Monday, 29 May 2017

Qualcomm sues iPhone manufacturers for withholding royalties

By Nick Wood, Total Telecom
Wednesday 17 May 17

Mobile chip maker says Apple has ordered Foxconn, Pegatron and Wistron not to pay licensing fees.

Qualcomm on Wednesday sued the four manufacturers of all Apple iPhones and iPads for withholding royalty payments for its patented technology. In its complaint, the mobile chip maker claims that FIH Mobile and Hon Hai Precision Industry – together known as Foxconn – as well as Pegatron, Wistron, and Compal Electronics…

Qualcomm on Wednesday sued the four manufacturers of all Apple iPhones and iPads for withholding royalty payments for its patented technology.

In its complaint, the mobile chip maker claims that FIH Mobile and Hon Hai Precision Industry – together known as Foxconn – as well as Pegatron, Wistron, and Compal Electronics, are holding back payments on the direction of Apple.

"As Apple continues to collect billions of dollars from consumer sales of its Qualcomm-enabled products, it is using its market power as the wealthiest company in the world to try to coerce unfair and unreasonable license terms from Qualcomm in its global attack on the company," said Don Rosenberg, EVP and general counsel of Qualcomm, in a statement.

According to Qualcomm, the defendants continue to pay royalties for Qualcomm tech they are using in non-Apple products, under the same agreements that apply to the Apple products.

"Our license agreements with Apple's manufacturers remain valid and enforceable. The manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference," Rosenberg said.

The complaint has been filed with the U.S. District Court for the Southern District of California. It is the latest twist in a tit-for-tat dispute over the royalties Qualcomm charges for use of its patented technology.

Apple struck first, with a $1 billion lawsuit in January that accused Qualcomm of various anti-competitive practices, including an abusive licensing model aimed at wresting excessive royalties from suppliers and device makers.

Qualcomm hit back with a lawsuit of its own in April, alleging that the iPhone maker made false statements to regulators, breached agreements, and deliberately limited the performance of Qualcomm's modem chips in the iPhone 7.

In May, it emerged that Apple had taken to withholding royalty payments to suppliers that use Qualcomm's tech, which led Qualcomm to lower its fiscal third quarter guidance.

In turn, those suppliers have now ceased payments to Qualcomm, prompting the company to seek an order requiring Foxconn et al to comply with their contractual obligations.

"It is unfortunate that we must take this action against these long-time licensees to enforce our agreements, but we cannot allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed," said Rosenberg.

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