In October 2017 Patently Apple posted a report titled “Taiwan’s FTC Hits Qualcomm with a Record $773 Million Fine for Abusing their Monopoly Power.” In December 2017 Qualcomm’s CEO Threatened Taiwan Businesses to Force their Government to Overturn the Monopoly Ruling against them or else. It was revealed late yesterday in a press release that Qualcomm and Taiwan’s Fair Trade Commission had reached a settlement for $93 million and a complete rewrite of the settlement terms allowing Qualcomm to carry on business as usual against Apple. The Taiwan Fair Trade Commission was basically bought off with promises of new business for Taiwanese companies as Qualcomm’s threat had mentioned. This isn’t going to help Apple’s case against Apple to be sure.
It’s a big win for Qualcomm because, as their press release puts it, “the whole TFTC decision is replaced by the settlement terms and the decision shall be deemed revoked ab initio (from the beginning) and Qualcomm’s litigation filed in the Taiwan Intellectual Property Court is closed.
Qualcomm’s press release further noted that “As part of the resolution, Qualcomm has agreed to certain process-related commitments confirming principles of mutual good-faith and fairness in the negotiation of agreements with handset licensees to Qualcomm’s cellular standard essential patents (SEPs). The resolution does not require component-level licensing or set specific financial terms; instead it is focused on commitments that ensure good-faith negotiations for the benefit of licensees and SEP owners.
As part of the settlement, the parties agreed that the NTD 2.73 billion (approximately $93 million USD) Qualcomm paid towards the monetary fine through the end of July will be retained by the TFTC and no other amounts will be due.
In addition, Qualcomm will drive certain commercial initiatives in Taiwan over the next five years for the benefit of the mobile and semiconductor ecosystem, SMEs and consumers, including 5G collaborations, new market expansion, start-up and university collaborations and the development of a Taiwanese center for operations and manufacturing engineering. Qualcomm will work with the TFTC and sister agencies within the Taiwanese government to implement these initiatives and investments.
“We are pleased to have reached a mutually beneficial resolution with the TFTC that puts the litigation behind us,” said Alex Rogers, executive vice president and president, Qualcomm Technology Licensing. “This settlement directly addresses concerns raised by the TFTC, regardless of disputed positions, and builds on our foundation of collaborative, long-term business relationships in Taiwan. We are happy to reaffirm our commitment to licensing our valuable intellectual property under principles of fairness and good faith. With the uncertainty removed, we can now focus on expanding our relationships that support the Taiwanese wireless industry and rapid adoption of 5G technology.”
I don’t know if Apple legal can challenge the settlement but it’s clear that the Taiwan Fair Trade Commission was bribed and forced to reverse their initial decision against Qualcomm by the Taiwan business community and a likely nudge from other wings of Taiwanese government. It’s an absolute farce. Like the God Father movie, Qualcomm made them an offer they couldn’t refuse.
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