FTC v Qualcomm trial begins

Trial proceedings in the antitrust suit brought by the US Federal Trade Commission (FTC) against Qualcomm have begun.

The trial began in the US District Court for the Northern District of California on Friday, January 4.

The FTC brought the suit against Qualcomm in January 2017, accusing the microchip manufacturer of using anti-competitive tactics to maintain a monopoly over the industry.

Qualcomm faces accusations of extracting royalties above fair, reasonable, and non-discriminatory (FRAND) terms from its licensees.

Both sides are set to produce testimony from a number of technology companies throughout the dispute. Foss Patents, an IP blog covering the trial, noted that both sides’ opening statements claimed that testimony from Samsung would support their respective cases.

Largely at issue is Qualcomm’s alleged “no licence-no chips” policy. The FTC accused the company of withholding its baseband processors unless customers accepted a licence to Qualcomm’s standard-essential patents on non-FRAND terms, “including elevated royalties that the customer must pay when using competitors’ processors”.

“This leaves Qualcomm’s customers in a markedly different position than they would be in a typical patent licensing negotiation,” the FTC said in the complaint.

Qualcomm’s relationship with Apple is expected to play a pivotal role in the trial. Among the issues highlighted by the FTC is the exclusive patent licensing deal Qualcomm had in place with the technology company from 2011 to 2016.

Apple and Qualcomm have been involved in litigation across several jurisdictions. Recently, Chinese and German courts have handed victories to Qualcomm after issuing injunctions against some iPhone models which Qualcomm claimed infringed its patents. Apple has denied accusations of patent infringement.

Judge Lucy Koh, presiding over the antitrust trial in the US, reportedly rebuked Qualcomm for a joke made by a member of the company’s legal team. According to the judge, the Qualcomm lawyer asked clerks at the courthouse to “settle the case for us”. Koh reminded attorneys of the rules prohibiting them from discussing the case with court staff outside of the courtroom, Bloomberg reported.

The trial is expected to close on January 28 and will last a total of ten days.