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

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34 Comments

31. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Apple basically dowsnt want to lay what othwr pay foe top tech. Apple thinhs it should pay 3 dollars each and not 5, because it increases profits. Just because Apple needs 100M, doesn't mean I have to offer it at the same price I did someome else. If I charge HTC 5.00.each, I can charge Apple 7.00 if i want too. If they don't wanna pay, just say no. I can choose to.drop the price or not. All these OEMs need to stop being nice to Applw. All the Android owns could kill Apple.is they want too. Just sell a premium Android at manufacturing cost. Sell the Note 8 for $350 and make enough of them. That's how you kill Apple. Oh and I dont have to sell Apple anything. They got money, make your own crap.

35. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

That is exactly what FRAND prevent.

41. tedkord

Posts: 17519; Member since: Jun 17, 2009

FRAND does not require that all parties pay the same, it simply requires Fair and Reasonable. If QC charges others a percentage of the value of the final device, then it's fair to charge Apple the same.

45. sissy246

Posts: 7129; Member since: Mar 04, 2015

May has well give up, In their eyes apple does no wrong.

28. L0n3n1nja

Posts: 1613; Member since: Jul 12, 2016

Seems Apple is mad because they sell expensive phones and there for need to pay more. However if it was made a flat rate, Apple would save money but to maintain profits Qualcomm would be charging more to budget device makers. So Apple would win, anyone making an entry level phone would get less profit, if Qualcomm had maintained the same level of overall profit. If Qualcomm's profits go down, Apple still wins, but Qualcomm loses. If a company can't protect its patents then there is no incentive to invest in R&D and EVERYONE loses.

24. Cole-Cawtuh

Posts: 6; Member since: Sep 07, 2017

Qualcomm should be paid. What is the judge is in their pocket or something? There must be more to this story than being reported. It seems like an open and shut case from the way it is reported in this "article."

15. jove39

Posts: 2152; Member since: Oct 18, 2011

Judge is also member of Apple Cult...ruling is expected.

10. higeyuki

Posts: 24; Member since: Aug 06, 2012

Screw Qualcomm, they are the reason Samsung cannot sell their Exynos processors without paying a license fee to Qualcomm and that dates back to 1993. Qualcomm holds a monopoly on CDMA modem patents. The only reason the Note 5 and S6 were Exynos was that Samsung had no choice when developing the phones when the SD810 was having overheating problems before Qualcomm addressed the issue. When you design a product you have to be sure all the components are going to be ready and Qualcomm could not guarantee that so Samsung bit the bullet and used them anyway. Not to mention Samsung, Intel, Google, Amazon and other companies are backing Apple on this. Don't throw this on Apple, this has everything to do with Qualcomm holding back competition in the mobile space. Also, the reason Apple is just designing their own hardware components. zdnet.com/article/qualcomm-blocked-samsung-from-se​lling-exynos-chips-kftc/

21. audibot

Posts: 689; Member since: Jan 26, 2017

yes all big tech selling people will back apple because they dont like to pay fees to other companies thinking that this will help them cut costs and more profits dur

8. blkkobra

Posts: 45; Member since: Jan 22, 2014

Seeing as these companies have binding contracts with Qualcomm to use their components, I doubt the contracts in question wouldn't specify how much they would have to pay for the licensing. Seems like the judge in this case needs a refresher in law and enforcement of legally binding agreements. But, US courts have been known to be biased against anyone that Apple is fighting with, so this doesn't surprise me.

4. Mr.Pussy

Posts: 348; Member since: Feb 16, 2017

Awww! Lol

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: 2687; 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.

19. audibot

Posts: 689; Member since: Jan 26, 2017

frand patents need to stop its hurting everything and apple uses that every time like the last time with the 3g modem they didnt want to pay

34. roscuthiii

Posts: 2383; Member since: Jul 18, 2010

Just so you're aware... the "F" and "R" stand for fair and reasonable. It could be considered fair if Qualcomm is charging the same percentage to all parties. Reasonable doesn't have to mean cheap and it doesn't mean the manufacturers have to like it. Just up the courts to decide now.

1. Zylam

Posts: 1825; Member since: Oct 20, 2010

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

2. zunaidahmed

Posts: 1186; 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: 1186; 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: 17519; 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.

12. yann

Posts: 616; 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: 1518; 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: 689; 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: 616; 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.

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: 67; 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: 17519; 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.

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