For Qualcomm?
Marc Knapper, Deputy Chief of Mission at the U.S. Embassy in Seoul, reportedly visited Seo-jong city on July 18 to have a lunch with Woo Tae-hee, vice minister of the Ministry of Trade, Industry and Energy.
Though officials in the ministry said it was simply just a normal visit, there was something uncommon about the meeting. The situation adds more suspicion since a decision by the Fair Trade Commission (FTC) to impose surcharge on Qualcomm is just around the corner. The US-based telecommunications chipmaker has been accused of abusing patent rights.
The FTC concentrates on Qualcomm's abuse of its market power. Qualcomm is suspected of collecting the patent commissions for the technology of Code Division Multiple Access (CDMA) based on the price of smart-phone terminal, not on the price of independent telecommunication chipset. For the patent commission called "Qualcomm Tax," domestic IT companies including Samsung Electronics have paid presumably around 2 trillion won royalty every year.
Qualcomm is also suspected of allowing only its affiliates to produce the chipsets exclusively in spite that the company registered the chipset technology as a standard compulsory patent which other chipmakers can use.
When a specific technology is designated as a standard technology, all the companies in the related industry cannot but be subject to the patent. However, the FRAND (Fair, Reasonable and Non-Discrimination) is the principle for the international standard patent, which means that the patent holder can get royalty payment within a reasonable limit but should not abuse the patent rights.
It has been known that the FTC sent an examination report to Qualcomm November last year, which included an order to correct the abuse of monopoly position with imposing 1 trillion won (US$ 869 million) fine. Earlier in February last year, the Chinese government imposed a trillion 60.98 yuan fine Qualcomm for violating the anti-trust law. The EU also launched an official research on Qualcomm’s violation of anti-trust law in July last year, and delivered the "objection statement" related with the suspicion of the chipmakers’ violation of the anti-trust law.
Korean smart-phone manufacturers are inwardly looking forward to FTC's decision on surcharge imposition on Qualcomm, but the atmosphere of the US government’s protecting domestic corporations is likely to be a variable as the Presidential election is nearing.