“Qualcomm Inc. filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc. so far in a sprawling and bitter legal fight,” Ian King reports for Bloomberg.
“The San Diego-based company aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made. The product provides almost two-thirds of Apple’s revenue. Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, according to Christine Trimble, a company spokeswoman,” King reports. “‘Apple employs technologies invented by Qualcomm without paying for them,’ Trimble said.”
“The legal battle started earlier this year when Apple filed an antitrust suit against Qualcomm arguing that the chipmaker’s licensing practices are unfair, and that it abused its position as the biggest supplier of chips in phones. Qualcomm charges a percentage of the price of each handset regardless of whether it includes a chip from the company, and Apple is sick of paying those fees,” King reports. “Soon after its first legal salvo, Apple cut off licensing payments to Qualcomm. That’s about $2 billion a year in highly profitable revenue.”
Read more in the full article here.
MacDailyNews Take: Qualcomm is desperate and delusional.
SEE ALSO:
Qualcomm fined record $773 million in Taiwan antitrust probe – October 11, 2017
Apple faces down Qualcomm, Ericsson over EU patent fees – October 2, 2017
Qualcomm loses two key rulings in its patent royalty fight with Apple – September 21, 2017
Apple’s A11 Bionic obliterates top chips from Qualcomm, Samsung and Huawei – September 18, 2017
U.S. judge rules Apple lawsuits against Qualcomm can proceed – September 8, 2017
Qualcomm CEO expects out of court settlement with Apple – July 18, 2017
Apple-Qualcomm legal dispute likely to be ‘long and ugly’ – July 7, 2017
Qualcomm wants court to block Apple from U.S. iPhone imports and sales – July 6, 2017
Judge rules U.S. FTC antitrust lawsuit against Qualcomm to proceed – June 27, 2017
Apple uses Supreme Court decision to escalate war against Qualcomm – June 20, 2017
Apple’s amended San Diego complaint against Qualcomm leaves no doubt: many billions at stake – June 20, 2017
Apple rejects Qualcomm’s allegation of throttling iPhones, says ‘study’ is ‘methodologically unsound’ – June 20, 2017
Apple just poached one of Qualcomm’s top guys – May 31, 2017
Go the distance Apple! Qualcon days of patent abuse are coming to an end. (I hope.)
I thought Apple hated Google the worst. This fight might end up in the Octagon with the black-suited lawyers slugging it out! Go get em Apple! Never have liked that Qualcom company over the years for some reason!
By analogy, the crude oil processor charges General Motors an IP fee on the sale price of the total automotive vehicle as well as on all of its vehicles because, without gasoline, all of its cars would be immobile; There would be no buyers; And GM would have to fold. It’s a compelling argument. But, if the argument is novel, then it has a good chance to be struck down. If it’s standard practice, then the crude oil processor has a good chance. Further, the oil processor asserts that there is only one way to process crude oil, so any car manufacturer who makes its own gasoline must be using the processor’s IPs.
Qualcomm is whining that Apple is doing two things: It wants to pay a non-exorbitant fee for the Qualcom chip as well as attempting to make its own chips.
This dispute has nothing to do with Qualcomm chips. See my comment below.
No Chinese court will shut down production of the iPhone in China based over a dispute of a $20 per phone component.
Indeed not to mention they will never give credence to patent protection of that nature to a US company that would harm its own business imeasurably. Damn it they wouldn’t do that even if it were not a company acting like Al Capone.
qpertino,
For about the millionth time, this is not about Qualcomm components! The dispute is over Qualcomm’s software patents, not its hardware. They are legally entitled to fees (but only reasonable fees) from anybody who uses the patents, no matter what hardware is used to implement the patented ideas.
Every wireless device that can connect to a cellular network must use Qualcomm’s patents because they are embedded into the standards for interoperability between every network and every device. The issue is not whether manufacturers like Apple have to pay Qualcomm licensing fees, even if there is not a single Qualcomm component in the device. That is a given. The only question is how much the licensees need to pay.
Since these are “standards-essential patents,” Qualcomm had to agree (at the time it submitted them for inclusion in the standards) to charge only a “Fair, Reasonable, and Non-Discriminatory” (FRAND) fee for use of the patents. Qualcomm thinks that the fees it demands comply with that standard; absolutely nobody else agrees.
Qualcomm’s theory is that it is entitled to a percentage of the value that the use of its patents adds to the hypothetical value of the device if it weren’t using the patents. Obviously, the value of a cellphone that can’t connect to any cellular network is zero. Qualcomm argues that it is therefore entitled to a percentage of the entire value of the phone, because it was enhanced from zero by the fact that it actually works, thanks to the patented ideas.
Apple’s argument is that the percentage model might be fair and reasonable when applied to the maker of a $30 burner phone, but clearly discriminates against companies that make phones that cost over $1000. The revenue model simply does not work for premium phone makers, and is therefore unreasonable.
I agree, and I hope the courts will agree, but this is a legitimate legal dispute, not just highway robbery (although it is that, too).
Qualcomm better watch what they wish for. Apple could use its offshore cash to set up a subsidiary to buy Qualcomm. The issue is whether regulators would approve it. Perhaps it would be a joint operation like the Toshiba chip buyout. In fact that venture could be the parent company and could continue to sell to the current buyers and collect patent royalties. Go for it Tim.
Doesn’t Apple not paying anything and continuing manufacture and sales of devices help Qualcomm’s case for banning the same in China? The case would be considerably weaker if Apple made payments and was in court to have funds returned.
Apple has all the payments currently ‘owed’ to Qualcomm saved and ready for payment AFTER the lawsuit is completed, if Apple loses. I believe the term for this action is called holding payments ‘in escrow’.
I can understand holding some funds in escrow, but since no payments at all were received by Qualcomm, the situation is Apple is using patents in (and not in) contention for ‘free’ and making profits. Perhaps there is a “interest accrued” clause for long term escrow deposits?
The escrowed funds are earning interest at market rates. Whichever party prevails will collect both the principal and interest.
These are factors to be considered by the court(s) where Apple is suing Qualcomm. I should just leave it as that. We’ll see what happens.
Qualcomm turns the “GRR!” volume up to 11.
But the lawsuits continue and Qualcomm’s ‘GRR!’ is irrelevant. Even this new attempt at banning iPhones in China will be on hold until the lawsuit Apple has brought against Qualcomm is completed, one way or the other.