Qualcomm to seek U.S. ITC import ban for Apple iPhones

“Incensed over Apple Inc.’s decision to stop paying it billions of dollars in licensing fees for smartphone chips, Qualcomm Inc. plans to retaliate by asking a U.S. trade agency to ban the imports of iPhones, according to a person familiar with the company’s strategy,” Ian King and Susan Decker report for Bloomberg.

“Qualcomm is preparing to ask the International Trade Commission to stop the iPhone, which is built in Asia, from entering the country, threatening to block Apple’s iconic product from the American market in advance of its anticipated new model this fall, according to the person, who asked not to be identified because the discussions are private,” King and Decker report. “The escalating legal dispute revolves around patents Qualcomm holds that let it to charge a percentage of the price of every modern high-speed data-capable smartphone, regardless of whether the devices use its chips.”

Apple argues the system is unfair and Qualcomm has used licensing leverage to illegally help its semiconductor unit,” King and Decker report. “Qualcomm hasn’t offered fair terms as required under rules governing the licensing of patents, Apple Chief Executive Officer Tim Cook said when asked about the possibility the chipmaker could try to halt iPhone sales anywhere in the world. ‘That’s both the price and the business terms,’ Cook said Tuesday during a conference call with analysts. ‘Qualcomm has not made such an offer to Apple,’ he added. ‘I don’t believe anyone’s going to decide to enjoin the iPhone based on that. There’s plenty of case law around that subject. But we shall see.'”

Read more in the full article here.

MacDailyNews Take: Good luck with that, Qualcomm.

In 2017, Qualcomm’s licensing scam — charging a percentage of the total cost of all components in the phone, even non-Qualcomm components — is unreasonable, illogical, and irrational.

SEE ALSO:
Qualcomm slashes profit forecasts as Apple ceases paying iPhone royalties – April 28, 2017
BlackBerry awarded $815 million in arbitration with Qualcomm over royalty overpayments – April 13, 2017
Qualcomm countersues Apple – April 11, 2017
Qualcomm wants FTC to drop their antitrust suit, but it doesn’t mater because Apple’s isn’t going anywhere – April 5, 2017
Apple’s dispute with Qualcomm could last two years – March 3, 2017
Apple widens global patent war, files lawsuit against Qualcomm in the United Kingdom – March 2, 2017
Apple may have paid Qualcomm $40 per iPhone; accounting for 1/3rd of Qualcomm’s revenue – February 10, 2017
Conservative groups ask President Trump to terminate FCC lawsuit over Qualcomm patent licensing – January 27, 2016
Qualcomm CEO fires back at Apple: Bring it on – January 26, 2017
Apple sues Qualcomm in China seeking 1 billion yuan – January 25, 2017
Qualcomm comments on Apple’s lawsuits in China – January 25, 2017
Apple’s rebellion against the ‘Qualcomm Tax’ – January 24, 2017
Despite lawsuit, Qualcomm wants to keep doing business – January 24, 2017
Why Apple, the FTC, and others are attacking Qualcomm’s royalty model – January 24, 2017
Here are the most damning parts of Apple’s blockbuster lawsuit against Qualcomm – January 23, 2017
Apple’s legal assault on Qualcomm part of iPhone margin grab – January 23, 2017
Qualcomm says Apple’s claims are ‘baseless’ in response to Cupertino’s $1 billion lawsuit – January 21, 2017
Apple sues Qualcomm for $1 billion over onerous licensing practices – January 20, 2017
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

[Thanks to MacDailyNews Readers “Fred Mertz” and “Dan K.” for the heads up.]

21 Comments

  1. Unless it’s voluntarily licensed under FRAND, they are allowed to be unreasonable, illogical, and irrational. We may not like it, but no one yet has shown proof if FRAND terms. Maybe it’s indeed so…

    1. Huh? Maybe do a little looking. Qualcomm charges based upon the value of the device being sold, so a more valuable smartphone pays more than a cheaper smartphone. How is that FRAND? Recently the Supreme Court remanded a case where the IP was based upon the whole product, and not just the infringing part. I have a feeling Qualcomm is not going to get a sympathetic hearing when this goes to court.

      1. FRAND as I understand it is offered by a company for inclusion in s standard. Neither is mandatory, otherwise it’s theft of IP. Having a patent allows you to prevent others from using the invention for any reason or no reason at all.

        1. You may not have seen any “proof” that this is a SEP and FRAND issue, but I doubt you’ve seen any “proof” that this is not a SEP issue.

          Everything I’ve seen indicates this is a SEP and FRAND issue. I’ve already pointed out that you should do a little looking. It’s not that hard.

          Here:
          http://www.fosspatents.com

          1. Mueller is a hack, and he hasn’t proven it either. I leave that homework to the courts.

            No one can proclaim a patent a SEP without the consent of the patent holder. You cannot practice or do anything with a patent, including making it part of a standard, without the patent holder’s permission. A patent holder is not required to offer their property for anything unless they choose. Anything less than that is theft.

            This does not mean that the patents in question aren’t covered by FRAND and SEP though, that should be easy to prove. Somewhere there’s an agreement with the Standards Bodies that QC consented. Or not….The courts will easily be able to make that determination.

            I don’t work for Apple or QC so it’s not my fight. Two behemoths fighting… I’ll just watch the show.

            1. Applecynic,
              You ask, “no one yet has shown proof if FRAND terms. Maybe it’s indeed so.”

              I understand you are a cynic, but it might be wise to extend your cynicism beyond Apple. Qualcomm states explicitly in its pleadings and briefs that these patents were voluntarily submitted for inclusion in a standard, and therefore must be licensed to all comers on a Fair Reasonable and Non-Discriminatory basis. I think that is “proof,” and no “maybe” about it.

              The only issue in this case is whether the terms offered by Qualcomm on a take it or leave it basis are indeed FRAND. Qualcomm argues that it is fair and nondiscriminatory to charge a royalty that is not based on the price of the chip that incorporates the patents, but on the retail price of the device that incorporates the chip.

              Apple argues that charging them ten times as much as bargain device makers using exactly the same patents in exactly the same way is neither fair nor nondiscriminatory. Remember, Qualcomm makes most of Apple’s modem chips and is getting paid for them separately. Intel is also paying royalties on their chips, and Qualcomm expects a second royalty from Apple when it uses those chips.

              Determining what price would be reasonable is a fact question that—absent a settlement—must be decided by a judge and jury. That has nothing to do with whether Qualcomm has the right to the benefit of its intellectual property within the bounds set by law. Of course it does, and Apple understands that. It is setting aside the royalties that would otherwise be paid to Qualcomm into a special account until the dispute is resolved, not including the “savings” in net revenue.

              As people point out here almost every day with regard to the corporate income tax, Apple is not paying these royalties. They are being passed through as an increased price to consumers. If you own an Apple device, it is your fight.

            2. Finally I get a reasoned answer and not just supposition from other equally unresearched posters. You have finally provided proof regarding the proceedings. I take you at your word. That’s all I was saying. Now FRAND and SEP are applicable.

              Regarding my cynicism… it’s broader than Apple, but the subject matter on this is Apple.

            3. Admission by the party is pretty good proof.
              I have to admit I was confused that @applecynic asked everyone else to look up this fairly clear part of the story. It’s like he’s learned what FRAND means and when it applies, but then couldn’t be bothered to find out himself that it definitely applies to the components/patents involved in this case.
              If Qualcomm’s patents weren’t part of a standard, Apple couldn’t be using them in the first place. Most of the articles I’ve seen were sloppily written, but had clear implications that the lawyers actually involved all agreed that FRAND was in play.

              Part of reading any story about tech/law/expertise involves being able to see through the journalist’s poor understanding to what the knowledgable sources are saying. Yes, the journalist should do a better job conveying meaning, but you can often see through the journalist’s poor explanation if they provide quotes from people who actually know what they’re talking about.

            4. Confirmation bias. Your intention to be an Apple cynic, prevents you from seeing the obvious. You may think Mueller is a “hack”, but there’s plenty of information in his blog about the Qualcomm case for you to come to the legitimate conclusion that this is indeed a case about SEPs and FRAND. You could look lots of places to learn that and yet rather than lift a finger, you’d rather stick your fingers in your ears and say “nah-nah-nah” the whole time. Kudos. I’m so impressed.

            5. You are calling him a hack, because he provided opinions on firms he PREVIOUSLY consulted for. He has mentioned that several times.

              His understanding of the disputes have proven over and over to be spot on. Now if you’re talking about his unbridled support for Trump, then I’d agree in that case he’s an idiot.

            6. You didn’t research it either. TxUser provided a concise and applicable argument. He’s also an attorney, it’s not my job to research QC and Apple’s legal matters. If my cynicism was unwarranted, it was to counter you unwarranted optimism as presented.

            7. Are you 5yrs old or just a millennial? I have followed the case, but since it’s been taking place over months, I didn’t feel the desire to look back and find the article for you. You could do that, but no, you’d rather argue with people, rather than spend your time constructively answering your own questions. Congrats. Tell me when you grow up.

    2. Isnt it that if terms are not under a FRAND agreement then the licenses are not generally used as a standard? And hasn’t this basically already been determined when QC went after Apple, trying to double-dip by charging Apple separately for the same license that was already paid for by the individual component supplying company. I’ve slept some since then, so …

  2. Prediction: The court lawsuits are going to proceed before anyone bothers to look at any ‘ban’. The fact that Apple is holding their payments to Qualcomm until the court lawsuits points out their sincerity regarding this dispute.

    But we’ll see. How many years will this drag on? Will Apple holding back their payments speed up Qualcomm?

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