Qualcomm countersues Apple, claims credit for success of iPhone

11 Apr 20177 Shares

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iPhone 7 smartphone. Image: Simon Greig/Shutterstock

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The iPhone would not have been a success without Qualcomm, the chipmaker tells Apple in a fiery legal retort.

Qualcomm has countersued Apple, striking out at what it says are Apple’s alleged efforts to undermine and devalue its contribution to the technologies that power the iPhone.

The core of the issue concerning Apple and Qualcomm is royalties, and it all goes back to a deal struck around the provision of chips between 2011 and 2016.

‘Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90pc of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies’
– DON ROSENBERG

Qualcomm is claiming that the iPhone would not be possible without the use of its technology.

Apple is claiming that Qualcomm is charging exorbitant royalties for unique Apple innovations.

Qualcomm rocks the iPhone Apple cart

Last January, the Federal Trade Commission filed charges against Qualcomm, alleging the use of anticompetitive tactics that prevent rivals from supplying handset makers. It claimed that Qualcomm goes into deals with low licensing fees, harming rivals and then extracting high royalties for patented technologies.

Apple responded with a $1bn lawsuit, alleging that Qualcomm collects onerous royalties for unrelated technologies. It cited the example of its Touch ID function, which enables the use of Apple Pay, for which Qualcomm insists on charging royalties.

“The more Apple innovates with unique features such as Touch ID, advanced displays and cameras, to name just a few, the more money Qualcomm collects for no reason, and the more expensive it becomes for Apple to fund these innovations,” Apple said at the time.

Qualcomm has responded with counterclaims in a 134-page filing, seeking unspecified damages.

“Over the last 10 years, Apple has played a significant role in bringing the benefits of mobile technology to consumers with its popular products and services,” said Don Rosenberg, executive vice-president and general counsel of Qualcomm.

“But Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90pc of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies.”

Qualcomm denied each and every allegation that Apple made in its January lawsuit, and said that the iPhone maker withheld monies owed to the company.

Qualcomm claimed that Apple breached contracts, interfered with agreements with contract manufacturers of iPads and iPhones, and encouraged various government regulatory agencies to launch inquiries into Qualcomm “by misrepresenting facts and making false statements”.

It also said that Apple chose not to utilise the full capability of Qualcomm’s modem chip in the iPhone 7, misleading people on the performance difference between its modem and one made by rival Intel.

“Apple’s goal is clear – to leverage its immense power to force Qualcomm into accepting less than fair value for the patented technologies that have led innovation in cellular technology and helped Apple generate more than $760bn in iPhone sales,” Qualcomm said in its filing.

Qualcomm has reportedly invested more than $40bn in R&D, has a patent portfolio of 130,000 issued patents and employs 20,000 engineers.

The case, which has the potential to eclipse the epic IP battles between Apple and Samsung several years ago, continues.

iPhone 7 smartphone. Image: Simon Greig/Shutterstock

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com