Qualcomm Trades Higher As Justice Department Intervenes In Patent Case

Qualcomm, Inc. QCOM shares were in the green Wednesday after the Trump administration urged a federal appeals court to delay a patent licensing-related ruling, according to CNN.

What Happened

U.S. District Judge Lucy Koh said in a May ruling that Qualcomm illegally charged customers unnecessarily high fees to license and use its technology.

Qualcomm's business practice amounts to "unreasonable restraint of trade" under existing antitrust laws, she said. 

On Tuesday, the Department of Justice requested that the independent federal appeals court pause any rulings on national security grounds, CNN said.

"Diminishment of Qualcomm's competitiveness in 5G innovation and standard-setting would significantly impact US national security," the filing said. 

Why It's Important

The Department of Defense and Department of Energy are backing the DoJ's claim on similar national security grounds.

Ellen Lord, the Defense Department's undersecretary of defense for acquisition and sustainment, said preventing Qualcomm's ability to make significant investments in R&D "presents a serious threat" to its networks, telecommunications infrastructure and "ability to control the battlespace," according to Bloomberg.

What's Next

Qualcomm's legal and patent-related activities have been "going on for years," and it is unclear if Tuesday's development is the "last thing we are going to hear" on the antitrust front, CNBC "Fast Money" contributor Pete Najarian said Tuesday.

Investors may want to consider looking elsewhere to avoid "all these headaches of what is going to happen next," he said. 

Qualcomm shares were higher by 1.18% at $76.56 at the time of publication Wednesday. 

Related Links:

What To Make Of The Surprise Qualcomm Antitrust Ruling

3 Things To Drive Qualcomm's Outlook Over Next 2 Years

Photo courtesy of Qualcomm.