Qualcomm, Taiwan Reach Settlement in Patent-Licensing Dispute
August 10 2018 - 12:08AM
Dow Jones News
By Tripp Mickle
Qualcomm Inc. notched a victory in its effort to preserve its
patent-licensing business, as it reached a settlement with the
Taiwanese government that revokes a previous finding against the
chip maker and saves the company nearly $700 million in fines.
The settlement comes as world's dominant supplier of chips for
smartphones seeks to chart a new path following a tumultuous year
that involved fending off a takeover effort by rival Broadcom Inc.
and abandoning its takeover of NXP Semiconductors NV amid trade
tensions between the U.S. and China. Chief Executive Steve
Mollenkopf is pursuing an ambitious plan to lift earnings and
reduce the company's dependence on smartphone-related chip sales,
all while battling legal challenges to its licensing business from
Apple Inc.
Qualcomm's issues in Taiwan spiked in October when Taiwan's Fair
Trade Commission fined the company $773 million and ruled Qualcomm
violated the country's laws by unfairly licensing its patents, a
decision that could have upended Qualcomm's business by forcing it
to license its intellectual property to other chip makers.
The settlement revokes Taiwan's ruling, Qualcomm said. In its
place, Qualcomm said it has pledged to negotiate in good faith with
Taiwanese handset makers including HTC and agreed to let Taiwanese
authorities intervene to resolve any negotiation-related
disputes.
Qualcomm also said it committed to invest an undisclosed amount
of money over the next five years in Taiwan by collaborating on 5G
technology with chip makers and others, funding
research-and-development projects with universities and developing
a Taiwanese center for operations and manufacturing
engineering.
Under the agreement, Taiwan will keep $93 million in payments
from Qualcomm toward the fine assessed last year, but the remaining
amount was waived, according to the chip maker.
Qualcomm continues to face regulatory challenges in the U.S.,
where the Federal Trade Commission sued it in early 2017, alleging
the company engaged in unlawful tactics to maintain a monopoly on
cellular-communications chips. It also is appealing an $853 million
fine by South Korea's Fair Trade Commission over alleged antitrust
violations.
In the U.S., the company remains mired in a legal battle with
Apple and several Taiwanese manufacturers, which have sought to end
the chip maker's practice of collecting royalties on the entire
sales price of a handset.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
August 09, 2018 23:53 ET (03:53 GMT)
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