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Qualcomm must license technology to its rivals, U.S. court rules

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(Reuters) - A U.S. federal judge ruled on Tuesday that chip seller Qualcomm Inc (QCOM.O) must license some of its technology to competitors such as Intel Corp (INTC.O).

The preliminary ruling came in an antitrust lawsuit against Qualcomm brought by the U.S. Federal Trade Commission in early 2017 and that is scheduled to go to trial next year.

The preliminary ruling by Judge Lucy Koh in the U.S. District Court for the Northern District of California said that Qualcomm must license some patents involved in making so-called modem chips, which help smart phones connect to wireless data networks, to rival chip firms.

The ruling is a setback for Qualcomm because the chip company and the FTC had jointly asked Koh last month to delay ruling on the issue for up to 30 days while they pursued settlement talks.

Koh denied that motion and issued her decision on Tuesday.

It was not immediately clear whether and how the ruling would affect the settlement talks. Qualcomm shares were down about 0.3 percent to $63.26 after the news.

Qualcomm, the FTC and Intel did not immediately return requests for comment.

Settling with U.S. regulators would be a turning point for the San Diego chip firm, which has been defending its business model amid lawsuits from large customers such as Apple Inc (AAPL.O) and Huawei Technologies Inc, as well as dealing with regulatory challenges to its practices around the world.

At issue in the civil litigation and regulatory disputes is whether Qualcomm’s patent licensing practices, when combined with its chip business, constitute anticompetitive behavior. Regulators in South Korea and Taiwan initially ruled against Qualcomm, but it has appealed the rulings and settled some of them.

In Taiwan in August, Qualcomm settled with regulators for $93 million and an agreement to invest $700 million in the country over the next five years.

Reporting by Stephen Nellis; Editing by Leslie Adler and Susan Thomas

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