Instead of a chip license, Qualcomm offered Samsung an agreement to be sued last

Instead of a chip license, Qualcomm offered Samsung an agreement to be sued last
Qualcomm, the company that designs those wonderful chipsets that power the majority of handsets around the world, the company whose Snapdragon X50 modem chip will soon bring the joy of 5G data speeds to many, is rapidly turning into a villain. Imagine a Snidely Whiplash-like character with the top hat and long handlebar mustache; that's Qualcomm, tying smartphone manufacturers to the train tracks with their "no license, no chips" demand.

Another interesting story that is bound to make Qualcomm look even more evil was reported today by Foss Patents. On day three of the 10-day real-life courtroom drama known as FTC v. Qualcomm (also billed as the trial that could change everything), Samsung's Andrew Hong testified that Qualcomm refused to give patent licenses to his company. Part of the reason was due to a joint venture that Samsung had with other companies, including NTT DoCoMo, which already had licenses for Qualcomm patents. The joint venture assumed that it could get access to Qualcomm's chipset related standard essential patents (these are patents that manufacturers need to obtain to make sure their products meet technical standards) through NTT DoCoMo, but Qualcomm refused to allow this. The chip designer said it was concerned that giving the joint venture a patent would allow Samsung to become a competitor in the modem chip market inside of a year.

While Qualcomm refused to grant the license to Samsung, it did offer to give the company a "covenant to sue last." This information came from an email sent by an ex-Qualcomm president and was part of the FTC's pre-trial brief. To make this clearer, instead of giving Samsung the patent license it requested, all Qualcomm would offer was an agreement not to sue them for patent infringement until all of the other alleged infringers were dealt with first. The email from the former Qualcomm executive also mentioned other companies that received this deal including Intel, Texas Instruments and MediaTek.

Other internal Qualcomm documents revealed the company's fear that granting an IP license to a chip competitor (like Intel, TI, Samsung and MediaTek) would hamper its ability to get OEMs to pay high royalty prices for its patents. Or, as the internal-document says, "we absolutely cannot give a chip supplier a full license to our IP with pass through rights to his customers as that would have the potential of severely impacting our subscriber licensing program."

Hear that whistle? It's the 10:20 coming around the bend. But don't worry, Judge Lucy Koh could soon come to the rescue of phone manufacturers and consumers around the world.



1. lyndon420

Posts: 6915; Member since: Jul 11, 2012

K...that is down right dirty.

2. Back_from_beyond

Posts: 1485; Member since: Sep 04, 2015

Definitely starting to sound like an abuse of power from Qualcomm. Refusing access to SEP licenses to maintain their high royalty income, they've managed to royally screw themselves in the process. Sure Qualcomm has a right to defend its business and income, but this is some seriously shady activity.

6. toukale

Posts: 672; Member since: Jun 10, 2015

Like I have been saying for months. Like them or hate them I was in Apple's corner on this one because Qualcomm was abusing their position. Only a big company like Apple could stand against them and forced the change. Some on here never bother to learned about the case because of their Apple bias. Qualcomm may win a battle here or there against Apple, but they are going to lose the war at the end of the day. Both Qualcomm and Facebook hired the firm "Definers" to spread and paid writers as well as publishers to spread a ton of fake news about Apple last year as a way to put pressure on Apple. So glad Apple can stand the heat.

8. monkeyb

Posts: 414; Member since: Jan 17, 2018

“Only a big company like Apple could stand against them and forced the change.” The most sensible statement I have heard in relation with QC posts. You are absolutely correct.

3. monkeyb

Posts: 414; Member since: Jan 17, 2018

I hope all the haters would open their eyes. Stop making this about Apple. What QC is doing is wrong.

7. toukale

Posts: 672; Member since: Jun 10, 2015

This case have never been about Apple. Only the fanatics and paid "Definers" sheep kept trying to make it about Apple. Sure, Apple is the one who started the it, with a complaint to the ftc, but it will be good for the whole industry if this case goes in the ftc/apple's way.

32. shm224

Posts: 317; Member since: Mar 19, 2015

? This case has all to do with Apple. The lawsuit was filed at the 11th hour of the Obama's administration as a gift from Apple's buddies in the DC. The case is further being heard in Apple's hometown backyard with their hometown judge known for biased and lopsided views.

37. shm224

Posts: 317; Member since: Mar 19, 2015

Actually, this is all about Apple and the Obama administration's last minute gift to Apple. It's been the wireless industry's practice to collect royalties from last manufacturer in the manufacturing chain, or end-user handset maker for the past two decades. I could see how that practice could pose a problem for companies that manufacture both component and end-user products, but with respect to Apple, it's all about saving their bottom line and nothing else. I guess one way Qualcomm can avoid all these nuance is to go from a percentage of a end-user device to a fixed-cost per unit as Ericsson has recently announce with their 5G licensing.

4. apple-rulz

Posts: 2198; Member since: Dec 27, 2016

Qualcomm plays dirty against Apple-“Those greedy Apple bastards deserve to lose and should just pay what they owe and stop stealing!” Qualcomm plays dirty against Samsung-“Qualcomm is a bad man and should stop abusing Samsung with these frivolous non-enforceable patents”.

20. Back_from_beyond

Posts: 1485; Member since: Sep 04, 2015

Maybe that's because we're talking about two completely different cases here. In the Apple v. Qualcomm case, it's simply a matter of Apple wanting out of a contract that costs them a lot of money. Sure, parts of that case touch on subjects in this case but they're still separate issues.

31. DolmioMan

Posts: 348; Member since: Jan 08, 2018

It’s exactly the same. Qualcomm isn’t playing fair with license fees and everyone wants out, including Samsung. The only reason you may think the cases are different is because everyone on this site back up anyone vs Apple.

33. shm224

Posts: 317; Member since: Mar 19, 2015

Samsung already settled their differences with Qualcomm last year and renegotiated a new licensing deal greatly in their favor. Apple came to the wireless game about a decade too late and they are now refusing to accept widely upheld industry licensing practices in quest for profit.

5. cmdacos

Posts: 4386; Member since: Nov 01, 2016

All signed agreements should be honored.

12. domfonusr

Posts: 1101; Member since: Jan 17, 2014

Qualcomm has definitely been up to shady stuff... no doubt about it; but that doesn't mean that Apple is the good-guy in all of this, either. Qualcomm and Apple are both very big bullies, and it will be interesting to see who ends up being favored in this dispute, in the end. Either way, we end up with one of the bullies beat up, knocked down, and humbled, while the other will be suddenly rather unchecked, thumping their chest and calling for bragging rights. Either way, this is going to end badly for everybody except the victor. And with how fast everything that goes unchecked becomes corrupt, I would say that it won't be all that good for the victor for too long, either. When people or businesses sign agreements, they need to be content to stay in those agreements until they expire, or else ask for help in meeting or canceling their commitments by declaring bankruptcy, or whatever, in the event that they are truly unable to complete the requirements on their own. There are better ways to deal with this kind of thing without having to pay billions to corrupt lawyers in order to exercise unfettered power. One thing is for sure... Apple can afford to pay Qualcomm, and Qualcomm can afford to license its patents at fair and reasonable rates!

13. toukale

Posts: 672; Member since: Jun 10, 2015

Your arguments are not wrong and that is the way it should work. But Qualcomm can't do that kind of thing with FRAND patents which is what everyone keep forgetting. You are free to do/charge whatever you want with your regular patents, but not so with FRAND, with FRAND patents others can challenge and take you to court if you are abusing it. That is what Apple has done here. Apple is getting trashed for following and using the legal avenue that is available to them, that is the crazy thing in this whole thing. Qualcomm's money is seating in an escrow account (as set by the judge) until this case is decided. Qualcomm is just throwing stuff all over the place hoping to pressure Apple into a settlement. Apple, to their credit in this case said "no", they will let the court decides. Meanwhile, Qualcomm's money is in escrow.

15. domfonusr

Posts: 1101; Member since: Jan 17, 2014

Yes, FRAND patents are legally required to be licensed at fair and reasonable, non-discriminatory rates. This argument is over Qualcomm's FRAND patents, and so, yes, Apple should have the ability to license these patents from Qualcomm at fair and reasonable rates; however, that is not the agreement that Apple decided to sign. Apple and Qualcomm came to an "agreement" over the rates that were to be paid... and Apple ought to stand by its agreements when it signs them. Yes, Qualcomm was not licensing at FRAND rates, but both Apple and Qualcomm were aware of the negotiated agreement terms, and both agreed to the terms as stated. Qualcomm is definitely a bad monkey for being discriminatory and unfair when they licensed FRAND patents to Apple for exorbitant rates, but Apple, even though they saw the abuse, agreed to the rates and started paying Qualcomm for their modems, among other things, because they saw it as their best option on CDMA iPhones. And truly, the Intel modems on GSM-based iPhones have had some bad reviews when compared to the Qualcomm modems in the CDMA-based iPhones (though I would not argue, as others have, that these Intel modems are either crippled or entirely substandard). Yes, the Qualcomm modems are better than the Intel ones, and Apple knew that going into this. They signed the agreement, knowing what they had gotten themselves into... and then later welched out of honoring their agreement because "Qualcomm isn't being fair with us or anybody else!" I'm sorry, but where I come from, that is definitely whining. Both Apple and Qualcomm are swimming in money... let Apple honor their commitments, and pay Qualcomm for the modems that they licensed from them, and now that we have seen Qualcomm's bad behavior for what it is, let's make sure Qualcomm doesn't license FRAND patents at non-FRAND rates anymore. Both sides need to own up to their past, and not welch out of anything else!

19. monkeyb

Posts: 414; Member since: Jan 17, 2018

"however, that is not the agreement that Apple decided to sign." Have you even bothered to read articles that QC was bullying everyone into signing their agreements because they had no competition??? And yes even a company like Apple can be bullied! They got Bullied!! Now they are fighting back as they don't need to rely on a bully!!!

21. domfonusr

Posts: 1101; Member since: Jan 17, 2014

Apple is just as much a bully as Qualcomm, I don't care what anybody else says or thinks. I have read plenty of articles about Qualcomm bullying everyone and their mother, but you seem to forget that companies can refuse to do business with each other, rather than willingly signing "agreements" in order to get something from the other. Apple never needed to do business with Qualcomm... they did business with Qualcomm because, even with the unfair and discriminatory licensing rates mandated by Qualcomm, Apple still got way ahead of where they were before doing business with Qualcomm. What Qualcomm did isn't right, and I'm not going to pretend that it is right, but what Apple did with their "agreement" with Qualcomm wasn't right, either. Apple has been helped much more than they were harmed in this case, and simply claims so much overwhelming harm because the truth is that they have a hard time sharing ANY of their profits with any other company, even when they owe a portion of them based on a prior "agreement". Yes, Qualcomm bullied Apple... but they bullied everybody else, too. Apple is whining about being bullied, when they have done plenty of their own bullying against a host of other companies over the years... and it just so happens that, right now, the two biggest bullies on the block, Qualcomm and Apple, are locked in a stupid fight over whether the government will allow one of them to keep being a bully forever. The winner will be asking for the kingly crown... Apple should not be welching out of something that they agreed to pay for, and benefited from (yes, Qualcomm had a monopoly on CDMA-based modems, and Apple knew that, but Apple STILL chose to do business with them, willingly, when they could have simply refused to do so, and not made non-GSM-based iPhones), and most certainly should not have stolen technology from Qualcomm to pass on to Intel just so that they could get around Qualcomm, even if the fact of Qualcomm's modem monopoly was unfair. Once again, the fact that stealing is against the law does not seem to be important to Apple in the face of the "unfair treatment" that everybody was under. Two wrongs do not make a right, and never will.

23. toukale

Posts: 672; Member since: Jun 10, 2015

@domfonusr - You can't have it both ways with your argument. You keep saying Qualcomm is abusing and wrong but says Apple is wrong for challenging and trying to do something about it. What other legal avenue do others have besides what Apple has done? According to you Apple should shut up and pay those crazy fees even when everyone is aware that Qualcomm is wrong. According to you no one should do anything about it, and no one should challenge Qualcomm even when they are legally require to do so. Have you actually read back your own argument? It makes no sense. You bias towards a certain company is blinding you from seeing the whole thing properly. I am sure Apple pushed their weight around, but they are not breaking a law/rule they sign when the commission accepted their contributions as part of the standard. That is the problem here. It's like blaming a rape victim of a rape instead of dealing with the person who commits the crime (rape).

39. domfonusr

Posts: 1101; Member since: Jan 17, 2014

You can't have it both ways, either! Are you now going to say that it was right for Apple to take privileged information and technology from Qualcomm, and silently transfer it to Intel (Apple stealing on behalf of Intel... which is illegal, by the way) so that they could get away from Qualcomm and welch out of their agreement? Are you just so blindly loyal to Apple that you will equate me with someone who accuses a rape victim over the rapist just to score quick points with your fan-base and try to make me look like a heartless fool? Well, either way, you are making it hard for me to even type here anymore. I am sick of this contention over something that is clearly a two-way street situation, and all anyone seems to be able to see is just the one side of it that is being broadcast the loudest.

24. monkeyb

Posts: 414; Member since: Jan 17, 2018

"Apple never needed to do business with Qualcomm" OF COURSE APPLE NEEDED to do business with QC till 2018. I think it is useless to discuss what FRAND means to blind Apple haters.

40. domfonusr

Posts: 1101; Member since: Jan 17, 2014

If they wanted to make iPhones for Verizon, Sprint, and US Cellular, then yes, they needed to do a deal with Qualcomm, since Qualcomm essentially owns an unholy monopoly in the CDMA-based world... but Apple could have just kept being GSM-only, and they still would have made plenty of money... but no, Apple was not satisfied with that, and was willing to do a deal, however fair or unfair by anyone's standards, with the "devil." People and businesses ought to keep their commitments as a matter of honor, if nothing else. Contrary to what you claim, I am not a "blind Apple hater." I advised my father to buy Apple stock when the stock split last time, and he did so, and is still holding all of his stock even through the tough couple of months they've had. I personally own an iPod, and while it has seen some difficulty in the last month with some changes to iTunes that appear to have crippled my iPod's abilities, I am still trying to keep it together and look for solutions in my spare time. I have generally had positive experiences with Apple. However, my complaint is with this situation as a whole, and not with just Qualcomm or just Apple. This situation threatens to take two of the biggest bullies in the industry, and, regardless of which side others have chosen, or which side I might take depending on what particular detail we are talking about, make one of them into the ultimate super-bully at the expense of the other. I find that, alone, to be the most threatening aspect of this entire thing... the quest by the lawyers of both sides to impart immunity and power to their respective side, and I fear that, unless things go in a very careful and particular way, one side will get what they seek over the other.

28. mootu

Posts: 1541; Member since: Mar 16, 2017

"And yes even a company like Apple can be bullied! They got Bullied!! Now they are fighting back as they don't need to rely on a bully!!!" No Apple did not get bullied! Apple received it's QC modems on a rebate deal for 6 years, they paid LESS than everyone else. The EU put a stop to this in 2016 and made it illegal for QC to give Apple the rebate, this meant Apple had to pay the same as everyone else. This is when apple decided to throw a fit and started to use Intel modems as well as QC for it's 2017 phones. They were never bullied, they were the ones getting the cream.

29. monkeyb

Posts: 414; Member since: Jan 17, 2018

"Apple received it's QC modems on a rebate deal for 6 years" See this is your issue. It's all about Apple for you. QC was doing a mistake from the start. No company was supposed to be paying ridiculous high amounts to QC for FRAND patents. First of all you haters keep coming up with all sorts of statements that suit your need: - Apple got a deal from QC and were supposed to pay less is what you say. - Apple signed a contract to pay QC more is what the other haters keep yapping. Look at how sad it looks when you change statements. I will still keep true to what I say, No company had to pay what QC made them pay or wants them to pay for these FRAND patents.

30. monkeyb

Posts: 414; Member since: Jan 17, 2018

You say Apple was getting the cream. I say QC was not meant to even "offer" the cream in the first place. The cream was supposed to be placed on the table for everyone to taste by law. Which is why the law is deciding who is correct here.

35. shm224

Posts: 317; Member since: Mar 19, 2015

> QC was doing a mistake from the start. No company was supposed to be paying ridiculous high amounts to QC for FRAND patents. No, you are wrong. Qualcomm's rates and basis are in fully compliance with FRAND. Apple made the same claims against other wireless patents holders in the pats and lost or settled the past 10 years, Now having failed at every attempt at toppling the industry practice, they are now using the gov't regulator FTC to attack the wireless industry. The FTC's accusation evolved around the "elevated" charges around the rebates, bundling, etc.. You need to stop pull fake new out of your as*.

41. domfonusr

Posts: 1101; Member since: Jan 17, 2014

I'm sorry, but I don't think Qualcomm is guiltless in this, either. Practices where a company (in this case, Qualcomm), in exchange for licensing a few chips in the finished product, gets a hefty (though I would not say 'large') percentage of the total profits on the entire unit, for all units sold, is really quite wrong. I do not see how that complies with FRAND in any way. They should charge a set price per chip based on which chips got into the units, not a set percentage of the entire unit. In this element alone, I find Qualcomm's licensing fees to be just a bit ridiculous.

38. shm224

Posts: 317; Member since: Mar 19, 2015

Apple was not bullied; they were the one bullying Qualcomm to offer the rebate in the first place, contrary to Apple's previous claims that Qualcomm "forced" Apple to sign "rebates" for exclusivity deal.

34. shm224

Posts: 317; Member since: Mar 19, 2015

You are mischaracterizing the issue here. Qualcomm isn't violating any FRAND terms here -- which is what Apple is accusing here. The FTC is well aware of that and it isn't saying that Qualcomm's rates or basis is in violation of FRAND -- instead they are obfuscating the issue by using the term "elevated" fees to describe Qualcomm's licensing practice. In another word, what Qualcomm's is accused of here is their licensing practicess, not their FRAND violation.

18. superguy

Posts: 476; Member since: Jul 15, 2011

Judge Lucy Koh? As in the one that sided with Apple against Samsung? Samsung's screwed again.

* Some comments have been hidden, because they don't meet the discussions rules.

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