Broadcom Corp. v. Qualcomm Inc.

In the cellular telephone industry, industry-wide standards were necessary to ensure interoperability among different servicers and device manufacturers. The standards were established by private standards determining organizations (SDOs). Because much of the technology included in the standards was subject to intellectual property rights, SDOs required that industry companies license their patent-protected technology on fair, reasonable, and non-discriminatory (FRAND) terms. Qualcomm Inc. (Qualcomm) (defendant) provided to an SDO a technology called wideband code division multiple access (WCDMA) to be used in the industry standard. Qualcomm held a patent on the technology and agreed to comply with the SDO’s FRAND terms requirement. Broadcom Corporation (Broadcom) (plaintiff) brought an antitrust suit, alleging that Qualcomm breached its FRAND commitment by providing its WCDMA technology on non-FRAND terms. Broadcom claimed that Qualcomm had engaged in deceptive conduct by committing to FRAND terms to induce the SDO to adopt its technology, but had then violated those terms. In particular, Broadcom accused Qualcomm of demanding higher payments from competitors and consumers not using other Qualcomm technology. According to Broadcom, Qualcomm intended to monopolize the WCDMA technology market. Broadcom claimed that WCDMA was necessary for the functioning of the industry standard. The district court dismissed the complaint for failure to state a claim. Broadcom appealed.