Qualcomm, LG Reach New Chip-Licensing Deal -- 3rd Update
August 20 2019 - 10:11AM
Dow Jones News
By Sarah E. Needleman
Qualcomm Inc. has reached a new patent-licensing deal with LG
Electronics Inc. of South Korea, helping land its technology in a
suite of wireless devices while U.S. federal regulators continue to
scrutinize its business practices on antitrust grounds.
The San Diego chip maker said Tuesday the five-year agreement
will allow LG to use its chips in 3G, 4G and 5G single-mode and
multimode devices. Although the deal's financial terms weren't
disclosed, Qualcomm said it will earn royalties from LG and that
the agreement is consistent with its established global licensing
terms.
The agreement is significant for LG because the company doesn't
manufacture the kind of chips that Qualcomm makes for providing its
smartphones with internet service. Gaining 5G service is
particularly crucial as the technology enables the faster and more
powerful connectivity than ever before, among many other
benefits.
Ensuring U.S. companies such as Qualcomm lead the race to adopt
5G has become a priority of the Trump administration in recent
months, as it looks to squash competition from China.
The deal comes after a federal judge in May ruled that Qualcomm
had unlawfully stifled competition in the market for wireless
chips. The ruling followed a Federal Trade Commission investigation
into Qualcomm's practices of demanding licensing agreements from
companies purchasing its chips for use in wireless devices, and its
refusal to issue licenses to other chip makers seeking to field
competitive products. Qualcomm has appealed the ruling.
The agreement with LG also comes months after Qualcomm settled a
bruising patent-litigation fight with Apple Inc. that lasted more
than two years and cost it a fortune in legal fees and lost
business. In that case, Qualcomm claimed Apple violated its patents
by withholding royalty payments, while Apple argued Qualcomm had
been overcharging for those patents for years.
Qualcomm shares rose 0.8% in premarket trading.
--Colin Kellaher contributed to this article.
Write to Sarah E. Needleman at sarah.needleman@wsj.com
(END) Dow Jones Newswires
August 20, 2019 09:56 ET (13:56 GMT)
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