The FTC Should Give Up Its Doomed Fight with Qualcomm and Adopt Delrahim’s New Madison Approach


“The exercise of IP rights should not be confused with anticompetitive conduct. Those who implement the inventions of others, who bore no up-front risk, shouldn’t be advantaged by antitrust enforcers putting their thumbs on the scales.” Federal Trade Commission (FTC) just can’t take “no, you’re wrong” for an answer. Despite its embarrassing reversal by the Ninth Circuit Court of Appeals in August, the FTC has now appealed its Qualcomm case to the full Ninth Circuit.

A three-judge appellate panel overturned the trial court’s errant ruling, giving the FTC a comeuppance in its antitrust suit against Qualcomm, the trailblazer in wireless technology with thousands and thousands of patented inventions.

A Steep Climb

The sheer cliff the FTC seeks to climb features daunting crags. The appellate judges ruled unanimously. They also found fundamental problems in the trial court’s (and FTC’s) legal and factual analysis, and so they gave basic aspects of the case fresh eyes, or de novo, review. And several federal departments, including the Justice Department Antitrust Division, weighed in with the trial court in opposition to the FTC.

Former FTC commissioner and George Mason law Professor Joshua Wright has written that “[T]he FTC has ruled for itself in 100 percent of its cases over the past three decades.” (Joshua Wright, Supreme Court Should Tell FTC To Listen To Economists, Not Competitors On Antitrust, FORBES (Mar. 14, 2016). Well, it finally lost here. And the agency may be inviting an even more thorough legal thrashing that, in anybody’s book, would count as a litigation loss. Pride cometh before a fall, the Bible says. The FTC has taken and may take another doozy of a fall.

The Winners

As Assistant Attorney General for Antitrust Makan Delrahim recently said, it’s “a radical theory that a patent holder who fails to live