Speaker 1: You're listening to Bloomberg Law with June Grasso from Bloomberg Radio.
Speaker 1: The New York Attorney General is suing to dissolve the
Speaker 1: n r A, accusing the gun rights group of engaging
Speaker 1: in a massive fraud against donors. Attorney General Letitia James
Speaker 1: claims that top n r A officials, including its longtime
Speaker 1: leader Wayne Lapierre, have been using the nonprofit organization as
Speaker 1: their personal piggy bank, illegally diverting more than sixty four
Speaker 1: million dollars from the organization in the last three years alone.
Speaker 1: They use millions upon millions dollars from the n r
Speaker 1: A for personal use, including for lavish trips for themselves
Speaker 1: and their families, private jets, expensive meals, and other private travel.
Speaker 1: My guest is Second Amendment expert Adam Winkler, a professor
Speaker 1: at u c l A Law School. Adam the New
Speaker 1: York A g alleged massive fraud, corruption, and self dealing.
Speaker 1: The breath of it is stunning. What strikes you most
Speaker 1: about the allegations, well, just the breadth of them. There's
Speaker 1: so many allegations. It does seem like the n ra
Speaker 1: A leadership has been running the organization without much oversight
Speaker 1: from the board of directors that there's insider deals for directors,
Speaker 1: there's officers like Wayne Lapierre that negotiated a secret seventeen
Speaker 1: million dollar conversation package for when he leaves the n
Speaker 1: r A. Sounds like something you'd expect in a fortune company,
Speaker 1: not a nonprofit organization like the n r A. William Brewer,
Speaker 1: the n r AS lawyer, said, the truth is the
Speaker 1: transactions in question have been reviewed, vetted, and approved. It
Speaker 1: seems like that would be a hard defense to make
Speaker 1: in light of some of these expenses, like the private
Speaker 1: jets for Lapierre's family and more than a quarter of
Speaker 1: a million dollars in designer clothes. How can they prove
Speaker 1: that those kinds of expenses were proper Well, I think
Speaker 1: they really have no choice because the actual transactions happened.
Speaker 1: They can't deny that they happened. And under New York law,
Speaker 1: profits can engage in some kinds of insider deals, but
Speaker 1: they have to follow the appropriate procedures and have to
Speaker 1: be ultimately fair and reasonable to the corporation, in this
Speaker 1: case a nonprofit corporation. So they really have to say
Speaker 1: that these are fair and reasonable transactions, because that's the
Speaker 1: only way that they're going to survive. Did the allegations
Speaker 1: come as a surprise to you or have we heard
Speaker 1: enough in the past with you know, the struggles within
Speaker 1: the n r A that these did not come as
Speaker 1: a complete surprise. Well, they were surprising in a few ways.
Speaker 1: You're absolutely right. There has been a steady stream of
Speaker 1: leaks coming out of the n r a S lawsuit
Speaker 1: with its longtime ad agency, Ackerman McQueen. Ackerman McQueen was
Speaker 1: responsible for the n ra AS messaging for more than
Speaker 1: three decades and they really worked hand in hand with
Speaker 1: the n r A, including creating n r A t
Speaker 1: V and been the real brain CHILDBND. So much of
Speaker 1: what we associate at the n r A S message
Speaker 1: and that lawsuit is very nasty, and a lot of
Speaker 1: leaks have come out that suggests that there has been
Speaker 1: malfeasons inside the n r A. But it was nonetheless
Speaker 1: pretty surprising these allegations for two reasons. One, there were
Speaker 1: surprising allegations such as the seventeen million dollar compensation package
Speaker 1: for Wayne Lapierre that hadn't come out previously, but also
Speaker 1: that the remedy sought by the New York Attorney General
Speaker 1: dissolution of the n r A is the kind of
Speaker 1: remedy that's really reserved for organizations that engage in persistent
Speaker 1: fraud or illegality. So it was really remarkable and surprising
Speaker 1: that such a broad and aggressive remedy was chosen. Well,
Speaker 1: this isn't the first high profile charity that James has targeted,
Speaker 1: but the allegations that are sued against the Trump Foundation
Speaker 1: just pale in comparison to these allegations. Trump dissolved his
Speaker 1: foundation voluntarily, but the n r A is not going
Speaker 1: to do that. What are the chances that they would
Speaker 1: actually be required to dissolve, Well, it's really hard to say. Obviously,
Speaker 1: it seems hard to imagine, and that the n r
Speaker 1: A vast national organization with chapters in every state and
Speaker 1: training programs for police officers, would actually go out of business.
Speaker 1: It seems pretty crazy, just in the sense of it's
Speaker 1: such a big organization, we wouldn't expect to see such
Speaker 1: a thing. The Trump Charitable Foundation was put out of business,
Speaker 1: but it was only Donald Trump and a few people
Speaker 1: who worked for him who were organizing that charitable foundation.
Speaker 1: It wasn't nearly the size of the n r A.
Speaker 1: I think that makes dissolution a little bit less likely,
Speaker 1: because there's going to be plenty of things that the
Speaker 1: n r A has been doing that's been perfectly legal
Speaker 1: and perfectly appropriate. But I think that this is an
Speaker 1: opening salvo. In these kinds of situations, regulators often bring
Speaker 1: their charges to begin the negotiation, and it's really the
Speaker 1: negotiated settlement that really determines what the remedies will be,
Speaker 1: and I expect in this case it will probably be
Speaker 1: something like removal of certain directors or officers, some restitution
Speaker 1: for some of the deals and transactions that have gone on.
Speaker 1: But disillusion is probably not in the cards in the
Speaker 1: long run for the n r So this is not
Speaker 1: likely to go to trial in your view, Well, it's
Speaker 1: hard to say, you know. I definitely don't want to
Speaker 1: predict the future too much. One of the things about
Speaker 1: requesting dissolution as a remedy, I think it does sort
Speaker 1: of put the n l RAS back to the wall
Speaker 1: and makes it maybe less likely that they'll engage in
Speaker 1: the negotiated settlement. If the Attorney General had simply sought
Speaker 1: to remove certain directors and certain officers like Wayne Lapierre
Speaker 1: and a point a receiver to oversee the appointment of
Speaker 1: new directors for a short period of time. It's the
Speaker 1: kind of thing that could have put pressure on other
Speaker 1: board members to push for settlement and for a reform.
Speaker 1: But now that disillusion is on the table, I think
Speaker 1: it's going to be a long while before we get
Speaker 1: a resolution in this case, Adam. The n r A
Speaker 1: counter suit accusing the Attorney General of violating the group's
Speaker 1: free speech rights and unfairly targeting the gun rights lobby.
Speaker 1: Are those strong claims. I think the n r A
Speaker 1: suit is baseless and not going to go anywhere. Look,
Speaker 1: these allegations were first brought a light by the n
Speaker 1: r rais lawsuit with that agency. No matter who the
Speaker 1: Attorney General was, whether it was Latitia James who clearly
Speaker 1: doesn't like the n r A and I said so,
Speaker 1: or someone else, they would have had to take action
Speaker 1: in light of the grievous nature of some of the
Speaker 1: insider deals that the n r A leadership has engaged in.
Speaker 1: And I don't think that arguing that prosecutors are politically
Speaker 1: motivated really ever got any defendant very far in a
Speaker 1: court of law. It's a parallel lawsuit the Washington d C.
Speaker 1: Attorney General opened a second front, suing the n r
Speaker 1: A for allegedly misusing charitable funds to finance improper laverst
Speaker 1: spending by executives. How does that play into this or
Speaker 1: does it at all? Is it a separate track? No,
Speaker 1: I'm sure that these prosecutions are related, that these actions
Speaker 1: by the Attorney General of d C and the Attorney
Speaker 1: General of New York are somewhat coordinated, and that they're
Speaker 1: sharing information. I'm sure. And it's the same basic set
Speaker 1: of facts, um. The only differences is that the n
Speaker 1: r A has two different nonprofit organizations. It's got it's
Speaker 1: five oh one C three. It's charitable arm that's located
Speaker 1: in Washington, d C. Chartered in Washington, d C. And
Speaker 1: that's known as the n r A Foundation. That's the
Speaker 1: one that the DC Attorney General is going after. And
Speaker 1: the five oh one C four the National Rifle Association
Speaker 1: that we often think about, um, when we think about
Speaker 1: the n r R that's the organization that's uh social
Speaker 1: welfare corporation that's formed in New York and that the
Speaker 1: Attorney General of New York is going after. But that's
Speaker 1: the same basic set effects. The n r A has
Speaker 1: had a lot of political clout in the past. Where
Speaker 1: does this lawsuit and the in fighting that proceeded it,
Speaker 1: plus the drain in financial resources, where does it leave
Speaker 1: its political clout? Well, I think the n r A
Speaker 1: still remains a very powerful player in American politics because
Speaker 1: it's cloud really comes from having a bunch of voters
Speaker 1: that listen to the nl RA and that really care
Speaker 1: about gun rights and opposed gun control. And I think
Speaker 1: those voters are still going to make their voices heard
Speaker 1: come election day. At the same time, there's no way
Speaker 1: that all this disorganization and disarray and focus of the
Speaker 1: n r A on this lawsuit with acrimental Queen and
Speaker 1: now on the lawsuits by the New York and d
Speaker 1: C Attorney General, how can that not be a distraction
Speaker 1: for its top leaders probably won't be able to spend
Speaker 1: the kind of time and energy focusing on the election
Speaker 1: that they'd like to. How much have gun control advocates
Speaker 1: cut into the n r A financially as well as politically, Well,
Speaker 1: I think that in the recent years, gun control advocates
Speaker 1: have made great headway in terms of organization, in terms
Speaker 1: of money. You know, before the new Town massacre back
Speaker 1: in the gun control organizations were pretty poorly organized, pretty
Speaker 1: poorly funded, and the Democratic Party wasn't taking that seriously
Speaker 1: issues of gun violence prevention. Now we've seen a real
Speaker 1: scene change and it's become one of the issues at
Speaker 1: the very top of the Democratic Party agenda. We see
Speaker 1: gun control groups that are outspending the n r A
Speaker 1: in some elections, and they're also affecting the n r
Speaker 1: A in things like these complaints brought by the New
Speaker 1: York Attorney General and the d C Attorney General. A
Speaker 1: lot of this activity has been revealed through investigations by
Speaker 1: organization like every Town for Gun Safety and its publication,
Speaker 1: the TRACE and other advocacy groups working in the space
Speaker 1: that are trying to reveal the problems with the n
Speaker 1: r A. So I don't think there's a real separation
Speaker 1: from what we're seeing from the New York Attorney General
Speaker 1: and the linkage to gun control organizations. President Trump suggested
Speaker 1: that the n r A move to Texas. Obviously, they
Speaker 1: can't move their assets while this investigation, while the lawsuit
Speaker 1: is going on. But what about starting over in a
Speaker 1: different state where the where the laws of the political
Speaker 1: charities laws may not be as stric M. Well, we
Speaker 1: might see the n r A and its leadership reform
Speaker 1: a new corporation, a new organization, a new lobbying group,
Speaker 1: maybe the National Revolver Association rather than the National Rifle
Speaker 1: Association somewhere else. But the key difference here is that
Speaker 1: it cannot take the n r AS assets with it.
Speaker 1: It doesn't get the can't take the membership list, It
Speaker 1: can't take the assets, the buildings and UM, the goodwill
Speaker 1: and the brand, and all the training facilities and training
Speaker 1: programs that the n r A has. That's all stuck
Speaker 1: in New York now, and just re performing a new
Speaker 1: organization in Texas is not going to change that. So
Speaker 1: I don't think that even if the n r A
Speaker 1: is dissolved, we're not going to see the end of
Speaker 1: organized advocacy for the Second Amendment and opposition to gun
Speaker 1: control UM. But it's just not going to be the
Speaker 1: n r A that's doing it. President Trump is is
Speaker 1: constantly pushing the idea that Democrats will erode your set
Speaker 1: an Amendment rights. Do you think that will be a
Speaker 1: big issue in the upcoming campaign. I expect that Donald
Speaker 1: Trump and the Senate Republicans are going to make a
Speaker 1: big issue out of gun violence prevention. I think both
Speaker 1: Joe Biden and Kamala Harris have come out in favor
Speaker 1: of strong, new, aggressive gun control laws. And I think
Speaker 1: that's something that um or Donald Trump, especially who doesn't
Speaker 1: have a lot of good things to point to right
Speaker 1: now in his election campaign, demonizing Biden, issuing warnings about
Speaker 1: what law the law is going to be like. If
Speaker 1: Biden wins, it's pretty much all the president has right now,
Speaker 1: and I think that will include issues of the Second
Speaker 1: Amendment and gun policy for sure. Thanks for being on
Speaker 1: the Bloomberg Law Show. Adam. That's Professor Adam Winkler of
Speaker 1: a u c l A Law School. After years of
Speaker 1: legal and regulatory obstacles, Qualcolm's business model and it's no
Speaker 1: License no Chips policy survives a league challenge from the
Speaker 1: Federal Trade Commission. The Ninth Circuit Court of Appeals has
Speaker 1: thrown out a lower court decision that would have required
Speaker 1: the chip maker to renegotiate billions of dollars worth of
Speaker 1: agreements with smartphone makers, ruling that the judge was wrong
Speaker 1: to side with the FTC in finding that Qualcom had
Speaker 1: violated antitrust law, joining me as Jennifer Ree, Bloomberg Intelligence
Speaker 1: senior litigation analyst, This is certainly a major victory for Qualcom.
Speaker 1: Shares initially jump more than four percent on the news
Speaker 1: of the decision. Explain why it's so important, Well, this
Speaker 1: really was major. Qualcom couldn't have come out better than
Speaker 1: it came out with this decision. A disrecord had found
Speaker 1: that the way Qualcolm was licensing its patents was anti competitive,
Speaker 1: and the licensing of its patents and the royalties are
Speaker 1: huge part of Qualcom's revenue. And what the district Court
Speaker 1: had said is because the way Qualcolm was licensing these patents,
Speaker 1: that had to go back and had to renegotiate basically
Speaker 1: almost all of its licensing agreements for certain modem chips,
Speaker 1: certain cellular chips of different generations that are used in
Speaker 1: our basically everybody's cell phones, and it would have really
Speaker 1: cut into Qualcom's revenue. So what happened here with the
Speaker 1: appeal is that the appellate court basically just reversed everything.
Speaker 1: As a matter of law. It said that every single
Speaker 1: practice of Qualcom that the District Court took through and
Speaker 1: claimed was illegal monopolization was not, and it erased everything
Speaker 1: to Qualcom did. It vacated the injunction and it essentially
Speaker 1: left Qualcolm free just to continue its business practices as
Speaker 1: they were before the f PC sued them in two
Speaker 1: thousand seventeen. So it's a huge one for Qualcom because
Speaker 1: it preserves this big piece of revenue that they're able
Speaker 1: to achieve with these patents. The trial Judge Lucy co
Speaker 1: wrote a really thorough two d thirty three page opinion
Speaker 1: and Qualcom does have this no license, no chips policy,
Speaker 1: it's dominant. Why did the appellate court not find that
Speaker 1: that was enough? Well, you know, it's it's very complicated,
Speaker 1: and that's part of the reason why the District Court's
Speaker 1: opinion was so long. The theories of harm that the
Speaker 1: FTC put forward are are complicated and and in my
Speaker 1: mind a little bit convoluted theories, and the District Court
Speaker 1: had to walk through a lot of different practices and
Speaker 1: the way those practices into relate in order to reach
Speaker 1: her conclusion. And that's part of the reason it's so
Speaker 1: long and so thorough on the no license, no chips policy.
Speaker 1: Part of the recent Qualcom is able to do that
Speaker 1: is because it had the i P that was needed
Speaker 1: to practice certain standards. When an international standards board shows
Speaker 1: the standards that would be used for cellular devices to
Speaker 1: be able to communicate with each other, those standards incorporated
Speaker 1: Qualcom's i P. So it means it has what's called
Speaker 1: standard essential patents. And when you have standard essential patents,
Speaker 1: anyone who wants to practice that patent, and in this
Speaker 1: case that means any chip maker that's going to supply
Speaker 1: mobile phone needs to get a lit license from you.
Speaker 1: You are required to license on what's called fair, reasonable
Speaker 1: and non discriminatory terms. So here what Qualcolm was doing
Speaker 1: was licensing the o e M, the companies that actually
Speaker 1: make the final product or the cell phone or the iPads,
Speaker 1: and not licensing the companies that make the chips that
Speaker 1: practice the patents that go into those phones. And what
Speaker 1: the no license, no chips policy said is o E
Speaker 1: M S, you will be practicing our i P, but
Speaker 1: you don't have to get a license from US, so
Speaker 1: long as the o e M that you sell to
Speaker 1: has a license. And likewise, O E M S, we
Speaker 1: won't supply our chips to you unless you have a
Speaker 1: license from US. So it sounds like it's abuse. If
Speaker 1: it sounds like it's monopolistic. But the fact of the
Speaker 1: matter is that in order to create an antitrust claim
Speaker 1: out of that, you have to show how that claim
Speaker 1: harmed competition in the relevant market. And in this case, somebody,
Speaker 1: whether it be the O e M or whether it
Speaker 1: be the chip rival, must take a license from Qualcom
Speaker 1: because Qualcom has the i P that goes into the
Speaker 1: the practice of the O e MS product or the chip.
Speaker 1: So either the O e M or the chip maker
Speaker 1: has the license. And in this case the court said
Speaker 1: there's nothing wrong with Qualcom refusing to licensees chip rivals
Speaker 1: and requiring the license to be at the O e
Speaker 1: M level. That was another piece of that. And once
Speaker 1: you get to that place, the no license, no chips
Speaker 1: policy is a little bit different, because what the court
Speaker 1: saw was that Qualcom saying, hate chip makers. You can
Speaker 1: go sell the any O e M. You don't have
Speaker 1: the license to us. We're not going to sue you
Speaker 1: for infringing our patents so long as that O M
Speaker 1: has a license from US, and therefore, in the patent
Speaker 1: world can legally use our i P. And what the
Speaker 1: PC had to do to somehow suggest that that was
Speaker 1: anti competitive was suggest that Qualcom's royalties were so high,
Speaker 1: so super competitive, that it was able to then undercut
Speaker 1: with its chips the pricing of its chip's rivals, and
Speaker 1: that left an O e M better off if it
Speaker 1: acquired chip and licensing from Qualcom because it's cheaper because
Speaker 1: the chip rivals will have to charge more for their ships.
Speaker 1: They can't charge these low prices that Clock I'm charging
Speaker 1: because they can't offset it with these high royalties. But
Speaker 1: in antitrust, based on precedents, the way that becomes an
Speaker 1: anti trust violation is if it's predatory pricing, and that's
Speaker 1: what this court said. They said, only if that's predatory pricing,
Speaker 1: will that violate the antitrust laws. And the SPC didn't
Speaker 1: show that it's predatory pricing. You have to show that
Speaker 1: it's pricing below cost to drive out your rivals to
Speaker 1: later recoup what you lost in those low costs sales.
Speaker 1: And none of that was alleged or shown in the trial.
Speaker 1: That's how this court said the no lessons, no chips
Speaker 1: policy doesn't violate anti trust laws for entanglements for the
Speaker 1: company jen the court said anti competitive behavior is illegal
Speaker 1: under federal anti trust law. Hyper competitive behavior is not
Speaker 1: and that seems to illustrate the reasoning behind the court's decision.
Speaker 1: This was business, tough business, but not anti competitive exactly.
Speaker 1: They even said later, this is just qualcom with sharp elbos,
Speaker 1: you know, hyper competitive, aggressive, maximizing their profits, and all
Speaker 1: of that is fine, and all of that encourages innovation
Speaker 1: and June, this is exactly why I have been saying
Speaker 1: for quite a long time. It's just very difficult for
Speaker 1: a plaintiff under current US precedent to prove illegal monopolization
Speaker 1: in court because there's a very fine line between anti
Speaker 1: competitive conduct and hyper competitive conduct. And the Distretport found
Speaker 1: this to be anti competitive. It crossed the line from
Speaker 1: hyper competitive into illegal, and this appellate court said, no,
Speaker 1: it didn't. It didn't cross that line, and it's simply
Speaker 1: hyper competitive. And it's an incredibly difficult determination for any
Speaker 1: judge or jury to make. And it's part of the
Speaker 1: reason why it's hard to prove monopolization because in our
Speaker 1: courts right now, the prevailing approach is to be more
Speaker 1: concerned about what's called false positives and false negatives, and
Speaker 1: false positives refers to finding violations of anti trust law
Speaker 1: when the conducts did not Endact Calm competition, and they're
Speaker 1: more concerned about that then finding a false negative, which
Speaker 1: would be finding no violation when the behavior actually did injure.
Speaker 1: And it's exactly what I think Congress is thinking about
Speaker 1: and a lot of antitrust activists are thinking about right
Speaker 1: now because they think that emphasis needs to be slipped.
Speaker 1: They think there needs to be more concerned over false
Speaker 1: negatives than there is over false positive and this court
Speaker 1: showed the exact opposite. Their concern was about a false
Speaker 1: positive and finding that what they thought was hyper competitive
Speaker 1: behavior being anti competitive. And this case was unusual because
Speaker 1: there was a rare split among the regulators where the
Speaker 1: Justice Department sided with QUA Common actually intervened in the lawsuit.
Speaker 1: And I'm wondering was the Justice Department's position more of
Speaker 1: a business decision because there was a lot of talk
Speaker 1: about how important Qualcom is to five G, and the
Speaker 1: Trump administration had intervened to stop a broad Com takeover
Speaker 1: of qual Calm for that same reason. So how much
Speaker 1: was five G and the importance of five G to
Speaker 1: the country involved in the Ninth Circuit's decision. I don't
Speaker 1: think that it was involved very much. I think only
Speaker 1: in one aspect. The Court mentioned that the district court
Speaker 1: hadn't given enough weight to the pro competitive aspects of
Speaker 1: what Qualcom was doing, but the court didn't really get
Speaker 1: into it, and I really don't think that the five
Speaker 1: G issue really entered into this decision. I think it
Speaker 1: would have been the same decision whether the Department of
Speaker 1: Justice intervened or not. But I do think that that
Speaker 1: intervention was in part political and related to the desire
Speaker 1: of this administration for America to be at the forefront
Speaker 1: of five G and afraid at hampering Qualcom's innovation in
Speaker 1: R and D. By imposing these licensing restrictions would have
Speaker 1: hampered qualcom zone R and D and work in five G.
Speaker 1: But the Department of Justice here the UH making del Raheim,
Speaker 1: the Assistant Attorney General for Anti trust, has taken the
Speaker 1: position in the past that where a company maybe violating
Speaker 1: its obligations um to license standard essential patents in a fair, reasonable,
Speaker 1: and nondiscriminatory manner, that that is has nothing to do
Speaker 1: with anti trust law, that the question as to whether
Speaker 1: they're violating that commitment is a patent law question and
Speaker 1: a contract law question, and that it's not a violation
Speaker 1: of anti trust and that's part of why he stepped in,
Speaker 1: because the distreport said their failure to um UH license
Speaker 1: their patents in the fair, reasonable and non discriminatory manner
Speaker 1: also violated anti trust law, and he wanted to make
Speaker 1: the point that he disagreed that he didn't think anti
Speaker 1: trust had a part in that UH sort of a
Speaker 1: business negotiation between two parties. The g C hasn't said
Speaker 1: whether it's going to take any further action. It could
Speaker 1: ask for a rehearing. It could ask for an on
Speaker 1: bank hearing of the Ninth Circuit Court of Appeals. It
Speaker 1: could go to the Supreme Court. What are its chances
Speaker 1: in either of those? Very low for both um I
Speaker 1: don't see the Supreme Court taking this case. And even
Speaker 1: if they did, with the conservative majority right now and
Speaker 1: understanding the way it's likely Gorsas and Kabanat would look
Speaker 1: at this, I think this decision would be affirmed. And
Speaker 1: with respect to getting a rehearing, you know, this is
Speaker 1: the second panel of three judges on the Ninth Circuit
Speaker 1: that has criticized the District Court's opinion. You know, about
Speaker 1: a year ago, Qualcom asked for a stay if it
Speaker 1: is reports injunction and in granting that stay. A year ago,
Speaker 1: a different panel of three judges on this court said
Speaker 1: that the District Court's decision had been controversial. Um, and
Speaker 1: now you have another three basically reversing it. I think
Speaker 1: that doesn't bode well at all forgetting a rehearing, or
Speaker 1: if a rehearing is granted, getting any kind of a
Speaker 1: change in this decision. Qualcom has been fighting legal challenges
Speaker 1: around the world and regulators around the world for years.
Speaker 1: Does this decision basically cement its business model or is
Speaker 1: it still facing other challenges? Well, this decision only governments
Speaker 1: Qualcom's conduct in the United States, so uh to the
Speaker 1: way it licenses let's say in China, Um, that's going
Speaker 1: to be governed by you know, I think ultimately Qualcom
Speaker 1: settled all of its issues in China. But however that
Speaker 1: was worked out which I don't at the moment recall,
Speaker 1: but I think that there there was some negotiation of
Speaker 1: what those rates would be there. Um. So it doesn't
Speaker 1: really have that much influence on any of its legal
Speaker 1: skirmishes outside the United States. I mean, those are going
Speaker 1: to be based on the laws and Europe or the
Speaker 1: laws in Asia, which are different from those in the
Speaker 1: US and in particular in Europe, it is that it's
Speaker 1: quite a bit easier for a finding of what they
Speaker 1: call abuse of dominance to be found than it is
Speaker 1: to prove a company as a monopolist in the US.
Speaker 1: So now there is still one of the largest consumer
Speaker 1: class actions ever against Qualcom, where fourteen point five billion
Speaker 1: dollars in triple damages are at stake. Will this decision
Speaker 1: affect that case? I think it will um Now that
Speaker 1: case is under California state law and not under federal
Speaker 1: anti trust law, and this decision interprets federal anti trust
Speaker 1: law and the California laws are a little bit different,
Speaker 1: but they're not that much different. So I think this
Speaker 1: decision is going to influence a court that asks whether
Speaker 1: the conduct violates California's anti trust laws, and so it
Speaker 1: will be difficult to say, well, it may not have
Speaker 1: violated the federal laws, that it does violate California's laws.
Speaker 1: I think it more likely that the opposite will be found.
Speaker 1: And we also think June in that case that there
Speaker 1: was decision on class certification that was controversial and that's
Speaker 1: up for appeal now, and we think that the class
Speaker 1: will be reduced we think that decision will be changed,
Speaker 1: and if you start to reduce the class, it becomes
Speaker 1: less less and less likely that those plaintiffs are is
Speaker 1: aggressive because it makes it more difficult to bring the
Speaker 1: case if the class is very small, or if the
Speaker 1: class certification is reversed completely. So we think right now
Speaker 1: that UM we see qualcom with a leg up on
Speaker 1: that case this time. One legal expert said that this
Speaker 1: sort of decision indicates that courts think that antitrust has
Speaker 1: no role to play in patent misuse. For use, do
Speaker 1: you agree with that? No, I don't actually agree with that.
Speaker 1: I do tend to agree with the court's decision that
Speaker 1: UM some violation of this brand the fair, reasonable and
Speaker 1: nondiscriminatory obligation made to a standard setting organization. If there,
Speaker 1: if there's been a violation of that. In my mind,
Speaker 1: I think that should be settled in contract law, patent law,
Speaker 1: maybe toward law. I don't think that arises to an
Speaker 1: anti trust offense, but I do still think that there
Speaker 1: are ways that patent rights can be misused that do
Speaker 1: arise to the level of an anti trust defense. UM,
Speaker 1: it might be harder to prove that in court after
Speaker 1: this decision. So I think this decision is really limited
Speaker 1: to the way standard essential patents are licensed and and
Speaker 1: didn't really extend to other types of patent misuse. So
Speaker 1: I would hope that where there's patent misuse that can
Speaker 1: cross the anti trust line, that plaintiffs could still have
Speaker 1: success in courts. Thanks so much for being on the show. Jen.
Speaker 1: That's Bloomberg Intelligence Senior Litigation analyst Jennifer Ree. For more
Speaker 1: of Jen's analysis, go to b I go on the
Speaker 1: Bloomberg Terminal. That's it for this edition of the Bloomberg
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Speaker 1: Slash Law. I'm June Grasso. Thanks so much for listening,
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