UPDATE 2-Regulator tells Qualcomm to revise license deals

Wed Sep 30, 2009 7:48am EDT

* Says license terms with Japan handset makers unfoar

* Regulator eyes future licensing on next-gen LTE phones

* Qualcomm has 60 days to dispute order

(Adds details)

TOKYO, Sept 30 (Reuters) - Japan's antitrust regulator ordered Qualcomm Inc (QCOM.O) to revise what it says are unfair licensing agreements with Japanese phone makers, rejecting the U.S. wireless chipmaker's argument against an earlier draft order.

Japan's Fair Trade Commission said on Wednesday it told Qualcomm to remove clauses in cross-licensing agreements that grant it free access to patents held by Japanese manufacturers, who it said have little choice but to use Qualcomm chips.

Qualcomm, which supplies NEC Corp (6701.T), Panasonic Corp (6752.T) and Sharp Corp (6753.T), must also refrain from imposing similar agreements for next-generation phones for high-speed LTE networks, the watchdog said.

The company also faces a probe by the European Commission and was fined roughly $200 million in July by South Korea's antitrust agency for discriminatory licensing practices. [ID:nNSEO19318]

The U.S. company had disputed a July draft order by Japanese regulators that said it illegally pressured its customers to accept cross-license patents on a royalty-free basis and to promise not to assert their patents. [ID:nN27538514]

Qualcomm spokesman Takayuki Nozaki said the company was still studying the cease-and-desist order and could not yet comment. The company has 60 days to dispute the regulator's ruling.

Qualcomm, which earns roughly 10 percent of its revenue from Japan, supplies chips to most third-generation phones for Japan's No.2 phone operator KDDI Corp (9433.T).

It also supplies chips to many phones for the W-CDMA standard adopted by NTT DoCoMo Inc (9437.T) and Softbank Corp (9984.T). (Reporting by Mayumi Negishi; Editing by Chris Gallagher and David Holmes)