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Qualcomm Asks Judge To Toss FTC's Anti-Trust Lawsuit
Posted April 5, 2017
Qualcomm Asks Judge To Toss FTC's Anti-Trust Lawsuit
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By Mike Freeman. Updated April 5, 2017 9:24AM

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Qualcomm is asking a judge to dismiss a U.S. Federal Trade Commission lawsuit that alleges the San Diego wireless chip firm's patent licensing practices violate anti-trust laws.

The company filed its motion on Monday in U.S. District Court in Northern California. It argues that the FTC fails to show that Qualcomm's licensing practices hurt competitors such as Intel and MediaTek in the cellular modem market -- a key legal hurdle when bringing an anti-monopoly case.

"This failure, after more than two years of (pre-lawsuit) investigation, reflects the fact that the FTC not only has not, but cannot, plead facts stating a plausible claim of competitive harm," said Qualcomm in its dismissal motion.

The FTC sued Qualcomm on Jan. 17 in the waning days of the Obama administration. Its lawsuit is one of several recent legal assaults on Qualcomm's patent licensing business model.

Apple also has sued Qualcomm over patent licensing in San Diego federal court. Qualcomm is expected to file a response in court to Apple's allegations by April 10.

Taiwan and Japan regulators are looking into the company's practices. And South Korea's anti-monopoly regulator fined Qualcomm more than $850 million late last year for violating that country's anti-monopoly laws. Qualcomm has appealed the fine and regulatory ruling in the Seoul High Court.

Qualcomm pioneered modem technology that connects smartphones and other wireless devices to cellular networks. While the company makes the bulk of its revenue from selling semiconductors that power wireless devices, it earns most of its profit from licensing its portfolio of thousands of mobile patents.

In its dismissal motion, Qualcomm says the FTC's legal theories are flawed, and it fails to provide facts that prove that Qualcomm illegally harmed competitors.

"Having failed to meet even the most minimal pleading standards, the complaint should be dismissed," said Qualcomm General Counsel Don Rosenberg in a statement.

Dismissal motions are common in civil lawsuits. In January when the case was filed, current acting FTC Chairwoman Maureen Ohlhausen opposed the commission's decision to sue Qualcomm. Some Wall Street analysts have speculated that Trump administration appointees to the FTC may not pursue the case.

A phone call to the FTC media office was not returned.

Qualcomm shares were up 29 cents at $56.78 in late day trading on the Nasdaq exchange.

© 2017 San Diego Union-Tribune syndicated under contract with NewsEdge/Acquire Media. All rights reserved.

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