The Federal Trade Commission (FTC) [official website] filed a lawsuit [complaint, PDF] against Qualcomm [corporate website] in the District Court for the Northern District of California [official website] on Tuesday, claiming the company monopolized a semiconductor device used in cellphones. The FTC alleges [press release] that Qualcomm, a leading supplier of baseband processors, imposed onerous conditions and licensing terms on cellphone manufacturers. According to the FTC, Qualcomm requires cellphone manufacturers to agree to license terms which would require paying higher royalty fees to Qualcomm if the manufacturer uses a competitor’s device and that the company refuses to provide licenses for competitors. The FTC also believes it precluded Apple [corporate website] from using devices of other companies in their cellphones, knowing that Apple’s business would make them a stronger company. Qualcomm responded publicly [press release] to the complaint, saying the company defends its business practices and believes the suit is “based on a flawed legal theory, a lack of economic support and significant misconceptions about the mobile technology industry.”
Qualcomm has faced several other anti-trust lawsuits over the last decade. In December 2008 the US Court of Appeals affirmed a 2007 ruling in part, and vacated in part, against Qualcomm, finding its patents unenforceable [JURIST report]. The court found that by not disclosing relevant intellectual property rights, Qualcomm was engaging in what is known as “patent hold-up” in an effort to prevent competitors from implementing the technology. Broadcom [corporate website] sued Qualcomm in federal court in 2008 asking the court to declare several Qualcomm patents exhausted and unenforceable. That suit was dismissed [JURIST report] in federal court the following year. Also in 2009, a district court dismissed [JURIST report] a consumer class action lawsuit against Qualcomm which claimed that it used patent licensing to adversely affect competition in the CDMA market. In February 2012 Apple brought suit against Motorola Mobility seeking an injunction to stop Motorola from bringing patent claims against Apple in Germany, which Apple contended violated a licensing agreement [JURIST report] between Motorola and Qualcomm.