Four Apple manufacturers launch antitrust complaint against Qualcomm, with Apple's backing

Four of Apple's manufacturing partners — Hon Hai/Foxconn, Compal, Wistron, and Pegatron — have filed counterclaims against Qualcomm, accusing the chipmaker of violating two sections of the Sherman Antitrust Act.

Apple is funding the manufacturers' legal defense, and has in fact joined as a defendant itself, a senior company official confirmed with Reuters. The coalition launched its action late Tuesday via a filing with the U.S. District Court for the Southern District of California.

Apple first sued Qualcomm in January, charging it with withholding $1 billion in patent license rebates as revenge for cooperating with a South Korean investigation. The suit also argued that Qualcomm was abusing its market position, demanding high patent royalties while simultaneously forcing chip buyers to sign up for patent licenses.

Qualcomm countersued in April. In the midst of the legal battle, Apple told manufacturers to withhold their license payments to Qualcomm until issues are resolved — this led to their being sued by Qualcomm in May, on the basis that they're still contractually obligated to pay iPhone-related royalties.

Earlier this week, Qualcomm CEO Steve Mollenkopf expressed optimism that the fight with Apple will end in an out-of-court settlement. The firm will still have to deal with a separate U.S. Federal Trade Commission lawsuit, however, which while predating Apple's action has similar claims.

11 Comments

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tmay 11 Years · 6456 comments

About 7 years ago

Now this, this is what a patent war should look like.

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SpamSandwich 19 Years · 32917 comments

tmay said:

Now this, this is what a patent war should look like.

To paraphrase Yoda: "Begun this patent war has."

mjtomlin 20 Years · 2690 comments

tmay said:

Now this, this is what a patent war should look like.

Not so much a patent war as it is an antitrust issue. Qualcomm has basically become a monopoly not by their own merits but by the fact that the standards body allowed their IP to be used in an industry standard on the basis that Qualcomm would charge a fair price for the licensing fees. They, as we've been reading about, are most certainly no longer being fair about licensing the IP.

The real issue is, if everyone who has contributed IP in the standard did the same thing - no company could afford make products that used that standard, which defeats the purpose of why there are standards.

mjtomlin said:

tmay said:

Now this, this is what a patent war should look like.

Not so much a patent war as it is an antitrust issue. Qualcomm has basically become a monopoly not by their own merits but by the fact that the standards body allowed their IP to be used in an industry standard on the basis that Qualcomm would charge a fair price for the licensing fees. They, as we've been reading about, are most certainly no longer being fair about licensing the IP.

The real issue is, if everyone who has contributed IP in the standard did the same thing - no company could afford make products that used that standard, which defeats the purpose of why there are standards.

You are correct, but Patent Wars sounds better.

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gatorguy 13 Years · 24632 comments

mjtomlin said:

tmay said:

Now this, this is what a patent war should look like.

Not so much a patent war as it is an antitrust issue. Qualcomm has basically become a monopoly not by their own merits but by the fact that the standards body allowed their IP to be used in an industry standard on the basis that Qualcomm would charge a fair price for the licensing fees. They, as we've been reading about, are most certainly no longer being fair about licensing the IP.

The real issue is, if everyone who has contributed IP in the standard did the same thing - no company could afford make products that used that standard, which defeats the purpose of why there are standards.

FWIW this could have been taken care of years ago as it's not the first time that Qualcomm's licensing model has been challenged. Search up "Broadcom sues Qualcomm 2007". The same general claims were made then, 10 years ago!

One lawsuit based on antitrust claims was dismissed by a Federal Court and the rest of the disagreement between the two was settled out of court. Broadcom wussed out.

So Qualcomm has seen this coming for a long time. That they've gotten away with the licensing for this long is amazing to me, but you can nearly guarantee they've planned for this and already charted a new model. It's not as tho they haven't been aware for a decade or more that eventually they'd be forced to change it.