The Wall Street Journal: Taiwan fines Qualcomm $773 million, claiming unfair patent licensing

Qualcomm Inc. was fined about $773 million by the Taiwanese government, the latest setback as the chip maker defends its patent-licensing business against an international wave of regulatory and legal challenges.

In a filing Wednesday, the Taiwanese Fair Trade Commission ruled that Qualcomm violated the country’s laws by licensing its patents unfairly. Qualcomm, in a statement, said it plans to appeal.

Qualcomm QCOM, +0.46%   is the dominant supplier of chips for smartphones. Its intellectual-property business, though, is far more profitable, accounting for roughly 80% of the company’s pretax profit last year.

As an owner of patents deemed essential to cellular communications, Qualcomm is required to license its intellectual property on fair and reasonable terms. How it does so has come under fire. For instance, Qualcomm bases its royalty rate on the price of a whole device rather than that of its chips, and it licenses its essential patents only along with its entire patent portfolio.

An expanded version of this report appears on WSJ.com.

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