181020 Why Do Standard Essential Patents (SEPs) Holders Implement the Bundled Rebate Programs? Analyses from Legal and Business Perspectives

Title:
Why Do Standard Essential Patents (SEPs) Holders Implement the Bundled Rebate Programs? Analyses from Legal and Business Perspectives

Speaker:
盧憶 (Thomas Y. Lu), J.S.D. Candidate, Washington University

Time:
10/20 (Sat.) 7:30 pm PDT, 8:30 pm MDT, 9:30 pm CDT, 10:30 pm EDT
10/21 (Sun.) 10:30 am Taiwan

Keywords:
Law, Intellectual property law, Antitrust law

Abstract:
The purpose of this paper is to explain the reasons behind a standard essential patents (SEPs) holder’s behavior: why does a (SEPs) holder, Qualcomm for instance, insist to implement bundled rebate program for its customer, Apple for instance, under the risk of violation of antitrust law? This question is originated from the story between Qualcomm, FTC and Apple. In early 2017, both FTC and Qualcomm’s customer, Apple, sued Qualcomm for violating antitrust law. Qualcomm was alleged to manipulate “web of contracts” which are implemented by so-called “no-license, no- chips” policy to achieve its anticompetitive purpose. By addressing the case law of antitrust regime related to bundled rebate and loyalty discount, we can understand the legal risk that Qualcomm might face with is enormous. However, through the game- theoretic models in this paper, we find the reasons why Qualcomm insists to implement the bundled rebate program and loyalty discount, no matter what legal risks they face with--Qualcomm might want to prepare the future fierce competition from potential competitors. In order to ease the future loss, based on the models, Qualcomm desires to implement the bundled rebate and loyalty discount program in advance. Finally, this article will conclude into the expectations for the future of the businesses, especially for Asian businesses, which wish to implement the bundled rebate and loyalty discount in the U.S.