Apple Hit With iPhone Sales Ban in China, Qualcomm Says -- 2nd Update
December 10 2018 - 10:31AM
Dow Jones News
By Tripp Mickle
A Chinese court ordered Apple Inc. to stop selling older iPhone
models in the country after finding the tech giant infringed on two
patents held by Qualcomm Inc., the chip supplier said Monday.
The Nov. 30 decision by a Chinese intellectual-property court is
the first in the world's largest smartphone market that seeks to
curtail iPhone sales.
The preliminary injunction is the latest turn in a long-running
legal dispute between Apple and Qualcomm. The San Diego chip
company has brought more than a dozen cases against Apple over
patent infringement in China.
Qualcomm said the Fuzhou Intermediate People's Court in China
found Apple had infringed on two nonstandard essential patents: one
related to photo editing and another to swiping on a touch-screen
device.
The import and sales ban didn't appear to include Apple's newest
devices -- the XS, XS Max and XR -- because those weren't on the
market when the patent case was filed.
It wasn't immediately clear when any such ban would take effect.
Four models affected by the ban -- the iPhone 7, 7 Plus, 8 and 8
Plus -- were still on sale through Apple's website in China as of
Monday. Apple has stopped directly selling some other models
affected, including the 6s, 6s Plus and X.
Apple plans to appeal the decision and all iPhone models would
remain available in China, a spokesman said.
"Qualcomm's effort to ban our products is another desperate move
by a company whose illegal practices are under investigation by
regulators around the world," the spokesman said.
Qualcomm is battling an antitrust lawsuit brought by the Federal
Trade Commission in San Jose, Calif., and also appealing an $853
million fine by South Korea's Fair Trade Commission over alleged
antitrust violations. In August, it settled an antitrust dispute
with Taiwan's Fair Trade Commission.
The ruling comes as China and the U.S. have been locked in a
monthslong trade battle. The U.S. has imposed tariffs on more than
$200 billion in Chinese goods, alleging unfair trade practices and
intellectual-property theft. China has retaliated with tariffs of
its own on U.S. goods.
A new rift between the countries opened this month after Huawei
Technologies Co.'s finance chief was arrested in Canada on behalf
of U.S. authorities. She is accused of lying to banks about
Huawei's ties to a company that did business in Iran, in violation
of U.S. sanctions.
The decision by the Chinese court was made before the arrest of
the Huawei executive. The companies said they didn't learn of the
decision until last week.
Apple and Qualcomm have been engaged in a bitter and
wide-ranging legal battle for nearly two years. The dispute began
in January 2017, when Apple filed a lawsuit over Qualcomm's
practice of collecting royalties on the entire sales price of an
iPhone up to $400.
Qualcomm says it charges a percentage of an entire device
because its patents, essential to implementing
cellular-communication standards, relate to cellular devices as a
whole, not just its chips.
The chip maker, which has counted on licensing revenue from
Apple for a significant chunk of its earnings, has responded by
suing Apple for infringing on Qualcomm patents in the U.S., China
and Germany.
Write to Tripp Mickle at Tripp.Mickle@wsj.com
(END) Dow Jones Newswires
December 10, 2018 10:16 ET (15:16 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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