Qualcomm asks US court to the anti-trust ruling on hold, while chipmaker appeal

(Reuters) – Qualcomm Inc on Tuesday asked a federal judge not to enforce her decision that it was illegally squeezed out rivals in the smartphone chips market, as it plans to appeal that more than a year to wind through the courts.

FILE PHOTO: A sign on the Qualcomm campus is seen, as chip maker Broadcom Ltd announced an unsolicited offer to buy peer Qualcomm Inc $103 billion, in San Diego, California, USA November 6, 2017. REUTERS/Mike Blake

In a filing in federal court in San Jose, California, Qualcomm said that it believes that it can succeed in appealing the May 21 decision of the U. S. District Judge Lucy Koh in an antitrust case brought by the U.S. Federal Trade Commission in January 2017. The company has not yet filed that appeal; Tuesday, only relates to the question or the pronunciation of the provisions put on hold temporarily out of play.

Qualcomm argued that Koh ruling raised “serious legal questions” because, among other things, she excluded evidence after a March 2018 deadline – including the fact that Apple Inc declined Qualcomm in favor of the rival chip vendor Intel Corp, showing that Qualcomm does not have a stranglehold on the market. Qualcomm has also said that the FTC’s theory in the case of Qualcomm’s patent licensing practices amounted to a “tax” on the smart phone makers, the generation of profit which We then put to work, undercutting its rivals – was unprecedented in antitrust law.

Qualcomm said Koh ruling could force a rethink of the license deals, and even offer deals rival chip vendors, scrambling cases in a way that would be impossible to relax if it wins on appeal. Qualcomm shares rose from 23% in April, when it is resolved in a legal battle with Apple, but then decreased by 15% after Koh ruling.

“After a radical restructuring of its business partners, Qualcomm will not be able to return to the pre-ban in an orderly fashion,” the company said. “Nor will it be able to relax licensing agreements it has negotiated, in the shadow of an order that is later reversed.”

FTC officials not immediately return a request for comment. Hours before the filing, the FTC Commissioner Christine Wilson, who was appointed by President Donald Trump, wrote a commentary in the Wall Street Journal calls Koh’s ruling “alarming” and calling for it to be reviewed.

“Speaking for myself, and not for the FTC or any other commissioner, I urge the higher court to reconsider the wisdom of the right conclusions,” Wilson wrote. “In the meantime, I write to make clear to companies, co-antitrust enforcers abroad, and law students, it is my opinion that this decision is both bad law and bad policy.”

San Diego-based Qualcomm makes mobile processors and modem chips, but generates most of its profit from the technology of the mobile phone makers.

Koh ruled that Qualcomm’s patent licensing practices had “strangled competition” and addressed to the company to renegotiate license agreements with customers at fair prices without compromising to cut off the supplies.

They also ruled that Qualcomm must offer to license the patents on fair terms to compete with chipmakers such as MediaTek Inc. Qualcomm currently licenses for the patents-to-device-makers. The shift from licenses to other chip suppliers can reduce Qualcomm’s royalty fees of as much as $20 per phone on only a few dollars per device.

The judge also said Qualcomm could not be in the exclusive agreements that block rivals from the sale of chips to smartphone manufacturers such as Apple and Samsung Electronics Co Ltd. Koh required Qualcomm to be monitored for seven years to ensure compliance with its remedies.

As Koh denies Qualcomm’s request for the ruling on hold during the appeal proceedings, Qualcomm will ask the U.S. Ninth Circuit Court of Appeals to do the same. The company appeal on the legal merits of the ruling, and will continue, even if he loses his application to the provisions relating to the keeping if the process takes place.

Qualcomm had argued during a 10-day non-jury trial before Koh in January was a dominant position on the market for smartphone chips technology leadership, not to freeze out rivals.

Reporting by Stephen Nellis in San Francisco; Editing by Lisa Shumaker

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