Skip to main content

Qualcomm takes iPhone maker Foxconn to court over royalties dispute

Qualcomm’s legal kerfuffle with Apple just escalated. The Sand Diego, California-based chip supplier filed a breach of contract suit late Tuesday against Foxconn, Pegatron, and two other manufacturers that Apple contracts to build the iPhone and iPad.

In documents submitted to San Diego Federal Court, Qualcomm alleges that Foxconn (also known as Hon Hai Precision Industry Co.), Pegatron Corp., Winstron Corp., and Compal Electronics refused to pay licensing fees on the company’s intellectual property.

Recommended Videos

All of Apple’s contract manufacturers, which are based in Taiwan but have manufacturing operations in China and elsewhere, have have patent license agreements with Qualcomm. Normally, Apple reimburses any royalties owed on patented technologies in the iPhone and iPad, but the company blocked Foxconn and others from paying last month.

Qualcomm, which is seeking $1 billion in damages, said its court action was in direct response to Apple’s decision.

“Apple is definitely behind this, and certainly what the contract manufacturers would say is the reason they are not paying,” Don Rosenberg, Qualcomm’s general counsel. told the Associated Press. “Our response to that is you are big, sophisticated companies. You have contractual obligations. You have license agreements with us that don’t involve Apple. You are responsible for paying that.”

Qualcomm’s legal action falls short of what some analysts expected. Last week, Bloomberg reported that Qualcomm would ask the United States International Trade Commission to issue an injunction prohibiting iPhone imports.

“While not disputing their contractual obligations to pay for the use of Qualcomm’s inventions, the manufacturers say they must follow Apple’s instructions not to pay,” Qualcomm said in a statement.

Over the better part of the year, Qualcomm and Apple have traded blows over what the chipmaker characterized as a “global attack.”

Qualcomm has been accused of government regulators that its patent licensing scheme, which ensnared electronic giants like Samsung and Intel, is “monopolistic.” The company owns cellular patents that it’s agreed to lease under “fair, reasonable, and nondiscriminatory” terms because they’re an essential part of the technology inside most smartphones. But Apple and licensees say that Qualcomm abused its market dominance to overcharge for patents and block competition.

The Korea Federal Trade Commission fined Qualcomm more than $850 million, and has sought to dismantle the company’s patent licensing. The U.S. Federal Trade Commission (FTC) filed suit shortly after, and Samsung and Intel have filed briefs in support the FTC’s case.

Apple has pushed back more aggressively. Earlier this year, it withheld $1 billion in reimbursements on grounds that Qualcomm had violated a closed-doors agreement between the two companies in retaliation for Apple’s cooperation with regulators.

In response, Qualcomm’s counter-sued, appealing the Korea Fair Trade Commission decision and asking a Northern California federal judge to dismiss the FTC case.

Kyle Wiggers
Former Digital Trends Contributor
Kyle Wiggers is a writer, Web designer, and podcaster with an acute interest in all things tech. When not reviewing gadgets…
A new kind of folding phone may take on the iPhone 16 this year
The Huawei Mate Xs being unfolded.

TCL's concept trifold smartphone Corey Gaskin / Digital Trends

Huawei is reportedly preparing to show off a new foldable smartphone that will put the Samsung Galaxy Z Fold 6 and the Google Pixel Fold to shame. How so? Because it has two hinges and perhaps even three screens. It’s being referred to as a trifold device and will apparently fold and unfold in a Z or N shape, making at least three screen orientations possible in a single device.

Read more
Apple is working on a futuristic iPhone feature that sounds too good to be true
A person holding the Apple iPhone 15 Plus.

Apple’s numerous teams are constantly working on innovative projects and regularly file new patents for them. One of the company’s recent patents pertains to a new feature for the iPhone that, if brought to fruition, could significantly transform how we use our mobile devices.

Patently Apple recently discovered a new patent that covers a concept for a new iPhone that would allow you to replace the standard back panel with something else. In other words, it would add modularization to the iPhone.

Read more
I can’t wait to make my iPhone look like Android with iOS 18
An iPhone home screen with iOS 18.

Apple’s WWDC 2024 keynote was quite a spectacle. It showed off a ton of new features coming to iOS 18, iPadOS 18, and macOS Sequoia, with most of it being powered with Apple Intelligence -- Apple’s own brand of AI.

But there were some other non-AI features, too, including some much-needed changes to the iPhone's home screen. It’s been a while since Apple really overhauled the home screen, the last time being iOS 14 and the ability to add widgets and create custom app icons through Shortcuts. With iOS 18, users can further customize their home screen with new ways to rearrange apps and widgets, plus the ability to theme app icons like never before.

Read more