips” Program Violates Antitrust LawsClick here to read the full article online
On May 21, 2019, following a full trial on the merits, Judge Koh of the Northern District of California issued a 233-page opinion in a closely watched case between the Federal Trade Commission (“FTC”) and Qualcomm, one of the largest chip suppliers in the world. See FTC v. Qualcomm Inc., No. 17-CV-00220-LHK, slip op. (N.D. Cal. May 21, 2019). In a decision Qualcomm has vowed swiftly to appeal, Judge Koh found violations of Sections 1 and 2 of the Sherman Act (and, therefore, a violation of Section 5 of the FTC Act) and invalidated Qualcomm’s “No License, No Chip” business model, condemned discounts characterized as de facto exclusive dealing, and entered an injunction upending Qualcomm’s business model. Depending on how the appeal fares, the decision may have significant implications for licensing practices of holders of Standard Essential Patents (“SEPs”), including for 5G and the Internet of Things (“IoT”).