Qualcomm has long been hailed as the king of the mobile processor industry, but back-to-back-to-back lawsuits may cause it to take a bit of a hit.
Apple and Qualcomm are set to embark on a yearslong and epic battle. Following news that Qualcomm had been charging heightened royalties for use of its tech, as well as reports indicating Qualcomm required Apple to pay a percentage of the iPhone’s revenue in return for the use of Qualcomm patents, Apple has sued the company in not one, but two countries.
In the U.S., Apple is suing Qualcomm for a hefty $1 billion — but it has also filed a lawsuit in China for $145 million.
Here’s everything you need to know about the lawsuit battle so far.
Apple files a third lawsuit against Qualcomm
Apple has filed yet another lawsuit against Qualcomm. The two companies were already at war in both the U.S. and in China,and now they’ll be going head to head in the U.K. According to reports, the U.K. lawsuit was actually filed in January, but it’s only now being noticed after being refiled.
While we don’t yet know specifics about the new lawsuit, it does have something to do with patents and designs, according to a report from Bloomberg. It’s likely that it’s similar to the lawsuits Apple has filed in the U.S. and China.
Qualcomm is ready for a fight
Qualcomm had some fighting words against Apple during a call on its quarterly earnings report. The chipset manufacturer’s CEO, Steve Mollenkopf, said Apple just wants to grab as much money as possible from the lawsuits.
“Apple’s complaint contains a lot of assertions, but in the end, this is a commercial dispute over the price of intellectual property,” Mollenkopf said, according to CNET. “They want to pay less for the fair value that Qualcomm has established in the marketplace for our technology, even though Apple has generated billions in profits from using that technology.”
He said Qualcomm’s patents have “tangibly and meaningfully increased over time,” but the company has never raised its royalty rates. Derek Aberle, president of Qualcomm, chimed in.
“If you peel apart all of the arguments Apple’s making, we believe firmly they’re all without merit,” Aberle said. “At the end of the day, they essentially want to pay less for the technology they’re using. It’s pretty simple.”
But the CEO said Qualcomm will keep supplying chips to the Cupertino company, even while the legal battle rages on.
Apple files patent lawsuit against Qualcomm in China for $145 million
Just a few days after Apple filed a lawsuit against Qualcomm in the U.S. for $1 billion, Apple announces it will also take Qualcomm to court in China — this time for “only” $145 million.
The motive behind the lawsuit is similar to the motive behind the U.S. lawsuit — Apple is basically accusing Qualcomm of not delivering on patent-related promises. Qualcomm isn’t being silent about the suit.
“These filings by Apple’s Chinese subsidiary are just part of Apple’s efforts to find ways to pay less for Qualcomm’s technology,” said Don Rosenberg, Qualcomm general counsel, in an interview with TechCrunch. “Apple was offered terms consistent with terms accepted by more than 100 other Chinese companies, and refused to even consider them. These terms were consistent with our NDRC Rectification plan.”
The U.S. lawsuit
Apple has followed in the Federal Trade Commission’s footsteps by suing Qualcomm for $1 billion for “royalties that they had nothing to do with,” according to a report from CNBC.
The Cupertino, California, company claims in the U.S. suit that Qualcomm demanded onerous terms for the use of its patented technology and even sought to punish Apple for cooperating in a South Korean regulatory probe that dove into Qualcomm’s licensing practices — practices that are now under the microscope once again.
Apple’s documents also mentioned that Qualcomm required Apple pay a percentage of the selling price of the iPhone in return for the use of Qualcomm patents, and demanded that Apple use Qualcomm chips exclusively between 2011 and 2016. While Apple did get so-called “quarterly rebates” under the agreement, Qualcomm began withholding those rebates when Apple agreed to work with the Korean Fair Trade Commission. According to the suit, Qualcomm even told Apple that Apple had forfeited almost $1 billion in rebates by working with regulators.
“We are extremely disappointed in the way Qualcomm is conducting its business with us and, unfortunately, after years of disagreement over what constitutes a fair and reasonable royalty, we have no choice left but to turn to the courts,” Apple said in a statement.
Qualcomm responded to Apple’s lawsuit by calling its claims “baseless.”
“While we are still in the process of reviewing the complaint in detail, it is quite clear that Apple’s claims are baseless,” according to Rosenberg. “Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed. and shared with all mobile device makers through our licensing program.”
Rosenberg said Apple has been “encouraging regulatory attacks” on Qualcomm with meritless claims and by withholding information. The chipset manufacturer is referring to the Korean Fair Trade Commission, which placed a hefty $853 million fine on Qualcomm in December for its alleged anti-competitive practices. As with the FTC lawsuit, Qualcomm said it would fight the fine.
It’s possible this could be a long and brutal legal battle, like the one between Apple and Samsung. We’ll keep this article updated with more information as we find out more.
Article originally published in January. Updated on 03-02-2017 by Christian de Looper: Added news that third lawsuit has been filed, this time in the U.K.