Q’comm Returns Fire in Apple Suit

SAN JOSE, Calif. – Apple refused to pay cellular chip royalties, pressured its contract manufacturers not to pay them, instigated regulatory investigations and throttled performance of an LTE modem chip, according to Qualcomm.

The charges are contained in a 134-page court document the chip vendor filed in response to Apple’s $1 billion suit filed in January. Apple alleged Qualcomm charges exorbitant patent royalties and paid the iPhone maker not to talk to regulators.

The document provides a rare look into the sometimes combative relationship and complex web of agreements between the two mobile giants. It also sheds light on the murky area of patent royalties.

In its suit, Apple claimed Qualcomm asks for five times the royalties of all other cellular patent holders combined. Qualcomm countered Apple offered “a small fraction” of the royalties other smartphone makers pay and asked for an agreement that included more patents, including some on 5G cellular.

In the latest court document, Qualcomm asked the Southern District Court of California for a jury trial and unspecified damages.

“Apple contributed virtually nothing to the development of core cellular technology…relying significantly on cellular technologies pioneered by Qualcomm, [yet] in recent years, Apple has captured upwards of 90 percent of all profits in the smartphone industry,” Qualcomm claimed, noting it has 130,000 issued patents.

“Qualcomm’s per device royalties for its portfolio of tens of thousands of patents are far less than what Apple charges consumers for a basic plastic phone case,” the chip vendor said, noting the two companies have had “on-and-off negotiations about a potential direct license agreement for years.

By contrast in Apple’s suit against Samsung’s Galaxy phones the iPhone designer asked for the equivalent of $7.14 per phone for three user interface patents, Qualcomm said.

Apple is pressuring Taiwan ODMs Compal, Foxconn, Pegatron and Wistron not to honor royalty agreements Qualcomm forged with them in 2010, the chip maker said. It also pressured them not to comply with third party audits. “As a result, Qualcomm has been unable to verify the accuracy of the contract manufacturers’ royalty reports,” it said.

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