Qualcomm: South Korean Court Rejects Antitrust Challenge

Qualcomm has lost its legal bid in South Korea to postpone implementation of changes in the way it licenses cellular patents -- moves that were called for last year by that country's anti-monopoly regulator.

The San Diego company confirmed late Monday that the Seoul High Court had denied Qualcomm's application to shelve a remedial order by the Korea Fair Trade Commission, or KFTC, over its patent licensing practices.

Qualcomm sought to delay the measures imposed by the KFTC while the company appeals the regulator's findings in court.

The Seoul High Court ruled that Qualcomm's business wouldn't suffer irreparable harm if the order takes effect while the company appeals. Irreparable harm typically is the legal threshold that courts use when determining whether to grant a stay.

Qualcomm said it would immediately appeal the Seoul High Court's decision to the Korea Supreme Court.

Late last year, the KFTC fined Qualcomm more than $900 million and ordered changes in the way it licenses patents -- most notably that it must negotiate patent licenses with rival cellular modem chip makers such as Intel and MediaTek.

Such a move could pave the way for patent licensing based on the price of modem chips.

That's counter to the way Qualcomm and other cellular patent holder license their technologies today, which is based on a percentage of the sales price of the entire smartphone.

Presumably, licensing patents at the chip level would cost smartphone makers less -- though that's not clear.

Qualcomm argues that its thousands of core cellular patents aren't implemented on just one chip. It takes a host of technologies inside the phone, in cellular towers and the wider cellular network to deliver fast wireless Internet to smartphones. That's why the cellular industry has calculated patent royalties based on the smartphone price for three decades.

But Qualcomm's patent licensing business model is under fierce attack...

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