Imagination Tech Starts 'Dispute Process' With Apple Over Chip Licensing Rights

[MacRumors]

Long-time Apple chip supplier Imagination Technologies has started a "dispute resolution procedure" with Apple after failing to resolve a disagreement over licensing between the two companies (via Reuters).

Last month, Apple informed the British chipmaker that it plans to cease using its graphics technology in consumer devices over the next two years as it transitions to using its own in-house chips for products including iPhones and iPads.

The news came as a major blow to Imagination, which receives a small royalty on every device sold, amounting to up to half of its revenue. The company's shares fell by 70 percent on the day and have barely recovered.

Imagination stated in April that it doubted Apple could go it alone without violating Imagination' patents, intellectual property and confidential information. On Thursday it said it had been unable to make satisfactory progress with Apple on an alternative commercial arrangements for the current license and royalty agreement.

"Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement," it said.

"Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process. Imagination has reserved all its rights in respect of Apple's unauthorised use of Imagination's confidential information and Imagination's intellectual property rights."

Analysts have predicted that Imagination will become loss-making by 2019 without any Apple royalties to fall back on, and that the firm will have to work out a cost-cutting strategy if it is to survive.

The company has revealed it is selling MIPS and Ensigma - two of its three major businesses - in an attempt to shore up cash, allowing for a renewed focus on its PowerVR graphics technology.

"While the Group has continued to invest in its MIPS and Ensigma businesses, it has now decided to actively market these businesses for sale, concentrate its resources on PowerVR and strengthen Imagination's balance sheet," it said.

Article Link: Imagination Tech Starts 'Dispute Process' With Apple Over Chip Licensing Rights

 

[maflynn]

If Apple has the means to make its own graphic chips, not sure what a dispute resolution will do if Apple is intent on divorcing.

 

[Avieshek]

It's this Logical? or Emotional?

 

[LeonardXW]

what will happen if Samsung invest on Imagination Technology? All Apple technology will then be known by competitors.
[doublepost=1493894298][/doublepost]What is dispute resolution? Anyone can explain?

 

[djcerla]

This is not about graphics.

It's the AI chip that Apple wants to build on its own technology.

 

[CarlJ]

Imagination Technologies would appear to have two possible arguments here:

1. "We think Apple will use / is using information gained by working with us, in making their own chips". This could come at varying levels; if Apple used information they got under NDA with the promise that they wouldn't, that would be bad. If Apple learned useful bits from working with the Imagination, and Imagination's lawyers didn't get some sort of non-compete clause in the contract, that would seem to be on the lawyers, not Apple. But the bits I've heard so far sound more along the lines of "nobody could be smart enough to work out this technology except us". Well, Apple seems to have a good collection of very smart chip people, given what they've done with their A-series CPUs. And presumably this is something Apple has been experimenting with for a long time. They wouldn't have just one day said, "oh yeah, well, we're gonna make our own GPUs - with blackjack and hookers!"

2. "Nobody could possibly make GPUs without infringing our patents". If this is what Imagination has in mind, it would be a pretty much a textbook example of everything that's wrong with the patent process as it currently stands.

 

[jaymie1983]

Apple always tread on the face of those giving it a leg up

 

[thisisnotmyname]

They're flailing. They are making the assumption that Apple *must* be violating their IP in some way by developing in house. Of course it is so early there's nothing to indicate this. This is the conundrum of having sales concentrated to a very large customer, it's a gravy train while the relationship exists but when the eventually cease to be a customer it is an existential problem. They better start marketing what they've already done for Apple hard and start selling into their competitors.

 

[Kaibelf]

Apple always tread on the face of those giving it a leg up

Apple has decided to move on as a customer to another plan. Do you work for Imagination or something? They didn't sign a lifetime contract to be that company's client.

 

[Ries]

Imagination Technologies would appear to have two possible arguments here:

2. "Nobody could possibly make GPUs without infringing our patents". If this is what Imagination has in mind, it would be a pretty much a textbook example of everything that's wrong with the patent process as it currently stands.

Only Apple is entitled to having IP, right?

 

[FrenchRoasted]

Imagination Technologies would appear to have two possible arguments here:

1. "We think Apple will use / is using information gained by working with us, in making their own chips". This could come at varying levels; if Apple used information they got under NDA with the promise that they wouldn't, that would be bad. If Apple learned useful bits from working with the Imagination, and Imagination's lawyers didn't get some sort of non-compete clause in the contract, that would seem to be on the lawyers, not Apple. But the bits I've heard so far sound more along the lines of "nobody could be smart enough to work out this technology except us". Well, Apple seems to have a good collection of very smart chip people, given what they've don't with their A-series CPUs. And presumably this is something Apple has been experimenting with for a long time. They wouldn't have just one day said, "oh yeah, well, we're gonna make our own GPUs - with blackjack and hookers!"

2. "Nobody could possibly make GPUs without infringing our patents". If this is what Imagination has in mind, it would be a pretty much a textbook example of everything that's wrong with the patent process as it currently stands.

This is where the concept of IP starts to get fuzzy. How can a person or company own ideas forever?

 

[Scoobysnack1]

Only Apple is entitled to having IP, right?

WHAT? Did you read what was written? He is saying Apple can and likely will develop their own IP. Unique IP.

 

[danckwerts]

I'm sure that Apple can eventually develop its own graphics chips but it will take time and the fact that it has been recruiting Imagination staff for some time suggests that they might want some of their IP.

 

[Someyoungguy]

Apple always tread on the face of those giving it a leg up

Behind their backs right under their noses.

 

[Michaelgtrusa]

I as many others will ask them to keep MIPS and Ensigma in British hands. They put all their eggs on one basket and now have to get them out.

 

[Fall Under Cerulean Kites]

Imagination Technologies would appear to have two possible arguments here:

1. "We think Apple will use / is using information gained by working with us, in making their own chips". This could come at varying levels; if Apple used information they got under NDA with the promise that they wouldn't, that would be bad. If Apple learned useful bits from working with the Imagination, and Imagination's lawyers didn't get some sort of non-compete clause in the contract, that would seem to be on the lawyers, not Apple. But the bits I've heard so far sound more along the lines of "nobody could be smart enough to work out this technology except us". Well, Apple seems to have a good collection of very smart chip people, given what they've don't with their A-series CPUs. And presumably this is something Apple has been experimenting with for a long time. They wouldn't have just one day said, "oh yeah, well, we're gonna make our own GPUs - with blackjack and hookers!”

Indeed. For anyone to believe that Apple cannot possibly produce a GPU if they wanted to, shows how dillusional people can be. Whether or not they will is another story. But they certainly have the means to.

2. "Nobody could possibly make GPUs without infringing our patents". If this is what Imagination has in mind, it would be a pretty much a textbook example of everything that's wrong with the patent process as it currently stands.

+1
[doublepost=1493912051][/doublepost]If Apple thought Imagination Technologies’ technology was worth it they would have bought them. IT's curent market cap is a paltry £275MM. That’s about US$355MM, which falls out of Apple’s nose when it sneezes. Even pre-announcement, IT’s market cap was around US$1BN. Apple is unhappy about somehting. Likely, they’re not getting enought benefit for the costs they are incurring.

There’s something to be learned here about eggs and baskets.

 

[whooleytoo]

Behind their backs right under their noses.

That comment went over my head right in front of my eyes..

 

[PBG4 Dude]

Imagination Technologies would appear to have two possible arguments here:

1. "We think Apple will use / is using information gained by working with us, in making their own chips". This could come at varying levels; if Apple used information they got under NDA with the promise that they wouldn't, that would be bad. If Apple learned useful bits from working with the Imagination, and Imagination's lawyers didn't get some sort of non-compete clause in the contract, that would seem to be on the lawyers, not Apple. But the bits I've heard so far sound more along the lines of "nobody could be smart enough to work out this technology except us". Well, Apple seems to have a good collection of very smart chip people, given what they've don't with their A-series CPUs. And presumably this is something Apple has been experimenting with for a long time. They wouldn't have just one day said, "oh yeah, well, we're gonna make our own GPUs - with blackjack and hookers!"

2. "Nobody could possibly make GPUs without infringing our patents". If this is what Imagination has in mind, it would be a pretty much a textbook example of everything that's wrong with the patent process as it currently stands.

Guess they forgot about Apple's acquisition of GPU maker Raycer Graphics in 1999.

 

[MrX8503]

Considering what Apple has done for the CPU, I'm excited to see what they can do for the GPU.

 

[CarlJ]

This is where the concept of IP starts to get fuzzy. How can a person or company own ideas forever?

Neither a person nor a company should own ideas forever. I don't want to have to buy Ogg-caveman-branded fire. The original point of patents was: because it is beneficial to the population of the country to have many people inventing truly new things, we want to entice people to invent those things by giving them a "window of opportunity" during which only they can sell items of that design (or license the design to others). In return, they have to meticulously document their invention, and after their period of exclusivity expires, that design documentation becomes available to everyone. A public resource to benefit the whole country. If a company uses patents as a weapon to prevent others from using an obvious idea (one that any designer in that field would readily arrive at when faced with the same problem), they are perverting the system (and hurting - not benefiting - the country) for their own gain. Which is decidedly not what the founding fathers had in mind.
[doublepost=1493921034][/doublepost]

Only Apple is entitled to having IP, right?

Decidedly no, and that isn't what I said. If Imagination has specific patents on novel and unobvious ideas for particular ways of implementing a GPU, those should stand. What I said is that if Imagination is asserting that it is not possible to make a working GPU without using/licensing their IP - that they thus have a monopoly on the entire field of GPU design - then that would be an indication that they were granted patents that are overly broad. (Patents, because it doesn't appear that Imagination is claiming Apple is using the branding or appearance of their GPUs, or the actual chip masks - and if they were claiming that Apple was given access to trade secrets and is violating their contract by using them, that would fall under my first point rather than my second.)