Qualcomm will reportedly ask a U.S. trade agency to impose an import ban on iPhones in retaliation for Apple’s decision to withhold royalty payments from the chipmaker.
Bloomberg reported that Qualcomm plans to push the International Trade Commission to block shipments of the iPhone from Asia to the United States ahead of the expected introduction of a new model this fall. Bloomberg cited “a person familiar” with Qualcomm’s strategy who requested anonymity.
Apple’s handsets are manufactured in Asia, although The Wall Street Journal reported recently the company may soon start production in India as well.
The move would mark a significant escalation of a battle that began in January when Apple filed a $1 billion lawsuit against Qualcomm over royalty payments, claiming the venerable chip manufacturer insisted on onerous royalties for its technologies and demanded royalties for technologies it didn’t develop, such as Apple’s Touch ID. Apple claimed that it “has been overcharged billions of dollars on Qualcomm’s illegal scheme,” though the suit seeks damages of just under $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.
Qualcomm struck back last month by filing a countersuit against Apple, claiming among other things that the iPhone vendor “breached” and “mischaracterized” agreements with the chipmaker and interfered in deals with Qualcomm licensees.
Qualcomm’s 139-page filing claimed Apple failed to “engage in good faith negotiations for a license to Qualcomm’s 3G and 4G standard essential patents on fair, reasonable and non-discriminatory terms.”
Apple is accused of interfering with long-standing deals between Qualcomm and licensees that manufacture iPhone and iPads, encouraging regulatory attacks by misrepresenting facts, making false statements and choosing not to utilize the full performance of Qualcomm’s chips in the iPhone 7 in an effort to misrepresent their performance.
Apple executives briefly addressed the company’s ongoing patent-licensing dispute with Qualcomm this week during the company’s 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.
Of course, Qualcomm continues to argue for higher royalty payments.