A US judge ordered Qualcomm to renegotiate its patent licence agreements, ruling the company had for years engaged in anticompetitive practices to secure favourable terms.
The decision came after nearly four months of deliberations in a case brought by the US Federal Trade Commission (FTC), which accused Qualcomm of using its dominant market position to force customers, including Apple, to pay excessive patent licensing fees.
Qualcomm blasted the decision in a statement, adding it will seek an immediate stay of the ruling and an expedited appeal.
“We strongly disagree with the judge’s conclusions, her interpretation of the facts and her application of the law,” Qualcomm EVP and general counsel Don Rosenberg commented.
The judge ruled Qualcomm used anticompetitive conduct to negotiate its patent licences, threating to withhold access to chip supplies, software and technical support to secure favourable deals.
She concluded the company’s licensing practices “strangled competition in the CDMA and premium LTE modem chip markets for years, and harmed rivals, OEMs and end consumers in the process.”
In particular, she cited Intel’s inability to compete and ultimate exit from the market as an example of such harm.
The judge ordered Qualcomm to renegotiate its licence agreements without using such tactics and submit to compliance monitoring for seven years, filing annual reports with the FTC.
She also blocked the company from entering into exclusive agreements for the supply of modem chips and demanded it make “exhaustive” standards essential patents available to other modem chip suppliers on reasonable terms.