Apple sues Qualcomm, saying chipmaker withheld $1B as “extortion”
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Apple sued Qualcomm in the present day, alleging that the chip firm fees billions in patent royalties “for applied sciences they don’t have anything to do with.”
In its criticism, Apple says that Qualcomm really withheld $1 billion in funds it owes to Apple as a result of Apple cooperated with the Korea Honest Commerce Fee, or KFTC. Apple legal professionals go on to make a unprecedented declare: that Qualcomm “tried to extort Apple into altering its responses and offering false data to the KFTC in alternate for Qualcomm’s launch of these funds to Apple,” however Apple refused.
Apple’s lawsuit seeks unspecified damages whereas stating it has been “overcharged billions” by Qualcomm. The lawsuit notes that regulation enforcement businesses world wide are investigating Qualcomm, which “has been declared a monopolist by three separate governments” up to now two years. Final month, Korean regulators slapped Qualcomm with a $850 million high-quality over its patent-licensing practices. The US Federal Commerce Fee sued Qualcomm earlier this week, once more over patent points.
An Apple spokesperson supplied an e-mailed assertion on the lawsuit, which reads in full:
For a few years Qualcomm has unfairly insisted on charging royalties for applied sciences they don’t have anything to do with. The extra Apple innovates with distinctive options similar to TouchID, superior shows, and cameras, to call just some, the extra money Qualcomm collects for no purpose and the costlier it turns into for Apple to fund these improvements. Qualcomm constructed its enterprise on older, legacy requirements however reinforces its dominance by way of exclusionary ways and extreme royalties. Regardless of being simply certainly one of over a dozen firms who contributed to primary mobile requirements, Qualcomm insists on charging Apple at the very least 5 occasions extra in funds than all the opposite mobile patent licensors we’ve agreements with mixed.
To guard this enterprise scheme Qualcomm has taken more and more radical steps, most not too long ago withholding practically $1B in funds from Apple as retaliation for responding in truth to regulation enforcement businesses investigating them.

Apple believes deeply in innovation and we’ve at all times been keen to pay honest and affordable charges for patents we use. We’re extraordinarily dissatisfied in the way in which Qualcomm is conducting its enterprise with us and sadly after years of disagreement over what constitutes a good and affordable royalty we’ve no alternative left however to show to the courts.

Qualcomm hasn’t instantly responded to Apple’s allegations.
“Monopoly energy”
Qualcomm has advised ETSI, a standard-setting group for telecommunications, that it has greater than 30,000 international patents which can be “important” to fashionable cell telephones. Submitting these patents to ETSI obligates Qualcomm to license them on a “honest, affordable, and non-discriminatory” (FRAND) foundation.
By refusing to promote chipsets to prospects who do not license their patents, Qualcomm “compelled purchasers of its chipsets to take a license to its SEPs at extortion-level royalties,” Apple claims. “And by foreclosing rivals from coping with Apple, a key purchaser of chipsets, Qualcomm facilitated the marginalization and exit of lots of these rivals, enhancing its personal monopoly energy.”
In Apple’s view, Qualcomm has “monopoly energy” available in the market for each CDMA and LTE-enabled chipsets. That lets the corporate extract funds from Apple which can be “anticompetitive” on each its merchandise and its patent licenses.
The lawsuit additionally states that Qualcomm “double-dips” royalty funds. Apple’s contracted producers purchase Qualcomm chips and take a patent license, after which Apple should take a separate license.
Apple claims that Qualcomm’s technique is to gouge it on royalty charges, then supply billions in royalty rebates for “exclusivity or de facto exclusivity” from Apple. “It was solely with the iPhone 7, launched in September, that Apple was in a position to make use of a competitor’s chipsets (Intel’s) in addition to Qualcomm chipsets,” write Apple legal professionals. That alternative price Apple, which did not get its traditional exclusivity “rebate” from Qualcomm. The quantity it price Apple is redacted from the criticism.
The lawsuit accuses Qualcomm of breach of contract, monopolization, and violations of California contract regulation. The lawsuit additionally mentions 9 particular patents for which Apple was overcharged and says Apple did not infringe these patents.

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