Law School Case Brief

FTC v. Qualcomm Inc. - 411 F. Supp. 3d 658 (N.D. Cal. 2019)

Rule:

Injunctive relief should be granted if "there exists some cognizable danger of recurrent violation.”

Facts:

Plaintiff Federal Trade Commission (FTC) brought suit against Defendant Qualcomm Incorporated (Qualcomm), alleging that Qualcomm has harmed competition in two markets for baseband processors, also called modem chips, through a set of interrelated Qualcomm practices. According to the FTC, Qualcomm’s conduct violated Section 1 of the Sherman Act, 15 U.S.C.S. § 1; (2) Section 2 of the Sherman Act, 15 U.S.C.S. § 2; and (3) Section 5 of the FTC Act, 15 U.S.C.S. § 45(a). Qualcomm moved to dismiss the FTC’s complaint. Thereafter, the FTC moved for partial summary judgment on the question of whether Qualcomm's commitments to two standard setting organizations (SSOs), the Alliance for Telecommunications Industry Solutions (ATIS) and the Telecommunications Industry Association (TIA), required Qualcomm to license to other modem chip suppliers on fair, reasonable, and nondiscriminatory terms Qualcomm's patents that are essential to practicing the ATIS and TIA standards.

Issue:

Did Qualcomm exhibit unlawful practices, warranting the grant of injunctive relief in favor of FTC?

Answer:

Yes.

Conclusion:

According to the federal district court, injunctive relief should be granted if "there exists some cognizable danger of recurrent violation.” In the case at bar it is found that Qualcomm has exhibited anticompetitive conduct, and such conduct was ongoing; thereby, an injunction was warranted. According to the court, Qualcomm continued to refuse to provide patent exhaustion, refuse to sell modem chips to an OEM until the OEM signed a license, and engage in chip supply threats and cutoffs. In addition, Qualcomm continues to withhold chip supply as leverage against OEMs. Qualcomm has also continued to use chip incentive funds and other payments to silence OEMs. Qualcomm also continues to refuse to license rival modem chip suppliers. Therefore, all of Qualcomm's unlawful practices continue unabated.