Qualcomm Inc. (QCOM) has breathed a sigh of relief related to its most disturbing patent related issues as the European Commission (European Union antitrust regulator) decided to stop investigating a monopoly abuse probe into Qualcomm without taking any punitive measures against the company. The European Commission has taken this decision due to the withdrawal of complaints against Qualcomm by the majority prosecutor.
 
In Oct 2005, six large wireless handset technology developers, namely, Nokia Corp. (NOK), L.M. Ericsson AB (ERIC), Broadcom Corp. (BRCM), Texas Instruments Inc. (TXN), NEC Corp., and Panasonic Mobile Communications filed coordinated complaints alleging that Qualcomm was both violating antitrust laws and breaching its own commitments to standard-setting bodies to license its declared essential patents on fair, reasonable and non-discriminatory terms. In support of these complaints, they filed substantial economic evidence that Qualcomm’s conduct has caused mobile phone users to pay billions in unnecessary costs.
 
Qualcomm has already settled its litigation issues with Nokia and Broadcom. On Jul 27, 2009, the anti-trust authority of the Government of South Korea imposed a fine of 260 billion won (approximately $208.7 million) on Qualcomm for unfair trading practice. On the very next day, Japan’s anti-trust regulator issued a notice to Qualcomm stating that the company had illegally pressured the Japanese mobile handset makers to incur unfair licensing expenses. As a result of the actions taken by the South Korean and Japanese regulators, Ericsson and NEC Corp have withdrawn their complaints.
 
The patent disputes were mainly due to Qualcomm’s 3G WCDMA licensing practices. Resolution of these issues will not only reduce litigation expenditure of Qualcomm but also accelerate the deployment of 3G networks throughout the world. The company is the undisputed global leader in the CDMA mobile chipset market, holding more than 5,700 patent and intellectual property rights. A recent report of ABI Research estimated that Qualcomm owns roughly 1 out of every 4 patents regarding the next-generation (4G) super-fast LTE technology. Settlement of legal issues with major customers will help the company to significantly increase its top-line when the LTE network starts getting deployed rapidly within, may be, the next 2−3 years.
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