FRAND declaration to license and patent-infringement indemnifications -FTC v. Qualcomm Case No. 19-16122 (9th Cir. 2020)

Qualcomm has long dominated the modem chip and handset industry with its research and development capabilities in mobile communications modem chips and its robust patent portfolio. The U.S. FTC alleged that Qualcomm's series of business practices of selling modem chips and licensing patents under its "no-license, no-chips" policy was anticompetitive against competing chipmakers and handset manufacturers. The district court ruled in favor of the FTC's claims, Qualcomm appealed. A panel of the Ninth Circuit Court of Appeals restated the issue, focused on the impact of Qualcomm's business practices in the modem chip market, "the area of effective competition," The court held that Qualcomm's business practices were hypercompetitive, but not anticompetitive, because Qualcomm had no obligation under the FRAND declaration or antitrust law to license essential patents to chipmakers competing in the modem chip market, and reversed the district court's decision as erroneous. Based on my review of these cases, I will discuss the obligations under the FRAND declaration and antitrust law to license competing chip makers, including the relationship between FRAND declaration to license and patent-infringement indemnifications