Qualcomm has won a partial stay on a court ruling that threatened to upend its business, a victory for the US chipmaker as it seeks to overturn an antitrust case brought by the Federal Trade Commission.

The ninth circuit court of appeals on Friday granted Qualcomm a stay on certain remedies imposed by a lower court that found the company had “strangled competition” and kept its royalty rates “unreasonably high”.

The ruling by the appeals court in the controversial case, which has seen the Department of Justice take the unusual step of intervening to side with Qualcomm, suggested the judges have some scepticism towards the arguments made by the FTC.

“While the FTC prosecuted this antitrust enforcement action, the DOJ filed a statement of interest expressing its stark disagreement that Qualcomm has any antitrust duty to deal with rival chip suppliers,” the ruling said.

“We are satisfied that Qualcomm has shown, at minimum, the presence of serious questions on the merits of the district court’s determination that Qualcomm has an antitrust duty to license its [standard essential patents] to rival chip suppliers,” it added.

The stay means Qualcomm will, for now, not have to renegotiate its license agreements, make “exhaustive” standard essential patent licenses available to its competitors, or stop linking chip sales to the purchase of patent licenses.

Bruce Hoffman, director of the FTC’s bureau of competition, said he was disappointed in the decision and noted that the partial stay meant several of the district court’s remedies remained in effect.

“While I am disappointed in the decision of the Ninth Circuit Court of Appeals to stay part of the district court’s order, we respect the decision and look forward to defending the district court’s decision on the merits,” he said in a statement.

Don Rosenberg, general counsel for Qualcomm, welcomed the decision and said it “keeps intact Qualcomm’s patent-licensing practices”.

“We are pleased that the Ninth Circuit granted our request and believe the district court decision will be overturned once the merits of our appeal have been considered,” he said in a statement.

A justice department spokesman had no comment.

Get alerts on Qualcomm Inc when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article