A US appeals court has reversed a decreased court ruling versus chip supplier Qualcomm in an antitrust lawsuit brought by the US Federal Trade Fee.

The US Ninth Circuit Court docket of Appeals also vacated an injunction that would have needed Qualcomm to alter its mental residence licensing methods.

The choice was a main vindication for the San Diego-primarily based enterprise, the major supplier of chips for cellular telephones and a crucial generator of wi-fi communications know-how.

Qualcomm was fighting a Might 2019 choice by US District Judge Lucy Koh in San Jose, California.

Koh sided with the FTC, writing that Qualcomm’s apply of demanding phone makers to sign a patent license settlement ahead of advertising them chips “strangled competition” and harmed buyers.

But the appeals court, in a three- ruling composed by Circuit Judge Consuelo Callahan, ruled that Qualcomm had no obligation to license its patents to rival chip suppliers and that it was not anticompetitive to have to have phone makers to sign a license settlement.

“Alternatively, these facets of Qualcomm’s enterprise design are ‘chip-supplier neutral’ and do not undermine competitors in the applicable antitrust markets,” Callahan wrote.

Qualcomm praised the choice although the FTC named it “disappointing.”

“The Court docket of Appeals unanimous reversal, completely vacating the District Court docket choice, validates our enterprise design and patent licensing system and underscores the huge contributions that Qualcomm has manufactured to the business,” Don Rosenberg, Qualcomm’s typical counsel, reported in assertion.

The FTC’s Bureau of Levels of competition director, Ian Conner, reported in a assertion, that the company “will be thinking of our possibilities.”

The situation divided US antitrust regulators with the Justice Office intervening to file a quick in assistance of Qualcomm.

The Justice Office did not quickly react to requests for remark.

Qualcomm shares rose about four per cent on the news. The shares have been up from March lows as the enterprise continued to clearly show advancement regardless of a sluggish intelligent phone marketplace.

Qualcomm had argued that the FTC choice, if permitted to stand, would upend its enterprise design by demanding it for the very first time to license its know-how to rival chipmakers and rework several of its patent licensing promotions with phone makers.

Qualcomm gained a pause in enforcement of the choice although its legal appeal played out and voluntarily adjusted how it structured some of its licensing promotions for 5G know-how.

With the appeals victory and raft of new agreements signed with shoppers since the situation was determined, Qualcomm is largely crystal clear to resume conducting enterprise as it had for many years ahead of the FTC situation.

Qualcomm’s enterprise design generally prompted conflict with phone makers, most notably Apple, which supported the FTC’s situation and mounted a independent antitrust lawsuit versus Qualcomm.

The phone makers bristled at Qualcomm’s insistence that manufacturers license its broad patent portfolio irrespective of whose chips they selected.

Apple settled its situation versus Qualcomm in 2018 and signed a license offer and chip source settlement.

Other main phone makers these kinds of as Samsung Electronics and Huawei Systems have also settled disputes with the chip supplier and signed license promotions since the FTC situation was determined.