Last week, the Federal Trade Commission (FTC) filed a lawsuit against Qualcomm accusing the company of using anticompetitive tactics, including reneging on patent licensing commitments to maintain its monopoly on a critical chip used in mobile devices.
The FTC's action against Qualcomm reflects the emerging consensus among competition regulators that violating commitments to license standard essential patents (SEPs) under fair, reasonable, and non-discriminatory (FRAND) terms can pose a significant threat to competition. The FTC correctly understands the commitments made within the processes of the European Telecommunication Standards Institute, the Telecommunications Industry Association, the Alliance for Telecommunications Industry Solutions, and other standard-setting organizations to license SEPs on FRAND terms as a commitment to license any implementer of a standard, including competing implementers of the standard. That is one of the ways FRAND commitments promote competition and provide the foundation for collaboration and development of the technological standards that make interoperability possible. That interoperability is central to the future of mobile computing and the rise of the internet of things.
When SEP owners do not honor the commitments they made in return for the incorporation of their patents into the industry standards, the effects on innovators are detrimental, particularly to the small businesses that rely on promises of reasonable access to these patents. We established the All Things FRAND initiative to address exactly this scenario, and we remain committed to ensuring the balance between patent licensors and licensees that FRAND commitments safeguard.