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The Korea Fair Trade Commission (KFTC)’s two decisions against Qualcomm on its Standard-Essential Patent (SEP) license are epoch-making in terms of the enforcement of the competition law. In particular, it has provided an opportunity for full-scale discussion on the relationship between intellectual property rights such as patents and competition law in Korea, and clearly stated that it will restore competition in relative markets through the enforcement of competition law while confirming the legal significance of the FRAND commitment.

In addition, the KFTC presented important proposals for the enforcement of the competition law in IP-related cases. First, in determining whether the SEP licensing practice constitutes a violation of the Fair Trade Act in Korea, the same criteria as those of other tangible property rights are applied. Second, the SEP is recognized as an essential element by changing its traditional stance. Third, it put an emphasis on the breach of FRAND commitments as a ground for finding anti-competitive intent or purpose and anti-competitive concerns. Furthermore, in assessing the illegality of the SEP holder’s violation of the FRAND commitment, the impact on not only the patent technology licensing market and the associated product market, but also on the innovation market and the welfare of the final consumer was taken into consideration.

The KFTC found that the conduct of Qualcomm in question violated the FRAND commitment. However, the KFTC did not directly determine whether the royalty level imposed by Qualcomm violated the FRAND condition or not and did not recognize that the royalty level was excessive or unfair. Rather, by focusing on the procedural aspects and taking away the opportunity to negotiate the FRAND condition of the provider, the KFTC recognized the Qualcomm’s conduct in question was a violation of the FRAND commitment.

Lastly, the KFTC not only reported the illegality of Qualcomm’s SEP licensing practices but also imposed licensing obligations involving specific procedures to negotiate licensing terms between the parties.