High-pass case closes, patent law and anti-monopoly boundary clarified

In the early hours of February 10, the US mobile chip maker Qualcomm issued a bulletin saying it had agreed with the NDRC that it would pay a fine of 6.088 billion yuan to provide Chinese customers with a basic license for 3G and 4G chip patents and lower patent rates. After 14 months of repeated games, the NDRC's antitrust investigation was finally closed.

The news came as the focus was on almost all of the biggest fines China has ever issued to antitrust. If the background of Qualcomm and Qualcomm is slightly understood, it will be found that the number of fines should at least not be the focus.

Qualcomm is the world's largest wireless communications standards necessary patent licensees, master the mobile chip market around the necessary patent. Qualcomm's core profit model, which is based on its extremely strong market position of the patent licensing model, the emergence of a controversial model. Because it is not, as is often the case, based on the portion of the patent involved, it's the whole machine bill, for example, the iphone uses a high pass chip to calculate royalties for the entire mobile phone, while Chinese operators ' custom machines pay for the phone chips and indirectly pay for the use of Qualcomm-patented equipment manufacturers (ZTE, Huawei, etc. ) royalties. The National Development and Reform Commission in this regard to "the whole machine as the basis for calculating license fees", "the standard necessary patent and non-standard necessary patent bundle license", "ask licensee to carry out free of charge" and other seven surveys, covering the previous EU and Japan and South Korea combined.

Qualcomm's biggest worry is not how much is fine, but whether the profit model is being subverted and can continue to develop steadily in the Chinese market. In the 2013 high-pass profit statement, the proportion of profits generated by the patent licensing business was more than 87% per cent of the total profit, and in the fiscal year ended September 28, 2014, about half of the 26.5 billion U.S. dollars in Qualcomm's global revenues came from China, and as the 2015 4G business was fully rolled out in China, The income from China is very considerable. If the reversal of the profit model triggered the butterfly effect or hindered the development of the Chinese market, it would be a serious blow to Qualcomm, which is why, in the 14-month survey, the stock price of Qualcomm will fall sharply on almost every case progress.

Ultimately, both the content of the agreement or Qualcomm's statement, the result is a step-by-step law enforcement reconciliation. Qualcomm's machine billing model has been retained, only in China's billing 65 percent, non-essential patents are no longer bundled with the necessary patent sales. This means that Qualcomm has retained its core profit model in China by lowering fees and has gained "eligibility" in the Chinese market. As a result, Qualcomm eagerly grabbed the agreement in front of the NDRC, and the stock price rose immediately. However, it is noteworthy that the reform and Development Commission announced the rectification plan, mentioned the cancellation of the anti-authorization clause, which is not mentioned in the Qualcomm Bulletin. The term is that companies that used Qualcomm chips in the past must authorize the patents in reverse, Qualcomm is not allowed to charge Qualcomm customers royalties for this patent, which means that a mobile phone manufacturer who uses a Qualcomm chip and its clients ' patents are free to use, and when the terms are canceled, Qualcomm has no such hidden "umbrella", has a negative impact on the number of Qualcomm.

Qualcomm case after 14 months of game, to settle the curtain, but there are still unresolved important issues and disputes.

With regard to the boundary between intellectual property protection and antitrust, it is a difficult problem for the whole world to protect and innovate while anti-monopoly. Qualcomm has many standard-necessary patents (SEPS), patent and patent charges are the protection of intellectual property rights, then the provisions based on the standard necessary patent, how to be in the legal scope, how to calculate the abuse of intellectual property rights, in the patent law and antitrust laws in the intersection of how to law enforcement, by WHO law enforcement, there is no clear answer. It is undeniable that the lack of intellectual property protection legislation in developing countries has given the case more room for negotiation, but it is clearly unreasonable for a single institution to make the rules, whether it is the NDRC or Qualcomm.

There is no foolproof solution to the problems left in the Qualcomm case, but more detailed and clear legislation and standard enforcement procedures are undoubtedly beneficial to the question of global intellectual property rights and antitrust problems.