Qualcomm Agrees to $975 Million Fine and Conduct Remedies to Resolve Chinese Standard Essential Patent Licensing Investigation

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The assertion of standard essential patents (SEPs) by patent-holders has raised patent, contract, and competition issues in jurisdictions around the world. One SEP holder, Qualcomm, has faced particular scrutiny with respect to its licensing practices, which are under investigation by enforcement agencies in the U.S., Europe, and Asia. On February 9, 2015, China’s National Development and Reform Commission (NDRC) announced that it had concluded its investigation into Qualcomm’s patent licensing practices, with Qualcomm agreeing to pay a $975 million fine and to several remedial commitments affecting its patent licensing practices in China.

BACKGROUND OF THE NDRC’S INVESTIGATION -

The NDRC commenced its investigation of Qualcomm in November 2013, focusing on whether Qualcomm’s patent licensing practices constituted abuse of dominance prohibited under China’s Anti-Monopoly Law (AML). According to its published statement, the NDRC received information from dozens of Chinese and international mobile phone and baseband chip manufacturers. The NDRC also discussed its investigation with Qualcomm.

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