Qualcomm, LG Reach New Chip-Licensing Deal -- Update

By Sarah E. Needleman 

Qualcomm Inc. has reached a new patent-licensing deal with LG Electronics Inc. of South Korea, helping land its technology in a suite of wireless devices while U.S. federal regulators continue to scrutinize its business practices on antitrust grounds.

The San Diego chip maker said Tuesday the five-year agreement will allow LG to use its chips in 3G, 4G and 5G single-mode and multimode devices. Although the deal's financial terms weren't disclosed, Qualcomm said it will earn royalties from LG and that the agreement is consistent with its established global licensing terms.

The agreement is significant for LG because the company doesn't manufacture the kind of chips that Qualcomm makes for providing its smartphones with internet connectivity.

The deal comes after a federal judge in May ruled that Qualcomm had unlawfully stifled competition in the market for wireless chips. The ruling followed a complaint filed by the Federal Trade Commission in 2014 arguing that Qualcomm's practice of demanding licensing agreements from companies purchasing its chips for use in wireless devices was anticompetitive, as was refusing licenses to other chip makers seeking to field competitive products. Qualcomm has appealed the ruling.

The agreement with LG also comes months after Qualcomm settled a bruising patent-litigation fight with Apple Inc. that lasted more than two years and cost it a fortune in legal fees and lost business. In that case, Qualcomm claimed Apple violated its patents by withholding royalty payments, while Apple argued Qualcomm had been overcharging for those patents for years.

Qualcomm shares rose 0.8% in premarket trading.

--Colin Kellaher contributed to this article.

Write to Sarah E. Needleman at [e-mail]

(END) Dow Jones Newswires

August 20, 2019 09:44 ET (13:44 GMT)

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