Qualcomm Incorporated (NASDAQ: QCOM) today announced that it has reached a mutually agreed settlement with the Taiwan Fair Trade Commission (TFTC) resolving the TFTC's investigation of Qualcomm and Qualcomm's litigation challenging the TFTC's decision alleging violations of Taiwan's Fair Trade Act. As a result, the whole TFTC decision is replaced by the settlement terms and the decision shall be deemed revoked ab initio (from the beginning) and Qualcomm's litigation filed in the Taiwan Intellectual Property Court is closed.
As part of the resolution, Qualcomm has agreed to certain process-related commitments confirming principles of mutual good-faith and fairness in the negotiation of agreements with handset licensees to Qualcomm's cellular standard essential patents (SEPs). The resolution does not require component-level licensing or set specific financial terms; instead it is focused on commitments that ensure good-faith negotiations for the benefit of licensees and SEP owners. As part of the settlement, the parties agreed that the NTD 2.73 billion (approximately $93 million USD) Qualcomm paid towards the monetary fine through the end of July will be retained by the TFTC and no other amounts will be due.
In addition, Qualcomm will drive certain commercial initiatives in Taiwan over the next five years for the benefit of the mobile and semiconductor ecosystem, SMEs and consumers, including 5G collaborations, new market expansion, start-up and university collaborations and the development of a Taiwanese center for operations and manufacturing engineering. Qualcomm will work with the TFTC and sister agencies within the Taiwanese government to implement these initiatives and investments.
"We are pleased to have reached a mutually beneficial resolution with the TFTC that puts the litigation behind us," said Alex Rogers, executive vice president and president, Qualcomm Technology Licensing. "This settlement directly addresses concerns raised by the TFTC, regardless of disputed positions, and builds on our foundation of collaborative, long-term business relationships in Taiwan. We are happy to reaffirm our commitment to licensing our valuable intellectual property under principles of fairness and good faith. With the uncertainty removed, we can now focus on expanding our relationships that support the Taiwanese wireless industry and rapid adoption of 5G technology."
For more than two decades, Qualcomm has contributed extensively to the development of Taiwan's mobile and semiconductor industries to achieve shared success in Taiwan and globally. Qualcomm's significant R&D investments in fundamental mobile technologies and its broad-based licensing of those technologies to mobile phone suppliers have facilitated the explosive growth of the mobile communications industry in Taiwan and worldwide. This brings immense benefit to consumers and fosters healthy competition at all levels of the mobile ecosystem.
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