Apple files $1B lawsuit against Qualcomm over royalties

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Qualcomm continues to fight legal battles around the world.

Apple filed a $1 billion lawsuit against Qualcomm over patent royalties just days after the dominant chipmaker was sued by the Federal Trade Commission on charges of anticompetitive practices.

The suit contends that Qualcomm insists on onerous royalties for its technologies and demands royalties for technologies it didn’t develop, such as Apple’s Touch ID. Apple claims that it “has been overcharged billions of dollars on Qualcomm’s illegal scheme,” through the suit seeks damages of just less than $1 billion.

Apple also accused Qualcomm of withholding nearly $1 billion in payments in retaliation for Apple’s cooperation with law enforcement agencies investigating Qualcomm. The iPhone vendor requested a jury trial.

“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with,” Apple said in a prepared statement. “Qualcomm built its business on older, legacy standards but reinforces its dominance through exclusionary tactics and excessive royalties. Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined.”

Qualcomm representatives didn’t immediately reply to a request for comment from FierceWireless. Shares of the San Diego-based firm were down 2.4% at the close of the market Friday.

The FTC Tuesday filed suit against Qualcomm, accusing it of using anticompetitive tactics to “maintain its monopoly” as the dominant vendor of semiconductors for phones and other mobile gadgets. The agency said Qualcomm imposed “onerous and anticompetitive supply and licensing terms” on hardware manufacturers, violating the FTC Act on several fronts.

Qualcomm maintains a “no license, no chips” policy under which it sells baseband processors only to manufacturers that agree to its licensing terms, the FTC’s suit alleges, and it refuses to license standard-essential patents to competitors despite committing to do so. The FTC’s complaint also accuses Qualcomm of offering Apple reduced patent royalties in an exclusive agreement preventing Apple from working with Qualcomm’s competitors over a five-year span.

Qualcomm rejected key elements of the FTC’s complaint, arguing that the FTC was acting without all the information and was trying to rush the investigation ahead of the arrival of President Trump's incoming administration. 

Qualcomm continues to fight legal battles around the world. In April, Nvidia sued Qualcomm in London, alleging it had unfairly forced Nvidia to pull the plug on the Icera business it bought in 2011. Qualcomm also faces a fine in South Korea of $853 million over alleged antitrust violations.

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