Broadcom Corp. v. Qualcomm Inc.
United States Court of Appeals for the Third Circuit
501 F.3d 297 (3d Cir. 2007)
Qualcomm (defendant) offered its patented WCDMA technology to a private standards-determining organization (SDO) for inclusion in the cellular industry's technical standard, agreeing to license it on fair, reasonable, and non-discriminatory (FRAND) terms as the SDO required for patented technology. After the SDO adopted the standard incorporating WCDMA, Broadcom (plaintiff) alleged Qualcomm had never intended to honor those FRAND terms, instead demanding higher payments from competitors and consumers not using other Qualcomm technology, effectively using its deceptive FRAND commitment to lock in monopoly power over technology essential to the industry standard. The district court dismissed Broadcom's antitrust complaint for failure to state a claim, and Broadcom appealed.
Whether a patent holder's deceptive conduct before a private standards-determining organization — specifically, falsely committing to license essential technology on fair, reasonable, and non-discriminatory terms in order to secure the technology's adoption into an industry standard — can constitute actionable exclusionary conduct under § 2 of the Sherman Act.