The six separate complaints accuse the wireless communications
firm of breaching European competition rules and reneging on
commitments it made during negotiations leading to the adoption of
the wideband code-division multiple access (WCDMA) 3G standard.
This standard was instrumental in the development of 3G, and
enables phones to include demanding applications such as video and
internet access. Qualcomm owns key patents in the technology and
its agreement to license use of its innovations on fair, reasonable
and non-discriminatory terms was necessary before the standard
could be adopted.
According to Broadcom, Ericsson, NEC, Nokia, Panasonic Mobile
Communications and Texas Instruments, Qualcomm is not fulfilling
its commitments.
The phone companies accuse Qualcomm of trying to exclude rival
mobile phone chipset makers from the market and is preventing
others from entering. In particular they allege that Qualcomm is
refusing to license essential patents to potential chipset
competitors on fair, reasonable and non-discriminatory terms, and
is offering lower royalty rates to handset customers who buy
chipsets exclusively from Qualcomm.
The mobile phone firms also accuse Qualcomm of charging
excessive and disproportionate royalties for its WCDMA essential
patents, in particular by imposing the same royalty rate on WCDMA
3G handsets as it does for CDMA2000 3G handsets (which are based on
the CDMA 2000 standard). This is despite the fact that Qualcomm has
contributed far less technology to the WCDMA 3G standard than it
has to the CDMA2000 standard, say the firms.
“Standards are established to guide the industry’s technology
development and provide a healthy environment for innovation and
competition,” said Joe Hubach, General Counsel, Texas Instruments
Incorporated. “We believe Qualcomm has abused its licensing
position in certain standards and has inhibited legitimate
competition. If this conduct goes unchecked, the risk is that
consumers in Europe and around the world will pay higher prices for
mobile phones and services and have less access to innovative
products.”
In response, Qualcomm issued a statement describing the
allegations as factually inaccurate and "legally meritless," and
pointing out that five out of the six complaining firms had already
agreed licence terms with it.
“This action appears to be nothing more than an attempt by these
licensees to renegotiate their licence agreements by seeking
governmental intervention,” said the firm.
According to Dr Paul E. Jacobs, Qualcomm’s CEO, “It is not
surprising that the reported allegations come largely from
entrenched 2G suppliers who have the most to lose from the enhanced
and expanded competition in 3G created by Qualcomm’s widespread
licensing and supply of enabling 3G technology, chipsets and
software.”
The firm said it will defend the claims vigorously.
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