Judge's ruling is bad for Qualcomm, good for phone manufacturers
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Back in May, Judge Lucy Koh ruled that Qualcomm's business practices are anti-competitive. The judge, already known for presiding over the iconic Apple v. Samsung patent trial sat through the FTC v. Qualcomm non-jury trial held earlier this year. Judge Koh found that the chipmaker's business practices violated antitrust laws. These included Qualcomm's "no license, no chips" policy and its failure to license standard-essential patents to competitors at a fair, reasonable and non-discriminatory (FRAND) manner. These are patents that companies need to license so that their products can meet technical standards. Qualcomm was also called out by Judge Koh for charging royalties based on the retail price of a phone instead of just the cost of its chips.
Judge Koh's decision makes LG happy
The FTC v. Qualcomm trial was held in January and featured testimony from employees of several phone manufacturers. Many testified about Qualcomm's onerous terms for licensing its IP and how it bases the royalties it charges manufacturers on the entire retail price tag of a phone. So instead of paying a percentage of a $20-$40 part for each unit sold, phone manufacturers were charged a percentage of retail prices amounting to $400 and up for each phone rung up with a Qualcomm part. This is the difference between the chipmaker receiving dollars per phone or pennies per phone.

Phone manufacturers like LG are negotiating licenses and chip supply agreements for Qualcomm's 5G modem chips
One of those who took the stand was Apple supply chain executive Tony Blevins. At the time, Apple and Qualcomm were not on speaking terms and both companies had filed multiple suits against each other. But that all changed in April after closing arguments were heard in a trial that pitted Apple against Qualcomm. A settlement was announced that resulted in Apple paying Qualcomm an undisclosed amount (believed to be as much as $4.5 billion) and in return, Apple received a licensing agreement for six years (with a two-year option) and a multi-year chip supply agreement. In addition, both sides dropped all lawsuits filed against each other.
One phone manufacturer happy with Tuesday's decision is LG. It doesn't want to see Koh's decision stayed because it is currently negotiating a licensing and chip supply deal with Qualcomm and is worried that it might be forced to sign another "unfair" deal with the company. And needless to say, the FTC was also against a ruling that would stay the decision.
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