Mobile silicon giant Qualcomm has refuted allegations made by the Japan Fair Trade Commission (JFTC) this week accusing it of violating the intellectual property rights of local handset makers. The regulator has imposed a ‘cease-and-desist’ order on Qualcomm’s alleged practice of forcing its local partners to accept cross-licensing agreements that effectively give Qualcomm use of Japanese patents for free and bars them from asserting their essential patents against other licensees under the same agreement. However, Qualcomm argued that none of its partners were forced to enter the agreement, which it claimed promotes ‘patent peace’ and reduces transaction costs and licensing fees.
“In addition to Qualcomm, many other industry members throughout the world, including handset and infrastructure manufacturers as well as wireless operators, have relied on these provisions in business planning,” said Qualcomm’s Donald J. Rosenberg in a statement. “If Qualcomm were to eliminate these provisions, there is a risk that some Japanese licensees may attempt to assert their previously licensed patents against Qualcomm, its customers and its licensees.” Qualcomm said it would exercise its right under Japanese law to have a full evidentiary hearing, and would pursue an appeal before the Japanese courts if the JFTC affirms the order following administrative review. According to a Reuters report, Qualcomm supplies to local vendors such as NEC, Panasonic and Sharp, and earns roughly 10 percent of its revenue from Japan. The vendor has also been under investigation in neighbouring South Korea, where it was recently fined US$200 million by South Korea’s antitrust agency for discriminatory licensing practices.