Verdict on ‘lawsuit battle of the century’ between Fair Trade Commission (FTC) and Qualcomm is expected to be made by end of this year.
If FTC wins the case, Qualcomm’s plan of going back to the old business method will be ruined. If Qualcomm wins the case, FTC needs to pay fine and additional payment on refund that are worth more than $861 million (1 trillion KRW) and domestic and foreign Smartphone manufacturers will greatly lose their bargaining power when they sign contracts with Qualcomm.
Court decision is expected to have huge impact on global ICT (Information Communication Technology market). Industries believe that it is difficult to predict the outcome. However, they expect the case to go to Supreme Court of Korea regardless of the outcome.
According to legal industry, Seoul High Court told FTC and Qualcomm that it would give a decision by January of 2020 at the latest.
Seoul High Court also finalized the final schedule for defense by Qualcomm and FTC. Remaining defenses will take place on the 20th and 22nd of May and the 12th and 14th of August.
With this, ‘lawsuit battle of the century’ that had had about 20 defenses for the past two years will be wrapped up on the 14th of August.
FTC found Qualcomm violating Fair Trade Act in December of 2016 and fined Qualcomm $887 million (1.03 trillion KRW) and issued a corrective order. FTC believed that Qualcomm refused to provide SEP (Standard Essential Patent) license to its chipset competitor and forced unfair license contracts on Smartphone manufacturers while holding supply of chipsets as a hostage. Qualcomm opposed FTC’s decision and filed a lawsuit through Seoul High Court in February of 2017.
As their defenses have been fairly close, it is hard to predict the decision of this lawsuit between FTC and Qualcomm.
Some predicted that FTC would win the lawsuit when Qualcomm’s application for suspension of execution was dismissed in 2017. Although Qualcomm asked effects of FTC’s corrective order to be suspended until case on the merits is announced, both Seoul High Court and Supreme Court of Korea dismissed its request. Legal industry states that courts reference case on the merits partially whenever they decide to grant a suspension of execution.
Industries believe that the fact that Samsung Electronics and Apple broke away from this lawsuit battle is advantageous for Qualcomm.
Initially, FTC formed an alliance with Samsung Electronics, Apple, Intel, MediaTek, and Huawei and fought against Qualcomm. However, Samsung Electronics fell out of this battle when it revised a cross-license contract with Qualcomm last year. Apple also broke away from this lawsuit battle as it recently came to an agreement with Qualcomm regarding a patent lawsuit. However, LG Electronics newly joined the alliance as a supplementary participant at the end of last year.
Whoever loses will take a major blow.
If FTC loses the lawsuit, it needs to pay $887 million (1.03 trillion KRW) and additional payment on refund to Qualcomm. Since global ICT industries are paying careful attention to this battle between FTC and Qualcomm, this lawsuit will leave a major crack to FTC if it loses. Also, domestic and foreign Smartphone and chipset manufacturers will lose their bargaining power whenever they have negotiations with Qualcomm.
If Qualcomm loses, it will not only lose its fine but there will be a snag to its plan of going back to its old business method. It is also expected to lose its bargaining power when it negotiates with Smartphone and chipset manufacturers.
Regardless of the decision, it is likely that this battle will go to Supreme Court of Korea as there is a high chance that whoever loses will file an appeal. Decision by Supreme Court of Korea will take much longer than that of Seoul High Court.
“Two years that it took for Seoul High Court to make a decision is relatively short based on the level of sanctions. Decision by Supreme Court of Korea will take much longer than two years.” said an attorney for a law firm. “Although it is difficult to predict Seoul High Court’s decision, there is a slightly higher chance that FTC will win the lawsuit while re-calculating the amount of fine.”
Staff Reporter Yoo, Seonil | ysi@etnews.com