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On Friday, Qualcomm said in a federal court hearing, in its hometown of San Diego, that Apple owes the chipmaker $7 billion in unpaid patent royalty payment. (Photo by Brooks Kraft LLC/Corbis via Getty Images)
On Friday, Qualcomm said in a federal court hearing, in its hometown of San Diego, that Apple owes the chipmaker $7 billion in unpaid patent royalty payments, according to a Reuters report.
This allegation is just the latest in a string of accusations since this epic legal battle between the two companies started almost 2 years ago, when Apple sued Qualcomm for roughly $1 billion, saying that the chipmaker "built its business on older, legacy, standards but reinforces its dominance through exclusionary tactics and excessive royalties."
Below is the full Apple statement that started it all:
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.
Atherton Research’s Take
In its legal battle with Qualcomm, Apple argues that the chipmaker is forcing it to pay at least 5 times more in patent royalty fees – 5% of the iPhone price – than all its cellular patent licensors combined.
Something that the Cupertino-based tech giant agreed to for years though.
Yet suddenly Apple claims that’s not fair as the retail price of its devices has significantly increased and so does the royalty amount, proportionally: "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," said the Silicon Valley company.
However, what’s not fair is for Apple to steel Qualcomm’s intellectual property and try to destroy its business model.
Apple has been on both sides of the coin: using without permission patents someone else owns (Qualcomm) and own patents used by someone (Samsung) without its permission.
Although the Apple and Samsung legal battle lasted 7 years, awarding Apple $539 million last May, we still believe that the 2 Californian tech companies will eventually settle despite the fact that the $7 billion figure gives Apple a huge incentive to litigate for a few more years.
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On Friday, Qualcomm said in a federal court hearing, in its hometown of San Diego, that Apple owes the chipmaker $7 billion in unpaid patent royalty payment. (Photo by Brooks Kraft LLC/Corbis via Getty Images)
On Friday, Qualcomm said in a federal court hearing, in its hometown of San Diego, that Apple owes the chipmaker $7 billion in unpaid patent royalty payments, according to a Reuters report.
This allegation is just the latest in a string of accusations since this epic legal battle between the two companies started almost 2 years ago, when Apple sued Qualcomm for roughly $1 billion, saying that the chipmaker “built its business on older, legacy, standards but reinforces its dominance through exclusionary tactics and excessive royalties.”
Below is the full Apple statement that started it all:
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.
Atherton Research’s Take
In its legal battle with Qualcomm, Apple argues that the chipmaker is forcing it to pay at least 5 times more in patent royalty fees – 5% of the iPhone price – than all its cellular patent licensors combined.
Something that the Cupertino-based tech giant agreed to for years though.
Yet suddenly Apple claims that’s not fair as the retail price of its devices has significantly increased and so does the royalty amount, proportionally: “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,” said the Silicon Valley company.
However, what’s not fair is for Apple to steel Qualcomm’s intellectual property and try to destroy its business model.
Apple has been on both sides of the coin: using without permission patents someone else owns (Qualcomm) and own patents used by someone (Samsung) without its permission.
Although the Apple and Samsung legal battle lasted 7 years, awarding Apple $539 million last May, we still believe that the 2 Californian tech companies will eventually settle despite the fact that the $7 billion figure gives Apple a huge incentive to litigate for a few more years.
