Qualcomm Accuses Apple of Helping Intel Using Qualcomm Software

[tooltalk]

Rubbish. Apple isn’t acting like they “can’t pay”. They can clearly afford to pay. They have issues with how payments are calculated.

Garbage! It's not that Apple can't or agree on how payments are calculated; it's that Apple simply doesn't "want to pay." Apple believes that while their frivolous "rectangular" design and like patents are worth over $7 per patent, everyone else's, however significant, worth $0.00000001.

With the way Qualcomm has behaved how likely are standards bodies willing to choose their IP for future standards? They’re not behaving like a company with a long term plan.

You seem to be under some delusion that SSO's are run by Apple fanbois. Qualcomm is no Rambus and has never been accused of abusing or cheating the system to gain unfair advantage, as Apple has repeatedly asserted against almost all wireless patent holders in numerous lawsuits.

 

[MentalFloss]

But that's how IP licensing works. Apple aren't (just) buying components, they're also licensing intellectual property. Licenses and costs are structured differently depending on how they're used by the licensee. That business model is how that stuff was invented by Qualcomm in the first place: They spent money on R&D to develop the technologies that enable an entire industry, based on the assumption that that industry would grow as a result of their effort.

Don't like it? Fine, don't license anyone's IP. But you also shouldn't cheat companies out of what you owe them just because you're Apple.

The problem is not that Apple is trying to cheat Qualcomm, but that Qualcomm wants more than what they are due - more than what any other company could ask as licensing fees for their patents. Because Qualcomm not only wants licensing fees for their patents, they also want a „Without us, none of this would exist“ fee. That is not how patent licensing works. Companies like Nokia, Ericsson or probably even Apple also hold essential patents, i.e. patents that would warrant that kind of „Without us, none of this would exist“ statement. Every company that participates in 3GPP standardization agrees to license these patents as FRAND (fair, reasonable and non-discriminatory). Qualcomm is the only company that violates this rule and that wants a cut of the profits as opposed to a fixed FRAND per-patent fee.

 

[tooltalk]

Warped view as always.
[doublepost=1509652077][/doublepost]

You forgot to discuss the double dipping of royalties. But I would never expect anything less than highly biased explanations from you.

My understanding is that the baseband chips are sold by QCT while wireless patents are licensed by QTL, along with their software. This division of sales seems pretty typical in technology business -- Apple itself is using their Irish International subsidiary to funnel their oversea profit this way, as if their IP's are owned and licensed by the completely separate business entity in Ireland. Why is this wrong?

 

[deanthedev]

Garbage! It's not that Apple can't or how payments are calculated; it's that Apple simply doesn't "want to pay." Apple believes that while their frivolous "rectangular" design and like patents are worth over $7 per patent, everyone else's, however significant, worth $0.00000001.

You seem to be under some delusion that SSO's are run by Apple fanbois. Qualcomm is no Rambus and has never been accused of abusing or cheating the system to gain unfair advantage, as Apple has repeatedly asserted against almost most all wireless patent holders.

Nowhere has Apple claimed they don’t owe license fees. Your claim they don’t “want to pay” is an outright lie.

Qualcomm has lost 4 major cases recently totaling over $3 billion in fines or settlements related to their IP. They are being investigated by the FTC here and also by the EU over their chipset sales and licensing practices. Your claim Qualcomm has “never been accused of abusing or cheating the system to gain unfair advantage” is another outright lie.

 

[hasanahmad]

What is Qualcomm thinking. If Apple didnt destroy them, they are saying Intel cannot match them in their components. Intel is going to destroy them

 

[MentalFloss]

Garbage! It's not that Apple can't or how payments are calculated; it's that Apple simply doesn't "want to pay." Apple believes that while their frivolous "rectangular" design and like patents are worth over $7 per patent, everyone else's, however significant, worth $0.00000001.

That is because Qualcomm‘s patents mostly fall under the jurisdiction of 3GPP, which makes them FRAND. Apple‘s design patents or other patents relating to the usability of a smartphone are not FRAND. It‘s not what Apple „believes“. It‘s the rules. Ask anyone with even the most basic clue of how standardization and patents work, and they will confirm that. Qualcomm is an ETSI and ATIS member, so they have to follow their IPR policies (which are readily accessible via Google searches, by the way).

You seem to be under some delusion that SSO's are run by Apple fanbois. Qualcomm is no Rambus and has never been accused of abusing or cheating the system to gain unfair advantage, as Apple has repeatedly asserted against almost most all wireless patent holders.

Yes, every time a wireless patent holder tried to get around their FRAND obligations, Apple has accused them of cheating the system. Because they did cheat the system. Others like Nokia have just tried to use this to push Apple out of the market. Qualcomm on the other hand has turned this into a business model.

 

[kerrikins]

You've got it backwards. It's Apple who is acting like they cannot pay a few bucks royalty on phones they charge customers hundreds for.

I mean, the argument isn't as to whether or not Apple ~can~ pay a 'few bucks royalty'. The argument is whether or not they SHOULD, and that's where the disagreement is. Apple feels that it's unfair for Qualcomm to feel entitled to more money simply because a device is expensive, and I have to agree with them on that. The chip is the same regardless of whether or not the phone is $1 or $1500, which means that Qualcomm is profiting off of Apple's design and marketing. A 'common way of licensing' doesn't mean right or fair or something that should continue. There's a reason other companies have lined up in agreement with Apple on this, not Qualcomm.

 

[haunebu]

Nowhere has Apple claimed they don’t owe license fees. Your claim they don’t “want to pay” is an outright lie.

You're splitting hairs here. They want to pay less. Actually, they're not paying anything right now. So no, they don't want to pay. They want to pay less, and on their terms.

A few dollars on a thousand dollar product isn't unreasonable - but that's for the court to decide.
[doublepost=1509653953][/doublepost]

The chip is the same regardless of whether or not the phone is $1 or $1500, which means that Qualcomm is profiting off of Apple's design and marketing.

See, this is the crux of the issue. Qualcomm is supporting the development of an entire industry with players large and small, that make products that are both expensive and inexpensive. If every smartphone in the world cost $1, $10 or $100 then Qualcomm wouldn't have been incentivized to invent the foundational technologies in use anyway.

In fact, if you are making a cheap smartphone, it's Qualcomm giving you a price break and thus bringing technology to the low end of the market - a segment which would otherwise be unable to afford it.

 

[MentalFloss]

You're splitting hairs here. They want to pay less. Actually, they're not paying anything right now. So no, they don't want to pay. They want to pay less, and on their terms.

No, they want to pay based on 3GPP terms, which Qualcomm has agreed to abide to.

A few dollars on a thousand dollar product isn't unreasonable - but that's for the court to decide.

But Qualcomm has agreed to make the patents available as FRAND. The „ND“ in FRAND stands for „non discriminatory“, which implies that all licensees pay the same, regardless of the product. That‘s what Qualcomm agreed to when they joined ETSI, ATIS and ARIB, which they had to do to contribute to 3GPP standardization.

 

[Preclaro_tipo]

This is what Qualcomm means when they say "Qualcomm's innovations are at the heart of every iPhone and enable the most important uses and features of those devices"

They mean, integration of the modem itself is a Qualcomm technology, that's pretty sick.

They also are suing for 3D touchscreen tech, and claiming Apple shouldn't be manufacturing the entire iPhone in the first place. That's brassy!

I can see how Apple would want to move away from them as soon as possible before Qualcomm lays claim to other technologies or technology integrations; not to mention Qualcomm's implication that Apple shouldn't be allowed to manufacture the iPhone without Qualcomm.

 

[R3k]

So bitter...

 

[2010mini]

The Contract Law Police?

They are basically accusing Apple of stealing intellectual property and giving it to another company.
Or helping another company steal their stuff. That is way for serious than a breach of contract.

 

[entropys]

You're splitting hairs here. They want to pay less. Actually, they're not paying anything right now. So no, they don't want to pay. They want to pay less, and on their terms.

A few dollars on a thousand dollar product isn't unreasonable - but that's for the court to decide.
[doublepost=1509653953][/doublepost]

See, this is the crux of the issue. Qualcomm is supporting the development of an entire industry with players large and small, that make products that are both expensive and inexpensive. If every smartphone in the world cost $1, $10 or $100 then Qualcomm wouldn't have been incentivized to invent the foundational technologies in use anyway.

In fact, if you are making a cheap smartphone, it's Qualcomm giving you a price break and thus bringing technology to the low end of the market - a segment which would otherwise be unable to afford it.

Ahh, you believe Qualcomm is serving mankind in an altruistic approach to charging customers! What they are actually doing is making sure their product is the dominant product by undercutting potential competitor chips in startups, by selling t break even or even a loss, at no financial cost to Qualcomm as they make it up by reaming higher priced competitors to those phones when they buy the exact same product!
Why would Apple, as a competitor to those phones, be happy with this? Well, apart from being a hipster commie Californian fruit company of course.

 

[kdarling]

Qualcomm has lost 4 major cases recently totaling over $3 billion in fines or settlements related to their IP.

Those were fines about things quite different from the percentage pricing method. Even after fining them for things like not licensing smaller patent groups, China has recently ruled that the pricing method stays in place.

... I think the practice of charging a percentage of retail price has got to end.

Maybe. But then what will happen to all the billions of people who enjoy cell phones now that have maker profits measuring in the handful of dollars? Tell them they have to pay more, or give up a phone, because Apple wants more profits?

They're the very reason why there's a worldwide network and market in the first place.

You forgot to discuss the double dipping of royalties.

As already pointed out, because of the separation of silicon and software, there is no double-dipping.

No, they want to pay based on 3GPP terms, which Qualcomm has agreed to abide to.

No, it's on ETSI's FRAND terms, which make no mention of pricing method, only that cross licensing can be required.

Qualcomm is the only company that violates this rule and that wants a cut of the profits as opposed to a fixed FRAND per-patent fee.

Only company? NO sir. Not even close. It has been common for decades for ETSI cellular patents to be licensed per device cost by all the major players. Here again is a chart showing just some of the publicly known percentage rates:



Along with some past legal decisions and comments noting this royalty method:

TL;DR - it is common and legal for IP to be licensed per device cost. The only major companies who think this is "unfair" are ones who contributed nothing to the standards and/or don't want to cross license, but who nevertheless still want to benefit cheaply from the decades of hard work and spending done by others.

 

[tooltalk]

Nowhere has Apple claimed they don’t owe license fees. Your claim they don’t “want to pay” is an outright lie.

*yawn* I never said Apple claimed they don't owe license fees, but that they "don't want to pay" -- Qualcomm's fee which they'd been all along. Further, I gave a comparative example of what Apple offered to Samsung in 2010 for fewer than a handful of frivolous UI/utility patents vs. what Apple wants to pay for a large portfolio of critical wireless patents that drives the market demand for their product to illustrate Apple's position.

Qualcomm has lost 4 major cases recently totaling over $3 billion in fines or settlements related to their IP. They are being investigated by the FTC here and also by the EU over their chipset sales and licensing practices. Your claim Qualcomm has “never been accused of abusing or cheating the system to gain unfair advantage” is another outright lie.

Sure, and you claimed that SSO's are less likely to choose their IP's for future standard. Why would losing contract disputes/being fined by regulators that deter SSO's from choosing Qualcomm's patents for future standard? Has Qualcomm ever been accused of cheating SSO's?

 

[Alan Wynn]

Even if the claim in the article is true, it's not a black and white situation.

You mean it might not be a black and white situation from a legal standpoint.

I doubt you'll find any evidence that Apple just handed over licensed software to Intel. They know they'd be strung up for that.

People have done dumber things. Again, I have no knowledge of the situation, but it is not beyond the possibility that some Apple employee did turn it over, possibly making Apple liable. It is also possible that the claim is simply false (or wrong).

But perhaps they used knowledge of the software to influence Intel's development efforts. With something that subtle, it'll come down to years of legal disputes and arguing microscopic legal meanings to sort out any license infringement. The rest of the world will lose interest long before this case is resolved.

You might be right that this could be true but that Qualcomm might not be able to prove it (the essential premise in your argument), but while that would protect Apple it financially, they would still be in the wrong.

 

[sherifhanna]

What I haven't seen in reporting on this story (as of yet) is any mention of what grounds Qualcomm has for the suit. Do they have evidence, or is this an annoyance suit based on the supposition that it must have happened (i.e., "How could they possibly have done what they have without this?").

https://twitter.com/sharatibken/status/926158791095152640

 

[techwhiz]

You've got a point. I think Qualcomm will run into trouble eventually, because it's only a matter of time before Samsung follows suit and start making their own chips too.

Samsung already does, but they still buy Qualcomm.

But the license fee Apple was paying was an agreed upon percentage.
Apple decided as the price increased on devices they wanted to pay less.
Then, and only, then, did they complain.

It is a common practice to ask for a royalty based on device cost.
This is normal to make sure the technology is available to low end devices also.
Qualcomm is not the bandit here.

 

[MH01]

A frightened dog barks louder.

Dunno ..... some are just angry , and threaten to go thermonuclear ! Fear?

 

[MrX8503]

Yours is a very common mistake. You are mixing up two totally separate things (as Apple hoped you will), chips and IP.

CHIPS - The chip vendor side of Qualcomm sells each part at a fixed price. Apple can buy those chips, or chips from anyone else who sells a chip for less. Which they do already, having used chips from Infineon, Intel (who bought Infineon) and Qualcomm.

IP - But chips are just silicon, sold at a price reflecting what it took to design and manufacture them. They do NOT REPEAT NOT include all the IP surrounding them or software needed to run them, for which a device maker must pay all the companies who created that IP / software.

Think of it like the difference between selling an ARM chip and if Apple were to license iOS. They're not the same thing, and the chip would not include a license for the OS. Likewise a modem chip is just a fancy CPU (DSP), useless without code to run it.

Here are just some of the inventors whom a phone maker has to pay to utilize 3G:

View attachment 730834

And guess what? Most of them charge by the device cost. Just as with the App Store, everyone pays a percentage. In that way, higher cost products subsidize lower cost products, leading to more customers for everyone. It's a common way of licensing IP.

Apple is not just targeting Qualcomm. They want to shave royalties to everyone. Even though they've made hundreds of billions themselves selling phones that rely on the IP of others.

But it would make more business sense for Apple to diversify. I don’t see the correlation with the App Store. Apple has to maintain the ecosystem and users when 3rd party apps sell.

I don’t think the IP should be worth the device cost. We’ll see what the courts decides.

 

[Phonephreak]

Warped view as always.
[doublepost=1509652077][/doublepost]

You forgot to discuss the double dipping of royalties. But I would never expect anything less than highly biased explanations from you.

But sources of his claims are always posted. Seems to call it straight to me

I love my Apple products, but Apple uses its size and cash to bully smaller businesses. It’s not illegal so I have no problem with it personally. But Apple has done some shady stuff too. They are not the moral compass like some claim they are. They are an incredibly successful business.

 

[ke-iron]

This right here will be the undoing of Qualcomm. It’s one thing to accuse the company you have an active disputes against, but to accuse another company that has nothing to do with the ongoing issues of using your software is a new low.

While anything is possible I highly doubt Apple and Intel would do something like what they’re being accused of. Apple and Intel have way too many resources to be bothered in spats like this. Apple would just buy a company that has the tech and patents they need or develop their own from scratch, and patent it.

 

[abhibeckert]

Qualcomm is no Rambus and has never been accused of abusing or cheating the system to gain unfair advantage, as Apple has repeatedly asserted against almost all wireless patent holders in numerous lawsuits.

2006 - Reliance (indian telecom company) accuses Qualcomm of unfair royalties and when negotiations faled Reliance switched from CDMA to GSM, costing Qualcomm $11.7 billion.

2007 US government blocked phones with one of Qualcomm's modems from being sold because Qualcomm infringed on Broadcom patents. The judge also accused Qualcomm of hiding relevant evidence and lying under oath

2009 south korean government fines Qualcomm $207m for unfair business practices in their chip sales and charging unacceptably high royalites

2012 federal probe begun investigating allegations Qualcomm was bribing foreign government officials

2014 China fines Qualcomm $917b for overcharging customers and abusing it's market position

2015 European Comission opens two anti-trust cases against Qualcomm. Results of the investigation haven't been released yet

2016 Apple started this lawsuit we are discussing here

2017 south korea finds Qualcomm was preventing samsung from selling chips to certain phone makers. case is ongoing.

Clearly Apple wasn't the first to accuse Qualcomm of charging unfair prices.

 

[HylianKnight]

Qualcomm's IP assets and legal team are one of the few that could very well win against Apple. They invented a huge proportion of the technology used this space. If Apple really did provide Intel, Qualcomm's direct competitor, with Qualcomm's IP, it's a complete disaster for Apple.

At this point, the whole thing seems to have become intensely personal for some executive team member(s) at Apple. Do they really care about just a few dollars per iPhone? Enough to completely remove what are indisputably the world's best mobile chipsets from their supply chain? Doesn't make any business sense.

I seriously doubt Apple gave info/access to intel. I also doubt intel would have needed it. Besides, with all these years that intel has been kinda stagnant in the CPU market (only due to a lack of real competition) they had to have been doing something to pass the time.

 

[tooltalk]

2006 - Reliance (indian telecom company) accuses Qualcomm of unfair royalties and when negotiations faled Reliance switched from CDMA to GSM, costing Qualcomm $11.7 billion.

2007 US government blocked phones with one of Qualcomm's modems from being sold because Qualcomm infringed on Broadcom patents. The judge also accused Qualcomm of hiding relevant evidence and lying under oath

2009 south korean government fines Qualcomm $207m for unfair business practices in their chip sales and charging unacceptably high royalites

2012 federal probe begun investigating allegations Qualcomm was bribing foreign government officials

2014 China fines Qualcomm $917b for overcharging customers and abusing it's market position

2015 European Comission opens two anti-trust cases against Qualcomm. Results of the investigation haven't been released yet

2016 Apple started this lawsuit we are discussing here

2017 south korea finds Qualcomm was preventing samsung from selling chips to certain phone makers. case is ongoing.

Clearly Apple wasn't the first to accuse Qualcomm of charging unfair prices.

Sure, Qualcomm's trouble with regulators goes back even further -- I remember Qualcomm being fined other offenses in South Korea in late 1990's. This goes on to prove however that none of these lawsuits and fines have any bearings on Qualcomm's membership with SSO's or their ability to declare their patents standard.