Qualcomm agrees patent licensing deal with LG

Semiconductor company Qualcomm has entered into a five-year patent licence agreement with South Korea-based LG Electronics.

Qualcomm, which announced the deal yesterday, August 20, has granted LG a patent licence to develop, manufacture and sell 3G, 4G and 5G smartphones.

John Han, senior vice president and general manager, Qualcomm Technology Licensing, said: “This agreement builds on our long-standing technology relationship and reaffirms the value of Qualcomm’s world-class patent portfolio. Qualcomm is the developer and enabler of foundational technologies for the wireless industry and is the leader in the transition to 5G.”

No licence, no chips

Earlier this year, Apple and Qualcomm settled their bitter, long-running dispute over microchip patent licensing—with Qualcomm collecting at least $4.5 billion from its patent litigation settlement.

As part of the settlement, which ended all pending litigation between the two companies, Apple secured a six-year licence to Qualcomm’s SEPs with a two-year option to extend.

Then, in June, LG opposed Qualcomm’s request for a stay after a US court found Qualcomm had violated antitrust laws.

At the time, the South Korean company claimed it would be unfairly disadvantaged if the stay was granted, as LG was negotiating supply and patent licensing agreements with the chip supplier.

The US Federal Trade Commission (FTC) also requested that the court deny the request for a stay while Qualcomm appeals.

The month before, the US District Court for the Northern District of California had sided with the US Federal Trade Commission and concluded that Qualcomm must renegotiate licencing agreements with its customers.

Qualcomm’s “no licence, no chips” business practice gave the company an “unlawfully dominant position” in the market, said the court, while ordering the semiconductor company to renegotiate its licencing deals on fairer terms.

In response, Qualcomm requested a stay while it appealed against the decision.

Qualcomm claimed that the injunction would require it to renegotiate many existing licences and offer “exhaustive licences” for its standard-essential patents (SEPs), which cover the manufacture of modem chips.

“After radically restructuring its business relationships, Qualcomm will not be able to return to its pre-injunction business in an orderly fashion. Nor will it be able to unwind licensing agreements it has renegotiated in the shadow of an order that is later overturned,” added the semiconductor company.

Battle over SEP guidelines

In June, two diverging sets of guidelines for the licensing of SEPs for 5G technology and the internet of things (IoT) were published, in the wake of high-profile disputes such as the one Qualcomm was involved in.

Both sets of guidelines were endorsed by standard-setting bodies European Committee for Standardization (CEN) and the European Committee for Electrotechnical Standardization (CENELEC), but the differences between the two are stark.

One set of guidance, published by IP Europe, a coalition of research and development-intensive organisations, aims to make it easier for small and medium-sized enterprises and other companies to access the 5G standard and develop connected products and services for the IoT.

According to IP Europe, the companies that contributed to the workshop to develop the guidelines accounted for nearly half of the contributions to cellular standards, as well as users of the technology such as Mitsubishi, Panasonic and Philips.

The rival set of guidelines, published by trade bodies the App Association (ACT) and the Fair Standards Alliance (FSA), state that SEP owners should only threaten injunctions against licensees in “exceptional circumstances” and where disputes cannot be resolved by adjudication.

A release from FSA said that those who helped put together guidelines hoped they would “help avert the litigation and antitrust problems already experienced over the past decade in the smartphone sector, and more recently in the automotive sector”.

Did you enjoy reading this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Today's top stories:

EUIPO buries Reckitt Benckiser ‘botanical’ TM

Judge orders L’Oréal to pay $50m in Olaplex trade secrets case

Netflix employs Australian site-blocking laws for the first time