Q'comm Cites U.S. Security in Appeal

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Request for stay of injunction cites CFIUS, DoJ, NTIA

SAN JOSE, Calif., May. 29, 2019 – 

Qualcomm said that its position in 5G cellular is vital to U.S. national security in asking a court to stay an injunction against its patent licensing practices. The argument – one of several in its request – threatens to pit the Trump administration against a May 21 decision by a Ninth Circuit Court judge.

In a case brought by the Federal Trade Commission (FTC), Judge Lucy Koh ruled that Qualcomm's "no license, no chips" policy and its exclusive licensing deals with smartphone makers were anti-competitive. Qualcomm said that the ruling misinterprets complex antitrust law and would unfairly hurt Qualcomm and the cellular industry.

As evidence of the harms caused by the court's decision, Qualcomm noted that the order effectively knocked 15% off the value of its stock price, or more than $14 billion, as investors assumed that the company might have to renegotiate lucrative licensing deals. Among its most visceral and controversial arguments, however, Qualcomm said that the ruling could jeopardize U.S. national security.

Qualcomm filed as evidence the Trump Administration's March 2018 order striking down a proposed hostile takeover by Broadcom. "A threat to Qualcomm's business model and leadership position [in 5G] ... creates attendant national security risks," Qualcomm's attorneys wrote, citing the decision of the U.S. Treasury's Committee on Foreign Investment in the United States.

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