This case introduces Qualcomm’s licensing practices in the mobile telecom sector, with a focus on the Chinese market. The point of view adopted is that of the partners of the fictitious Xiao Xing, a Chinese mobile phone start-up that as yet has no sales but requires Qualcomm’s chips in order to prototype its product.
There are two cases. The main issues examined in Case A were: (a) the sort of questions and issues that entrepreneurs must examine when planning a technology start-up, including financing, location, and access to seed money; and (b) the terms under which Qualcomm’s chips could be procured, and the problems posed by such terms, especially regarding the level of royalties involved, cross-licensing provisions included in its standard agreements, and its attendant impact on the viability of the start-up.
Case B (which does not require previous study of Case A) examines the development of Anti-Monopoly Law in China and the recent measures taken by the Chinese NDRC regarding Qualcomm’s licensing practices.
After study and class discussion of this case, the students will:
- Have gained a basic technical understanding of the concept of dominant position and abuse thereof in a given market, both in general and within China.
- Be familiar with the initial stages of the development of Anti-Monopoly Law in China, by reference to the Qualcomm case as decided by the National Development and Reform Commission.
- Have developed practical ideas to approach the negotiation of a technology license with a corporation that enjoys a dominant position in a given market.