Wednesday, July 27, 2022

Qualcomm, Samsung sign seven-year extension of license agreement: possibly first major patent license to cover 6G

Qualcomm has just announced that is "strategic partnership with Samsung Electronics Co., Ltd." has been extended through the end of 2030. The patent license, which is a key part of the deal besides collaborations related to Qualcomm's Snapdragon platforms, will cover "3G, 4G, 5G and upcoming 6G mobile technology." This may very well be the first major patent license agreement to cover patents that will be essential to the future 6G standard that is being developed.

In early 2018, these two parties announced a five-year extension, which would have expired by the end of this calendar year. At the time, there was considerable risk of litigation. The Korean Fair Trade Commission (KFTC) was investigating Qualcomm's business practices, which presumably had to do with complaints by Samsung and/or LG. In 2017, Samsung filed an amicus curiae brief in support of the U.S. Federal Trade Commission (FTC) that leveled some of the same accusations of monopoly abuse at Qualcomm that Apple was making at the time. Yet they overcame their differences.

The renewal with Samsung is a major success for both Qualcomm's chipset division and its licensing business. It strengthens Qualcomm's position vis-à-vis other licensees--above all, Apple. The 2019 Qualcomm-Apple settlement was borne out of necessity: Apple needed 5G chips, and didn't believe it could rely on Intel to deliver high-quality 5G chips in time. Apple then acquired Intel's baseband processor division. There may or may not be delays with the development of Apple's own 5G baseband chip, but in any event Apple wants to become independent from Qualcomm's chips. If and when that happens, Qualcomm is still going to want to get paid for the use of its intellectual property in wireless standards.

Qualcomm executives have criticized Apple's policy positions on standard-essential patents (SEPs) on several recent occasions, sometimes highlighting the stark contrast between Apple's positions on FRAND royalty rates for SEPs and its app tax. Ericsson apparently intends to raise the same issue at the December trial in the Eastern District of Texas.

In a hypothetical future FRAND dispute between Qualcomm and Apple, the most comparable license agreement for the courts in different jurisdictions to consider will most likely be the one with Samsung that Qualcomm announced today.