Apple has filed a $1 billion lawsuit against Qualcomm saying that Qualcomm has been charging royalties for technologies they have nothing to do with. This comes days after Qualcomm was sued by US Federal Trade Commission (FTC) for anti-competitive practices relating to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products.
“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,” said Apple
In its lawsuit, Apple said:
Qualcomm broke its promise and has breached its FRAND commitments. Qualcomm illegally double-dips by selling chipsets that allow mobile telephones to connect to cellular networks and then separately licensing (but never to competitors) the purportedly necessary intellectual property.
By tying together the markets for chipsets and licenses to technology in cellular standards, Qualcomm illegally enhances and strengthens its monopoly in each market and eliminates competition. Then, Qualcomm leverages its market power to extract exorbitant royalties, later agreeing to reduce those somewhat only in exchange for additional anticompetitive advantages and restrictions on challenging Qualcomm’s power, further solidifying its stranglehold on the industry. All of this has been forced on Apple because the iPhone and the iPad have required Qualcomm chips.
In a statement Apple said:
Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts.
Qualcomm has denied this saying that Apple’s claims are baseless.
In response to Apple’s claims, Don Rosenberg, executive vice president and general counsel, Qualcomm Incorporated, said:
While we are still in the process of reviewing the complaint in detail, it is quite clear that Apple’s claims are baseless. 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.
Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information. We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.