Photo: Korea Fair Trade Commission. Credit: KFTC.
On April 13, the Supreme Court 대법원 upheld a record KRW 1.03t (USD 798.7m) fine that the Korea Fair Trade Commission 공정거래위원회 levied on Qualcomm. The KFTC fined Qualcomm in 2016 for anticompetitive behavior in the licensing of its patents to competitors.
Qualcomm holds standard essential patents (SEP) for smartphone modem chipsets, which it must license on a fair, reasonable, and non-discriminatory (FRAND) basis. In 2016, the KFTC found that Qualcomm did not maintain the FRAND basis for its SEPs by refusing to license its patents to a competing chipset manufacturer. KFTC also found that the company compelled smartphone manufacturers to purchase Qualcomm chipsets if they wished to license its patents.
In 2017, Qualcomm appealed KFTC’s decision to the Seoul High Court 서울고등법원, which accepted KFTC’s first theory but rejected the second. Both Qualcomm and KFTC appealed, but the Supreme Court dismissed both appeals, upholding the High Court’s ruling as well as the fine. The decision is a major milestone in the rules of patent licensing, and further cements the KFTC as one of the world’s most important anti-monopoly regulators in the digital economy. (See previous coverage, “KFTC Leads in Digital Economy Regulation.”)