FTC v Qualcomm (9th Cir., No. 19-16122, 2020)

Dhenne Avocats · 11 October 2026

Our analysis

Summary

The Ninth Circuit vacated the judgment finding that Qualcomm had violated the Sherman Act and reversed the permanent, worldwide injunction against its core business practices (p. 56). It held that licensing standard essential patents only to device makers (OEMs), declining to license rival chipmakers and the « no license, no chips » policy were not anticompetitive conduct, and that any breach of FRAND commitments is a matter for contract or patent law rather than antitrust law (pp. 36 to 40 and 56). For practitioners, the opinion confines US antitrust scrutiny of SEP licensing to effects in the relevant market and sends disputes over royalty levels back to patent law.

Facts and procedure

Qualcomm holds patents essential to the CDMA and LTE standards, which it licenses as portfolios at OEM level with royalties based on the handset price, and it also makes modem chips (pp. 10 to 13). It does not license rival chipmakers but undertakes, through « CDMA ASIC Agreements », not to assert its patents against them, and it refuses to sell chips to unlicensed OEMs (pp. 14 and 15). In 2011 and 2013 it entered into agreements with Apple providing incentive payments conditional on exclusive supply, which Apple terminated (pp. 17 and 18). The FTC sued in January 2017 under section 5(a) of the FTC Act and sections 1 and 2 of the Sherman Act. The district court (N.D. Cal., Koh J) found liability and granted a worldwide injunction (p. 18). It had also held on partial summary judgment that Qualcomm’s FRAND commitments to TIA and ATIS required it to license rival chipmakers (p. 19, n. 12).

The applicable law

Section 1 of the Sherman Act prohibits unreasonable restraints of trade and section 2 prohibits monopolisation, which requires anticompetitive conduct in addition to monopoly power (pp. 22 to 25). The harm must be to competition itself, not merely to competitors (p. 25), and must be assessed in the relevant market, here the markets for CDMA and premium LTE modem chips (pp. 29 and 30). A duty to deal with a rival arises only within the narrow Aspen Skiing exception (p. 32).

Question

Do Qualcomm’s licensing and sales practices, including any failure to honour its FRAND commitments to standard-setting organisations, amount to anticompetitive conduct under sections 1 and 2 of the Sherman Act?

Decision

None of the Aspen Skiing conditions was met: Qualcomm had not terminated a voluntary and profitable course of dealing, it chose OEM-level licensing because it was more lucrative, and it applies the policy neutrally to all rivals, which practise its patents royalty-free (pp. 33 to 36). The FTC did not explain how the alleged breach of FRAND commitments harmed rivals; Broadcom v Qualcomm, which rested on intentional deception of the standard-setting body, did not apply; and the court declined to recognise a further exception (pp. 36 to 40). The « anticompetitive surcharge » theory failed: the smallest salable patent-practising unit (SSPPU) is not a mandatory rule, the reasonableness of a royalty sounds in patent law, and the harm to OEMs lay outside the relevant markets (pp. 41 to 45). Royalties payable whichever chip supplier is used have no exclusionary effect, and linkLine forecloses the margin squeeze theory (pp. 45 to 48). The « no license, no chips » policy is chip-supplier neutral (pp. 48 to 51). Finally, the Apple agreements did not substantially foreclose the market and, having been terminated, could not justify an injunction (pp. 54 and 55). The partial summary judgment on the FRAND commitments was vacated as moot without reaching its merits (p. 20).

Key points for practice

• The court did not decide whether Qualcomm’s FRAND commitments required it to license rival chipmakers (pp. 36 and 56).
• The court contrasted the neutral « no license, no chips » policy with a hypothetical « no chips, no license » policy, which might give rise to a claim under sections 1 and 2 (p. 50).
• Practical point: in the United States, challenges to royalty levels or to the refusal of component-level licences are to be brought in contract or patent law rather than under the Sherman Act (pp. 39, 40 and 56).

Provisions applied

National law

Sherman Act, sections 1 and 2 (15 U.S.C. §§ 1 and 2); FTC Act, section 5(a) (15 U.S.C. § 45(a)); 15 U.S.C. § 53(b); 35 U.S.C. § 284

IPR policies

FRAND commitments to TIA and ATIS

Case law cited

Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985); Verizon v. Trinko, 540 U.S. 398 (2004); Pacific Bell v. linkLine, 555 U.S. 438 (2009); Ohio v. American Express, 138 S. Ct. 2274 (2018); United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001); Microsoft v. Motorola, 696 F.3d 872 (9th Cir. 2012) and 795 F.3d 1024 (9th Cir. 2015); Broadcom v. Qualcomm, 501 F.3d 297 (3d Cir. 2007); Rambus v. FTC, 522 F.3d 456 (D.C. Cir. 2008); Caldera v. Microsoft, 87 F. Supp. 2d 1244 (D. Utah 1999); Ericsson v. D-Link, 773 F.3d 1201 (Fed. Cir. 2014); CSIRO v. Cisco, 809 F.3d 1295 (Fed. Cir. 2015); Quanta v. LG Electronics, 553 U.S. 617 (2008); NYNEX v. Discon, 525 U.S. 128 (1998); FTC v. Qualcomm, 935 F.3d 752 (9th Cir. 2019)

Related decisions

• Microsoft v Motorola, Ninth Circuit, 30 July 2015, relied on by the district court for the duty to license all comers.
• Ericsson v D-Link, Federal Circuit, 4 December 2014, cited on the non-mandatory nature of the smallest salable unit.

Prepared by Dhenne Avocats from the text of the decision (official opinion, Ninth Circuit website; first read on Justia), consulted on 11 October 2026. Only the official text is authoritative.