Late on Friday, Apple announced that it would be suing Qualcomm for approximately $1 billion due to a dispute over patent royalties. Qualcomm licenses many wireless patents as well as being a modem supplier for the iPhone. Naturally, Qualcomm is rejecting Apple’s claims of misconduct and will fight the case.
In a statement, it said the claims are baseless and Apple has ‘intentionally mischaracterized our agreements and negotiations’.
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Although full details about what has happened are yet to come to light, Apple is arguing that Qualcomm is charging royalties on technologies they do not have a claim to own, and barred Apple from sourcing certain phone parts from other suppliers. It also alleged that Qualcomm held an almost $1 billion payment as ransom in a legal investigation.
Apple says that the company charges five times more for patent royalties than every other cellular patent license agreement it has, combined. Unable to reach a conclusion about what is a fair and reasonable royalty rate, it is bringing the case to the courts.
Here’s Qualcomm’s full statement in reply, in which it definitively opposes everything Apple says and claims Apple is actively encouraging attacks on its own business as well as misrepresenting facts.
“While we are still in the process of reviewing the complaint in detail, it is quite clear that Apple’s claims are baseless. 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. Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information. We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits,” said Don Rosenberg, executive vice president and general counsel, Qualcomm Incorporated.
Apple used Qualcomm modems in every iPhone exclusively, until the iPhone 7. Apple sources some of its cellular modems for the iPhone 7 and 7 Plus from Intel, perhaps foreshadowing a disagreement between the companies.
The legal process for this case will likely drag on for years, unless Apple and Qualcomm can resolve their differences out of court.