Apple sues Qualcomm for $1 billion over onerous licensing practices

“Apple Inc. is suing Qualcomm Inc., alleging the smartphone-chip supplier demanded onerous terms for its technology and that it sought to punish Apple for cooperating in a Korean regulatory probe into Qualcomm’s licensing practices,” Tripp Mickle reports for MarketWatch.

“The suit, which Apple said it filed Friday in federal district court in the Southern District of California, claims that Qualcomm leveraged its position as a manufacturer of a critical chip used in cellphones to seek “onerous, unreasonable and costly” terms for patents and blocked Apple’s ability to choose another supplier for chipsets,” Mickle reports. “The complaint seeks $1 billion in rebate payments that Apple says Qualcomm has withheld as retribution for Apple’s participation in an investigation by South Korea’s antitrust regulator. The Korean agency last month announced a roughly $853 million fine on Qualcomm for alleged anticompetitive patent licensing practices—a decision Qualcomm also vowed to fight.”

Read more in the full article here.

“According to the Apple complaint, Qualcomm’s terms required Apple to pay a percentage of the average selling price of an iPhone to use Qualcomm patents and to exclusively use Qualcomm chips in iPhones from at least 2011 to 2016,” The Wall Street Journal reports. “Apple received what it called quarterly rebates from Qualcomm under terms of the agreement, but Qualcomm began withholding those last year after Apple met with Korean regulators, the suit says.”

“The suit says that Qualcomm told Apple the iPhone maker had forfeited the nearly $1 billion in rebates by responding to the Korea Fair Trade Commission,” WSJ reports. “The suit also says that Qualcomm ‘then attempted to extort Apple into changing its responses and providing false information to the KFTC in exchange for Qualcomm’s release of those payments.'”

Read more in the full article here.

MacDailyNews Take: So, now we likely have one good answer to our question of who precipitated the days-old U.S. FTC complaint against Qualcomm.

Still wondering if Broadcom, Intel, Samsung, Texas Instruments, etc. and/or some combination of the aforementioned were also involved.

Qualcomm exec says FTC ‘rushed’ antitrust lawsuit before President-elect Trump’s inauguration – January 19, 2017
FTC alleges Qualcomm forced Apple into iPhone LTE chip deals – January 18, 2017
FTC charges Qualcomm with monopolizing key smartphone chip; alleges extracted exclusivity from Apple in exchange for reduced patent royalties – January 17, 2017
After eating Intel’s mobile lunch, Apple could next devour Qualcomm’s Baseband Processor business – January 20, 2015
Analyst: Apple’s going to dump Intel modems if they keep lagging Qualcomm – December 5, 2016
Yes, Apple is throttling download speeds for iPhone 7 and 7 Plus Verizon and Sprint versions – November 19, 2016
Apple’s modem choices may leave Verizon iPhone users feeling throttled – November 18, 2016
Tests show iPhone 7 Plus models with Qualcomm modem perform significantly better than those with Intel modem – October 20, 2016


    1. Fesarius, better to remain silent and be thought a fool than to post BS on this forum and be forever known as one.

      According to the information provided, this legal action is more than justified. Not only did Qualcomm (allegedly) refuse to fairly license its FRAND IP, but it coerced an exclusive provider agreement, then violated the agreement in retaliation for Apple responding to a government inquiry, then attempted to coerce Apple into altering its testimony.

      If these allegations are sustained in court, then Qualcomm is in for a big bag o’ legal hurt.

      1. You are correct but only because Qualcomm submitted the patents in question for inclusion into standards under FRAND terms.

        FRAND is not mandatory, therefore Qualcomm is wrong.
        Problem is FRAND, is ambiguous, therefore lawyers get rich.

        1. Hmmm, agencies that set up world wide standards that make patents so great, usually require that the company owning the critical patents submit to FRAND before allowing the standard to exist.

  1. Time to cancel Qualcomm’s patents and put the company out of business.

    “Qualcomm ‘then attempted to extort Apple into changing its responses and providing false information to the KFTC”

    Oh, and then put Qualcomm’s executives behind bars for obstruction of justice.

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