According to a US judge, Qualcomm owes Apple nearly a billion dollars in rebates

REUTERS: A US federal judge made a preliminary ruling that Qualcomm Inc. owes Apple Inc. nearly $ 1 billion in copyright rebate payments, although this decision is unlikely to lead to what Qualcomm sends a check to Apple because of the evolution of the conflict.

Judge Gonzalo Curiel of the US District Court Southern California said Thursday that Qualcomm, the world's largest supplier of mobile phone chips, was required to pay close to $ 1 billion in rebates to Apple, which was using for years the modem chips from Qualcomm. connect iPhones to wireless data networks.

The payments were part of a commercial cooperation agreement between the two companies among the particular patent licensing practices of the consumer electronics industry.

In general, the subcontractor factories that built the Apple iPhones would pay Qualcomm billions of dollars a year for using Qualcomm's patented iPhones technology, which Apple would pay back to the contracted factories. In addition, Qualcomm and Apple have entered into a cooperation agreement whereby Qualcomm would pay Apple a rebate on iPhone patent payments if Apple agreed not to sue the court or the regulators.

In a lawsuit filed two years ago, Apple sued Qualcomm alleging that the chip vendor had broken the cooperation agreement by not paying nearly $ 1 billion in royalties cuts. patents.

Qualcomm in turn asserted that it had stopped paying rebate payments because Apple had broken the deal by urging other smartphone makers to complain to the regulators and by doing so. "False and misleading" statements to the Korean Fair Trade Commission, which was investigating Qualcomm about antitrust allegations. Apple responded that it was responding legally to regulators as part of an ongoing investigation.

Judge Curiel sided with Apple, saying Qualcomm owed the missed payments.

"Although the Court does not consider Apple's behavior today as a violation of the promises made to Qualcomm by the cooperation and patent agreement entered into in 2013, Apple's role in these events is a serious one." advanced welcome, "said Don Rosenberg, executive vice president and general counsel. from Qualcomm, told Reuters in a statement.

Apple did not immediately respond to a request for comment.

However, the decision will only become final after the trial, which will begin next month. And it is unlikely that Qualcomm will make a new payment to Apple.

Apple's contract factories, which under normal circumstances would pay Qualcomm the patent fees owed on iPhones, have already withheld payments of nearly one billion US dollars paid to Qualcomm. Rosenberg of Qualcomm stated that the iPhone payments retained had already been recognized in Qualcomm's existing financial statements.

"Apple has already cleared the payment in question under the agreement with the royalties due to Qualcomm," said Rosenberg of Qualcomm to Reuters.

(Stephen Nellis report, edited by Cynthia Osterman)