Trial that could force Qualcomm to change everything begins next week

Trial that could force Qualcomm to change everything begins next week
As noted by Bloomberg, a week from tomorrow, January 4th, the U.S. Federal Trade Commission (FTC) squares off against chip maker Qualcomm in a non-jury trial. Expected to run for 10 days, the stakes are huge for Qualcomm because at issue is the company's business model. Qualcomm gets a percentage of the total sales price of each phone sold using its technology. Tech companies like Apple, Samsung and Intel argue that a phone is made up of other technology, and Qualcomm's take should be based on the price of the specific component that uses Qualcomm's intellectual property.

Qualcomm allows competitors like Intel, Samsung and MediaTek to use its patents without a license since the handset manufacturers pay Qualcomm based on sales. The FTC says that this is part of Qualcomm's plans to operate as a monopoly. The FTC also accuses Qualcomm of charging Apple lower licensing fees so that the latter would exclusively use Qualcomm modem chips on iPhone models from 2011-2016. Judge Lucy Koh has already ruled that Qualcomm can't use Apple's current use of Intel modem chips to defend itself of that charge. The judge, who sat on the bench during the first Apple v. Samsung trial, also ruled that Qualcomm's patents are standard essential patents and must be licensed under Fair, Reasonable and Non-Discriminatory (FRAND) terms. Standard essential patents are those required by a manufacturer to meet certain technical standards.

The FTC filed the suit in January 2017 with Apple following with its own lawsuit. In October this year, Qualcomm said that Apple owed it $7 billion in licensing fees. The disputes between the pair forced Apple to drop Qualcomm, which had split vendor duties with Intel in supplying modem chips to Apple in 2017. The 2018 iPhone models are the first by Apple to rely solely on Intel's chips.

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12 Comments

11. shm224

Posts: 319; Member since: Mar 19, 2015

There is no doubt that some aspects of Qualcomm's licensing, (eg, no licensing to OEM makers) is clearly illegal. I'm not however convinced of the legality of Apple's "rebate" for exclusivity. Based on my reading of Qualcomm's counter-suit, it's clear that it was Apple who proposed the exclusivity and Qualcomm merely acquiesced to Apple's demand. While Apple is certainly a big customer, no other customers were "forced" into this arrangement -- this is not Qualcomm's usual licensing practice. Apple is the only one benefitting from this and crying afoul. I'm willing to wager that Apple had set this up to get Qualcomm in trouble with regulators. If this is indeed illegal, both Qualcomm AND APPLE should be punished for colluding, not just Qualcomm.

13. ZerosAndOnes

Posts: 84; Member since: Oct 12, 2018

Literally from Phone Arena to every USA official are sucking apple's juice. Good luck ever getting justice in USA when it comes to Apple. Funny how in Germany Apple was found guilty but never in USA. Apple was also found guilty in Italy. In EU. Several Asian countries. Several Middle east countries. But magically never ever in USA.

16. Fibergk

Posts: 10; Member since: Dec 30, 2018

Oem makers are licensed. LGE Samsung etc. So what is illegal. Apple wanted license to contract manufacturers. So that is what they got

6. Peaceboy

Posts: 640; Member since: Oct 11, 2018

Burn this company! Asking more royalties to apple than any other garbage android phones is stupid.

15. Fibergk

Posts: 10; Member since: Dec 30, 2018

You are wrong. License fees are set at $400 even. Typed on Android phone.

3. strategic_developer

Posts: 1627; Member since: Jul 17, 2018

"FTC also accuses Qualcomm of charging Apple lower licensing fees so that the latter would exclusively use Qualcomm modem chips on iPhone models from 2011-2016." Well duh. The more years tou sign a deal for parts, the cheaper they get over tiome. How is that a monopoly. The FTC is full of BS. If a company asks me to run a a product, if they do only one year, then its expensive. A 2 year run means a lease cost because increased production drops cost over tike. For each year added you get more discount for the volume. That's not locking anyone in. Its offering you a deal to use them longer. When Apple asks a company to make parts, they will only work in an iPhone in many cases. Qualcomm offering a better deal to stay, isn't a monopolistic practice. The problem is the US Court system is Apples guard dog and now Apple likely went complaining like a little whiney coward. If QC loses, then every OEM should just not allow Apple to buy anything. Or when they ask say no. After all, no court can force you to do business with anyone. If Apple doesn't wanna pay, use someone else.

4. monkeyb

Posts: 417; Member since: Jan 17, 2018

“US court system is like Apple guard dog” : your hatred is disgusting. Apple has lost many cases in the US. So stop throwing random things Just’s because you badly want QC to win this case.

7. ph00ny

Posts: 2083; Member since: May 26, 2011

and then there is the famous one where obama veto'd iphone ban ordered by ITC

10. shm224

Posts: 319; Member since: Mar 19, 2015

Why? Don't you remember when Obama reversed Samsung's ITC win and refused to ban the iPhone "import ban"? This time around the USITC, despite having found Apple infringement and perhaps afraid of Apple's political clout, refused to issue an "import ban" again on "public interest" ground. Although the case has been appealed and ITC is reconsidering the punishment, do you not see the problem here?

2. monkeyb

Posts: 417; Member since: Jan 17, 2018

I recently heard from friends using older iPhones ( Qualcomm and Intel) that the latest software update created issues for the wifi/lte. My point is haters complaining about Intel chips are most of the time baseless. These are folks who show benchmarks like LTE/Wifi speed when it matters to them. A lot of my friends are using the XS and are super happy with it. So I request all the blind haters to stop supporting QC just because YOU think Apple is always wrong. The courts are the ones that will decide if Apple is wrong or not.

9. shm224

Posts: 319; Member since: Mar 19, 2015

Apple's hometown judge Lucy Koh already decided that Qualcomm is in the wrong. If you remember the last Samsung lawsuit, it was the same judge who refused most of evidence and witnesses on procedural ground crippling's Samsung's defense. We see the same in this case, already refusing to accept Apple's use on procedural ground.

1. mariosraptor

Posts: 195; Member since: Mar 15, 2012

And Intel chips are awful. You get what you pay Apple. Probably my last iPhone the XS Max. Unless something radical happens. To have this price tag, you’ve got have the equivalent hardware.

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