Qualcomm Asks China to Stop Manufacturing and Selling iPhones via New Lawsuits

[kdarling]

This is like making a ball bearing, patenting it, then charging a percentage of the cost of the items it is used in, after being paid for the ball bearing at purchase.

That's a common misunderstanding.

Qualcomm does not double charge for IP. Nobody's modems (not even Qualcomm's) come with a license for all the IP needed to run 2/3/4G.

Instead, every phone maker has to license such IP from all the standards contributors.

Phone makers such as Apple don't just pay Qualcomm a percentage, but also Nokia, LG, Sony, Ericsson, Samsung and a slew of others who invented the very standards that Apple has made hundreds of billions from, while contributing virtually nothing.

That's why it's not just Qualcomm that Apple is after. Apple wants more and more profit, which means they want lower royalties. And even though they've failed to prevail previously when they tried to claim that percentage royalties were non-FRAND (against Moto, Samsung, Nokia, Ericsson), they keep at it. They figure that sooner or later they'll get a legal foothold from a sympathetic court.

Good luck getting China to comply with any legal action against intellectual property rights!

On the contrary, as noted previously in this thread, even while fining Qualcomm for other issues, China's government recently ruled that phone makers must pay Qualcomm a percentage of the phone value for their IP.

However, the patents in this particular lawsuit are not standards essential, so yeah, who knows what'll happen, if anything. Although as some have mentioned, it certainly gives China another way of pressuring Apple for "favors" like the "R&D" centers they've built.

 

[tooltalk]

Apparently you missed the sarcasm in my original post. Of course these are different cases. Qualcomm has lost billions in antitrust cases related specifically to their dispute with Apple - licensing fees regarding cellular modems. So now Qualcomm is trying to bring up some unrelated patents to try and squeeze out a victory because of how horribly they’re losing cases related to their main business (modems).

I’m not pretending any Apple cases where they lost have never happened. What you’re doing is cherry picking cases Apple lost to make a point (and failing miserably). If you want to compare Apple and Samsung you have to list ALL cases each has been in, and not just the few that support your narrative.

And if you do that you’ll see Samsung and Apple are in a completely different league, with Samsung on the losing side.

I don't think you were being sarcastic, as much as being clueless. Qualcomm lost to FTC regulators of the three named countries, not Apple. It also pays to read kdarling's comment about what Qualcomm was accused and fined for this time around. Qualcomm didn't lose a single case to Apple -- if any, it's Qualcomm's competitors in the baseband business who stand to gain the most. Apple's main contention has always been that Qualcomm's royalty should be based on SSU, not EMVR -- so Apple can pay as little as possible. Apple made similar claims against Samsung, Ericsson, Nokia and hasn't won a single case. None of the three regulators likewise ruled against Qualcomm based on that Apple's wishful thinking. Apple's legal approach has been sadly let's throw the whole kitchen sink and see what sticks -- which includes, as Qualcomm alleges, lying about business agreements that the regulators didn't ask for. But if believing that Qualcomm lost to Apple is what it takes to make you happy, I won't stop you.

and speaking of cherry picking and Samsung's legal loss in non-US lawsuits, would you mind citing some notable cases to back up your claims? Having followed the lawsuits between the two companies since 2012, I'd really like to see what you are seeing there.

 

[expiredyogurt]

This right here is a manchild throwing a tamper tantrum. what an end of an era, qualcomm is going to get it's ass kicked so hard they are going to get bought out and go under.
good job poking the big bear for something so petty

 

[deanthedev]

I don't think you were being sarcastic, as much as being clueless. Qualcomm lost to FTC regulators of the three named countries, not Apple. It also pays to read kdarling's comment about what Qualcomm was accused and fined for this time around. Qualcomm didn't lose a single case to Apple -- if any, it's Qualcomm's competitors in the baseband business who stand to gain the most. Apple's main contention has always been that Qualcomm's royalty should be based on SSU, not EMVR -- so Apple can pay as little as possible. Apple made similar claims against Samsung, Ericsson, Nokia and hasn't won a single case. None of the three regulators likewise ruled against Qualcomm based on that Apple's wishful thinking. Apple's legal approach has been sadly let's throw the whole kitchen sink and see what sticks -- which includes, as Qualcomm alleges, lying about business agreements that the regulators didn't ask for. But if believing that Qualcomm lost to Apple is what it takes to make you happy, I won't stop you.

and speaking of cherry picking and Samsung's legal loss in non-US lawsuits, would you mind citing some notable cases to back up your claims? Having followed the lawsuits between the two companies since 2012, I'd really like to see what you are seeing there.

I love when people claim to know all about a subject while completely forgetting major events that happened.

 

[geenosr]

According to Qualcomm, the lawsuits are based on three non-standard essential patents covering power management and the Force Touch technology that Apple uses in its touch screens.

Force Touch is a technology developed by Apple Inc
https://en.wikipedia.org/wiki/Force_Touch

May the "Force Touch" be with Apple!

 

[FactVsOpinion]

When will Qualcomm just go bust?
Their ego know no bound...

Exactly. I live in San Diego, where they’re based, and I’m sick of seeing there ads everywhere telling me everything I love about my phone is thanks to them. No. Not really.

 

[B4U]

Exactly. I live in San Diego, where they’re based, and I’m sick of seeing there ads everywhere telling me everything I love about my phone is thanks to them. No. Not really.

I had met with some of their staff during UnPlugFest a few years ago, and you would not believe how much ego they have when I was trying to talk with them. It was like I was trying to talk to some divine beings.

 

[AZ63]

If Apple is using Qualcomm technology without paying for it, that's very low and they should be punished for their illegalities.

No matter if it is a percentage based or any other model. Apple agreed on it. Now pay or don't use the technology.

You can't just say: "I agree to pay you under your terms" and then suddenly stop paying but still use the technology just because you deem it unfair. That's scamming.

In what world does that make sense? Have we gone completely nuts?

I believe the article stated that Apple was paying for what was agreed upon but QC was not honoring the "rebate" part of the agreement. QC broke the agreement so Apple stopped paying due to QC not honoring their side of the agreement. To recap, Apple is reacting to QC breaking the agreement.
Does it make sense now?

 

[kdarling]

To recap, Apple is reacting to QC breaking the agreement.
Does it make sense now?

Both sides claim the other broke agreements.

For example, Qualcomm claims in their legal brief that Apple tried to gag them from saying anything about modem speeds, since Apple was planning on gimping the Qualcomm iPhones to be the same speed as the Intel iPhones:

"Apple warned that if Qualcomm engaged in or sponsored such comparisons, Apple would use marketing resources at its disposal to 'retaliate' against Qualcomm and that Qualcomm's standing as an Apple chipset supplier would be jeopardized.

"But Apple stated publicly—and falsely—that there was 'no discernible difference' between iPhones using Intel chipsets and iPhones using Qualcomm chipsets."

--
Qualcomm also noted that in false testimony before the Korean FTC, Apple claimed that they were unable to use modems from other chip suppliers. This helped the KFTC rule against Qualcomm.

Yet a few weeks later, iPhones went on sale with an Intel modem. Meaning they were actually being manufactured at the time that Apple made their KFTC claim.

--
There's a lot more. It's a real soap opera of a case. But it should become clear pretty quickly who is making things up, when the full contracts and email trails come out in trial.

 

[mabhatter]

I am not sure if it's justified or due to slanted news articles, it just feels like Qualcomm is a slimy company.

I think the issue is more technical than slimy. Qualcomm is using their model to get around the typical FRAND terms that other items like RAM and NAND are sold under. Typically when you buy “industry standard” chips the manufacturer sells them and the licensing is included in the chip cost as device makers buy from multiple companies. Qualcomm is essentially allowing multiple manufacturers to make chips with their technology to get around monopoly laws then sticking the device maker with the patent charges... which is really clever because Apple sells a $900 iPhone while NoNameChinese sells a $400 android clone with the same chips and pays a fraction of the licensing. I believe also that Qualcomm is trying to claim here that Intel’s LTE chips are also under Qualcomm license with a similar vibe to how Microsoft back in the day would claim ALL the computers sold by an OEM required MS-Dos & Windows licenses as part of their abusive contracts.

Go back to when Apple was starting out on phones and how the market was dominated by chipmakers and not device makers.. Apple was poor and got beat up early on.. but now they have chips from another company, and the money to fight protracted legal battles.
[doublepost=1508079173][/doublepost]

This lawsuit is just a side effect of Qualcomm punishing Apple for having the balls to fight Qualcomm's unfair excessive requirement of a piece of each device sale on top of the already paid license fees of the components included in the device.

Qualcomm is absolutely in the wrong here, there is no doubt about it. Apple is doing what other companies couldn't do because of the power Qualcomm have.

Apple most likely can lose this lawsuit but the damage to Qualcomm has been done, they're getting noticed by regulators around the world for their BS practices and they will lose.

Apple will keep filing new lawsuits, appeals to lost lawsuits and etc until Qualcomm stops.




No, the feud started many years ago but Apple simply didn't have a choice because Qualcomm was the only supplier. Apple started working with Intel to have Intel produce their own models, so that Apple can have a second supplier. Read Apple's interview on BI last week.

Once Apple had a second supplier, it made it safe for Apple to start dialing in Qualcomm's BS and start this major global war to have Qualcomm stop with the % sale requirement on top of licenses.



You realize it will not happen even if Qualcomm wins?

If Qualcomm loses the lawsuit and stop their BS on demanding % of each sale instead of just the components that Apple already paid for, Apple would have no problem using Qualcomm-only stuff for now on.

There is no justification for Qualcomm demanding all companies to pay % on each sale on TOP of the license fees. This isn't BS, they've already been fine 3-4 times by regulators around the world for pulling this move.



You are standing with the company that is demanding that every company pay a % of device sale on top of license fees for the same component in the same device, double-dipping.

Countries doesn't matter here.

This brings out the point more clearly. It’s not that Apple has a problem paying for licenses. It’s that Qualcomm as been abusing contract terms similar to Microsoft in the 1990’s.. so it’s not even a new trick. Nobody else in technology gets per-device royalty terms.. not ARM, or RAM and NAND designers, do why should Qualcomm?

The media codex companies tried abusive terms like these in the 2000’s which is why Apple designed AAC And M4P formats where they could carefully choose which patents to use instead of just jumping on the MP3/DIVIX thing like smaller companies. (Microsoft doc the same with WMA so it wasn’t just Apple trying to reign in trolls) “people” never saw the bill, but in the 00’s the codex companies were literally going for “per media” license fees.. so if you used the high end tools they wanted a cut of your mastered DVD or Alblum sales for using a program like Apple’s suite.. they didn’t just want Apple to pay them a fee to sell the software. Qualcomm would be trying to get “per GB” patents if they could get away with it.

 

[cmaier]

That's a common misunderstanding.

Qualcomm does not double charge for IP. Not even Apple claims they do. Nobody's modems (not even Qualcomm's) come with a license for all the IP needed to run 2/3/4G.

Apple alleges that they cannot use Qualcomm chips without also paying a separate IP licensing fee. It’s in the Complaint. That’s double charging for the IP because when they buy the chip any patents that are “substantially embodied” by the chips have their rights exhausted. See
Quanta Computer, Inc. v. LG Electronics, Inc.

 

[darren3]

This means more iPhone X’s for us?

 

[macbeta]

Hopefully Apple will take some of their money and invest in making their own modems and just break relations with Qualcomm all together .

If only they could. Its the problem is patents - they can't make any headway there as the whole thing is patented to hell. Their hands are essentially tied.

 

[jkichline]

If Apple is using Qualcomm technology without paying for it, that's very low and they should be punished for their illegalities.

No matter if it is a percentage based or any other model. Apple agreed on it. Now pay or don't use the technology.

You can't just say: "I agree to pay you under your terms" and then suddenly stop paying but still use the technology just because you deem it unfair. That's scamming.

In what world does that make sense? Have we gone completely nuts?

In the world of contract law. Contracts typically have an expiration and need to be renegotiated. Any business lawyer worth their salt would not provide a timeframe to a contract. Once that contract expired, Apple can renegotiate the terms. If they found themselves in a better spot, say using Intel modems, then why would they want to pay a per-device percentage to a company when they are using next to none of their IP? The use of IP shifted and Apple wanted to renegotiate. Qualcomm bulked and is demanding Apple stick with the existing contract. Apple is simply calling the contract and demanding new terms.

 

[kdarling]

Once that contract expired, Apple can renegotiate the terms.

Apple doesn't have a direct contract. Instead, they pay Foxconn back for Foxconn using their Qualcomm license. Ditto for the other iPhone factories.

That way, the per device royalty has only been on the price that Foxconn charges Apple, not on the doubled price Apple sells them for.

If they found themselves in a better spot, say using Intel modems, then why would they want to pay a per-device percentage to a company when they are using next to none of their IP?

You're right that Apple wants cheaper terms, but it doesn't matter whose modem chip they buy, it'll always be hugely dependent on IP from the cellular standard creators. They all deserve and must be paid a royalty. For example, here are just a few of the LTE contributors:



This whole royalty attack is not just about Qualcomm. Apple doesn't want to pay much to any of the standards inventers, even though those companies have spent decades and billions inventing the very worldwide infrastructure and market that Apple themselves have hypocritically made many billions in profit from while using.

 

[SDRLS]

When I visit San Diego (home of Qualcomm), there are billboards and radio ads going on and on about how important Qualcomm is to cellular communications and that we should be supporting them in all they do....

Where are these exactly? I live in SD. And I have yet to ever see anything of the sort.

 

[AZ63]

Both sides claim the other broke agreements.

For example, Qualcomm claims in their legal brief that Apple tried to gag them from saying anything about modem speeds, since Apple was planning on gimping the Qualcomm iPhones to be the same speed as the Intel iPhones:

"Apple warned that if Qualcomm engaged in or sponsored such comparisons, Apple would use marketing resources at its disposal to 'retaliate' against Qualcomm and that Qualcomm's standing as an Apple chipset supplier would be jeopardized.

"But Apple stated publicly—and falsely—that there was 'no discernible difference' between iPhones using Intel chipsets and iPhones using Qualcomm chipsets."

--
Qualcomm also noted that in false testimony before the Korean FTC, Apple claimed that they were unable to use modems from other chip suppliers. This helped the KFTC rule against Qualcomm.

Yet a few weeks later, iPhones went on sale with an Intel modem. Meaning they were actually being manufactured at the time that Apple made their KFTC claim.

--
There's a lot more. It's a real soap opera of a case. But it should become clear pretty quickly who is making things up, when the full contracts and email trails come out in trial.

I look forward to the truth. As much as we will get of it. I use and like
Apple products but, unlike so many here, I have no illusions as far as Apple goes. Apple is big business and will work to "spin" the story in their favor, just like every business/politician. Most people just find the truth with which they are comfortable.

 

[Phonephreak]

I had met with some of their staff during UnPlugFest a few years ago, and you would not believe how much ego they have when I was trying to talk with them. It was like I was trying to talk to some divine beings.

Kinda like a few people here

 

[FactVsOpinion]

Where are these exactly? I live in SD. And I have yet to ever see anything of the sort.

They’re all over... I live here to. Check ads posted on sides of bus stop shelters for example

 

[DeepIn2U]

Other modems will likely always be behind, because that's Qualcomm's primary business: spending billions in R&D on comms each year. They're hugely responsible for the 3G we all enjoyed for years, and are a big part of 4G and beyond.

What people also don't realize is that, while Qualcomm contributes basic FRAND patents that are needed to implement a standard, they do not contribute all the optimization methods they themselves come up with that can work within the standard. That's why they're the gold standard for speed and power conservation, and why others want/need to license their non-SEPs as well.

Plus they've been around mobile since the early 90s and have patented related inventions ranging from touch controllers to augmented reality to image processors. They rank about fourth in the US when it comes to getting patents per year.



Note: I think articles and posters are using the wrong term.

Force Touch is an old industry term and is what Apple calls their corner sensor based clicks on the Mac and Watch. I believe they license it from a third party.

Seems more likely that Qualcomm is targeting what Apple calls 3D Touch, which is used on the iPhone.

Just a slight rebuttal to your quote in bold. I believe Qualcomm has a big role in CDMA to 3G in the USA, however Ericsson has the lions share for GSM/GPRS/EDGE transition to 3G ... at least for providers towers - hence why that standard was established and deployed first on a global scale (and in the USA) before Qualcomm chips began to be heavily used (CDMA-2000/EV/EVD). It was only when 4G launches or after Verizon went to 3G did we see Qualcomm grow their treasure chest exponentially.


Ericsson Wiki “
Operators use Ericsson products to migrate from 2G to 3G and, most recently, to 4G networks.[83]

The company's network division has been described as a driver in the development of 2G, 3G, 4G/LTE technology, future 5G and the evolution towards all-IP,[84”

 

[kdarling]

Just a slight rebuttal to your quote in bold. I believe Qualcomm has a big role in CDMA to 3G in the USA, however Ericsson has the lions share for GSM/GPRS/EDGE transition to 3G ...

Many people don't know that GSM's 3G is CDMA based (WCDMA).

Ericsson had to license basic patents from Qualcomm in order to develop WCDMA.

As for deployment, 2G CDMA networks (Verizon, Korea, Japan, China, Australia, etc) were able to far more easily migrate to 3G since the base technology did not change for them, and they only needed one radio type. GSM networks and phones, OTOH, had to add on a second radio type (3G WCDMA plus 2G TDMA), and resite many towers.