Sci-tech

Apple, Qualcomm spat intensifies, manufacturers drawn in

Apple, Qualcomm spat intensifies, manufacturers drawn in

Four Asian contract manufacturers, including Foxconn Technology Group and Pegatron Corp., aren't complying with obligations to pay for the use of patented technology, according to a complaint Qualcomm said it filed in federal court in San Diego.

The company has since filed their own countersuit against Apple and now it seems that they are going after Apple's manufacturing partners as well.

In April, Qualcomm said in its second-fiscal quarter earnings results that its reported revenue had not been affected by the withheld royalties, as the suppliers continued to report the royalties and acknowledged that the money was still owed.

Qualcomm said the contract manufacturers are withholding iPhone royalties because Apple has refused to reimburse them, directed them not to pay and agreed to indemnify them against any damages they may incur by failing to pay royalties to Qualcomm.

The rub here is that Qualcomm says many of these licensing agreements were in place before Apple produced its first iPhone.

He went on to say that "the manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference".

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"We don't like suing our licensees", said Rosenberg, noting that in the past decade the company has brought just one patent infringement case against a smartphone maker.

Now chipmaker Intel made a decision to add to the discussion and filed an Amicus Brief in opposition to Qualcomm's motion to dismiss the FTC's complaint.

The FTC brought the lawsuit against Qualcomm for anticompetitive patent-licensing practices in January in the U.S. District Court for the Northern District of California.

In Wednesday's complaint, Qualcomm alleges that Apple "orchestrated" the actions of the contract manufacturers against it.

Last week, Bloomberg reported Qualcomm would ask the U.S. International Trade Commission to issue an injunction prohibiting iPhone imports, citing sources familiar with the company's plans. "And we said, that is interesting, but that is between you and Apple". He likened the resistance to pay for the use of Qualcomm technology to someone walking into an Apple store and refusing to pay full price for a smartphone. The FTC and Apple accused it of abusing its power in the chip business.

Qualcomm, the largest maker of chips used in smartphones, added in the filing that Apple is trying to force the company to agree to a "unreasonable demand for a below-market direct license".


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