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posted by martyb on Monday August 17 2020, @02:32PM   Printer-friendly
from the I-thought-everything-worked-in-theory dept.

Appeals court ruling for Qualcomm "a victory of theory over facts":

A federal appeals court has tossed out a lower court ruling that Qualcomm abused its dominance of the modem chip market to force customers to pay inflated royalties for its patent portfolio. The appeals court forcefully rejected Judge Lucy Koh's 2019 analysis of Qualcomm's business practices and held that Qualcomm's behavior was merely "hypercompetitive," not anticompetitive.

The two rulings could not have been more different. In last year's 233-page ruling, Judge Koh explained Qualcomm's business practices in so much detail that it took us more than 3,500 words just to summarize her findings. This week's ruling by the Ninth Circuit Appeals Court was shorter—56 pages—and more theoretical.

The appeals court acknowledged that "from 2006 to 2016, Qualcomm possessed monopoly power in the CDMA modem chip market, including over 90% of market share." However, the court found that the Federal Trade Commission—which brought the lawsuit against Qualcomm—had failed to prove that Qualcomm had abused that power. The court reasoned that Qualcomm's licensing practices were simply designed to maximize the company's revenue—and that in itself isn't illegal.

"The plaintiff must show that diminished consumer choices and increased prices are the result of a less competitive market due to either artificial restraints or predatory and exclusionary conduct," the appeals court ruled.

Judge Koh thought the FTC had demonstrated predatory and exclusionary conduct. She described how Qualcomm threatened to abruptly cut off the modem chip supply of smartphone makers who challenged Qualcomm's high patent rates. She found Qualcomm structured deals with Apple, Samsung, LG, and other smartphone vendors to discourage them from doing business with other chipmakers. She cited internal documents in which Qualcomm executives acknowledged the anticompetitive impact of these policies.

But three judges from the Ninth Circuit Appeals Court ignored much of this evidence and waved the rest away.

"I would describe it as a victory of theory over facts," said Tim Wu, a legal scholar at Columbia University. Wu told Ars that the Ninth Circuit showed "an indifference to the actual effects" of Qualcomm's conduct.


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  • (Score: 1, Informative) by Anonymous Coward on Tuesday August 18 2020, @05:12AM

    by Anonymous Coward on Tuesday August 18 2020, @05:12AM (#1038204)
    I don't think the patent term in the US has substantially increased. From 1861 to 1994 the standard patent term was 17 years, and this was increased only slightly to 20 years in 1995 by the Uruguay Round Agreements, bringing the US patent term in conformance with the WTO's TRIPs. Copyright terms though have indeed increased much more substantially, from life of author + 50 or creation + 75 for corporate works, to life + 70 / creation + 120 for corporate works thanks to Sonny Bono and lobbying by Disney. This is substantially longer than the minimum required by the Berne Convention, which US copyright law already complied with since 1976. Thanks to that extra extension we won't see Mickey Mouse's "Steamboat Willie" (1928) enter the public domain until 2024, and before then we'll probably see Disney lobbyists on a full court press for yet another copyright extension.
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