Apple’s latest lawsuit target? Qualcomm.
The iPhone maker on Friday filed suit against Qualcomm, alleging the wireless chipmaker didn’t give fair licensing terms for its processor technology. Apple also said Qualcomm sought to punish it for cooperating in a South Korean investigation into Qualcomm’s licensing practices by withholding a $1 billion rebate.
Apple wants a court to lower the amount it pays Qualcomm in licensing fees, as well as order the return of the $1 billion. The company said in its suit that Qualcomm should be paid royalties based on the value of its particular contribution, not for contributions from other patent holders. Currently, Qualcomm’s royalties are based off the selling price of a phone, rather than what portion Qualcomm’s technology enabled.
“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with,” Apple said in a statement. “The more Apple innovates with unique features such as TouchID, 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. ”
Qualcomm, meanwhile, fired back at Apple’s allegations, calling them “baseless. ” Don Rosenberg, Qualcomm executive vice president and general counsel, said in a statement:
Qualcomm is the world’s biggest provider of mobile chips, and it created some of the essential standards for connecting phones to cellular networks. The company derives a significant portion of its revenue from licensing that technology to other chipmakers. Apple designs the processors in its iPhones and iPads, but it buys chips from Qualcomm to connect to 4G LTE and other cellular networks. Under Qualcomm’s licensing structure, Apple pays it a fee for its chips and another fee for the intellectual property included in those chips. Most components suppliers bundle the IP cost in with the chip sales price.
For the iPhone 7 and 7 Plus introduced this year, Apple also started buying 4G LTE chips from another supplier, Intel.
