Qualcomm Vindicated in Ninth Circuit Reversal of California Court’s Antitrust Ruling

“Citing the ‘persuasive policy arguments’ submitted by experts like Judge Paul Michel and former FTC Commissioner Joshua Wright, the Court agreed with their caution against ‘using the antitrust laws to remedy what are essentially contractual disputes between private parties engaged in the pursuit of technological innovation.’”

The U.S. Court of Appeals for the Ninth Circuit today vacated a decision of the U.S. District Court for the Northern District of California finding that Qualcomm had engaged in unlawful licensing practices, and reversed a permanent, worldwide injunction against several of Qualcomm’s core business practices.

A Winding Road

In May 2019, Judge Lucy Koh 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 Ninth Circuit issued a partial stay of Koh’s ruling and more than a dozen amicus briefs were filed, mostly in support of Qualcomm or its arguments.

Koh’s ruling was widely criticized—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 Federal Trade Commission (FTC) Commissioner Joshua Wright, and attorney Lindsey Edwards of Wilson Sonsini Goodrich & Rosati. The U.S. Department of Justice notably filed a statement of interest in the case that departed from the FTC’s views. Even within the FTC, some of the commissioners have come out against the Commission’s decision to pursue the case.

At the IPWatchdog Patent Masters Symposium in September 2019, FTC Commissioner Christine Wilson told attendees that Koh’s decision “scares me” as it “radically expands a company’s legal obligation to help its competitors.”