Qualcomm Incorporated today confirmed that it has recently received the Korea Fair Trade Commission's staff-generated Case Examiner’s Report (ER), which commences a process that affords Qualcomm the ability to respond to allegations and defend itself. The ER alleges, among other things, that we do not properly negotiate aspects of our licenses, and that our practice of licensing our patents only at the device level and requiring that our chip customers be licensed to our intellectual property violate Korean competition law. The ER proposes remedies including modifications to certain business practices and monetary penalties.
The allegations and conclusions contained in the ER are not supported by the facts and are a serious misapplication of law. Our patent licensing practices, which we and other patent owners have maintained for almost two decades, and which have facilitated the growth of the mobile communications industry in Korea and elsewhere, are lawful and pro-competitive. Device level licensing is the worldwide industry norm, and Korean companies have long enjoyed the benefits and protections of access to our patents, which cover essentially the entire device.
We intend to vigorously defend ourselves at the Commission hearings and remain hopeful that the Commission will reject the conclusions of the Examiner’s Report. We expect the process to take some time. Until then, we intend to continue to invest in leading technologies that drive the industry forward and share those innovations through its licensing program.