Chip maker in formal dispute with Apple

BRITISH CHIP maker Imagination Technologies has launched a formal dispute against Apple just a month after the iPhone maker said it would scrap royalty and licence agreements that make up half of the UK firm’s revenues.

The company is concerned Apple’s plans to replace Imagination’s intellectual property – used in the graphics processor units for Apple’s phones, tablets, iPods and TVs – with its own technology within the next two year risks violating the British company’s patents.

The move would also mean Imagination would not be eligible for Apple’s royalty payments and licence fees, which brought in £60.7m in revenues in the year to April 30.

That accounted for half of the £120m made in group revenue from continuing operations for the last financial year.

Imagination said in a trading update that while it had proposed “alternative” commercial arrangements with Apple, the two companies failed to reach a deal.

It said: “Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement.

“Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process.”