Antitrust Alert: Japan Challenges "Essential" Patent Licenses Under Anti-Monopoly Act

The Japan Fair Trade Commission ("JFTC") has announced a cease and desist order requiring that Qualcomm Inc. rescind license provisions that required licensees to cross-license their patents to Qualcomm and refrain from asserting their own patents against Qualcomm or Qualcomm licensees. The second such order in the last two years, the JFTC has clearly signaled that it views such provisions as unlawful when imposed by a dominant licensor of "essential" IP rights.

The patents in question bear on standards for cellular equipment that had been adopted for use in Japan. In 2000, the Association of Radio Industries and Businesses ("ARIB"), designated by the Japanese Ministry of Posts and Telecommunications as responsible for communications standards in Japan, adopted W-CDMA and CDMA2000 as the third-generation (3G) wireless telecommunications standards, in accordance with the international standard adopted by the International Telecommunication Union. ARIB announced that