On May 21, California federal judge Lucy Koh ordered a sweeping injunction against cellphone chipmaker Qualcomm, requiring the company to renegotiate its licenses and alter its business model. Qualcomm’s “no license, no chips” policy, which required cellphone manufacturers to license Qualcomm’s patents in order to access Qualcomm’s modem chips, was challenged by the Federal Trade Commission in January 2017. Apple also sued Qualcomm for its patent-licensing practices but, in April of this year, reached a surprising settlement on the first day of trial. See Daniel Siegal, Apple, Qualcomm Drop Multibillion-Dollar Licensing War, Law360 (April 16, 2019).

The case was long-anticipated to have a significant impact on intellectual property law and the technology industry by clarifying the obligations of standard essential patent holders to license their technology on fair terms and deal with competitors. Given the case’s potential impact, the Department of Justice took the unusual step of filing a statement of interest after the bench trial to encourage additional briefing on a potential remedy should the court side with the FTC. The DOJ’s intervention, and the judge’s ultimate decision, has exposed tensions between the DOJ and FTC, and within the FTC itself, and public scrutiny is far from over as the case heads to the Ninth Circuit on appeal.

Asserted Harm and Proposed Remedy