AH SnapDragon Qualcomm 1.9

Qualcomm Will Have To Lower License Fees And End ‘Reverse Patent License’ In China

December 4, 2014 - Written By John Anon

Qualcomm’s Snapdragon processor might be hot property in the tech world with just about every OEM making sure their latest flagship device contains one. But it is not all plain sailing for the chip giant. In fact, in China, Qualcomm are in some serious trouble. We’ve covered this before as the story has been an on-going one. That said, for a brief recap, Qualcomm have been under an antitrust investigation in China. This is in relation to their “monopolising” activities in regards to patents in China. You see, it is not just chips that Qualcomm make their money from.

Anyway, the investigation has been on-going now for awhile, although it has finally concluded. In spite of the verdict not being officially given, we are starting to get a clear idea of what will happen. Firstly, Qualcomm are in for some serious fines for their accused behaviour. Although fines will not be what Qualcomm wants, it is expected that the additional punishments will be a lot more costly to the company. Firstly, they will have to lower their license fees in the country and Qualcomm will also be ordered to surrender its ‘reverse patent license’. This was an interesting creation by Qualcomm, which meant any smartphone maker who uses Qualcomm chips could not collect on patent royalties from other Qualcomm clients. This was felt by the invigilators to be a breach of practise and allowed those who had lots of patents to benefit far more than those who only had a few.

Interestingly, it seems the biggest winners from the antitrust outcome with be ZTE and Huawei. these two companies already hold an abundance of patents in China. In fact, ZTE currently has over 52,000 active patents while Huawei hold more than 30,000. As a sign of things to come it seems ZTE have already alluded that they are looking forward to Qualcomm’s blocking of patent profits to be lifted so they can finally cash in. Either way, it looks like Qualcomm will be losing in a number of ways over this in the course of the next year. How do you feel about the antitrust investigation and Qualcomm’s reverse patent license? Happy for ZTE and Huawei? Let us know.