Apple Sues Qualcomm Over Patent Royalties

Apple sued Qualcomm, accusing it of monopolizing the market for chips for wireless devices and withholding $1 billion in retaliation for cooperating with South Korean antitrust authorities, according to Bloomberg. Apple is demanding Qualcomm hand over money that was supposed to be a rebate for licensing fees.

Qualcomm is holding back the money as punishment for Apple cooperating with Korean antitrust regulators, according to the complaint filed in San Diego, where Qualcomm is based. Apple also wants back some of the billions of dollars it claims it was overcharged in “Qualcomm’s illegal scheme“ to control the market for mobile phone chips. It wants a court to change how Qualcomm charges for its technology in the future.

Qualcomm, the largest maker of mobile phone chips, has been under fire by regulators around the world for its patent licensing practices. The lawsuit filed Friday is the first direct challenge by one of its biggest customers and threatens to upend how royalties are calculated by any owner of a patent on technology that underlies modern electronics.

“It is quite clear that Apple’s claims are baseless,“ Qualcomm General Counsel Don Rosenberg said in a statement. “Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program.“

“Qualcomm built its business on older, legacy, standards but reinforces its dominance through exclusionary tactics and excessive royalties,“ Apple said in a statement. “Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.“

The complaint also challenges the validity of some key Qualcomm patents for wireless technologies. Apple asks the court to rule that, if the patents are upheld, that the royalty amount is significantly lower than what Qualcomm charges now.