The US Court of Appeals for the Ninth Circuit overturns a ruling finding that a semiconductor company’s licensing practice abused its dominant position (Qualcomm)

On 11 August 2020, a panel of the U.S. Court of Appeals for the Ninth Circuit (“Ninth Circuit”), in a unanimous opinion by Judge Callahan, reversed the U.S. Federal Trade Commission’s (“FTC’s”) win in the district court against Qualcomm Inc. (“Qualcomm”) and upheld Qualcomm’s licensing practices, including (1) its policy of licensing only to original equipment manufacturers (“OEMs”) and not to direct competitors, and (2) its “no license, no chips” policy of selling chips to customers only if they also agree to pay a per phone royalty fee. Qualcomm, which maintains one of the world’s largest patent portfolios, has a vast array of cellular standard-essential patents (“SEPs”). The FTC contended, and Judge Koh had found, that Qualcomm’s licensing practices in the Code Division Multiple