Apple and its partners seek $27 billion from Qualcomm

Apple and its partners seek $27 billion from Qualcomm
A trial starting in San Diego on April 15th has all the makings of a big courtroom battle. Apple and its contract manufacturers are suing chip maker Qualcomm. According to CNET, the firms that assemble the iPhone such as Foxconn, Compal, Pegatron, and Wistron are seeking $27 billion in damages from Qualcomm, claiming that the company violated antitrust laws and breached various contracts. You might wonder why they are involved in this battle at all. That's because they are the companies that license Qualcomm patents for Apple. Both Apple and Qualcomm are also seeking damages.

The trial is scheduled to run for 20 days, and a joint filing made by Apple and Qualcomm includes a witness list that names the CEOs of both companies (Tim Cook and Steve Mollenkopf, respectively), as well as executives from other phone manufacturers like Samsung and Motorola, and industry experts. Qualcomm owns patents on software used in most smartphones, and technology related to 3G, 4G and 5G connectivity. That is in addition to patents it owns for the chips that it sells. Apple instructed its contract manufacturers to stop paying royalties to Qualcomm and has claimed in other lawsuits that the chip maker failed to license its standard-essential patents in a fair, reasonable and non-discriminatory (FRAND) fashion as required. Such patents must be licensed by manufacturers to make sure that their products meet technical standards.

Apple, and other phone manufacturers, are not pleased with Qualcomm's "no license, no chips" policy, and claim that they are paying royalties to Qualcomm for phones they sell that don't use any of the chip maker's patents. And while the $27 billion claim certainly makes you take notice, we are awaiting a decision on a more important case held earlier this year. The FTC v. Qualcomm trial was a non-jury affair, and depending on how Judge Lucy Koh rules, the company might have to change the way it licenses and sells its chips.

Qualcomm loses one of its patents


Qualcomm has been successful in several cases where Apple has been found to have infringed on various patents related to the Snapdragon designer. Earlier this week, ITC Judge MaryJoan McNamara ruled that Apple had infringed on a couple of Qualcomm patents and recommended that an exclusion ban be imposed on the versions of the iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X using an Intel modem chip. That decision now goes for review in front of the entire commission, and a final decision will be announced in July. The same day that decision was announced, a final ruling was issued by the ITC in another patent infringement case involving Qualcomm and Apple. Originally, Judge Thomas Pender ruled that Apple infringed on a Qualcomm patent, but didn't recommend a import ban on certain iPhone models. The entire commission decided that Qualcomm's patent was invalid, which left them no choice but to uphold Judge Pender's decision not to ban the iPhone in the U.S.

All of these legal battles have affected Qualcomm's relationship with Apple and has cost it business. From 2011-2015, Apple exclusively sourced modem chips for the iPhone from the San Diego based company. Over the subsequent two years, both Qualcomm and Intel shared the task of supplying Apple with this all-important part. But last year, Apple decided to drop Qualcomm and the 2018 iPhone models sport Intel modem chips only.

One of the most interesting court cases involving Qualcomm is a class action lawsuit that can be joined by anyone who purchased a smartphone after since Feb. 11, 2011. Dubbed the biggest class action in history, more than 250 million phone owners are seeking damages ranging between $4.84 billion and $5.54 billion.

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14 Comments

1. OneLove123

Posts: 788; Member since: Aug 28, 2018

I’m pretty sure Apple will win because the u.s government has stocks in Apple. I don’t see how Qualcomm will come out on top.

13. shm224

Posts: 232; Member since: Mar 19, 2015

No, it doesn't have any stocks. But some politicians like Boxer, Feinstein have fairly high stakes in Apple.

2. vgking9699

Posts: 89; Member since: Mar 01, 2019

Apple should win, QUALCOMM thinks they should get money from Apple for selling iPhones that don’t even contain QUALCOMM is parts simply because they look just like the iPhones that do contain call their parts

3. lyndon420

Posts: 6445; Member since: Jul 11, 2012

Maybe a contract violation or something? There's almost always more to every story told.

4. ph00ny

Posts: 1985; Member since: May 26, 2011

Not to mention pretty much admitting in court that they contain qualcomm tech by saying newest iOS update will not be using qualcomm's method

10. sgodsell

Posts: 6728; Member since: Mar 16, 2013

The other thing is Apple and others signed into contracts with Qualcomm. The funny thing is people quickly forget that every Apple device presents a license on the device when you first set it up. I don't see why Qualcomm can't have that "no license, no chips". That makes sense to me.

5. vincelongman

Posts: 5611; Member since: Feb 10, 2013

Someone doesn't know how patents licensing works lol E.g. every Android OEM pays Microsoft licensing fees for patents, despite not having Microsoft partshttps://www.howtogeek.com/183766/why-microsoft-makes-5-to-15-from-every-android-device-sold/ They question is if Qualcomm has violated antitrust laws and breached various contracts like Apple claim or not And if Apple has voilated Qualcomm's patents like Qualcomm claims

11. Sammy_DEVIL737

Posts: 1504; Member since: Nov 28, 2016

#5 Thanks for the info and link didn't knew that android OEMs are paying to Microsoft.

7. Plutonium239

Posts: 1144; Member since: Mar 17, 2015

Qualcomm should get royalties from Apple, even if there are no Qualcomm parts in the phone, if the parts that are there use Qualcomm's patents. That's how patents work.

9. slashas

Posts: 120; Member since: Jul 17, 2017

It doesn’t matter if chip inside or not, but if competitors chip is using QC patent in their chip instead of own technology it should be licensed and charged as been before, they can only claim that it is too expensive, that’s all. But if it is too expensive no one stops to invest these money in own research and development but instead they just use patented technology without licensing... The most funny thing where they have been before? If this licensing stuff is too expensive why they haven’t went to court to rule out price before using unlicensed stuff, it is strange practice to use unlicensed stuff and then after negotiate the price...

14. shm224

Posts: 232; Member since: Mar 19, 2015

Every wireless modem uses Qualcomm's IP regardless where the modem comes from. Qualcomm's IP is part of wireless standard .

6. whatev

Posts: 2113; Member since: Oct 28, 2015

Qualcomm is now quaking after teasing the giant

8. iloveapps

Posts: 401; Member since: Mar 21, 2019

This is bad but they need to be learn from their unfair practices.

12. domfonusr

Posts: 1057; Member since: Jan 17, 2014

If Qualcomm wins, they become a bigger bully... if Apple wins, they become the biggest corporate bully the world has ever seen... either way, a bunch of attorneys are going to get their biggest payday in decades... and all this stuff that we like to buy will only become far more expensive, far exceeding the rate of inflation. Whoever wins, their product price will skyrocket... either iPhones or Qualcomm chips. Or both. They will pass their legal expenses, and more, on to consumers everywhere, even if neither one pulls out a true victory.

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