If you’re sailing into the headwinds, you might be going in the wrong direction
On March 29, 2021, the Federal Trade Commission (FTC) confirmed it would not seek Supreme Court review in its lawsuit against Qualcomm, ending a years-long dispute between the agency and the company over Qualcomm’s licensing program. The FTC filed the lawsuit in 2017, alleging Qualcomm’s behavior in licensing its patents was anticompetitive. The agency, briefly, prevailed in 2019, when a district court judge issued an opinion and an injunction against Qualcomm, significantly hindering the company’s ability to license its patents. However, in 2020, a panel of the U.S. Court of Appeals for the Ninth Circuit unanimously reversed the district court, finding in Qualcomm’s favor and allowing the company’s licensing program to continue. The entire Ninth Circuit declined to hear an appeal – leaving the panel’s reversal in effect.
In their ruling, the panel specifically wrote that, “hyper-competitive behavior” is not illegal. The panel’s decision rejecting the FTC’s case was confirmed by the entire Ninth Circuit, which declined to hear an appeal by the agency.
The decision of the FTC to not seek review at the Supreme Court is a good outcome, not just for Qualcomm, but for other innovative companies and innovation itself. While the case has left a cloud of uncertainty over the industry or too long, the final result is positive one. Having courts confirm that hyper-competitive behavior is not illegal (and in fact has benefits) sends a powerful message to innovators.