Post details: Qualcomm's Adventures in Iraq

Qualcomm's Adventures in Iraq

Posted by Andrew on March 21st, 2007

Memory chip manufacturer Rambus Inc. has spent the past several years as a defendant facing multiple antitrust claims. Rambus allegedly promoted the adoption of its designs by an industry standards organization, while failing to inform the organization that it had pending, secret patent applications covering those designs. Rival company Infineon Technologies AG, accused of infringing Rambus's patents, won a jury verdict on an antitrust counterclaim, but had that verdict overturned by the Federal Circuit in 2003. The Federal Trade Commission conducted its own investigation beginning in 2002, however, and last August unanimously held Rambus liable for unfair competition in violation of section 5 of the FTC Act. The administrative litigation is still pending, and appeals will likely follow.

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I mention all this because next week the Columbus School of Law at Catholic University of America will be hosting a timely and interesting symposium on "Ethical Issues in Patent Law." According to the symposium announcement:

The final session of the day will include a discussion of ethical dilemmas faced by actual patent practitioners in the real world. Panelists will speak on standards-setting activities in the context of private patent/antitrust litigation and government antitrust enforcement (e.g., Rambus) and how the patent office determines what ethical violations should result in a suspension of a patent practitioner's ability to practice before the United States Patent and Trademark Office.

The ethical dimensions of Rambus's conduct have been little discussed in the already voluminous antitrust and patent law scholarship on the litigation, so the symposium promises a fascinating discussion. I regret that I will be unable to attend, but I look forward to hearing reports in the coming weeks.

In the meantime, though, it's worth noting that wireless telephone service provider Qualcomm Inc. stands accused of analogous misconduct in its pursuit of the cellular market in post-invasion Iraq that makes Rambus's standards-pushing practices look like Girl Scout cookie sales. From Mother Jones:

[By summer 2003] the focus had already turned from the needs of Iraq to the bottom lines of a select few corporations. "The battle for Iraq is not over oil," said one Defense Department official involved in communications. "It's over bandwidth." And no one was fighting harder for a piece of the spectrum than the consortium led by American cellular giant Qualcomm with such business partners as Lucent Technologies and Samsung of South Korea. They wanted to follow U.S. troops into Iraq with Qualcomm's patented cellular technology, called CDMA, a system no nation in the Middle East had yet been willing to adopt.

Even as the bombs fell over Baghdad, Rep. Darrell Issa (R-Calif.), whose district includes many Qualcomm employees, had tried to wrap his favored company in the flag. He denounced the cellular system used by Iraq's neighbors as "an outdated French standard," and proposed a law that would effectively mandate Qualcomm on Iraq. "Hundreds of thousands of American jobs depend on the success of U.S.-developed wireless technologies like CDMA," Issa wrote in a March 26, 2003, letter to Defense Secretary Donald Rumsfeld.

...

On October 6, Iraq's new minister of communications, Haider al-Abadi, announced the winners—two Kuwaiti firms and one Egyptian company. Not one of them used the Qualcomm standard.

If any officials in Baghdad or Washington thought such a decision would be the end of Qualcomm's quest, the next six months would prove them wrong. Like dozens of American corporations looking to influence U.S. policy—shaping everything from the banking and insurance markets to foreign-investment rules—Qualcomm, Lucent, Samsung, and their partners would only expand their efforts and broaden their reach into the CPA. With the guidance of a deputy undersecretary of Defense, John Shaw, this effort became one of the most brazen lobbying campaigns of the postwar reconstruction, one that has brought Shaw under investigation for potentially breaking federal ethics rules.

According to documents provided to Senator John McCain (R-Ariz.), the companies' supporters in Washington, D.C., attempted to sneak a new cellular license into an unrelated contract for Iraqi police and fire communications, tried to oust the CPA officials who resisted their efforts, and ultimately caused the delay of plans for a badly needed Iraqi 911 emergency system.... Because of the delay in establishing the new emergency-response system, said a former CPA technical adviser, "people have died."

There's much more. And you might be hearing more about this in the coming days, because it appears likely that the U.S. Attorney at the center of the unfolding Purgegate scandal, Carol Lam, was investigating Rep. Issa's lobbying connections at the time of her firing.

Qualcomm's adventures in Iraq aren't mentioned in Catholic's announcement, but they're certainly germane to the symposium, and I hope the subject comes up at some point during the day. If even half of the allegations in the Mother Jones article are true, Qualcomm has brought new meaning to the term "inequitable conduct."

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