The U.S. Court of Appeals for the Ninth Circuit is set to hear oral arguments tomorrow in the closely-watched case of FTC v. Qualcomm (N.D. Cal. May 21, 2019), which will review the issue of whether Qualcomm is required to license its standard essential patents (SEPs) to modem-chip suppliers, after the district court determined that the company’s “no license, no chips” policy violated U.S. antitrust law.

In May 2019, Judge Lucy Koh of the U.S. District Court for the Northern District of California issued a 233-page order finding that Qualcomm had engaged in unlawful licensing practices and ordered in part that Qualcomm “must make exhaustive SEP licenses available to modem-chip suppliers on fair, reasonable, and non-discriminatory (“FRAND”) terms and to submit, as necessary, to arbitral or judicial dispute resolution to determine such terms…[and] submit to compliance and monitoring procedures for a period of seven (7) years.”

In August, the U.S. Court of Appeals for the Ninth Circuit issued a partial stay of Koh’s ruling and more than a dozen amicus briefs have been filed, most in support of Qualcomm or its arguments. As Professor Kristen Osenga explained for IPWatchdog in September, Judge Paul Michel’s amicus brief argues that the “smallest salable patent-practicing unit (SSPPU) concept” was not properly applied by the district court, which “acted as though SSPPU was mandated.” Michel also argued there are errors in the district court’s analysis of the reasonable royalty calculation and overall concerning potential effects on patent and antitrust law if the decision is affirmed.

Judge Douglas Ginsburg of the U.S. Court of Appeals for the D.C. Circuit also condemned the decision in a paper co-authored with former FTC Commissioner Joshua Wright, and attorney Lindsey Edwards of Wilson Sonsini Goodrich & Rosati. In their paper, “Section 2 Mangled: FTC v. Qualcomm on the Duty to Deal, Price Squeezes, and Exclusive Dealing,” the authors characterize the decision as being a part of “the misguided trend of using antitrust law to intervene in contract disputes between sophisticated parties negotiating over intellectual property rights.” Ginsburg et al cite three glaring errors made by Koh that demand reversal.