It is easy to recall the words 'technical standards, patent infringement, antitrust', etc. The most valuable asset of Qualcomm, the largest patent giant in the field of communications, is being incorporated into the most prevalent technological standards in the world today (3G, 4G, 5G) patent, often referred to as the SEP, because of the inevitable use of the communications industry, which from time to time is also considered to have the market dominance of these patent licensed markets and is licensed worldwide for its licensing While subject to "abuse of market dominance," the antitrust law enforcement questioned.
But recently, Qualcomm filed a patent infringement lawsuit against Apple against the Beijing Intellectual Property Court, but it is not directly related to the standard essential patents.
In the lawsuit, Qualcomm alleged that Apple allegedly infringed its use of three non-standard essential patents, including power management and Force Touch touch-related technologies used by the iPhone, requesting the court to rule a ban on the iPhone in China.
Patent litigation as a strategic deployment
From a purely legal point of view, the two giants may experience a lengthy litigation process: Apple is likely to challenge the validity of a patent by the Patent Reexamination Board of the State Intellectual Property Office, and the court will therefore suspend the hearing pending on the validity of the patent As a result, the review committee's decision is likely to be prosecuted and returned to the Beijing Intellectual Property Court for first instance and may be appealed to the Beijing Higher People's Court.
From the procedural point of view, if the final patent is to remain valid, then the Beijing Intellectual Property Court will hear whether the infringement has been established and try it again.
In other words, it is almost impossible to obtain a bargain in a year or two about whether the iPhone will be barred by Qualcomm's lawsuit.
Patent litigation in the communications industry should not be treated as orphans in the isolated lawsuit in the past in the Chinese courts patent litigation, the main goal is to implement its patent licensing business, urging its use of its standard essential patent communications companies pay license fees, such as last year's Qualcomm With Meizu's patent lawsuit, the two parties reached a license agreement and reconciliation ended.This Qualcomm will years of the most important clients to court, revealed a very unusual meaning.
According to Qualcomm, Apple's handsets have been using their baseband chips for nearly a decade, and Apple did not complain about licensing fees in the past. In fact, Qualcomm's patent licenses for Apple's handsets are not negotiated directly with Apple but with Apple Foundries Signed a license agreement, which is involved in the battle of Apple Qualcomm Foxconn, and Shuo, Wistron and Compal with the intensification of conflicts, these foundries have also stopped to pay royalties to Qualcomm licensing, and Qualcomm in May this year, at The United States filed a lawsuit against this.
In the melee context, Qualcomm's non-standard patent infringement claim against Apple was mainly intended not to license these patents but rather to be a demonstration.
In the previous series of Qualcomm antitrust rulings, behind the projection of Apple's presence, and Qualcomm in launching this wave of 'counter-offensive' seems to have been trying to put up with it.
Qualcomm series antitrust case ruled points
Qualcomm's main business can be divided into two blocks, namely chip and patent licensing business, the former is the product, the latter is technology.
For the communications industry, the establishment of interoperability standards is undoubtedly the basis for the development of the industry in the process of the establishment of technical standards, a large number of Qualcomm patented technology because of its basic and advanced, has been incorporated into the standard and become the standard necessary patents Making the same 'FRANDs' license commitments as other standard essential patent holders constitutes a constraint on future licensing conditions, that is, to claim unreasonably high prices or to be 'unreasonable' without breaking the promises Discrimination. "Antitrust enforcement in standards-essential patents often revolves around whether the FRANDs promise to be respected.
In February 2015, in addition to a fine of RMB6,088 million fined by China's National Development and Reform Commission for its antitrust administrative penalty against Qualcomm, the reasons for the recognition of Qualcomm's monopolistic behavior deserve attention.
China Development and Reform Commission that Qualcomm in the wireless standard essential patent licenses and baseband chips in both markets have market dominance in the previous market, because each standard essential patents are not substitutable, and therefore constitute a separate market, Qualcomm in each of these related markets have reached 100% market share.
Eye
The key point of this decision is that Qualcomm's license fee is too high, not to insist on a higher permit rate, wholesale net wholesale price of the machine as a basis for calculating the necessary royalties for wireless standards.For this designation, Qualcomm Accept the original permit fee of 65% discount as the rectification results, but the billing standard is still the machine price.
In addition, the decision also requires Qualcomm to correct certain practices and conditions in its licensing practice, including providing the licensee with a list of patents and not subjecting the expired patent to licensing fees; it may not compel the licensee to hold non-wireless essential patents Reverse license; shall not force the reverse permit without paying a reasonable price; may not have no reason to tying non-wireless standards essential patent license. In addition, Qualcomm in the sale of baseband chips also do not have the above conditions, nor will be licensed People do not challenge the patent license agreement as a condition of the transaction.
In general, China's National Development and Reform Commission, on the one hand, makes a quantitative judgment on the license price and maintains a relatively open attitude toward the specific calculation of reasonable expenses. On the other hand, it makes a qualitative judgment on certain special provisions of the license conditions, In addition, there is no more in-depth intervention on the operational model of licensing practices.
At the end of 2016, two FTC-compliant antitrust rulings by the Korea Fair Trade Commission and the Taiwan Fair Trade Commission in Taiwan in 2017 made 1.03 trillion won (5.94 billion yuan) and 23.4 billion yuan (50.96 yuan) 100 million yuan) fine.
Specific analysis, the two rulings and the idea of China's NDRC is not the same, for Qualcomm licensing practice in the object, link and mode made a deep evaluation and intervention.
Both rulings agree that Qualcomm's refusal to grant patent licenses to chipmakers that compete with itself is a violation of FRAND's promises, and Qualcomm's "no license, no chip" policy is a combination of patent licensing and chip sales Binding, using the advantages of chip supply, to avoid the FRAND commitment to force manufacturers to sign and fulfill unfair agreements.
The same is true of the FTC's prosecution of Qualcomm antitrust indictment in January 2017, which is currently pending before the Federal District Court for the Northern District of California.
Antitrust Dispute and Analysis
There are some worthy discussions on the relevant points in the two antitrust rulings in South Korea and Taiwan.
First, the issue of refusing transactions, both of which found Qualcomm's refusal to grant patent licenses to chipmakers violated the FRAND commitment, but this assertion may be simplified in the context of the concrete practice of standard essential patent licenses in the field of communications, Ignore some complicated factors.
The reason why the patentee, including Qualcomm, does not grant the chip manufacturer the patent license is because for a long time the licensing fee collection mode in the industry charges the end product (the whole mobile phone), so it is no longer necessary to provide the intermediate link Chip manufacturers charge.
If from a chip manufacturer's point of view, do not need to pay royalties in their own production processes, leaving the machine manufacturers to worry about, at least do not think this gives them extra competitive transaction costs, South Korea and Taiwan If the monopoly review authority makes this determination for the benefit of the chip maker, there are grounds for scrutiny and perfection on the grounds.
In fact, this problem is the essence of the whole machine manufacturers based on their own interests based on the principle of exhaustion of patent rights, if Qualcomm charges chip manufacturers, then in the same production chain, Qualcomm chip-based patents will not once again to the machine manufacturers Charges The manufacturer wants to be able to calculate the license fee at the chip price (which is much lower than the mobile terminal), thus reducing the overall license fee that the manufacturer needs to bear.This method is called the principle of "minimum salable unit".
Of course, such a calculation may seem wishful thinking.The final level of license fee is not determined by the license fee alone, but simply lowering the benchmark does not necessarily result in a lower overall royalty rate.
The patentee's choice to license the end-product provider may not necessarily be to raise royalty fees entirely, possibly due to operational reasons such as asymmetric information and enforcement costs, for example, when license fees are calculated on a yield basis There will be monitoring costs.
If the patentee is required to supervise the standard implementers at all levels, the cost will be greatly increased, and the choice of the relatively easy downstream manufacturers to monitor as the licensees becomes the mainstream practice of the current patentee's permission. To change this mode of practice, a substantial increase in licensing costs will be transferred to all downstream aspects of standard implementation, resulting in a decline in overall social efficiency.
There may also be scrutiny for Qualcomm's "no license, no chip" policy, which adds a more concrete factual basis. On the face of it, it is the act of 'binding' or 'tying' the chip and the patent license , And both the antitrust review authorities in South Korea and Taiwan agree that Qualcomm uses the dominance of its chip market to obtain more favorable terms on patent licensing.
This conclusion needs to be based on a concrete analysis of Qualcomm's actual behavior, such as what kind of patent is being tucked in. If it is a standard-essential patent, then according to the analysis of China's National Development and Reform Commission, Qualcomm may actually occupy a more dominant position Position, do not need to rely on chip sales to achieve.Moreover, for chip purchasers, if the chip used in the manufacturing process, will inevitably be implemented Qualcomm patents, if you do not purchase the relevant permits will fall into the risk of infringement.
Compared with the ruling of China's National Development and Reform Commission, the two rulings in South Korea and Taiwan quite force the company to fundamentally restructure its licensing model.
Incentive innovation or promote competition?
The antitrust and patent war between Qualcomm and Apple, returning to the origin of the system, is the contradiction and tension between the incentive and innovation represented by the patent system and the promotion of free competition by the antitrust system.
In general, a patent is a legal monopoly created by the lawyer, which encourages innovation and promotion of investment by giving innovators a period of exclusive rights, and only through such a legal monopoly may the patentee obtain royalty or self-enforce the patent Higher profit ways to cover and benefit from innovative inputs as well as the cost of risk.
After the combination of patents and standards, the market power of the standard essential patent holder is considered to be further expanded, triggering concerns about the antitrust law, so that the standard essential patent becomes a focus of antitrust scrutiny.
However, excessive restrictions on the rights of the standard necessary patents will make such patents a weaker right and face the risk of 'reverse hijacking', which may result in reluctance of right holders with high-quality patents to participate in the standardization process, Affect the quality of the standard.
In the long run, it may also lead to the suppression of R & D investment in relevant fields, thereby curbing the innovation process in the entire field.
Therefore, to maintain a sophisticated dynamic balance mechanism to prevent excessive intervention, to maintain enough incentives for innovation, anti-monopoly reviewer should become the important task to be undertaken.
The purpose of the government intervention in the market is to correct the factors that cause the failure in case of market failure and urge the market players to achieve an efficient arrangement through rational negotiation and cooperation instead of trying to dismantle and reconstruct the market with reasonable factors Existing structure.
Moreover, if the two parties to the transaction or confrontation are evenly matched Apple and Qualcomm, there will be more obvious competitive constraints on the market at this time, and neither will be as powerful as imagined, so it is usually not necessary for the government to intervene on the basis of antitrust law Typical scene.