Japanese regulators order Qualcomm to revise licensing deals

Japanese antitrust regulators slapped Qualcomm with a cease and desist order, and told the chip maker that it had to revise its licensing deals with Japanese handset makers.

The Japan Fair Trade Commission rejected the company's arguments against a draft order issued earlier this summer, and said that Qualcomm had to remove clauses in its cross-licensing deals that give the company free access to patents held by Japanese companies. The regulators said the companies were forced to agree to deals that reduced competition. Qualcomm supplies chips to NEC, Panasonic and Sharp. The company also was told not to engage in similar practices for LTE chips.

In response, Qualcomm said that it had not forced companies to enter into licensing agreements. The company said the agreements were subject to negotiation, are common and that they generate benefits to the wireless industry and consumers.

"These provisions promote 'patent peace,' and reduce transaction costs and licensing fees. In addition to Qualcomm, many other industry members throughout the world, including handset and infrastructure manufacturers as well as wireless operators, have relied on these provisions in business planning," Donald Rosenberg, Qualcomm's general counsel, said in a statement. "If Qualcomm were to eliminate these provisions, there is a risk that some Japanese licensees may attempt to assert their previously licensed patents against Qualcomm, its customers and its licensees." 

Qualcomm said it would request a full evidentiary hearing on the matter, and could appeal in Japanese courts. In the meantime, it said it was going to look to have the order suspended or stayed while the reviews take place.

For more:
- see this Reuters article
- see this Bloomberg article
- see this release

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