Apple, Qualcomm Legal Tangle Heading for Clarity as Trials Begin

After more than a year of accusations and a flurry of lawsuits and counter claims, Apple and Qualcomm’s multibillion-dollar legal dispute is about to get serious, according to Bloomberg.

Hearings in the three most important markets, the U.S., China and Germany, will soon determine whether Apple’s attempt to save itself billions in technology licensing payments by forcing one of the world’s biggest chipmakers to change the way it does business is legal. Apple may be the hook for $2.5 billion to $4.5 billion in unpaid fees, based on estimates for the amount per phone the company may be charged, a total that could be equivalent to about one-fifth of Qualcomm’s annual revenue.

The iPhone maker has argued that Qualcomm uses its ownership of patents that cover the basics of how modern smartphones communicate to extract unfairly high payments and coerce it into buying chips. The chipmaker has countered that Apple is stealing its property by refusing to hand over fees for technology that the rest of the industry values and pays for.

The companies’ legal teams have been busy and are likely to stay that way. There are more than 50 separate intellectual property and antitrust proceedings filed across 16 jurisdictions in six countries. While no single case will resolve everything, a number of decisions in the second half of 2018 may create an incentive to settle.

Next week the International Trade Commission in Washington will begin a hearing on Qualcomm’s argument that Apple is infringing three patents. They're asking the agency to ban imports of all iPhone 7 models that don’t have Qualcomm’s chips. The iPhone, which provides Apple with more than 60 percent of its sales, is manufactured in Asia.

Similarly, a court in Mannheim, Germany, is hearing a case by the chipmaker that argues iPhones using Intel chips infringe Qualcomm’s patents and should be excluded from access to Europe’s largest national market. The judge tentatively agreed with Qualcomm but put the case on hold while the European Patent Office decides whether the patent in question is valid.

And in China, the biggest market for smartphones, the Chinese Patent Review Board begins hearings this month and next to consider Apple’s request to invalidate patents that Qualcomm is trying to use against it. Decisions in those cases could come in the third quarter.