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Speaker 1: You're listening to Bloomberg Law with June Grasso from Bloomberg Radio.

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Speaker 1: The New York Attorney General is suing to dissolve the

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Speaker 1: n r A, accusing the gun rights group of engaging

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Speaker 1: in a massive fraud against donors. Attorney General Letitia James

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Speaker 1: claims that top n r A officials, including its longtime

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Speaker 1: leader Wayne Lapierre, have been using the nonprofit organization as

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Speaker 1: their personal piggy bank, illegally diverting more than sixty four

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Speaker 1: million dollars from the organization in the last three years alone.

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Speaker 1: They use millions upon millions dollars from the n r

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Speaker 1: A for personal use, including for lavish trips for themselves

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Speaker 1: and their families, private jets, expensive meals, and other private travel.

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Speaker 1: My guest is Second Amendment expert Adam Winkler, a professor

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Speaker 1: at u c l A Law School. Adam the New

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Speaker 1: York A g alleged massive fraud, corruption, and self dealing.

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Speaker 1: The breath of it is stunning. What strikes you most

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Speaker 1: about the allegations, well, just the breadth of them. There's

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Speaker 1: so many allegations. It does seem like the n ra

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Speaker 1: A leadership has been running the organization without much oversight

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Speaker 1: from the board of directors that there's insider deals for directors,

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Speaker 1: there's officers like Wayne Lapierre that negotiated a secret seventeen

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Speaker 1: million dollar conversation package for when he leaves the n

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Speaker 1: r A. Sounds like something you'd expect in a fortune company,

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Speaker 1: not a nonprofit organization like the n r A. William Brewer,

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Speaker 1: the n r AS lawyer, said, the truth is the

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Speaker 1: transactions in question have been reviewed, vetted, and approved. It

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Speaker 1: seems like that would be a hard defense to make

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Speaker 1: in light of some of these expenses, like the private

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Speaker 1: jets for Lapierre's family and more than a quarter of

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Speaker 1: a million dollars in designer clothes. How can they prove

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Speaker 1: that those kinds of expenses were proper Well, I think

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Speaker 1: they really have no choice because the actual transactions happened.

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Speaker 1: They can't deny that they happened. And under New York law,

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Speaker 1: profits can engage in some kinds of insider deals, but

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Speaker 1: they have to follow the appropriate procedures and have to

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Speaker 1: be ultimately fair and reasonable to the corporation, in this

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Speaker 1: case a nonprofit corporation. So they really have to say

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Speaker 1: that these are fair and reasonable transactions, because that's the

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Speaker 1: only way that they're going to survive. Did the allegations

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Speaker 1: come as a surprise to you or have we heard

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Speaker 1: enough in the past with you know, the struggles within

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Speaker 1: the n r A that these did not come as

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Speaker 1: a complete surprise. Well, they were surprising in a few ways.

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Speaker 1: You're absolutely right. There has been a steady stream of

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Speaker 1: leaks coming out of the n r a S lawsuit

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Speaker 1: with its longtime ad agency, Ackerman McQueen. Ackerman McQueen was

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Speaker 1: responsible for the n ra AS messaging for more than

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Speaker 1: three decades and they really worked hand in hand with

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Speaker 1: the n r A, including creating n r A t

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Speaker 1: V and been the real brain CHILDBND. So much of

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Speaker 1: what we associate at the n r A S message

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Speaker 1: and that lawsuit is very nasty, and a lot of

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Speaker 1: leaks have come out that suggests that there has been

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Speaker 1: malfeasons inside the n r A. But it was nonetheless

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Speaker 1: pretty surprising these allegations for two reasons. One, there were

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Speaker 1: surprising allegations such as the seventeen million dollar compensation package

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Speaker 1: for Wayne Lapierre that hadn't come out previously, but also

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Speaker 1: that the remedy sought by the New York Attorney General

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Speaker 1: dissolution of the n r A is the kind of

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Speaker 1: remedy that's really reserved for organizations that engage in persistent

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Speaker 1: fraud or illegality. So it was really remarkable and surprising

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Speaker 1: that such a broad and aggressive remedy was chosen. Well,

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Speaker 1: this isn't the first high profile charity that James has targeted,

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Speaker 1: but the allegations that are sued against the Trump Foundation

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Speaker 1: just pale in comparison to these allegations. Trump dissolved his

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Speaker 1: foundation voluntarily, but the n r A is not going

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Speaker 1: to do that. What are the chances that they would

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Speaker 1: actually be required to dissolve, Well, it's really hard to say. Obviously,

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Speaker 1: it seems hard to imagine, and that the n r

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Speaker 1: A vast national organization with chapters in every state and

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Speaker 1: training programs for police officers, would actually go out of business.

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Speaker 1: It seems pretty crazy, just in the sense of it's

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Speaker 1: such a big organization, we wouldn't expect to see such

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Speaker 1: a thing. The Trump Charitable Foundation was put out of business,

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Speaker 1: but it was only Donald Trump and a few people

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Speaker 1: who worked for him who were organizing that charitable foundation.

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Speaker 1: It wasn't nearly the size of the n r A.

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Speaker 1: I think that makes dissolution a little bit less likely,

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Speaker 1: because there's going to be plenty of things that the

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Speaker 1: n r A has been doing that's been perfectly legal

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Speaker 1: and perfectly appropriate. But I think that this is an

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Speaker 1: opening salvo. In these kinds of situations, regulators often bring

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Speaker 1: their charges to begin the negotiation, and it's really the

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Speaker 1: negotiated settlement that really determines what the remedies will be,

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Speaker 1: and I expect in this case it will probably be

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Speaker 1: something like removal of certain directors or officers, some restitution

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Speaker 1: for some of the deals and transactions that have gone on.

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Speaker 1: But disillusion is probably not in the cards in the

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Speaker 1: long run for the n r So this is not

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Speaker 1: likely to go to trial in your view, Well, it's

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Speaker 1: hard to say, you know. I definitely don't want to

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Speaker 1: predict the future too much. One of the things about

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Speaker 1: requesting dissolution as a remedy, I think it does sort

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Speaker 1: of put the n l RAS back to the wall

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Speaker 1: and makes it maybe less likely that they'll engage in

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Speaker 1: the negotiated settlement. If the Attorney General had simply sought

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Speaker 1: to remove certain directors and certain officers like Wayne Lapierre

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Speaker 1: and a point a receiver to oversee the appointment of

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Speaker 1: new directors for a short period of time. It's the

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Speaker 1: kind of thing that could have put pressure on other

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Speaker 1: board members to push for settlement and for a reform.

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Speaker 1: But now that disillusion is on the table, I think

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Speaker 1: it's going to be a long while before we get

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Speaker 1: a resolution in this case, Adam. The n r A

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Speaker 1: counter suit accusing the Attorney General of violating the group's

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Speaker 1: free speech rights and unfairly targeting the gun rights lobby.

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Speaker 1: Are those strong claims. I think the n r A

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Speaker 1: suit is baseless and not going to go anywhere. Look,

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Speaker 1: these allegations were first brought a light by the n

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Speaker 1: r rais lawsuit with that agency. No matter who the

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Speaker 1: Attorney General was, whether it was Latitia James who clearly

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Speaker 1: doesn't like the n r A and I said so,

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Speaker 1: or someone else, they would have had to take action

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Speaker 1: in light of the grievous nature of some of the

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Speaker 1: insider deals that the n r A leadership has engaged in.

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Speaker 1: And I don't think that arguing that prosecutors are politically

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Speaker 1: motivated really ever got any defendant very far in a

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Speaker 1: court of law. It's a parallel lawsuit the Washington d C.

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Speaker 1: Attorney General opened a second front, suing the n r

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Speaker 1: A for allegedly misusing charitable funds to finance improper laverst

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Speaker 1: spending by executives. How does that play into this or

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Speaker 1: does it at all? Is it a separate track? No,

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Speaker 1: I'm sure that these prosecutions are related, that these actions

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Speaker 1: by the Attorney General of d C and the Attorney

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Speaker 1: General of New York are somewhat coordinated, and that they're

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Speaker 1: sharing information. I'm sure. And it's the same basic set

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Speaker 1: of facts, um. The only differences is that the n

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Speaker 1: r A has two different nonprofit organizations. It's got it's

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Speaker 1: five oh one C three. It's charitable arm that's located

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Speaker 1: in Washington, d C. Chartered in Washington, d C. And

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Speaker 1: that's known as the n r A Foundation. That's the

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Speaker 1: one that the DC Attorney General is going after. And

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Speaker 1: the five oh one C four the National Rifle Association

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Speaker 1: that we often think about, um, when we think about

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Speaker 1: the n r R that's the organization that's uh social

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Speaker 1: welfare corporation that's formed in New York and that the

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Speaker 1: Attorney General of New York is going after. But that's

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Speaker 1: the same basic set effects. The n r A has

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Speaker 1: had a lot of political clout in the past. Where

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Speaker 1: does this lawsuit and the in fighting that proceeded it,

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Speaker 1: plus the drain in financial resources, where does it leave

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Speaker 1: its political clout? Well, I think the n r A

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Speaker 1: still remains a very powerful player in American politics because

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Speaker 1: it's cloud really comes from having a bunch of voters

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Speaker 1: that listen to the nl RA and that really care

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Speaker 1: about gun rights and opposed gun control. And I think

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Speaker 1: those voters are still going to make their voices heard

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Speaker 1: come election day. At the same time, there's no way

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Speaker 1: that all this disorganization and disarray and focus of the

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Speaker 1: n r A on this lawsuit with acrimental Queen and

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Speaker 1: now on the lawsuits by the New York and d

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Speaker 1: C Attorney General, how can that not be a distraction

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Speaker 1: for its top leaders probably won't be able to spend

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Speaker 1: the kind of time and energy focusing on the election

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Speaker 1: that they'd like to. How much have gun control advocates

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Speaker 1: cut into the n r A financially as well as politically, Well,

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Speaker 1: I think that in the recent years, gun control advocates

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Speaker 1: have made great headway in terms of organization, in terms

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Speaker 1: of money. You know, before the new Town massacre back

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Speaker 1: in the gun control organizations were pretty poorly organized, pretty

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Speaker 1: poorly funded, and the Democratic Party wasn't taking that seriously

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Speaker 1: issues of gun violence prevention. Now we've seen a real

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Speaker 1: scene change and it's become one of the issues at

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Speaker 1: the very top of the Democratic Party agenda. We see

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Speaker 1: gun control groups that are outspending the n r A

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Speaker 1: in some elections, and they're also affecting the n r

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Speaker 1: A in things like these complaints brought by the New

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Speaker 1: York Attorney General and the d C Attorney General. A

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Speaker 1: lot of this activity has been revealed through investigations by

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Speaker 1: organization like every Town for Gun Safety and its publication,

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Speaker 1: the TRACE and other advocacy groups working in the space

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Speaker 1: that are trying to reveal the problems with the n

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Speaker 1: r A. So I don't think there's a real separation

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Speaker 1: from what we're seeing from the New York Attorney General

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Speaker 1: and the linkage to gun control organizations. President Trump suggested

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Speaker 1: that the n r A move to Texas. Obviously, they

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Speaker 1: can't move their assets while this investigation, while the lawsuit

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Speaker 1: is going on. But what about starting over in a

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Speaker 1: different state where the where the laws of the political

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Speaker 1: charities laws may not be as stric M. Well, we

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Speaker 1: might see the n r A and its leadership reform

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Speaker 1: a new corporation, a new organization, a new lobbying group,

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Speaker 1: maybe the National Revolver Association rather than the National Rifle

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Speaker 1: Association somewhere else. But the key difference here is that

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Speaker 1: it cannot take the n r AS assets with it.

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Speaker 1: It doesn't get the can't take the membership list, It

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Speaker 1: can't take the assets, the buildings and UM, the goodwill

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Speaker 1: and the brand, and all the training facilities and training

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Speaker 1: programs that the n r A has. That's all stuck

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Speaker 1: in New York now, and just re performing a new

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Speaker 1: organization in Texas is not going to change that. So

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Speaker 1: I don't think that even if the n r A

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Speaker 1: is dissolved, we're not going to see the end of

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Speaker 1: organized advocacy for the Second Amendment and opposition to gun

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Speaker 1: control UM. But it's just not going to be the

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Speaker 1: n r A that's doing it. President Trump is is

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Speaker 1: constantly pushing the idea that Democrats will erode your set

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Speaker 1: an Amendment rights. Do you think that will be a

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Speaker 1: big issue in the upcoming campaign. I expect that Donald

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Speaker 1: Trump and the Senate Republicans are going to make a

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Speaker 1: big issue out of gun violence prevention. I think both

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Speaker 1: Joe Biden and Kamala Harris have come out in favor

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Speaker 1: of strong, new, aggressive gun control laws. And I think

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Speaker 1: that's something that um or Donald Trump, especially who doesn't

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Speaker 1: have a lot of good things to point to right

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Speaker 1: now in his election campaign, demonizing Biden, issuing warnings about

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Speaker 1: what law the law is going to be like. If

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Speaker 1: Biden wins, it's pretty much all the president has right now,

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Speaker 1: and I think that will include issues of the Second

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Speaker 1: Amendment and gun policy for sure. Thanks for being on

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Speaker 1: the Bloomberg Law Show. Adam. That's Professor Adam Winkler of

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Speaker 1: a u c l A Law School. After years of

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Speaker 1: legal and regulatory obstacles, Qualcolm's business model and it's no

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Speaker 1: License no Chips policy survives a league challenge from the

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Speaker 1: Federal Trade Commission. The Ninth Circuit Court of Appeals has

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Speaker 1: thrown out a lower court decision that would have required

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Speaker 1: the chip maker to renegotiate billions of dollars worth of

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Speaker 1: agreements with smartphone makers, ruling that the judge was wrong

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Speaker 1: to side with the FTC in finding that Qualcom had

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Speaker 1: violated antitrust law, joining me as Jennifer Ree, Bloomberg Intelligence

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Speaker 1: senior litigation analyst, This is certainly a major victory for Qualcom.

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Speaker 1: Shares initially jump more than four percent on the news

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Speaker 1: of the decision. Explain why it's so important, Well, this

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Speaker 1: really was major. Qualcom couldn't have come out better than

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Speaker 1: it came out with this decision. A disrecord had found

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Speaker 1: that the way Qualcolm was licensing its patents was anti competitive,

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Speaker 1: and the licensing of its patents and the royalties are

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Speaker 1: huge part of Qualcom's revenue. And what the district Court

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Speaker 1: had said is because the way Qualcolm was licensing these patents,

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Speaker 1: that had to go back and had to renegotiate basically

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Speaker 1: almost all of its licensing agreements for certain modem chips,

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Speaker 1: certain cellular chips of different generations that are used in

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Speaker 1: our basically everybody's cell phones, and it would have really

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Speaker 1: cut into Qualcom's revenue. So what happened here with the

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Speaker 1: appeal is that the appellate court basically just reversed everything.

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Speaker 1: As a matter of law. It said that every single

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Speaker 1: practice of Qualcom that the District Court took through and

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Speaker 1: claimed was illegal monopolization was not, and it erased everything

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Speaker 1: to Qualcom did. It vacated the injunction and it essentially

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Speaker 1: left Qualcolm free just to continue its business practices as

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Speaker 1: they were before the f PC sued them in two

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Speaker 1: thousand seventeen. So it's a huge one for Qualcom because

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Speaker 1: it preserves this big piece of revenue that they're able

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Speaker 1: to achieve with these patents. The trial Judge Lucy co

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Speaker 1: wrote a really thorough two d thirty three page opinion

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Speaker 1: and Qualcom does have this no license, no chips policy,

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Speaker 1: it's dominant. Why did the appellate court not find that

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Speaker 1: that was enough? Well, you know, it's it's very complicated,

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Speaker 1: and that's part of the reason why the District Court's

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Speaker 1: opinion was so long. The theories of harm that the

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Speaker 1: FTC put forward are are complicated and and in my

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Speaker 1: mind a little bit convoluted theories, and the District Court

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Speaker 1: had to walk through a lot of different practices and

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Speaker 1: the way those practices into relate in order to reach

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Speaker 1: her conclusion. And that's part of the reason it's so

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Speaker 1: long and so thorough on the no license, no chips policy.

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Speaker 1: Part of the recent Qualcom is able to do that

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Speaker 1: is because it had the i P that was needed

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Speaker 1: to practice certain standards. When an international standards board shows

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Speaker 1: the standards that would be used for cellular devices to

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Speaker 1: be able to communicate with each other, those standards incorporated

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Speaker 1: Qualcom's i P. So it means it has what's called

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Speaker 1: standard essential patents. And when you have standard essential patents,

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Speaker 1: anyone who wants to practice that patent, and in this

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Speaker 1: case that means any chip maker that's going to supply

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Speaker 1: mobile phone needs to get a lit license from you.

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Speaker 1: You are required to license on what's called fair, reasonable

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Speaker 1: and non discriminatory terms. So here what Qualcolm was doing

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Speaker 1: was licensing the o e M, the companies that actually

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Speaker 1: make the final product or the cell phone or the iPads,

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Speaker 1: and not licensing the companies that make the chips that

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Speaker 1: practice the patents that go into those phones. And what

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Speaker 1: the no license, no chips policy said is o E

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Speaker 1: M S, you will be practicing our i P, but

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Speaker 1: you don't have to get a license from US, so

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Speaker 1: long as the o e M that you sell to

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Speaker 1: has a license. And likewise, O E M S, we

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Speaker 1: won't supply our chips to you unless you have a

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Speaker 1: license from US. So it sounds like it's abuse. If

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Speaker 1: it sounds like it's monopolistic. But the fact of the

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Speaker 1: matter is that in order to create an antitrust claim

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Speaker 1: out of that, you have to show how that claim

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Speaker 1: harmed competition in the relevant market. And in this case, somebody,

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Speaker 1: whether it be the O e M or whether it

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Speaker 1: be the chip rival, must take a license from Qualcom

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Speaker 1: because Qualcom has the i P that goes into the

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Speaker 1: the practice of the O e MS product or the chip.

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Speaker 1: So either the O e M or the chip maker

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Speaker 1: has the license. And in this case the court said

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Speaker 1: there's nothing wrong with Qualcom refusing to licensees chip rivals

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Speaker 1: and requiring the license to be at the O e

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Speaker 1: M level. That was another piece of that. And once

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Speaker 1: you get to that place, the no license, no chips

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Speaker 1: policy is a little bit different, because what the court

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Speaker 1: saw was that Qualcom saying, hate chip makers. You can

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Speaker 1: go sell the any O e M. You don't have

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Speaker 1: the license to us. We're not going to sue you

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Speaker 1: for infringing our patents so long as that O M

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Speaker 1: has a license from US, and therefore, in the patent

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Speaker 1: world can legally use our i P. And what the

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Speaker 1: PC had to do to somehow suggest that that was

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Speaker 1: anti competitive was suggest that Qualcom's royalties were so high,

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Speaker 1: so super competitive, that it was able to then undercut

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Speaker 1: with its chips the pricing of its chip's rivals, and

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Speaker 1: that left an O e M better off if it

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Speaker 1: acquired chip and licensing from Qualcom because it's cheaper because

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Speaker 1: the chip rivals will have to charge more for their ships.

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Speaker 1: They can't charge these low prices that Clock I'm charging

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Speaker 1: because they can't offset it with these high royalties. But

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Speaker 1: in antitrust, based on precedents, the way that becomes an

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Speaker 1: anti trust violation is if it's predatory pricing, and that's

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Speaker 1: what this court said. They said, only if that's predatory pricing,

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Speaker 1: will that violate the antitrust laws. And the SPC didn't

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Speaker 1: show that it's predatory pricing. You have to show that

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Speaker 1: it's pricing below cost to drive out your rivals to

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Speaker 1: later recoup what you lost in those low costs sales.

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Speaker 1: And none of that was alleged or shown in the trial.

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Speaker 1: That's how this court said the no lessons, no chips

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Speaker 1: policy doesn't violate anti trust laws for entanglements for the

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Speaker 1: company jen the court said anti competitive behavior is illegal

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Speaker 1: under federal anti trust law. Hyper competitive behavior is not

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Speaker 1: and that seems to illustrate the reasoning behind the court's decision.

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Speaker 1: This was business, tough business, but not anti competitive exactly.

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Speaker 1: They even said later, this is just qualcom with sharp elbos,

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Speaker 1: you know, hyper competitive, aggressive, maximizing their profits, and all

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Speaker 1: of that is fine, and all of that encourages innovation

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Speaker 1: and June, this is exactly why I have been saying

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Speaker 1: for quite a long time. It's just very difficult for

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Speaker 1: a plaintiff under current US precedent to prove illegal monopolization

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Speaker 1: in court because there's a very fine line between anti

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Speaker 1: competitive conduct and hyper competitive conduct. And the Distretport found

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Speaker 1: this to be anti competitive. It crossed the line from

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Speaker 1: hyper competitive into illegal, and this appellate court said, no,

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Speaker 1: it didn't. It didn't cross that line, and it's simply

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Speaker 1: hyper competitive. And it's an incredibly difficult determination for any

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Speaker 1: judge or jury to make. And it's part of the

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Speaker 1: reason why it's hard to prove monopolization because in our

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Speaker 1: courts right now, the prevailing approach is to be more

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Speaker 1: concerned about what's called false positives and false negatives, and

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Speaker 1: false positives refers to finding violations of anti trust law

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Speaker 1: when the conducts did not Endact Calm competition, and they're

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Speaker 1: more concerned about that then finding a false negative, which

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Speaker 1: would be finding no violation when the behavior actually did injure.

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Speaker 1: And it's exactly what I think Congress is thinking about

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Speaker 1: and a lot of antitrust activists are thinking about right

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Speaker 1: now because they think that emphasis needs to be slipped.

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Speaker 1: They think there needs to be more concerned over false

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Speaker 1: negatives than there is over false positive and this court

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Speaker 1: showed the exact opposite. Their concern was about a false

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Speaker 1: positive and finding that what they thought was hyper competitive

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Speaker 1: behavior being anti competitive. And this case was unusual because

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Speaker 1: there was a rare split among the regulators where the

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Speaker 1: Justice Department sided with QUA Common actually intervened in the lawsuit.

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Speaker 1: And I'm wondering was the Justice Department's position more of

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Speaker 1: a business decision because there was a lot of talk

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Speaker 1: about how important Qualcom is to five G, and the

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Speaker 1: Trump administration had intervened to stop a broad Com takeover

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Speaker 1: of qual Calm for that same reason. So how much

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Speaker 1: was five G and the importance of five G to

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Speaker 1: the country involved in the Ninth Circuit's decision. I don't

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Speaker 1: think that it was involved very much. I think only

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Speaker 1: in one aspect. The Court mentioned that the district court

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Speaker 1: hadn't given enough weight to the pro competitive aspects of

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Speaker 1: what Qualcom was doing, but the court didn't really get

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Speaker 1: into it, and I really don't think that the five

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Speaker 1: G issue really entered into this decision. I think it

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Speaker 1: would have been the same decision whether the Department of

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Speaker 1: Justice intervened or not. But I do think that that

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Speaker 1: intervention was in part political and related to the desire

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Speaker 1: of this administration for America to be at the forefront

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Speaker 1: of five G and afraid at hampering Qualcom's innovation in

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Speaker 1: R and D. By imposing these licensing restrictions would have

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Speaker 1: hampered qualcom zone R and D and work in five G.

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Speaker 1: But the Department of Justice here the UH making del Raheim,

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Speaker 1: the Assistant Attorney General for Anti trust, has taken the

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Speaker 1: position in the past that where a company maybe violating

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Speaker 1: its obligations um to license standard essential patents in a fair, reasonable,

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Speaker 1: and nondiscriminatory manner, that that is has nothing to do

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Speaker 1: with anti trust law, that the question as to whether

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Speaker 1: they're violating that commitment is a patent law question and

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Speaker 1: a contract law question, and that it's not a violation

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Speaker 1: of anti trust and that's part of why he stepped in,

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Speaker 1: because the distreport said their failure to um UH license

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Speaker 1: their patents in the fair, reasonable and non discriminatory manner

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Speaker 1: also violated anti trust law, and he wanted to make

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Speaker 1: the point that he disagreed that he didn't think anti

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Speaker 1: trust had a part in that UH sort of a

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Speaker 1: business negotiation between two parties. The g C hasn't said

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Speaker 1: whether it's going to take any further action. It could

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Speaker 1: ask for a rehearing. It could ask for an on

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Speaker 1: bank hearing of the Ninth Circuit Court of Appeals. It

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Speaker 1: could go to the Supreme Court. What are its chances

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Speaker 1: in either of those? Very low for both um I

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Speaker 1: don't see the Supreme Court taking this case. And even

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Speaker 1: if they did, with the conservative majority right now and

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Speaker 1: understanding the way it's likely Gorsas and Kabanat would look

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Speaker 1: at this, I think this decision would be affirmed. And

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Speaker 1: with respect to getting a rehearing, you know, this is

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Speaker 1: the second panel of three judges on the Ninth Circuit

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Speaker 1: that has criticized the District Court's opinion. You know, about

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Speaker 1: a year ago, Qualcom asked for a stay if it

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Speaker 1: is reports injunction and in granting that stay. A year ago,

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Speaker 1: a different panel of three judges on this court said

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Speaker 1: that the District Court's decision had been controversial. Um, and

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Speaker 1: now you have another three basically reversing it. I think

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Speaker 1: that doesn't bode well at all forgetting a rehearing, or

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Speaker 1: if a rehearing is granted, getting any kind of a

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Speaker 1: change in this decision. Qualcom has been fighting legal challenges

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Speaker 1: around the world and regulators around the world for years.

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Speaker 1: Does this decision basically cement its business model or is

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Speaker 1: it still facing other challenges? Well, this decision only governments

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Speaker 1: Qualcom's conduct in the United States, so uh to the

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Speaker 1: way it licenses let's say in China, Um, that's going

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Speaker 1: to be governed by you know, I think ultimately Qualcom

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Speaker 1: settled all of its issues in China. But however that

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Speaker 1: was worked out which I don't at the moment recall,

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Speaker 1: but I think that there there was some negotiation of

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Speaker 1: what those rates would be there. Um. So it doesn't

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Speaker 1: really have that much influence on any of its legal

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Speaker 1: skirmishes outside the United States. I mean, those are going

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Speaker 1: to be based on the laws and Europe or the

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Speaker 1: laws in Asia, which are different from those in the

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Speaker 1: US and in particular in Europe, it is that it's

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Speaker 1: quite a bit easier for a finding of what they

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Speaker 1: call abuse of dominance to be found than it is

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Speaker 1: to prove a company as a monopolist in the US.

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Speaker 1: So now there is still one of the largest consumer

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Speaker 1: class actions ever against Qualcom, where fourteen point five billion

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Speaker 1: dollars in triple damages are at stake. Will this decision

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Speaker 1: affect that case? I think it will um Now that

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Speaker 1: case is under California state law and not under federal

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Speaker 1: anti trust law, and this decision interprets federal anti trust

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Speaker 1: law and the California laws are a little bit different,

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Speaker 1: but they're not that much different. So I think this

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Speaker 1: decision is going to influence a court that asks whether

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Speaker 1: the conduct violates California's anti trust laws, and so it

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Speaker 1: will be difficult to say, well, it may not have

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Speaker 1: violated the federal laws, that it does violate California's laws.

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Speaker 1: I think it more likely that the opposite will be found.

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Speaker 1: And we also think June in that case that there

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Speaker 1: was decision on class certification that was controversial and that's

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Speaker 1: up for appeal now, and we think that the class

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Speaker 1: will be reduced we think that decision will be changed,

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Speaker 1: and if you start to reduce the class, it becomes

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Speaker 1: less less and less likely that those plaintiffs are is

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Speaker 1: aggressive because it makes it more difficult to bring the

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Speaker 1: case if the class is very small, or if the

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Speaker 1: class certification is reversed completely. So we think right now

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Speaker 1: that UM we see qualcom with a leg up on

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Speaker 1: that case this time. One legal expert said that this

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Speaker 1: sort of decision indicates that courts think that antitrust has

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Speaker 1: no role to play in patent misuse. For use, do

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Speaker 1: you agree with that? No, I don't actually agree with that.

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Speaker 1: I do tend to agree with the court's decision that

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Speaker 1: UM some violation of this brand the fair, reasonable and

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Speaker 1: nondiscriminatory obligation made to a standard setting organization. If there,

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Speaker 1: if there's been a violation of that. In my mind,

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Speaker 1: I think that should be settled in contract law, patent law,

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Speaker 1: maybe toward law. I don't think that arises to an

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Speaker 1: anti trust offense, but I do still think that there

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Speaker 1: are ways that patent rights can be misused that do

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Speaker 1: arise to the level of an anti trust defense. UM,

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Speaker 1: it might be harder to prove that in court after

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Speaker 1: this decision. So I think this decision is really limited

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Speaker 1: to the way standard essential patents are licensed and and

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Speaker 1: didn't really extend to other types of patent misuse. So

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Speaker 1: I would hope that where there's patent misuse that can

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Speaker 1: cross the anti trust line, that plaintiffs could still have

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Speaker 1: success in courts. Thanks so much for being on the show. Jen.

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Speaker 1: That's Bloomberg Intelligence Senior Litigation analyst Jennifer Ree. For more

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Speaker 1: of Jen's analysis, go to b I go on the

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Speaker 1: Bloomberg Terminal. That's it for this edition of the Bloomberg

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Speaker 1: Law Show. Remember you can always at the latest legal

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Speaker 1: new was on our Bloomberg Law Podcast. You can find

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Speaker 1: them on iTunes, SoundCloud, or Bloomberg dot com slash podcast

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Speaker 1: Slash Law. I'm June Grasso. Thanks so much for listening,

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Speaker 1: and remember to tune in to The Bloomberg Law Show

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00:27:12,200 --> 00:27:15,399
Speaker 1: every weeknight at ten pm Eastern on Bloomberg Radio