Qualcomm denies Japanese allegations on patents abuse
Published: 14 August, 2009
READ MORE: Japan | Qualcomm | Regulator
Qualcomm has broken its silence on antitrust complaints by Japan's Fair Trade Commission (JFTC), denying allegations that it forced Japanese companies to cross-license patents on a royalty-free basis in order to use Qualcomm IPR, and so to give up essential patent rights.
In the wake of a $208m fine from the Korean FTC, Qualcomm last month received a draft order from the Japanese body. This warned that the JFTC would soon issue a formal notice to the chip giant to "stop abusing its market dominance in violation of antitrust law". The complaint was spearheaded by NEC, Mitsubishi and Panasonic, which claims Qualcomm's contracts include a clause that allows it to use their patents freely and restricts their ability to appeal against perceived IPR violations.
At the time, the US chip giant was unable to comment in detail, beyond saying the draft appeared to be directed at common, industry standard licensing terms, which had been the result of "intense negotiations" with major Japanese vendors - in other words, hardly firms that could be easily bamboozled into unfavourable contract terms.
Having made a full review of the JTFC order (which remains only in draft so far), Qualcomm has issued a more official response, and has come out fighting, saying it
will oppose any modifications to existing licenses with Japanese companies.
"If Qualcomm were to eliminate these provisions as contemplated by the draft order, there is a risk that some Japanese licensees may attempt to assert their previously licensed patents against Qualcomm, its customers and its licensees," the company said in a statement. "These licenses were agreed to voluntarily by the Japanese licensees many years ago, after extensive arms-length negotiations."
It added that some Japanese customers has rejected the "non-assert provision" and their contracts did not include it.
Qualcomm will submit a written response opposing the draft order within the next two weeks, and the JFTC will then decide whether to issue a formal order, modify the complaint, or withdraw altogether. If action goes ahead, Qualcomm says it will request a full evidentiary hearing and review, so it can argue its case in full to the JFTC.
Japanese phonemakers are under intense pressure as the country's operators become less reliant on their homegrown suppliers, and most vendors fail to make significant inroads into global markets.
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