Published: Thu, May 18, 2017
Sci-tech | By Javier West

Qualcomm: Apple is pressuring contractors in patent dispute

Qualcomm: Apple is pressuring contractors in patent dispute

Qualcomm filed a breach of contract complaint against Apple's manufacturers on Wednesday, almost one month after the iPhone maker stopped paying for the chip company's patent royalties.

Qualcomm said in its complaint that Apple had advised the contract manufacturers to withhold royalty payments and agreed to indemnify them against any damages resulting from the breach of their agreements with Qualcomm.

Forbes reports that Qualcomm is suing these four manufacturers for not paying royalities to Qualcomm for the patents on its smartphone tech, including IP on cellular modems - you know, 3G/4G are a big thing.

Don Rosenberg, executive vice president and general counsel of Qualcomm, said in a statement: "We can not allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed". Our license agreements with Apple's manufacturers remain valid and enforceable.

Ltd., known as Foxconn: Pegatron Corp.; Wistron Corp.; and Compal Electronics - all based in Taiwan but with manufacturing operations in China and elsewhere.

For its part Apple claimed Qualcomm is trying to charge it for patents it never used - it wants a $1bn rebate for alleged overpayments.

The FTC brought the lawsuit against Qualcomm for anticompetitive patent-licensing practices in January in the U.S. District Court for the Northern District of California. Apple reimburses Foxconn and the other contract manufacturers for patent royalties owed to Qualcomm.

Last week, Bloomberg reported Qualcomm would ask the U.S. International Trade Commission to issue an injunction prohibiting iPhone imports, citing sources familiar with the company's plans.

Now, Qualcomm is insisting that Apple was in no position to influence the manufacturers, as the license agreements were entered into before Apple sold the first iPhone. Apple and other companies claim Qualcomm is charging unfairly high rates in violation of pledges to license inventions that are essential to comply with industry standards. Those contract manufacturers in turn had stopped paying Qualcomm by the same amount.

In addition to being one of the world's largest maker of chips for mobile devices, Qualcomm owns thousands of patents on fundamental technology that ensures all phones work. The FTC and Apple accused it of abusing its power in the chip business.

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