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QUALCOMM’S STATEMENT REGARDING PUBLIC LICENSING INFORMATION

17-CV-0220-LHK-NMC

CRAVATH, SWAINE & MOORE LLP

Gary A. Bornstein (pro hac vice) 

gbornstein@cravath.com

Yonatan Even (pro hac vice)

yeven @cravath.com

825 Eighth Avenue

New York, NY 10019-7475

Telephone: (212) 474-1000

Facsimile: (212) 474-3700

MORGAN, LEWIS & BOCKIUS LLP

Richard S. Taffet (pro hac vice)

richard.taffet@morganlewis.com

101 Park Avenue

New York, NY 10178-0060

Telephone: (212) 309-0060

Facsimile: (212) 309-6001

 KEKER VAN NEST & PETERS LLP

 Robert A. Van Nest

 Eugene M. Paige

 Justina K. Sessions

 633 Battery Street

 San Francisco, CA 94111-1809 Telephone: (415) 676-2289 Facsimile: (415) 397-7188 

 MORGAN, LEWIS & BOCKIUS LLP

 Geoffrey T. Holtz (SBN 191370)

 Geoffrey.holtz@morganlewis.com One Market, Spear Street Tower

 San Francisco, CA 94105-1596 Telephone: (415) 442-1000 Facsimile: (415) 442-1001

 Attorneys for Defendant

 QUALCOMM INCORPORATED

 

 Additional Counsel listed on the Signature 

 Page

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

FEDERAL TRADE COMMISSION

 Plaintiff, v.

QUALCOMM INCORPORATED,

a Delaware corporation,

 Defendant.

Case No. 5:17-CV-0220-LHK-NMC

QUALCOMM’S STATEMENT 

REGARDING PUBLIC LICENSING 

INFORMATION

Case 5:17-cv-00220-LHK Document 1169 Filed 01/07/19 Page 1 of 5
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QUALCOMM’S STATEMENT REGARDING PUBLIC LICENSING INFORMATION

17-CV-0220-LHK-NMC

1

Pursuant to the Court’s request on January 4, 2019 (Jan. 4. Tr. at 151:8-16, 152:10-13), 

and to assist the Court in considering motions to seal evidence to be presented at trial, 

Qualcomm hereby provides the following information regarding publicly available information 

about its licensing program. 

Generally, Qualcomm has not sought to keep confidential information about the basic 

royalty rates it has sought as part of its licensing program. As the Court recognized, for example, 

it is well-publicized that, for portfolio-wide licenses (i.e., licenses under both Qualcomm’s SEPs 

and non-SEPs), Qualcomm has historically sought royalty rates of 5% of the net selling price of 

complete devices that implement 2G and/or 3G standards (whether or not the handsets also 

implement 4G LTE standards), subject to certain royalty caps. For example, as of April 2018, 

the maximum handset selling price (generally the licensee’s wholesale selling price net of certain 

permissible deductions such as transportation, insurance, and other items) used to calculate the 

royalty owed to Qualcomm is $400.1 

In December 2008, Qualcomm publicly announced that for handsets that implement 4G 

LTE standards only (i.e., that do not implement 2G or 3G standards), “Qualcomm expects that it 

will charge royalties for a license under its standards essential LTE patents . . . of approximately 

3.25% of the wholesale selling price of each such device, subject to reciprocity and other 

standard terms and conditions.”2 

In November 2017, in anticipation of the future release of 5G NR standards, Qualcomm 

publicly announced revised licensing terms as follows:

Under Qualcomm’s licensing program for cellular essential patents, the 

following royalty terms will apply on a worldwide basis to a license for 

Original Equipment Manufacturer (OEM) branded mobile handsets that 

 1 https://www.qualcomm.com/media/documents/files/examples-of-royalties-for-smartphoneprice-points.pdf

2 https://www.qualcomm.com/media/documents/files/lte-wimax-patent-licensingstatement.pdf

Case 5:17-cv-00220-LHK Document 1169 Filed 01/07/19 Page 2 of 5
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QUALCOMM’S STATEMENT REGARDING PUBLIC LICENSING INFORMATION

17-CV-0220-LHK-NMC

2

implement the 5G NR standard, up to and including release 15 of the 3GPP 

specifications:

• An effective running royalty rate of 2.275% of the selling price of branded 

single-mode 5G handsets; and

• An effective running royalty rate of 3.25% of the selling price of branded 

multi-mode (3G/4G/5G) handsets.

. . .

In addition, Qualcomm will continue to offer licenses for OEM branded 

mobile handsets that include both Qualcomm’s cellular standard essential 

patents as well as those patents not essential to the standard . . . at royalty rates 

of 4% of the selling price for branded single-mode handsets and 5% of the 

selling price for branded multi-mode handsets.3

Qualcomm noted in its November 2017 announcement that these terms are “generally 

consistent” with the terms of Qualcomm’s Chinese Patent License Agreements (“CPLA”).

4

 The

general terms of Qualcomm’s CPLAs are likewise widely known: 

For licenses of Qualcomm’s 3G and 4G essential Chinese patents for branded 

devices sold for use in China, Qualcomm will charge royalties of 5% for 3G 

devices (including multimode 3G/4G devices) and 3.5% for 4G devices 

(including 3-mode LTE-TDD devices) that do not implement CDMA or 

WCDMA, in each case using a royalty base of 65% of the net selling price of 

the device.5

In addition, Qualcomm notes that the existence of a license agreement between 

Qualcomm and a particular counterparty (as opposed to the specific terms of the license 

agreement) is often not confidential, and Qualcomm discloses lists identifying many of its 

licensees on its website.6 

 3 https://www.qualcomm.com/media/documents/files/qualcomm-5g-nr-royalty-termsstatement.pdf

4 Id.

5 https://investor.qualcomm.com/static-files/2a33b6bd-66bd-4977-8486-808386aac482

6 https://www.qualcomm.com/invention/licensing

Case 5:17-cv-00220-LHK Document 1169 Filed 01/07/19 Page 3 of 5
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QUALCOMM’S STATEMENT REGARDING PUBLIC LICENSING INFORMATION

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Dated: January 7, 2019 Respectfully submitted,

CRAVATH, SWAINE & MOORE LLP

s/ Gary A. Bornstein

Gary A. Bornstein

Yonatan Even

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

Telephone: (212) 474-1000

Facsimile: (212) 474-3700

gbornstein@cravath.com

Robert A. Van Nest

Eugene M. Paige

Justina K. Sessions

KEKER, VAN NEST & PETERS LLP

633 Battery Street

San Francisco, CA 94111

Telephone: (415) 676-2289

Facsimile: (415) 397-7188

rvannest@keker.com

epaige@keker.com

jsessions@keker.com

Richard S. Taffet

MORGAN, LEWIS & BOCKIUS LLP

101 Park Avenue

New York, NY 10178

Telephone: (212) 369-6000

Facsimile: (212) 309-6001

richard.taffet@morganlewis.com

Willard K. Tom

MORGAN, LEWIS & BOCKIUS LLP

1111 Pennsylvania Avenue, N.W.

Washington, DC 20004

Telephone: (202) 739-3000

Facsimile: (202) 739-3001

willard.tom@morganlewis.com

Case 5:17-cv-00220-LHK Document 1169 Filed 01/07/19 Page 4 of 5
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QUALCOMM’S STATEMENT REGARDING PUBLIC LICENSING INFORMATION

17-CV-0220-LHK-NMC

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Geoffrey T. Holtz

MORGAN, LEWIS & BOCKIUS LLP

One Market, Spear Street Tower

San Francisco, CA 94105

Telephone: (415) 442-1000

Facsimile: (415) 442-1001

donn.pickett@morganlewis.com

geoffrey.holtz@morganlewis.com

Attorneys for Qualcomm Incorporated

Case 5:17-cv-00220-LHK Document 1169 Filed 01/07/19 Page 5 of 5