Apple’s shiny logo outside its San Francisco store.Steve Rhodes
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Apple sued Qualcomm today, alleging that the chip company charges billions in patent royalties “for technologies they have nothing to do with.”
In its complaint, Apple says that Qualcomm actually withheld $1 billion in payments it owes to Apple because Apple cooperated with the Korea Fair Trade Commission, or KFTC. Apple lawyers go on to make an extraordinary claim: that Qualcomm “attempted to extort Apple into changing its responses and providing false information to the KFTC in exchange for Qualcomm’s release of those payments to Apple,” but Apple refused.
Apple’s lawsuit seeks unspecified damages while stating it has been “overcharged billions” by Qualcomm.
The lawsuit notes that law enforcement agencies around the world are investigating Qualcomm, which “has been declared a monopolist by three separate governments” in the past two years. Last month, Korean regulators slapped Qualcomm with a $850 million fine over its patent-licensing practices.
The US Federal Trade Commission sued Qualcomm earlier this week, again over patent issues.
An Apple spokesperson provided an e-mailed statement on the lawsuit, which reads in full:
For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with.
The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations. Qualcomm built its business on older, legacy standards but reinforces its dominance through exclusionary tactics and excessive royalties.
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.
To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1B in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.
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 hasn’t immediately responded to Apple’s allegations.