Apple added more allegations to its complaint against Qualcomm, escalating a massive battle over patent royalties that began in January.
The iPhone vendor earlier this year filed a $1 billion lawsuit against Qualcomm, contending the chipmaker insists on onerous royalties for its technologies and demands payments for technologies it didn’t develop, such as Apple’s Touch ID. Apple claimed in that suit that it “has been overcharged billions of dollars on Qualcomm’s illegal scheme,” although the suit seeks damages of just less than $1 billion.
Qualcomm filed a countersuit in April, claiming among other things that the iPhone vendor “breached” and “mischaracterized” agreements with the chipmaker and interfered in deals with Qualcomm licensees.
Bloomberg reported this morning that Apple returned fire, saying in a legal filing that evidence increasingly indicated Qualcomm’s business model is “illegal.” The new claims alleged that Qualcomm’s strategy “burdens innovation,” Bloomberg reported, and that some patents for which Qualcomm is demanding royalties are invalid.
Apple also said Qualcomm has failed to fulfill its obligation to charge fair and reasonable rates for the patents.
Apple executives briefly addressed the company’s ongoing patent-licensing dispute with Qualcomm last month during a post-earnings conference call. CEO Tim Cook noted that Apple is withholding patent licensing payments to Qualcomm because of the issue. “You can’t pay something when there’s a dispute about the amount,” he explained.
“There hasn’t been a meeting of the minds there,” Cook continued, adding that Qualcomm is attempting to charge Apple royalties based on the total value of the iPhone. That doesn’t make sense, Cook explained, because Qualcomm only supplies the device’s silicon while Apple builds much of the rest of the phone.
Apple’s latest move escalates a major standoff between the two tech heavyweights even as Qualcomm fights multiple other 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 (sub. req.) over alleged antitrust violations.
And earlier this year, the FTC 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.