Qualcomm Sues Apple iPhone, iPad Manufacturers in Escalating Royalties Battle

Qualcomm sued Apple iPhone manufacturers Compal Electronics, Foxconn, Pegatron and Wistron, opening a new front in the Apple-Qualcomm patent licensing battle. Apple sued Qualcomm in January on claims the smartphone chipmaker gouged Apple for billions of dollars in patent royalties on technologies it didn't own (see 1701230067). Qualcomm countersued (see 1704110026). Qualcomm also faces an FTC complaint the manufacturer had a monopoly in baseband processors used in cellphones and other devices (see 1701170065, 1704040040 and 1704040037). Qualcomm’s lawsuit against the manufacturers, filed in U.S. District Court in San Diego, claims the firms are in breach of patent licensing agreements and other commitments to Qualcomm by refusing to pay royalties on products they made for Apple, which also include iPads, at the company’s behest. Apple faces a separate lawsuit for interfering in Qualcomm's licensing agreements (see 1704200016). The firms entered into the agreements before they began making iPads and iPhones and are still paying royalties on all non-Apple products, Qualcomm said. “We cannot allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed," said Qualcomm General Counsel Don Rosenberg in a news release. "As Apple continues to collect billions of dollars from consumer sales of its Qualcomm-enabled products, it is using its market power as the wealthiest company in the world to try to coerce unfair and unreasonable license terms from Qualcomm in its global attack on the company.” Apple pointed to CEO Tim Cook’s statement during the company’s Q2 earnings call (see 1705030051) that Qualcomm is “trying to charge Apple a percentage of the total iPhone value” when its patents are just “one small part of what an iPhone is.”