The FTC Joins Huawei on a Misguided Troll Hunt
Qualcomm , the American company whose technology turned cellphones into smartphones, can’t seem to get any respect lately. The chip designer was hauled in for trial this month in a suit the Federal Trade Commission filed in the final days of the Obama administration. The FTC claims Qualcomm violates antitrust laws by overcharging phone makers for using its patented technology like 4G in smartphones. The lawsuit threatens to weaken the patents that have secured the key innovations of the modern tech age.
The FTC’s star witness in the first days of trial was Huawei, the Chinese telecommunications giant the Trump administration has called out for stealing intellectual property from American companies. Last month, at America’s request, Canada arrested a Huawei executive, escalating the trade war resulting from the U.S. challenge to China’s intellectual-property theft. Apparently, the FTC missed the irony of having Huawei testify about how a leading U.S. tech innovator is allegedly violating antitrust laws in licensing its patents to Huawei.
The FTC is blinded by a panic about “patent trolls” that has run rampant in Washington for the past decade. Like the fabled troll under the bridge, the story is that patent owners hold up companies from manufacturing new products or services by demanding a toll—a license to use their patents. The moral of the story is that these patent owners are somehow killing innovation by demanding extortionate royalties from companies that must use their technology in making and selling products like smartphones.
The patent troll was a favorite bogeyman of the Obama administration. Regulators’ fears were stoked by the efforts of companies like Google, whose lobbyists met with President Obama hundreds of times. Mr. Obama ordered regulatory challenges to technology patents and, in a 2013 Google hangout, called for Congress to enact legislation targeting patent trolls.
While a handful of true patent abusers have been dealt with by courts and regulators, the patent-troll rhetoric broadly condemns any patent owner who doesn’t manufacture a product and instead licenses its innovation. For example, in 2015 one congressman condemned universities as patent trolls because they license their patents to outside producers.