Apple ups the stakes in patent royalties battle with Qualcomm

Apple is expanding its legal war with Qualcomm to include an attempt at having the chip designer's patents thrown out. The Cupertino giant filed an amended complaint [PDF] that now asks the US District Court for Southern California to declare 18 of the patents Qualcomm seeks payments for invalidated. The two companies have …

[Pomgolian]

Well knock me down with a feather

I never ever thought I'd be on Apple's side, but if Qualcomm really are trying to have their cake and eat it, i.e. "here, buy our chips, oh, and about that licence fee", then hell has truly frozen over and I have to hope Apple wins that round. Just that one though.

[Youngone]

Re: Well knock me down with a feather

I had more or less the same thought.

Also, if Qualcomm does the same thing with all the others, then everyone will be lining up with their hands out wanting a refund.

Big stakes.

[Kurt 4]

Re: Well knock me down with a feather

So if Apple wins, I can then sue xm radio for charging me a fee to use the radio I already paid for! Since when are license fees tied to hardware chips. The chipsets may be capable of doing different things and require different licenses.

[Anonymous Coward]

Re: Well knock me down with a feather

It is almost certain that some of Qualcomm's patents are invalid or not required for standards based operation. That's likely true of almost every big patent holder, given how lawyers encourage patenting anything you think you can get a patent on, and standards processes require submitting any patent you believe to be applicable.

Apple is presenting Qualcomm with a quandry - if this goes to trial even if only a few of those 18 patents are declared invalid or not applicable to standards, they risk having to pay back not only Apple but everyone who has licensed those patents from them over the past decade. Whereas if they offer to settle, undoubtedly one of the terms of settlement Qualcomm would insist on is Apple keeping quiet about the terms of the settlement, so their other licensees can't come after them for repayment of royalties.

One wrinkle is that I've read some patent license agreements mandate that no reimbursement is made if patents are later declared invalid. If that's the case here, and a court couldn't overturn such terms, then Qualcomm wouldn't have to worry about Apple or anyone else getting money back. They would still have to worry about loss of future revenue, but it wouldn't be as damaging, or wouldn't put Qualcomm in such a difficult position.

[Gideon 1]

Re: Well knock me down with a feather

"One wrinkle is that I've read some patent license agreements mandate that no reimbursement is made if patents are later declared invalid."

If Qualcommm acted illegally then these terms could also be invalid and unenforceable.

[handleoclast]

Re: patenting anything you think you can get a patent

My client has a patent on patenting anything you think you can get a patent on, therefore I request that you cease and desist in engaging in this practise yourself.

[Steve Davies 3]

QC's last throw of the dice maybe?

I see lots of storm clouds heading QC's way and not only with respect of lawsuits.

For years there really was no other option but to bend over and take QC's [redacted] of you, smile and pay up. QC were the only game in town especially for a lot of players who could not design their SOC. Even the likes of Apple had to use their Modems and pay heavily for it because they were the best by a long way.

Now, things are different. With Intel coming along and providing pretty decent (but not quite as good as QC yet) modems to Apple, Samsung and Google designing thier own SOC's, the writing does seem to be on the wall for QC.

Now that they aren't the only game in town and add to that, that it seems that QC won't reduce the size of the you know what that they are using to shaft device makers, the device makers have decided that enough is enough and are going for QC's jugular with a vengance.

If Apple win here it will affect not only Apple but pretty well every mobile device maker around. I suspect that they are secretly on Apple's side here which is odd to say the least.

Interesting times. Can QC survive this onslaught?

If they lose who will step in and buy them? Google perhaps? They seem to have the most pressing need of SOC designers.

We shall have to wait and see.

[Anonymous Coward]

Re: QC's last throw of the dice maybe?

Samsung's SoC doesn't include CDMA, that's why you see Qualcomm SoCs in Samsung phones designed for North America and other markets where CDMA 3G is in use. That's also why iPhones used the Intel modem only on phones sold for AT&T/T-mobile (GSM carriers in the US) and not Verizon/Sprint (CDMA carriers)

Google may be designing their own SoC, but if it is used for smartphones (I don't think that's what they're intending) they will need a modem. They don't have people to design a modem (Intel has over a thousand engineers working on theirs, it is not a small effort to undertake!) so theirs will definitely not include one.

Thus they'd be like Apple and need to buy a separate modem. The only one who sells a discrete modem (other than Intel, who lacks CDMA) is Qualcomm. Rumor has it Qualcomm refuses to sell their modems without their full SoC to Android smartphone vendors. However, since it will take a few years for them to get an SoC designed and manufactured, maybe by the time they do they won't have to worry about CDMA and can go with Intel's LTE only modem even on CDMA carriers.

[TVU]

The news about Apple's latest litigation is disappointing. Anyone would think that their new role model is Larry from Oracle.

I hope that they fail this time.

[Anonymous Coward]

Re: I hope that they fail this time.

did you even bother to read the post above that says a victory for Apple will also be good for Google, Samsung and the rest?

Normally, I'd be not wanting Apple to win at anything but here I think that they are the good guys and it is Quallcomm that are screwing the industry into the ground (or trying to).

Now I need to go and wash my mouth out with soap for saying something good about Apple.

[VernDozier]

Apple's retail rent must have recently incresed in price..!

Well, Apple doesn't pass any savings onto its customers from using less expensive chips. Adding to this, it seems that telecom companies in Europe are waiting for the US to launch 5G networks first; see what adoption levels are like. So when Intel bought Germany-based Infineon, when Qualcomm was funding into many Linux-foundation projects like AllJoyn. It's actually very interesting to see Apple holding press events for new "kits" and copying everything Qualcomm was actively investing into.

So in the US, Today's iPhone 7 featuring more expensive chips on Sprint/Verizon cost the same as an iPhone 7 using the commodity low-quality Intel/Infineon chips. In addition to that, when Qualcomm found a way to more efficiently send data over the air, (freeing up time/space for more customers) Apple took the opposite approach and slowed down the chip so that Apple's devices are less efficient in sending data. That adds protocol overhead.

I think its odd no one has pointed out the royalty amount is a function of the selling price, and Apple is in complete control of product sale prices. There's an article in MacWorld Magazine titled "How Apple Sets Its Prices" by Marco Tabini. In the article, Apple restricts what can be sold and at what price. Apple resellers can't set their price without Apple's permission; Apple will perform audits and secret shopping to ensure prices are set at the price Apple needs to collect so it can pay for prime retail space at locations like Grand Central Station, Carousel du Louvre (in Paris), Regent Street, Berlin. When you have a retail presence in places like these, you need to pocket all the change you can find for a rainy day.

[hellwig]

IANAL, but Apple paid for what it got

How can Apple request a refund just because Qualcomm's patent's were invalidated? Wasn't Apple's time to sue when Qualcomm started charging Apple? Qualcomm said "give us money" and Apple said "OK". That's was the end of the transaction.

Imagine if you paid for HBO because you wanted to watch Game of Thrones, but then you find out the TV show was based on books, so you go read those books instead, and then demand a refund from HBO/your cable provider. I don't think it works that way.

Apple licensed tech from Qualcomm and received said tech. Now they say they don't want to use that tech, even though they have millions of phones out there with Qualcomm chips in them? Either Qualcomm's lawyers are idiots by drafting in a refund clause, or Apple stands no change in getting a refund.

[mark l 2]

Although I do hope that Apple win the court case against Qualcomm I doubt Apple will bother passing the saving they make onto the end user by lowering their handset costs. Any profit at the moment will be going into the pocket of patent lawyers.