Apple and Qualcomm Reach Settlement, Agree to Drop All Litigation

[Ronald C Schoedel III]

Too bad the settlement doesn’t require installation of Eudora as the default email client on all iOS devices. /s

 

[djphat2000]

More like Apple wanted to get something so they stopped litigation.
A six year license agreement with a two year option at the end.
Apple paying Qualcomm.

Qualcomm stock up more than Apple.
best outcome for both. Stop paying the lawyers and tying up the courts.

I don't think you know Apple that well. They will wait, think MacPro modular. They are not in any rush for anything they deem important. This was a big enough deal for them to go to intel for a completely inferior modem over. As long as it connects and gives you decent speed. They will put it in their flagship phone, and wait out Qualcomm. Which they did.
And for their efforts, they get a 6 year +2 deal. And most likely, MUCH more favorable terms going forward.

 

[Kabeyun]

The settlement ends all ongoing litigation between the two companies, including with Apple's contract manufacturers. All companies involved have reached a global patent license agreement and a chipset supply agreement, suggesting Apple may be planning to once again use Qualcomm chips in its devices going forward.

This must include Foxconn, Pegatron, Wistron, and Compal, right? They were co-complainants in Apple’s action against Qualcomm.

 

[Alan Wynn]

I settle a lot of my cases a day or two before trial, so a settlement is not surprising.

A settlement involving Apple specifically is somewhat surprising, because they seem to try almost anything.

Maybe Kim Fox’s cousin was Qualcom’s lawyer? :-D

 

[Brandon916]

Complete BS.

My post from the other day:

• In April 2017 Qualcomm and Blackberry had a binding arbitration case. Qualcomm lost and now owes $940 million to Blackberry. Since it didn't go to court, details are limited. What we do know is it was related to royalty rebates due to Blackberry over the number of devices sold. Which sounds eerily similar to what Apple is complaining about (with Apple winning a preliminary $1 billion against Qualcomm just recently).
  
• In June 2018 Qualcomm was fined $1.2 billion by the EU for antitrust issues arising from Qualcomm paying Apple money to ensure exclusivity in using Qualcomm modems. Just a week ago Qualcomm lost another part of their antitrust case by trying to prevent the handing over of data to the EU regarding their antitrust case.
• In October 2017 Qualcomm was fined $774 million by Taiwan's Fair Trade Commission for overcharging royalties for their cellular modems and IP. Qualcomm struck a deal with Taiwan and had their fine "reduced" to $93 million in exchange for investing $700 million over 5 years into Taiwan's tech sector. Several companies are still protesting this decision as Qualcomm wasn't forced to change all their licensing practices.
• In December 2016, South Korea fined Qualcomm $854 million for antitrust issues surrounding modem and IP royalty/licensing. Prior to this Qualcomm was fined $243 million way back in 2009 over kickback issues to cell manufacturers to use Qualcomm modems exclusively. This fine was lowered slightly to $200 million just last month.
• In February 2015 Qualcomm accepted a penalty of $975 million in China over violating anti-monopoly laws over - you guessed it, royalties and licensing related to modems and related IP.
• The FTC in the US just wrapped up a trial (now awaiting a decision) accusing Qualcomm of antitrust practices related to their modems and licensing practices.
• Apple and Qualcomm start their trial today regarding, again, over payment of royalties.

Qualcomm has been losing BIG TIME all over the world. It's beyond asinine to think Apple caved when Qualcomm is the one who's been losing literally EVERY SINGLE ANTITRUST CASE brought against them over their licensing practices.



Exactly. Qualcomm caved. They have lost so many times already that another loss (with Apple) would have been devastating. They can save face by striking a deal with the worlds largest tech company and continue to make money selling to Apple (though likely less money than before).

WTH? You only listed a bunch of cases that Qualcomm lost. What about the ones that they won? What about the many cases Apple loses? Come on. This is pathetic. Btw, Qualcomm got some of Apple's iphone ban from other countries. The courts sided with Qualcomm over Apple.

 

[TComm]

I hope Apple won’t have buy anything from Qualcomm ever again.

 

[cmaier]

I highly doubt Qualcomm caved, I bet it's more that Apple realized they really screwed up and decided to make it right. Either way this is a win for Qualcomm

It’s certainly a win for QC, but undoubtedly an even bigger win for Apple. And now Apple can design its own baseband chips for 2021 and not have to worry about QC’s patent portfolio.
[doublepost=1555446896][/doublepost]

WTH? You only listed a bunch of cases that Qualcomm lost. What about the ones that they won? What about the many cases Apple loses? Come on. This is pathetic. Btw, Qualcomm got some of Apple's iphone ban from other countries. The courts sided with Qualcomm over Apple.

QC lost every time the issue was their business model. The fact that they won some non-FRAND patent cases (which hadn’t been finally adjudicated yet) was of no importance in the grand scheme of things.

 

[Wowmail]

hehe Apple should have bought Qualcomm... Problems solved,

 

[Red Oak]

Apple caved.

If Apple really believed Qualcomm's patents were unfair, they would have fought this to the end. Instead, Apple just signed a 6 year licensing deal with Qualcomm, "including a two-year option to extend, and a multiyear chipset supply agreement."

You have zero details about the settlement. You have no ideas about what the new deal looks like or if Qualcomm keeps any royalties tied to the total value of the phone (Apple's main issue)

You know nothing at this point. Yet, you go out and have diarrhea of the mouth

 

[cmaier]

I hope Apple won’t have buy anything from Qualcomm ever again.

That is certainly Apple’s plan. They have no desire to ever again be stuck like this.

 

[iFan]

Funny how people here think Qualcomm needs Apple when it's the other way around. Qualcomm supplies chips for EVERY Android phone, Apple has stopped using Qualcomm a few times and QC never skipped a beat. Apple/Intel would have to pay Qualcomm regardless because Qualcomm owns the tech Apple needs. You guys are very delusional! I'll also like to add that before this trial started everybody talked so hard that 5G wouldn't be ready by 2020 so you all didn't care anyway but now all of a sudden 5G in the 2020 iPhone matters? We all knew it did whether the rollout was complete or not. The delusional ones did not. This is a win win for Qualcomm, Apple caved and it shows Qualcomm has superior technology which means more sales for QC

Let's be reasonable here. The middle ground:

Qualcomm didn't need Apple to survive, but they surely needed Apple to grow. I was listening to their own lawyer present their argument and in his own words from just a few hours ago: "@Qualcomm’s stock has plummeted," Chesler says. "People have been laid off. Research and development to develop new technology have been canceled. It’s billions of dollars. At the end of last year, over $8 billion. It's gone even higher since then."

This is a big win for Qualcomm, but it also wouldn't surprise me if Apple negotiated lower rates than $7.50 per device and if Qualcomm will still be settling with the FTC for double dipping. If that is the case, then Apple wins too. That is fantastic - a win/win!

As for 5G - I'm guessing that is a big part of why the settlement occurred now - right before Apple has to lock in modem designs for a 2020 iPhone. While I don't see 5G being prominent even 18 months from now, I do think customers will hold back on purchases if a phone isn't "future proof." My engineering sources within the industry all tell me 5G is no where near ready for prime-time, but I still wouldn't buy a phone without it in late 2020. That would be silly.

 

[Pepe4life]

Wtf I just had my popcorn heated up....

 

[iamkarlp]

I know there are going to be a lot of people declaring this a win for Qualcomm, but I wouldn't be to quick on that.

Apple likely has a lower payment rate than they did. They most certainly now have a 5G chipset supply plan on far more favorable terms than they otherwise would have had.

Qualcomm also had significant exposure to their business model, exposure which has just mostly been resolved.

In reality neither Apple or Qualcomm lost by resolving in this way.

The only real losers here are all the other cell phone manufacturers who are using Qualcomm chipsets and now won’t benefit from this agreement in a way they would have had it all been public in the courts.

…. and that likely doesn’t bother them* at all.

-Karl P

*Apple or Qualcomm

 

[realtuner]

WTH? You only listed a bunch of cases that Qualcomm lost. What about the ones that they won? What about the many cases Apple loses? Come on. This is pathetic. Btw, Qualcomm got some of Apple's iphone ban from other countries. The courts sided with Qualcomm over Apple.

Qualcomm has lost every single antitrust case regarding their licensing practices over modems/IP.

Any previous cases Apple/Qualcomm may have won or lost over other issues are completely irrelevant.

Try to stay on topic.

 

[hans1972]

And what exactly was apples evidence that it was too much or unfair? Everyone else pays Qualcomm the same. Qualcomm says they have over 300 customers. That seems like everyone else is saying the price is fair.

Or most of them think the price is unfair but they felt they had no choice.

Fairness is a subjective. Apple just wanted to pay less and especially change the principle from a percentage of production cost to a fixed price.

 

[Plutonius]

That was quick, wonder why Qualcomm folded so quickly.

I'm not sure who won ?

 

[techwhiz]

Oh, so double dipping in the reverse order make it legal? That's quite the leap...

The license it to use the patents.
The chip is an embodiment of some of those patents and also others.
Ericsson licensees their cellular/portfolio in much the same way.

 

[Kabeyun]

WTH? You only listed a bunch of cases that Qualcomm lost. What about the ones that they won? What about the many cases Apple loses? Come on. This is pathetic. Btw, Qualcomm got some of Apple's iphone ban from other countries. The courts sided with Qualcomm over Apple.

Well, those import bans applied to older models, and Apple implemented a software workaround. Not a massive victory. Otoh, Qualcomm was risking on he losing side, again, of a huge licensing litigation with a downside in the billions of Euro. They win if they get a fair licensing deal and make this all go away.

 

[Felix Burns]

I’ve done so NUMEROUS times on these forums. Here we go again: (i have plenty more if you wish)

“For over 160 years, the doctrine of patent exhaustion has imposed a limit on that right to exclude. See Bloomer v. McQuewan, 14 How. 539, 14 L.Ed. 532 (1853). The limit functions automatically: When a patentee chooses to sell an item, that product ‘is no longer within the limits of the monopoly’ and instead becomes the ‘private, individual property’ of the purchaser, with the rights and benefits that come along with ownership. Id., at 549-550. A patentee is free to set the price and negotiate contracts with purchasers, but may not, ‘by virtue of his patent, control the use or disposition’ of the product after ownership passes to the purchaser. United States v. Univis Lens Co., 316 U.S. 241, 250, 62 S.Ct. 1088, 86 L.Ed. 1408 (1942) (emphasis added). The sale ‘terminates all patent rights to that item.’ Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617, 625, 128 S.Ct. 2109, 170 L.Ed.2d 996 (2008).” Impression Products, Inc. v. Lexmark Int'l, Inc., 137 S.Ct. 1523, 1531 (2017)


“The declared purpose of the patent law is to promote the progress of science and the useful arts by granting to the inventor a limited monopoly, the exercise of which will enable him to secure the financial rewards for his invention. Constitution of the United States, Art. I, § 8, Cl. 8; 35 U.S.C. §§ 31, 40. The full extent of the monopoly is the patentee's ‘exclusive right to make, use, and vend the invention or discovery.’ The patentee may surrender his monopoly in whole by the sale of his patent or in part by the sale of an article embodying the invention. His monopoly remains so long as he retains the ownership of the patented article. But sale of it exhausts the monopoly in that article and the patentee may not thereafter, by virtue of his patent, control the use or disposition of the article. Bloomer v. McQuewan, 14 How. 539, 549-50; Adams v. Burke, 17 Wall. 453; Hobbie v. Jennison, 149 U.S. 355. Hence the patentee cannot control the resale price of patented articles which he has sold, either by resort to an infringement suit, or, consistently with the Sherman Act (unless the Miller-Tydings Act applies), by stipulating for price maintenance by his vendees. Bauer & Cie v. O'Donnell, 229 U.S. 1; Boston Store v. American Graphophone Co., 246 U.S. 8; Straus v. Victor Talking Machine Co., 243 U.S. 490; Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 456-57, and cases cited.” United States v. Univis Lens Co., 316 U.S. 241, 250 (1942)

“As the Court there explained, exhaustion was triggered by the sale of the lens blanks because their only reasonable and intended use was to practice the patent and because they ‘embodie[d] essential features of [the] patented invention.’ 316 U.S., at 249-251, 62 S.Ct. 1088. Each of those attributes is shared by the microprocessors and chipsets Intel sold to Quanta under the License Agreement.” Quanta Computer v. LG Electronics, 128 S.Ct. 2109, 2119 (2008)

“The authorized sale of an article that substantially embodies a patent exhausts the patent holder's rights and prevents the patent holder from invoking patent law to control postsale use of the article. Here, LGE licensed Intel to practice any of its patents and to sell products practicing those patents. Intel's microprocessors and chipsets substantially embodied the LGE Patents because they had no reasonable noninfringing use and included all the inventive aspects of the patented methods. Nothing in the License Agreement limited Intel's ability to sell its products practicing the LGE Patents. Intel's authorized sale to Quanta thus took its products outside the scope of the patent monopoly, and as a result, LGE can no longer assert its patent rights against Quanta.” Quanta Computer v. LG Electronics, 128 S.Ct. 2109, 2122 (2008)

There are several cases where the court interprets a sale as a 'restricted sale', when the sale is bundled with a license that puts restrictions on reselling or distribution or other downstream activities.

For e.g.

https://en.wikipedia.org/wiki/Vernor_v._Autodesk,_Inc.

 

[macduke]

Finally. At least this didn't take as long as the Samsung debacle. Hopefully Qualcomm is offering Apple FRAND terms now for essential standard technologies and then Apple can go knock them out in a few years with their own modem chips. This is probably a result of Apple needing to lock in hardware production for the 2020 iPhone combined with Qualcomm realizing they might lose this in court because they were unfairly charging Apple more than other companies. At least that's what I heard in the past, I'm sure what I'm saying probably isn't the whole story or entirely accurate today. I just refuse to bore myself with legal details like this.

 

[strategicthinke]

What a shocker... yet ANOTHER court case against a big company and supplier to Apple, Apple settled out of court with right before they got ripped apart in the court room..

Said it before, will say it again, this is nothing more then Apples business MO and it’s way to bring supplier costs down to the bare bone, but it seems to consistently lose? However I bet a million bucks they now have reduced costs to pay Qualcomm.

Perhaps they’ll use their modems again now?

La La Land.

Samsung phones with the latest QCOM SoCs spank Samsung’s latest chip. You are correct, though, for all prior generations.

good remark. I forgot the case for the Galaxy S10

 

[hans1972]

Funny how people here think Qualcomm needs Apple when it's the other way around. Qualcomm supplies chips for EVERY Android phone, Apple has stopped using Qualcomm a few times and QC never skipped a beat. Apple/Intel would have to pay Qualcomm regardless because Qualcomm owns the tech Apple needs. You guys are very delusional! I'll also like to add that before this trial started everybody talked so hard that 5G wouldn't be ready by 2020 so you all didn't care anyway but now all of a sudden 5G in the 2020 iPhone matters? We all knew it did whether the rollout was complete or not. The delusional ones did not. This is a win win for Qualcomm, Apple caved and it shows Qualcomm has superior technology which means more sales for QC

Look at Qualcomms revenue. It decreased due to the battle with Apple and it's suppliers. It affected Qualcomm's stock price.

Qualcomm's stock price was about flat for this year before today. Apple was up 23%.

 

[Packers1958]

Thank god. Get rid of those crappy Intel chips once and for all. 2020 will once again bring us phones that can actually lock on to weak signals.

 

[zombierunner]

Intel has left the chat.

 

[Peace]

Money talks kids.