Federal judge sides with iPhone manufacturers and against Qualcomm by refusing to toss countersuit

Federal judge sides with iPhone manufacturers and against Qualcomm by refusing to toss countersuit
A federal judge today refused to toss out a lawsuit filed by manufacturers that build devices for Apple, against chip maker Qualcomm. The latter had sought a dismissal of the suit which would have resulted in Qualcomm receiving royalty payments from the manufacturers. With the judge's decision, the manufacturers are now allowed to continue withholding these payments to Qualcomm.

The lawsuit involves patents owned by Qualcomm that are considered essential to the production of smartphones. Because these patents are so important, licensing is supposed to be done in a fair, reasonable and non-discriminatory manner. Qualcomm bases its royalty prices for its standard essential patents using a percentage of the entire price of a smartphone instead of a percentage of the chip it supplies to a particular phone. This results in a higher licensing fee which the manufacturers say is not fair.

Qualcomm, which collects a royalty on almost every smartphone sold globally, attempted to persuade the court that it faces "irreparable harm" if contract manufacturers like Compal Electronics Inc., Foxconn Technology Group, Pegatron Corp. and Wistron Corp. continue to hold off on paying royalties Qualcomm says that they owe it. All of these contract manufacturers build devices for Apple.

Companies that license patents from Qualcomm say that its royalty rates are too high. Analysts have computed that the aforementioned manufacturers together pay Qualcomm $10 in royalties for each iPhone made. Because Qualcomm has not been receiving royalties from the Apple-related manufacturers, the chipmaker's recent quarter saw earnings decline 40% year-over-year.

In May, Qualcomm sued the manufacturers for non-payment of royalties. In July, the iPhone and iPad producers filed a countersuit against the chipmaker. It was that countersuit that the federal judge refused to dismiss with today's ruling.

source: WSJ

FEATURED VIDEO

43 Comments

1. Zylam

Posts: 1817; Member since: Oct 20, 2010

Has almost nothing to do with Apple, but Death to Apple in 3.. 2..

2. zunaidahmed

Posts: 1183; Member since: Dec 24, 2011

This is pretty stupid too..... It's like saying because the leather in Rolce Royce and Hyundai comes from the same group of cow, but the rolce royce cost more, so they should charge rolce royce more for each unit.... Totally stupid, but all the Samsung fans here would start blaming Apple. It's weird, most android fans have nothing against Apple, but when it comes to Samsung fans, they almost act like their mother was raped by Apple or something, especially on phonearena

6. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Question. Would you sign a lease and then tell the landlord the rent is to high and you're not paying/? The problem is they agreed to pay. You don't agree to pay and then complain later.

7. zunaidahmed

Posts: 1183; Member since: Dec 24, 2011

Well, that's the case of renting, which is different. The better example would be you go to a mobile operator, maybe Verizon, sign a contract and agree to pay a lum sum amount each month, half way through your contract, you find out they are actually charging you more because you have a higher income than the other customers, of course you would be furious and you could take verizon to court, and I am pretty sure the judge would be on your side too.

9. tedkord

Posts: 17357; Member since: Jun 17, 2009

If you did, you'd lose. And deserve to. A contract is a contract. You don't get to stop honoring it just because you found out someone else's is better.

13. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

There are fallacies that make a contract unfair; one of them is being charged for a product according to ones income.

22. tedkord

Posts: 17357; Member since: Jun 17, 2009

Then you shouldn't have signed it. You obviously felt the price was fair, or you wouldn't have. Once you sign a contract, that is that.

32. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Ignorance is not perpetual. It doesn't matter that the buyer found the terms to be reasonable when he made the purchase, it only matters that the contract is indeed resonable for both parties. A contract is mandatory only when all the parties, knowing every aspect of the contract, gave their consent, and when the terms of it abide the law. Asking a different price from gay persons, women, Cristians, fat people, rich people is illegal and the party that did that should return the money.

37. tedkord

Posts: 17357; Member since: Jun 17, 2009

Nice try, attempting to lump this in with discriminatory practices. No, charging different prices to different people is not illegal, never has been. As I child, I attended Catholic School. My parents were charged a higher tuition because I wasn't catholic. Was that crappy? Yes. Illegal? No. There are laws protecting against discrimination for certain things, such as race, religion, sex, too an extent sexual preference. They're are no laws to prevent it against being wealthy, and those laws are to protect individuals, not corporations. My company pays WAY more for some supplies through their distributor for things I can buy on my own. Just because I can buy it cheaper myself doesn't mean they can refuse to pay the supplier. This was a contract, both sides agreed to it. Qualcomm doesn't get to increase its price to Apple because another company agrees to pay them more, and Apple (and its co conspirators) don't get to lower what they pay for the same reason. They stick to the same price for the term of the contract, then renegotiate.

42. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

I don't know where you live but charging different prices

43. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Charging different prices for the same service, based on religion, is illegal. Maybe the Catholic Church paid for a part of the tuition fee for catholic students. I have said it before (and I will only say it once more): a party that was deceived to pay a higher price, that no other company pays, for the exact same good, is entitled ask for restitution, break the contract or ask for the same price for the remainder of the contract.

12. yann

Posts: 614; Member since: Jul 15, 2010

Let's check the same case - Apple patent rights for lightning port - 4$ per cable for every single piece and Qualcomm patents for 10$ per piece for the whole phone unit. Is there any difference?

14. Iodine

Posts: 1480; Member since: Jun 19, 2014

You can make a phone without lightning port. But you can’t make one without wireless connection - that wouldn’t be a phone after all.

20. audibot

Posts: 634; Member since: Jan 26, 2017

yes you can its called voip also know as wifi calling remember when apples commercial added that feature 3 years after everyone else apple over charges everyone else in the world and takes down companies that dont like what they say, 10 for the phone is perfect if it was $40 or 100 thats crazy not 10, just like suing over bounce or rectangle or swipe icon

23. yann

Posts: 614; Member since: Jul 15, 2010

You didn't catch the sarcasm here - 4$ per 10$ headset and 10$ per 200-500$ phone. Can you calculate the difference now? Apple charge the producers of their accessories with 40% royalties and Qualcomm charge 2-5% royalties.

33. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Yes. Apple asks 4$ from EVERY cable manufacturer. QC asks 10$ from Apple while it only asks 5$ from Alcatel and 8$ from Samsung*. *the values and companies are only as an example, I don't know how much it asks from Samsung.

38. tedkord

Posts: 17357; Member since: Jun 17, 2009

Apple negotiated and agreed to those prices, signed a contract to those terms. The other companies did the same. Now, Apple wants the fruit of the other companies better negotiating skills? I buy a car, and negotiate the price down to $30,000. You buy the same car, but you get them down to $29,000. So I get to demand that extra $1000 back because you were better at haggling?

44. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

If you find out that I paid less for the same car in the exact same conditions (no of payments, color, options etc), you are entitled to ask for the same deal.

29. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

A lease is a contract. You do know that Right? What is a contract sir????? It's an agreement. When you sign a lease, you agree to pay, and abide by any policies. It's the term of the contract for the amount if time thou signed. They already knew what Qualcomm business is already. If they felt they were getting a and deal, they could have not paid and sources someone else. If they are charging to much, dont buy it. Isn't that how you shop? A lease is a contract. How do you feel your example is better than nine?

36. fastfreddy123

Posts: 66; Member since: Mar 25, 2017

Your full of s**t. These are ESSENTIAL PATENTS. They cant charge whatever they feel like. Theres an Industry standard.They have to follow those standards. They are NOT and thus they are getting sued. See the wizard soon .

39. tedkord

Posts: 17357; Member since: Jun 17, 2009

Maybe the industry standard is a percentage of the final product price.

25. Nopers unregistered

No Techie, it’s more like signing a lease with the landlord and the landlord seeing that you got a 20% pay raise this year so the landlord bumps your rent by 20% as well.

26. trojan_horse

Posts: 5868; Member since: May 06, 2016

Nah, man... just No. The terms and conditions of a contract does not change until the time length of the contract expires. If you sign a lease with your landlord for $500 a month during 5 years, and if on the 2nd year of your contract you get a huge salary increase, can the landlord bump the rent to charge you $1000 a month while your contract of $500 a month is still running active? No! The landlord can't bump the rent, because a contract can't be changed once it is signed, unless there was a clause in that contact which specifies that there will be a rent increase if the tenant gets a salary increase in future. So your comparison is flawed here, @Nopers.

27. Nopers unregistered

Pretty much the point I was trying to make. The comparison is flawed but it wasn’t a comparison I drew.

30. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

False. Because first, he cant raise the rent until you sign a new agreement If you dont want to pay, dont resign and you move. But if you sign you agree. Qualcomm stood but thwir agree to provide product and it expects to be paid. What Qualcomm should do now is simple. All these OEMs not paying, do ship them a frikkin thing. You ship what they did pay for and then nothing more. If someone is charging to much, dont buy it. Just like I've said about $1000 for a phone. I paid $570 for the Note foe the wife, and with the BOGO deal, we got a 2nd. The way to stop high prices is to it pay it. Don't pay it, it goes down. But you dont agree to pay and then dont. Qualcomm has a right to charge whatevwr they want, like any landlord can for his rent. When you go to someone foe something they offer, you are at the mercy of how much is to.muxh for you to pay. Don't complain about laying after you signed.

40. tedkord

Posts: 17357; Member since: Jun 17, 2009

No, it's not, because QC didn't bump Apple's price into the contract, they charged Apple exactly what Apple agreed to in the beginning.

18. audibot

Posts: 634; Member since: Jan 26, 2017

its nothing like that, we all know smartphones are way out of control with pricing and without Qualcomm's patents, they would not work so sorry for you make your own tech or pay the piper, $10 from 250 is nothing why does apple sell its phones at different prices around the world its to make money just like qc this could harm all tech if these judges dont get there asses out of their heads and stop being biased because they use iphone and think apple will raise the price of the phone to cover costs as they do.

3. Lumberjack

Posts: 306; Member since: May 04, 2017

Qualcomm has patents. It is their right to charge as much as wanted.

5. jellmoo

Posts: 2588; Member since: Oct 31, 2011

Not if it's a FRAND patent.

11. trojan_horse

Posts: 5868; Member since: May 06, 2016

It's still Qualcomm's patent, regardless. It's simple economics; you put a price tag which can generate maximum income.

Latest Stories

This copy is for your personal, non-commercial use only. You can order presentation-ready copies for distribution to your colleagues, clients or customers at https://www.parsintl.com/phonearena or use the Reprints & Permissions tool that appears at the bottom of each web page. Visit https://www.parsintl.com/ for samples and additional information.