Apple Steps Up Legal Battle With Qualcomm -- Update
June 20 2017 - 8:35PM
Dow Jones News
By Tripp Mickle
Apple Inc. broadened its legal offensive against Qualcomm Inc.
on Tuesday, arguing in a court filing that some of the chip
supplier's patents were invalid and that its business model
violates patent law.
The filing, to a federal court in the Southern District of
California, comes about five months after Apple's opening salvo
against Qualcomm, claiming the chip company demanded unfair terms
for the use of its technology.
Qualcomm, whose chips and patents are widely used in
smartphones, has accused Apple of mischaracterizing its business
and has sued four of Apple's contract manufacturers for withholding
royalty payments on Qualcomm technology used in iPhones and
iPads.
In its response on Tuesday, Apple said that about a dozen
Qualcomm patents were invalid because they conflict with already
established patents, while others weren't essential for cellular
communication.
Qualcomm usually licenses its patents in a bundle that includes
both patents deemed essential to cellular communications and others
that aren't.
"We have brought this [filing] to highlight the issue that they
want to collect patent royalties without identifying patents and
the patents we have looked at in their portfolio certainly don't
justify the kind of demands they have been making," an Apple
executive said.
Qualcomm General Counsel Don Rosenberg defended the company's
patents in a statement, saying its "innovations are at the heart of
every iPhone and enable the most important uses and features of
those devices. It simply is untrue that Qualcomm is seeking to
collect royalties for Apple innovations that have nothing to do
with Qualcomm's technology."
Apple updated its arguments against Qualcomm to include the
Supreme Court's recent affirmation that patent holders can't keep
rights over a product after it is sold. The ruling came in May
after a lawsuit brought by Lexmark International Inc. against
printer stores that disabled microchips in its printer cartridges
and sold toner refills.
Apple said the Supreme Court ruling showed a patent holder can
only demand a single reward for its products and that Qualcomm is
going against that principle by requiring anyone who wants to buy
its chips to also pay royalties on the technology in them.
Apple's latest filing also asked the court to weigh in on the
dispute with its contract manufacturers. Qualcomm has sought a
court order to force the four Taiwanese companies to pay royalties
on technology used in iPhones and iPads, according to their
previous agreements with Qualcomm.
Apple says that it pays the entirety of those royalties for the
manufacturers -- Compal Electronics Inc. Foxconn Technology Group,
Pegatron Corp. and Wistron Corp. -- and argues that Qualcomm's
licensing agreements with them aren't enforceable because the
royalties includes invalid patents. It said it was prepared to pay
a fair royalty fee but doesn't believe the current terms are
reasonable.
Ted Greenwald
contributed to this article.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
June 20, 2017 20:20 ET (00:20 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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