According to media reports, on August 11, local time, the U.S. communications giant Qualcomm（ QCOM.US ）Won an antitrust lawsuit with the Federal Communications Commission (FTC).

The antitrust lawsuit won by Qualcomm focuses on its business model and patent licensing model. In May last year, judge Lucy KOH of San Jose District Court in California ruled that the company hindered market competition by charging too high patent licensing fees to smartphone manufacturers. As a result, Lucy KOH ordered Qualcomm to renegotiate the royalty with smartphone manufacturers and not to threaten to stop chip supply.

Now, Qualcomm has successfully appealed to overturn the adverse judgment. According to media reports, the U.S. Court of Appeals for the Ninth Circuit rejected the above judgment by a vote of three to one, believing that the evidence provided by FTC could not prove that Qualcomm is suspected of illegal monopoly and hindering market competition.

This is undoubtedly a significant positive news for Qualcomm. On the same day, the company rose more than 5% and the highest price reached US $112.01, close to the highest price in nearly 20 years (on August 3, the intraday high reached $113, a new 20-year high).

In this regard, don Rosenberg, executive vice president and chief counsel of Qualcomm, said that the judgment of the Ninth Circuit Court of appeal completely overturned the previous judgment of the district court, and recognized our business model and patent licensing model, reflecting the great contribution of Qualcomm to the whole industry.

The head of FTC's market competition Department said that he was disappointed with the decision and was considering the option.

In fact, as early as 2017, FTC sued Qualcomm for suspected monopoly because of its dominant position in the baseband chip market, requiring smartphone manufacturers to enter into a patent licensing agreement with it. Once smart phone manufacturers use baseband chips from other companies, they will have to pay higher patent fees to Qualcomm.

One of the important reasons why Qualcomm's patent licensing model is frequently regarded as a "thorn in the eye" is that the patent licensing fees collected from various manufacturers are one of its major revenue sources. According to the latest financial report data, under the influence of the epidemic situation and other factors, in the third quarter of fiscal year 2020, Qualcomm recorded a total revenue of $4893 million, of which revenue from equipment and services was $3.794 billion, compared with $3.531 billion in the same period of the previous year; and revenue from patent licensing was $1.099 billion, compared with $6.104 billion in the same period of last year.

In addition, the recent good news from Qualcomm. At the latest performance meeting, Qualcomm announced that it had reached a patent cross licensing agreement with Huawei. In the next fiscal quarter, Huawei will pay 1.8 billion US dollars of patent fees in a lump sum, which will be included in the next fiscal quarter's performance under the GAAP caliber. At the same time, the company also said it would strive to find the possibility of providing chips to all Chinese smartphone manufacturers, including Huawei.

CICC commented in the research paper on August 2 that the patent settlement reached between Qualcomm and Huawei has opened a way for Huawei to purchase Qualcomm chips for mobile phones in the future. At the same time, CICC expects that Huawei will continue to contribute revenue increment to the royalty business of Qualcomm in the future.

On the first trading day (July 30) after the above results were announced, Qualcomm closed up more than 15%, and its stock price broke through $100 again after many years; on August 3, its intraday high reached $113, a new high in nearly 20 years.

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