Ap­ple in le­gal tus­sle over li­cence dis­pute

The Star Early Edition - - INTERNATIONAL -

AP­PLE and its Asian con­tract man­u­fac­tur­ers are hit­ting back at Qual­comm with le­gal claims that try to un­der­mine the chip­maker’s at­tempt to force them to pay li­cens­ing fees.

Qual­comm is ask­ing for pay­ments mas­sively in ex­cess of what it would nor­mally re­ceive, Ap­ple, Com­pal Elec­tron­ics, Hon Hai Pre­ci­sion In­dus­try and others said early yes­ter­day in court fil­ings.

If suc­cess­ful, their counter claims could cost Qual­comm bil­lions of dol­lars in re­funded fees and dam­ages, Ap­ple said.

The fil­ings rep­re­sent the lat­est es­ca­la­tion in the dis­pute be­tween Ap­ple and Qual­comm over fees the San Diego-based com­pany charges on all mod­ern phones – even if the de­vice doesn’t have one of its chips – a rev­enue stream that has made it one of the rich­est com­pa­nies in the in­dus­try.

The dis­pute first sur­faced in Jan­uary when Ap­ple ac­cused Qual­comm of over­charg­ing it bil­lions of dol­lars as part of il­le­gal busi­ness prac­tices.

The con­tract man­u­fac­tur­ers, who were dragged into the fight when Qual­comm sued them sep­a­rately for pay­ments owed by Ap­ple, are now sid­ing with the iPhone maker to make sure they’re not sad­dled with the fees.

Key con­tention

Ap­ple’s key con­tention is that Qual­comm is ask­ing the court to force the con­tract man­u­fac­tur­ers to pay li­cens­ing fees that are due on iPhones above the level that the chip­maker nor­mally re­ceives.

Qual­comm has counter-sued and has asked the US In­ter­na­tional Trade Com­mis­sion to stop ver­sions of the iPhone that aren’t built with its chips from en­ter­ing the coun­try.

The man­u­fac­tur­ers – Com­pal, Hon Hai Pre­ci­sion and its Fox­conn sub­sidiary, Pe­ga­tron, and Wistron – de­nied vi­o­lat­ing any pay­ment agree­ments.

They called the Qual­comm suit against them “yet an­other chap­ter of Qual­comm’s an­ti­com­pet­i­tive scheme to dom­i­nate mo­dem chip mar­kets, ex­tract supra­com­pet­i­tive roy­al­ties, and break its com­mit­ments to li­cence its cel­lu­lar tech­nol­ogy on fair, rea­son­able and non-dis­crim­i­na­tory terms.”

In sep­a­rate fil­ings, the man­u­fac­tur­ers and Ap­ple also ob­jected to a Qual­comm re­quest that the hand­set mak­ers be forced to con­tinue mak­ing pay­ments even be­fore the dis­pute is re­solved.

There’s no harm to Qual­comm wait­ing to get paid un­til the court de­ter­mines the cor­rect amount, they said.

The chip maker has con­tended that Ap­ple in­sti­gated reg­u­la­tory ac­tions against it around the world by ly­ing to gov­ern­ment of­fi­cials.

That’s a key part of the ar­gu­ments be­tween the two. Qual­comm is with­hold­ing about $1 bil­lion Ap­ple say it is owed in re­bates.

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