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Intel and Samsung Gang Up on Qualcomm, Backing FTC Monopoly Suit
- DuskStar 9y agoNon-AMP link: https://www.bloomberg.com/news/articles/2017-05-12/intel-to-add-its-support-to-ftc-lawsuit-against-qualcomm https://www.bloomberg.com/news/articles/2017-05-12/intel-to-...
- sctb 9y agoThanks, we've updated the link from https://www.bloomberg.com/amp/news/articles/2017-05-12/intel-to-add-its-support-to-ftc-lawsuit-against-qualcomm https://www.bloomberg.com/amp/news/articles/2017-05-12/intel....
- marklubi 9y agoCan we get a less click-bait title as well? The two companies filed amicus briefs, they didn't join the lawsuit. The current title implies that they joined in.
- deleted 9y ago[deleted]
- sverige 9y ago>“Intel is ready, willing, and able to compete on the merits in this market that Qualcomm has dominated for years,” Intel said in a posting on its website. “But Qualcomm has maintained an interlocking web of abusive patent and commercial practices that subverts competition on the merits.” >Samsung claims its in-house chip unit is artificially held back by Qualcomm’s unwillingness to license its technology. I don't know the details of the patents in question, but I assume they are hardware patents. In any event, the idea of either Intel or Samsung complaining about some other company subverting competition is hilarious. But I guess that's how the game is played at this level.
- dave_sullivan 9y ago> the idea of either Intel or Samsung complaining about some other company subverting competition is hilarious. But I guess that's how the game is played at this level. Agreed. I think this is what's happening: Big tech companies have realized they need to expand into other markets (intel and samsung being prime examples). The only markets left that are big enough are monopolies protected by patents, with Qualcomm being a prime example. Entirely new markets are less interesting because they're not big enough. Even with massive growth, it will take too long for them to become big enough. A.I. is a maybe, but that market is hardly proven. The money in A.I. might be in reforming companies from the inside instead of selling products to those same companies. There's going to be more money in invalidating patents and moving into the industries that suddenly opens than there is in actually benefitting from patent royalties. Winning the war on patent trolls would speed this process up. Once people realize that companies that derive a large percentage of their income from patent portfolios are just big dead rotting corpses waiting to be dismantled, the world will be a better place.
- zokier 9y ago> Big tech companies have realized they need to expand into other markets (intel and samsung being prime examples). I'm not sure if Samsung is a good example of this. They have been making Exynos chips for a long time, and other ARM SoCs before that. So its not like they have suddenly awakened and trying to break into new market.
- tooltalk 9y agoNo, that's not what's happening here. While Qualcomm holds a lot of wireless patents and they are entitled to make money for what they have contributed, they also agreed to declare their patents as part of the ETSI CDMA, LTE standards. This is beneficial for Qualcomm because now everyone HAS to use and license their patents, so they have guaranteed income. But, at the same time, they are also required to license their patents at fair and reasonable terms regardless of who licensees are. Qualcomm violated their FRAND obligations in two very blatant ways. First, they REFUSED to license their patents to competing baseband makers, like Intel, Samsung, and other baseband makers. KFTC last year also found out that Qualcomm barred Samsung from marketing and selling their own AP/baseband chips in certain market (US) for some 20 years. So it also runs a foul of US anti-trust/anti-competitive laws. If Qualcomm wants the kind of legal patent monopoly enjoyed by pharma's for instance, they need to keep their patents proprietary, and not declare them to SSO's. Qualcomm is trying to force everyone to license their tech as SSO's standards, then break every rule they agreed to uphold to maintain their dominance.
- jsjohnst 9y agoAs much as I want to laugh and mock as it's Intel/Samsung pressing this further, I sadly must agree, Qualcomm's stranglehold on the cellular market has hurt the industry for far to long.
- obstinate 9y agoI'm curious: why would Qualcomm be obligated to license its chipsets to Samsung in furtherance of Samsung's goals of competing with Qualcomm? Can't Samsung just design its own chipsets? I'd love to have this explained to me. Presumably there's a reasonable explanation for this expectation, but it doesn't sound reasonable on the surface.
- Grazester 9y agoThey already did this but it seems that Samsungs exynos uses some patients of Qualcomm.
- klagermkii 9y agoSamsung has designed their own chipsets (Exynos series), but Qualcomm will only grant a patent license for them to use their chipsets as part of their own phones. They won't allow Samsung to sell Exynos chips to be used by other companies.
- aey 9y agoSamsung just doesn't want to pay the licensing fee. TI has no problems selling arm phones. Apparently the r&d costs in this space are higher then lawyer fees. Otherwise why wouldn't they dump some money into r&d and get some patents of their own to cross license with Qualcomm.
- sofaofthedamned 9y agoTI don't do mobile chipsets anymore, do they?
- aey 9y agoThat's true. Forgot they exited the market. mediatek has no problems selling arm phones. Qualcomm has only 50% of market share in that space and there are plenty of other competitors. Unlike the x86 server market. Samsung, Intel and Apple have enough cash and tech clout to crush Qualcomm into dust if they really wanted to compete on r&d. Throwing a few million at a lawsuit is just a negotiation tactic.
- sspiff 9y agoI find it funny how Intel claims it wants to compete on merrit in a market locked by Qualcomm, where this is an almost exact replay of the tricks they pulled in the late 1990s to mid 2000s.
- saosebastiao 9y agoLol...if you have not one but two competitors, both of which have market caps in the 12-digit range, complaining about some other company's (one with a mere 11-digit market cap) market domination, that isn't a monopoly, that's called competition. And if their complaint succeeds, that's not called capitalism, that's called crony capitalism.
- skybrian 9y agoAccording to the article, their would-be competitors are legally blocked from competing. That's the opposite of competition.
- aey 9y agoThey can spend some money on r&d and build a patent portfolio to force Qualcomm to cross license.
- bhc 9y agoIntel and Samsung specifically did that by creating WiMax as a competing standard for LTE, but look what happened. https://www.theverge.com/2017/1/17/14303910/qualcomm-allegedly-bribed-apple-wimax-iphone-ft-complaint https://www.theverge.com/2017/1/17/14303910/qualcomm-alleged...
- aey 9y agoWell, standard != tech. They wanted to roll out an entire new network based on some flaky tech, instead of focusing on making a better radio. In 10 years LTE is going to be to slow, and Qualcomm is busy developing whatever is going to replace it. if Intel wants a piece of that pie they need to do some r&d.
- pritambaral 9y agoThat sounds awfully like worsening the situation further... like some sort of an arms race.
- 9y ago
- dis-sys 9y agoAfter playing the exact same game on x86 related patents for decades, Intel is now complaining that Qualcomm is doing something similar?
- libertine 9y agoExactly... so, couldn't this just backlash at them, and at others, if this ends up succeeding? For example, other CPUs architectures, GPUs, Memory ... like, everything that's pretty much set as standards?
- jessaustin 9y agoIntel didn't participate in any standards-publishing process in which they pushed x86 in exchange for FRAND. Qualcomm did.
- shmerl 9y agoQualcomm are known to abuse patents, and claim "that's just how we do it" argument to justify their aggression. That's what they did with attacking Opus codec with completely bogus claims. So I don't feel sorry for them even a bit.
- ChuckMcM 9y ago[known to abuse patents] ... as are Intel and Samsung. So it feels to me like reading a book where you don't really care about any of the characters.
- jessaustin 9y agoThat's probably the right way to look at any legal dispute? Good precedent and the rule of law are always more important than the parties involved...
- ChuckMcM 9y ago> Good precedent and the rule of law are always more important than the parties involved... I don't disagree, just don't expect much, if any, empathy for either the plaintiff or defendant.
- mjevans 9y agoYet that same kind of licencing abuse is what Intel used (and was eventually found guilty of IIRC) in the mid 2000s to cripple AMD and eventually forced them to leave the fabrication market (they couldn't afford to keep up their own fabs as a result and thus had to go fabless). Still, the goal should be seeing proper justice served and consumers benefiting. All of the guilty parties should be punished for the wrongdoings they've done.
- ksec 9y ago>Opus codec What happened?
- shmerl 9y ago
- faragon 9y agoDo Intel and Samsung license their patented stuff in more fair terms than Qualcomm? I guess that Intel and Samsung want to get radio IP license for cheap (e.g. LTE stuff), and that's OK. BTW, can Qualcomm or Mediatek get x86 and OLED IP/patens for cheap, too? I would love Mediatek x86-compatible SoCs for 5 USD, and high quality 6" OLED screens for 15 USD.
- ecopoesis 9y agoOLED and x86 aren't covered by FRAND, LTE is. When you push to make your patented tech part of a standard, you also agree to license it reasonably.
- faragon 9y agoThen, could you explain me why Mediatek can not sell x86-compatible SoCs for 5 USD?
- robert_foss 9y agoX86 is not covered by FRAND either?
- AlphaSite 9y agoBecause it's not a standard?
- faragon 9y agox86 is a de facto standard.
- wyldfire 9y agoThe term "standard" in this context means "governed by a standardization body like 3GPP, etc." This is significant because the FRAND limitation comes not from legal restrictions on patents but from these standardization bodies themselves. "Yes, QCOM, you made a far superior air interface for radios. In recognition of your superior design, we will use your patents as our standard but only if you agree to license it to anyone on 'fair' terms."
- oarla 9y agoWhat does backing the existing lawsuit mean? From the article, I don't see that they have filed their own suits. Isn't this more of a media stunt to show Qualcomm as the bad guy here?
- rgbrenner 9y agothey filed an amicus brief: http://blogs.intel.com/policy/2017/05/12/intel-filed-amicus-brief-support-ftcs-complaint-qualcomm/ http://blogs.intel.com/policy/2017/05/12/intel-filed-amicus-... http://blogs.intel.com/policy/files/2017/05/Intel-Amicus-Brief-FILED.pdf http://blogs.intel.com/policy/files/2017/05/Intel-Amicus-Bri...
- rgbrenner 9y agoI see a lot of comments where people are missing the point of the suit. These are standard essential patents for LTE and CDMA baseband processors. They were added as part of the standard, and in exchange for that, Qualcomm agreed to license them to competitors under FRAND (fair, reasonable, and non-discriminatory) terms. They arent doing that. This article has good descriptions of the behavior Qualcomm is being accused of: https://www.fool.com/investing/2017/01/18/regulators-accuse-qualcomm-of-3-shady-practices.aspx https://www.fool.com/investing/2017/01/18/regulators-accuse-...
- beaner 9y agoHonest question: why is anything that is patented ever made to be part of a standard?
- josephpmay 9y agoBecause a lot of standards wouldn't exist without patented technology
- gruez 9y agobecause the patented method is better than any non-patented method, and the patent owner agreed to license them to competitors under FRAND.
- tooltalk 9y agothey are not necessarily better in quality, but are required to be declared and be licensed under FRAND to be adapted by all willing buyers.
- faragon 9y agoBecause of the need of covering the investment.
- derf_ 9y agoBecause a) The people making the standard work for the companies filing the patents. They are highly incentivized to make their own patents required, and b) There's all sorts of potential legal liability associated with just knowing about patents, much less telling anyone else or writing that knowledge down. As a result, you get things like the ISO and ITU IPR policies which profess to make the standardization process "patent blind". That is, so long as you agree to license your patents under FRAND terms, you can participate, and no one is allowed to exclude your technology solely on the basis of your patents. This results in maximally patented standards. Even if you're not interested in seeking rent from other standards users, lots of other people contributing to the standard are. So you're forced to file patents just to minimize the amount you have to pay to use the technology you yourself helped create. That's why you see things like the HEVC mess, where four years after the standard was completed, no one knows if it's even possible to license all of the patents required, nor how much it would cost if you could.
- heisenbit 9y agoThe issue at the heart of it is what can be charged for the standard essentials patents which must be licensed in a fair, reasonable and non discriminatory manner (FRAND). Qualcomm committed to these rules and got in return its patents written into the standard i.e. a monopoly. That is the way the wireless and a lot of other industries have worked - like it or not. What is at the heart of the matter is whether Qualcomm lives up to the FRAND rules. In its Amicus Brief Intel argues (http://blogs.intel.com/policy/files/2017/05/Intel-Amicus-Brief-FILED.pdf http://blogs.intel.com/policy/files/2017/05/Intel-Amicus-Bri...) especially against the no-license no-chip policy: > The Complaint focuses, instead, on Qualcomm’s policy of conditioning its chipset sales on the OEM agreeing that handsets using another vendor’s chipsets be licensed on the terms Qualcomm dictates. But selling Qualcomm chipsets to an OEM plainly does not “assist” that OEM in producing a handset that uses another vendor’s chipset making Qualcomm’s policy unnecessary to avoid “assisting” supposed infringement that Qualcomm is no part of. Qualcomm “assists” an OEM’s sale of handsets using other vendor's chipsets only in the sense that Qualcomm could devastate an OEM completely by cutting off its supply. Imagine Intel insisting that buyers of AMD's chips are following Intel's licensing terms. Qualcomm uses its standard essential patents as power levers. The pricing structure reflects that and is now so out of whack with what is happening elsewhere that Apple now balked. The way Qualcomm yields it power is at the heart of not adhering to FRAND rules. And I somehow doubt that Intel and Samsung gang up here. It was probably a friendly call from a dear customer that got the ball rolling.
- rodionos 9y ago> no coherent theory of competitive harm and no allegations of the type of conduct that the antitrust laws are designed to address This line of defense from Qualcomm would serve Google just as well. No competition - no competitive harm, hence all is well.
- bitmapbrother 9y ago>Intel is ready, willing, and able to compete on the merits in this market that Qualcomm has dominated for years I would have more sympathy for Intel if they were able to compete fairly in the x86 market. I can't help but feel amused when a company that partakes in monopolistic practices in one market starts complaining about being the victim in another. However, in the case I think Intel is the lesser of two evils, but they're still bedfellows.
- microcolonel 9y agoThe difference here is that Qualcomm agreed (along with other contributors) ahead of time to license these exact patents to LTE implementors in a fair, reasonable, and non-discriminatory manner: that is, to charge license fees which do not exceed their value in Qualcomm's own products. Intel never made any agreement to any consortium that they would do anything like this, they applied fairly for patents on the considerable number of geniune inventions and design decisions which go into their silicon and ISA. Many of these patents have long expired, and even when they weren't expired, manufacturers such as IBM, AMD, Texas Instruments, Harris Semiconductor, UMC, Acer, SGS Thomson, Cyrix, Rise Technology, Transmeta, IDT, VIA, and DM&P Electronics manufactured 80386, 80486, 80586 (pentium), 80686 (pentium pro), and Core competitors. x86 being co-monopolized by AMD and Intel is a recent phenomenon, and I think it has more to do with the fatigue of trying to compete with AMD and Intel at making chips with probably the most complicated and unscalable ISAs to implement efficiently. So in addition to seemingly breaking the agreement they made, they are being more predatory than most prominent patent licensors who didn't need an agreement to behave more fairly than they do.
- jumpkickhit 9y agoIs that why every new phone this year has the Snapdragon 835? I notice the Galaxy S8 has Samsung's own in Europe and Asia, but in the USA it's ole' snappy 835 just like everything else.
- axaxs 9y agoFrom what I remember, Exynos doesn't do CDMA...which may or may not be patent related. Hence using SD in the USA.
- dogma1138 9y agoThat's correct, and the reason is QC patents.
- Markoff 9y agoGuys from Huawei (that's nr.3 in world) and Samsung would disagree with you, as you confirmed by yourself in 2nd sentence.
- tooltalk 9y agoActually you are wrong. Qualcomm's contract essentially forbids Samsung from competing in the US (Qualcomm doesn't grant licenses to Samsung). Under their current contract, they can't market / sell their chips to a third party. Meizu has been the only rare known buyer of the Exynos chips.
- wyldfire 9y agoI think that the biggest issue for "fairness" in the "FRAND" in the Apple v QCOM case will be whether or not "royalties based on the price of the finished device." QCOM will probably make the case along the lines that "we designed the engine that powers your F1, we are the reason that your product performs as well as it does." They sincerely believe that their multitude of patents is much of what is making smartphones successful. AAPL will probably make the case that since they purchase the electronics from Foxconn (or someone similar), that those devices should be considered the goods on which the royalty is based. That their finished good that they sell in retail stores is the result of their OS/software and their product's image cultivated over decades. Their press release has used a different analogy from the one above I imagined for QCOM -- that "Qualcomm charges a different price for the couch depending on which house it's sold in." The ruling from the Korean trade commission is probably what Apple saw as the chink in Qualcomm's armor. I can honestly see it from both sides. Qualcomm holds patents in many domains that allow them to exploit their position. They were awarded those patents because they sincerely did innovate in this area. CDMA alone is huge (although that initial basis may have expired or be expiring soon). I see Apple's side -- they can charge their customer vast markup because of their status as a luxury brand.
- mitchty 9y agoApple is pretty much in the right on royalty based on device cost is crazy. Even more extreme example. Imagine you're Rolls Royce and want to make your next car have a permanent cell connection. Does 2% of the cost of a car at say 500k sound "reasonable" any longer? It should be the component or at best overall component in a larger design, not the design itself. As it stands final device cost just seems like a liver punch for no real reason than "because". But thats just my view of things, I'm curious if anyone can argue for a fixed % of final device cost for things that start to get costly as being "fair and reasonable". I'm having a really hard time coming up with one outside of its good for qualcomm's bottom line.
- aey 9y agoExcept that using an alternative technology (gsm/tdma) would make their phone laughable. A windows phone with LTE would outsell an iPhone without :). Qualcomm is correct to argue that their patents are critical to the device functionality, so they should get a chunk of the profits. Apples market cap went up by 5 Qualcomms since they started selling the iPhone, so they clearly get the lions share of profits. It's hard to argue that the pricing is unfair.
- mtgx 9y agoHere are more details from Korea's anti-trust case against Qualcomm: http://www.essentialpatentblog.com/2017/01/korea-ftc-proposes-sanctions-qualcomms-sep-licensing-practices/ http://www.essentialpatentblog.com/2017/01/korea-ftc-propose... It's too bad the KFTC recently seems to have decided to remove all cases from its site from the past three years [1], because I got to skim through its recent anti-trust case against Qualcomm, and what Qualcomm seemed to be doing was horrific (significantly worse stuff than what Intel was being accused of about a decade ago, as I recall). [1] http://www.ftc.go.kr/eng/bbs.do?command=getList&type_cd=54&pageId=0302 http://www.ftc.go.kr/eng/bbs.do?command=getList&type_cd=54&p...
- AdieuToLogic 9y agoQualcomm makes a non-trivial amount of its revenue from licensing its patent suite in toto to companies participating in this space. So when a player wants/needs some of it, they have to pay for all of it. And Qualcomm has hundreds of IP and patent lawyers employed full-time (not from an external firm, but as FTE's) to enforce same. Not to mention the continued investment they do in R&D required to grow their patent portfolio. So while Intel and Samsung are not to be taken lightly, neither should be the ferocity with which Qualcomm will defend its IP revenue stream.