European Commission closes investigation of Howrey client Qualcomm

Brussels, November 24, 2009...Howrey welcomes the European Commission’s announcement earlier today (MEMO/09/516) that it has decided to close the formal antitrust proceedings it had launched against Qualcomm in October 2007. Complainants Ericsson and NEC have also issued press releases confirming the withdrawal of their complaints. This is a remarkable result for Qualcomm considering the vigour with which the European Commission has been enforcing the European competition rules in high tech industries.

This case, which was initiated following complaints lodged in 2005 by Ericsson, Broadcom, NEC, Nokia, Panasonic and Texas Instruments, raised highly complex and important issues about the pricing of patented technology after its adoption as part of an industry standard. The complaints alleged that Qualcomm’s royalties for its patented technology – which was part of the WCDMA wireless telecommunications standard adopted by ETSI – were excessively high and thus amounted to an exploitative abuse in violation of Article 82 EC.

The Commission’s press release indicates that given that all complainants have withdrawn or indicated their intention to withdraw their complaints, it does “not consider it appropriate to invest further resources in this case.” Nokia withdrew its complaint in July 2008 after reaching a global settlement of its licensing disputes with Qualcomm. Broadcom made a similar move a few months later. Although the complaints of Ericsson, NEC, Panasonic and Texas Instruments’ remained pending, Commissioner Kroes’s speech of 15 October 2009 and the subsequent Q&A indicated that the case against Qualcomm was likely to be terminated. The decision of the remaining complainants to withdraw their complaints (see the press releases of e.g. Ericsson and NEC of 24 November 2009) was no doubt seen as a preferable alternative than suffering the embarrassment of the Commission formally rejecting them.

Howrey wishes to praise the Commission for its thorough review of a complex body of evidence and the careful approach it took in this case. Consistent with the statement by Commissioner Kroes on 15 October 2009 that “any antitrust enforcer has to be careful about overturning commercial agreements without a clear and coherent evidence base,” the Commission wisely refrained from seeking to regulate the royalties and other terms comprised in Qualcomm’s licenses, which were the result of often longstanding contractual arrangements entered into after arm’s length negotiations with large undertakings several times its size.

This great success is the result of very hard work from both the Howrey and Qualcomm teams. The Howrey team was composed of partners Trevor Soames, Damien Geradin, Goetz Drauz, Lars Kjolbye, Carl de Meyer and Patricia Cappuyns and senior associates Jen Vasta (now at Qualcomm) and Miguel Rato. Economic support was provided by Dr. Jorge Padilla and Dr. Anne Layne Farrar of LECG. The Qualcomm team was led by Don Rosenberg, the General Counsel, and primarily comprised Mike Hartogs, Roy Hoffinger and Jen Vasta.

Howrey, which was founded as an antitrust firm in Washington in 1956, has remained at the cutting edge of antitrust practice for more than 50 years. In 2002, the firm opened in Brussels with a fifteen lawyer competition practice, which is now considered one of the best in Belgium. In their 2009 Brussels Survey, Global Competition Review identified Howrey as one of the four “Elite competition practices.” The firm’s European growth continued with the expansion of the London antitrust practice and the hiring of Tom McQuail in 2007, the addition of Spain’s #1 competition practice, Martínez Lage in 2008 and in Paris, the premier competition team led by Claude Lazarus joining from Clifford Chance in November 2009. In the US, the firm has long been regarded as a top antitrust practice and in recent months has added MJ Moltenbrey and Michael Jahnke to its roster.

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Founded in 1956, Howrey LLP is a global law firm with over 725 attorneys and more than 50 economic, financial and regulatory consultants. Howrey has offices in Washington DC; Northern Virginia; Houston, Texas; New York, New York; Los Angeles, Irvine, East Palo Alto and San Francisco, California; Salt Lake City, Utah; Chicago, Illinois; London, England; Brussels, Belgium; Paris, France; Amsterdam, The Netherlands; Munich, Germany; Madrid, Spain and Taipei, Taiwan. Howrey's affiliate, The CapAnalysis Group, LLC (economic, financial, and litigation consultants) teams with Howrey attorneys as a strategic business resource. A consistent American Lawyer “A-List” and PLC Which lawyer? “Global 50” firm, Howrey is one of the most frequently used law firms by the world’s leading companies. Howrey’s Intellectual Property practice was ranked as a top national IP practice and the Top IP Appellate practice by IP Law & Business and its Antitrust practice topped Global Competition Review’s “GCR 100.” As the winner of the 2003 Thomas L. Sager Award from the Minority Corporate Counsel Association, Howrey is committed to the ideals of diversity and is equally committed to the tenets of pro bono and public service. Howrey's “Advantage of Focus” makes it the clear choice for antitrust, intellectual property and complex business dispute resolution. For more information, visit our Web site at www.howrey.com.