SAN DIEGO - Alex Rogers says he likes stress. As head of Qualcomm's maligned patent licensing division, he has seen plenty of it over the past few years.
Starting in 2014, government regulators from China to South Korea to the U.S. attacked the San Diego mobile technology firm's lucrative business model for licensing its intellectual property, claiming it coerced smartphone makers into paying sky-high patent fees that harmed consumers.
Apple joined the fray in 2017 with a lawsuit aimed at dismantling Qualcomm's blueprint for licensing patents. A year later, chip rival Broadcom made licensing troubles the centerpiece of its hostile takeover pitch to Qualcomm shareholders. The takeover failed only after the U.S. government moved to block it over national security concerns.
"All of these matters were challenging various elements of the licensing business and creating pressure on the licensing business," said Rogers. "That created a tremendous amount of uncertainty. How would the licensing business fare? Will the licensing business, for example, be forced to license at the chip level and what will that do to the value of Qualcomm's patents?"
Fast forward to today. For the first time in years, the narrative around Qualcomm is not dominated by legal struggles in patent licensing, which helps fund about $5 billion a year in fundamental research that has made Qualcomm the U.S. leader in developing core mobile technologies such as 5G.
Instead, the conversation has shifted to the company's emerging 5G processor opportunity, including its return as a mobile chip supplier for Apple's iPhones. Qualcomm's shares are up more than 35% so far this year.
"This is probably the least controversial the licensing business has been from a Wall Street perspective in a decade," said Mike Walkley, an analyst with Canaccord Genuity. "If you step back, there was huge pressure on these guys to cave in and sell the company to Broadcom for 50% below where the stock is today. Give them credit. They held their ground and got through this."
The licensing turnaround stems from the culmination of factors - the accelerated commercialization of 5G that nudged Apple toward mending fences; settlements with regulators in China and Taiwan that left Qualcomm's business model intact; and a big legal win last month at the U.S. 9th Circuit Court of Appeals.
But the company also made strategic moves aimed at lowering the heat surrounding its licensing division.
Key among them was a decision to offer worldwide licenses for its cellular standard-essential patents - required intellectual property that enables interoperability between devices and networks - at a lower rate.