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Trump told to stop gov’t lawsuit over Qualcomm patent licensing

Joe Mullin
/ Federal Trade Commission (FTC) Chairwoman Edith Ramirez testifying in Congress last May. A conservative group says Ramirez has taken antitrust positions, including the recent suit against Qualcomm, "that weaken US patent rights."
Several conservative groups have written to President Donald Trump asking him to stop the Federal Trade Commission from pursuing a lawsuit against Qualcomm over its patent licensing.
The FTC sued Qualcomm last week just days before President Trump took the oath of office. The FTC lawsuit says that Qualcomm's patent licensing practices amount to an illegal "patent tax" on smartphone makers who choose non-Qualcomm processors.
Yesterday, conservative groups including Americans for Tax Reform and the American Conservative Union sent a letter (PDF) to the White House calling the FTC lawsuit "midnight regulation at its worst," a misuse of antitrust law to "undercut patent property rights and conservative free market principles." The letter was first reported by Morning Consult.
The FTC lawsuit was filed by a 2-1 vote, with Republican Commissioner Maureen Ohlhausen writing a strongly worded dissent. FTC Chairwoman Edith Ramirez, a Democrat who voted in favor of the lawsuit against Qualcomm, has already announced that she will resign on February 10. In their letter, the conservative groups say that Ohlhausen should be made permanent chair of the FTC. The president appointed Ohlhausen as interim chair yesterday.
"Commissioner Ohlhausen has pledged to uphold intellectual property rights and undertake only evidence-based antitrust investigations, in contra-distinction to the politically motivated actions taken by the outgoing FTC that harm U.S. companies relative to Asian competitors," the letter states.
The FTC lawsuit was quickly followed by a legal attack by Apple, which filed lawsuits against Qualcomm in the US and China. Apple's lawsuit claims Qualcomm tried to "extort" $1 billion in exchange for preventing Apple from talking to Korean regulators, who slapped Qualcomm with an $850 million fine last month. The complaint also says that Qualcomm's patent-licensing practices have resulted in Apple being overcharged "billions."

Patently Shifting

It's unclear where President Trump stands on patent issues and on the patent reforms that big industries—including tech, retailers, and restaurants—have been seeking for years now. If he follows the lead of these conservative groups, we're likely to see laws that favor patent enforcement and less likely to see the reforms that were supported by both parties during the Obama era.
Qualcomm's business model relies on patent licensing. During Congressional debates on patent reform efforts, Qualcomm has opposed most proposed changes to patent laws. The company believes that reform efforts would weaken patents and potentially its own negotiating position.
The groups that signed yesterday's letter are all conservative but are not in line with the patent views of most Republicans. The last patent reform bill voted on in the House was favored by majorities of both Democrats and Republicans, but the pro-reform majority was larger on the Republican side. Of the few Republicans that did oppose reform, many were affiliated with right-leaning groups like the American Conservative Union, which has opposed patent reform efforts. It's worth noting that the ACU also treated Vice President Mike Pence like something of a legislative rock star when he was in Congress.
If Trump does choose to oppose the FTC lawsuit, getting it shut down won't be a straightforward process. The FTC is an independent agency, so he can't simply turn off lawsuits that the agency has initiated. The president has the power to nominate new commissioners, but he can't control their actions. The FTC under the Trump administration is expected to have three Republican and two Democratic commissioners once it's fully staffed.
One writer behind the letter, Jim Edwards of the Inventors' Project, told Morning Consult he hopes the letter gets other administration officials to pressure the FTC into withdrawing the complaint.
Trump told to stop gov’t lawsuit over Qualcomm patent licensing Reviewed by Chidinma C Amadi on 4:39 PM Rating: 5

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