A Solution to Solve the Huge Penalty?
Qualcomm and Samsung Electronics agreed to strengthen their strategic partnership by renewing a long-term patent cross-licensing agreement. Samsung Electronics decided to scrap its plan to take part in an appeal trial as an auxiliary participant between Qualcomm and the Korean Fair Trade Commission (FTC) over a one trillion won (US$900 million) penalty.
Qualcomm announced on January 31 (local time) that the company would expand agreement with Samsung Electronics on reciprocal global patent use for mobile devices and infrastructure equipment. The renewal conditions were not disclosed due to a confidentiality agreement.
"This announcement means that a long-term strategic partnership with Samsung is vital to Qualcomm’s introduction of core mobile technology to various sectors," said Christiano Amon, president of Qualcomm, explaining the meaning of the deal. "As Qualcomm leads the world to 5G, opportunities among companies are on an upward spiral, and this agreement will continue to pave the way to success."
Accordingly, Samsung Electronics called off its participation as an auxiliary participant in the lawsuit between the Korean FTC and Qualcomm.
The FTC ruled that Qualcomm abused its power to force fallacious contracts with mobile phone makers such as Samsung and Apple for the supply of telecom chips and imposed a fine of KRW 1,031.1 billion won with a correction order in December 2016. In protest of the FTC’s ruling, Qualcomm filed an application to suspend the enforcement of the correction order in February of last year but it was finally rejected by the Supreme Court in November. Accordingly, Qualcomm’s remaining lawsuit is one pending at the Seoul High Court for the cancellation of the penalty ruling.
Qualcomm's move is construed as a new one to address problems in the process of rejecting the fine imposed by the FTC over abusing power based on patent rights. "The FTC’s correction order led to a renegotiation over loyalties and we cut a deal," a Samsung Electronics official said. "We decided to withdraw from our plan to participate in an appeal trial as an auxiliary participant."