US court says Qualcomm must share essential patents with its competitors

Patents are as often the source of lawsuits as they are protectors of intellectual properties. Companies fight tooth and nail to keep their most precious patents, but sometimes it’s not entirely up to them. It appears that Qualcomm might be forced to share some of its patents, according to a recent federal court ruling reported by the Verge.

The ruling is just a preliminary one and it’s only a small part of a large scope lawsuit against Qualcomm filed by the Federal Trade Commission in 2017. The lawsuit is meant to determine if Qualcomm leveraged its intellectual assets to keep its position as the leading smartphone modem manufacturer, which could be deemed an anti-competitive practice and thus illegal.

While this is yet to be decided upon, the court that’s handling the case did rule that Qualcomm has to start licensing its standard essential patents to whoever wants to use them, including its biggest competitors: Intel and Samsung. Not doing that would allow Qualcomm “to achieve a monopoly in the modem chip market and limit competing implementations of those components.” the court explained. Standard essential patents cover technologies that are fundamental for the workings of modems.

A good analogy would be if a car manufacturer, let’s say Ford, held patents for the engine’s cylinders and pistons, forcing competitors to either use engines without cylinders and pistons (such do exist, but have many drawbacks) or pay Ford fees so high that their product isn’t competitive anymore, making it cheaper to just buy engines from Ford, the de facto monopolist on the market (in this example).

This is roughly what Qualcomm is doing with modems, allowing companies to use its technologies if they agree with its terms (usually that means buying Qualcomm chips) or pay expensive licensing fees. If the court ruling in question remains, Qualcomm will have to begrudgingly share its essential patents, opening the floodgates for other chip manufacturers to develop their own modems that will compete on equal grounds with Qualcomm’s.

As you might have guessed, the ruling is viewed as a positive one by everyone besides Qualcomm. It will likely take months before we as consumers see any benefit from it, and that’s only if Qualcomm’s appeal of the ruling is unsuccessful.