Qualcomm in $93m licensing settlement

Mobile chipmaker Qualcomm is to settle a case with Taiwanese regulators for about $93 million and has agreed to invest $700 million in Taiwan over the next five years.

The new settlement replaces a $778 million fine imposed by Taiwan’s Fair Trade Commission in 2017 when it accused Qualcomm of refusing to sell chips to handset makers that would not agree to its patent-licensing terms.

In a statement, Qualcomm said: “Qualcomm Incorporated … announced that it has reached a mutually agreed settlement with the Taiwan Fair Trade Commission (TFTC) resolving the TFTC’s investigation of Qualcomm and Qualcomm’s litigation challenging the TFTC’s decision alleging violations of Taiwan’s Fair Trade Act.

“As a result, the whole TFTC decision is replaced by the settlement terms and the decision shall be deemed revoked ab initio (from the beginning) and Qualcomm’s litigation filed in the Taiwan Intellectual Property Court is closed.

“As part of the resolution, Qualcomm has agreed to certain process-related commitments confirming principles of mutual good-faith and fairness in the negotiation of agreements with handset licensees to Qualcomm’s cellular standard essential patents (SEPs).

“The resolution does not require component-level licensing or set specific financial terms; instead it is focused on commitments that ensure good-faith negotiations for the benefit of licensees and SEP owners.

“As part of the settlement, the parties agreed that the NTD 2.73 billion (approximately $93 million USD) Qualcomm paid towards the monetary fine through the end of July will be retained by the TFTC and no other amounts will be due.

“In addition, Qualcomm will drive certain commercial initiatives in Taiwan over the next five years for the benefit of the mobile and semiconductor ecosystem, SMEs and consumers, including 5G collaborations, new market expansion, start-up and university collaborations and the development of a Taiwanese center for operations and manufacturing engineering.

“Qualcomm will work with the TFTC and sister agencies within the Taiwanese government to implement these initiatives and investments.”

Taiwan’s Fair Trade Commission said this commitment amounted to an investment pledge of $700 million over five years.