Posted Sep 06, 2007 10:54 am CDT
A federal appeals court ruling against Qualcomm Inc. endorses competition and fair play when companies make assertions to boards that set standards for an industry.
Fordham law school professor Mark Patterson told the New Jersey Law Journal that the appellate ruling “potentially offers more room for competition.” The lower court decision it overturned gave companies “carte blanche to mislead standards organizations in order to gain an advantage,” he said.
The suit filed by Broadcom Corp. claims Qualcomm agreed to license its computer chipset technology for cell phones on fair, reasonable and non-discriminatory terms in exchange for being declared the industry standard. The suit claims Qualcomm broke that promise when it demanded higher royalties from Broadcom and other competitors.
The Philadelphia-based 3rd U.S. Circuit Court of Appeals said in its opinion (PDF) that the so-called FRAND promises “were intended as a bulwark against unlawful monopoly.” Since Broadcom relied on the commitments, it could sue in antitrust for their breach, the court said.