Did FTC v. Qualcomm Create an Antitrust Duty to License SEPs?

In May 2019, Judge Lucy H. Koh of the U.S. District Court for the Northern District of California issued a decision in FTC v. Qualcomm. She found that Qualcomm violated the Sherman Act by, among other things, refusing to offer a license to its standard essential patents (“SEPs”) to rival manufacturers of baseband processor modems. Some commentators have suggested that the effects of Judge Koh’s judgment transcend the litigation brought against Qualcomm and create for SEP holders a general duty to offer a license to SEPs to component manufacturers. However, Judge Koh’s conclusions about the existence of an antitrust duty to license have little support in either the facts of the case or in courts’ prior decisions. It is questionable whether they will survive the scrutiny of the Ninth Circuit or, upon further appeal, the Supreme Court of the United States.

By J. Gregory Sidak¹ & Urska Petrovcic²

I. INTRODUCTION

In May 2019, Judge Lucy H. Koh of the U.S. District Court for the Northern District of California issued her findings of fact and conclusions of law in FTC v. Qualcomm.³ She found that Qualcomm violated the Sherman Act by, among other things, refusing to offer a license to its standard‑essential patents (“SEPs”) to rival manufacturers of baseband processor modems. Several months earlier, in November 2018, Judge Koh also granted the Federal Trade Commission’s (“FTC’s”) motion for partial summary judg