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Qualcomm to Pursue iPhone Import Ban in United States in Ongoing Apple Feud
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I'm sure they have plenty of in-house counsel that tell them what they can and cannot legally do.
Although Apple likes to push the idea, using chip price as a royalty method makes the least sense of all.
The cost of manufacturing a chip is usually unrelated to the cost of creating the IP to design or use it. An inexpensive chip can do expensive things.
Look at Touch Id or a touchscreen controller chip. Should the value of any Apple patents on those be tied only to the cost of the physical chip? Of course not. The value is in how and what is done with the chip, and with what kind of product it enables.
(If I invent a teleportation device that costs only $1000 to make, I am sure as heck going to license it at a million dollars per device, not use the $1000 cost as a base!)
Plus chip prices fall over time, while what you can do with that chip remains as valuable as before.
That's backwards. Qualcomm would love to have a license with Apple directly, instead of only making money from the much lower price given by Apple's contractors. It's Apple that always refuses the offered rates.
Everyone has access to the same rate structures. If you mean royalty by price, that's not unusual for technology patents.
Just as with many other things in life (taxes, franchises), those who make more, pay more. Even better in this case, there's usually a fairly small cap.
Qualcomm isn't trying to renegotiate anything. Their rates have been set for decades and licensed by over 200 companies during that time.
It's Apple who wants to change Qualcomm's long standing rates, to benefit themselves as they move away from Qualcomm. This is understandable; Apple is all about profit.
But historical contract rates are against them here. Thus their favorite fallback "negotiating" method is to appeal to an ignorant and favorable home state jury.
True.
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This is about Qualcomm.
The FTC filed a complaint against Qualcomm for anticompetitive licensing practices. It's unlikely iPhones will be banned considering the government threw the first stone.
Yeah, what they've been doing really hasn't worked. They've only become the richest company in the world.
Obviously it's fine to try to have it both ways. In any court case you will ask for the moon and then see what the judge agrees with (that is, in the USA. In other countries asking for too much has risks on its own).
But it was a different situation: An iPhone is lots of devices in one case. It's a phone. But it's also a games console, a music player, a camera + video camera, a computer, and many other things. So a patent on something belonging to a phone shouldn't get money from all the other parts. In Apple vs. Samsung, Samsung copied Apple's design patent to sell complete devices. If anybody was tricked into buying a Samsung phone when they wanted to buy an iPhone, that's the sale of the whole device gone.
In the California case, the defendant is Qualcomm. In this ITC case, the defendant is Apple.
You're behind in the news. That FTC pushing cheap technology sharing was Obama's administration, and its Chief has resigned. Trump's FTC administration is pointed strongly in the other direction. Taken from a previous thread:
The FTC Commissioner who wrote a strong opposing opinion to the FTC charges against Qualcomm, has since been appointed as the new FTC Chief Commissioner by Trump.
1. She said there was no evidence that Qualcomm charged customers more for using other chips.
2. She said that it was not up to just customers to determine what is a "fair" rate.
Many observers think the new, more patent holder friendly, FTC will drop their case against Qualcomm. E.g.
Qualcomm's FTC Defender Just Got a Major Promotion - The Motley Fool
I don't even want to think about the legal consequences of this. Being blackmailed by the US president?
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The argument against it is that a device that combines lots of functionality might have to pay "reasonable" $5 for 200 different patents. Which makes $1000 patent fees on a $1000 device. If someone makes a gold plated, diamond encrusted iPhone for $100,000, should they have to pay $500 because they added a lot of bling?
how is it blackmail when the president/white house are not the ones that would impose the ban.
If those numbers are right, based on the cost of the 7, that's only 1% to 1.5%.
Here is my viewpoint, if your not willing to pay for something then why should you be able to use it? In a way, I agree with the BAN. If you don't pay then you can't play, hasn't that what Apple has said in the past about their products?
Yes, Apple can.
If Apple and Qualcomm can't agree on what would be a reasonable royalty, Apple can refuse to make royalty payments and wait for a court to decide what a reasonably royalty would be. If Qualcomm won't offer what Apple considers to be a reasonable royalty, it is well within its rights to ask a court (or otherwise wait for a court) to decide the matter. And, if the allegations made by Apple (and mirrored to a considerable extent by the final or preliminary findings of numerous regulatory bodies around the world) are true, then Qualcomm has refused to offer what would be considered (i.e. by a court) reasonable royalties to Apple.
Under these circumstances it's very unlikely that Qualcomm could get an injunction against against Apple, the best it could hope for is a damages around that's closer to what it thinks is appropriate than to what Apple thinks is appropriate. I don't think Qualcomm would prevail on any of the four eBay factors, let alone on the balance of them. I'd be happy for us to consider those factors one by one if you want to. But for starters I don't think Qualcomm can establish irreparable harm. Considering that Qualcomm already licenses the patents in question to many industry participants, the harm done to it by Apple using those patents can be remedied by a damages award. For similar reasoning relating to a different dispute see Apple v Motorola (Federal Circuit, 2014).
It's hard (though not necessarily impossible) for patent holders to demonstrate irreparable harm from the infringement of FRAND-encumbered SEPs because they've already committed to license those SEPs to anyone who needs to use them. The only question is what those SEP holders get in return (e.g. what is the royalty?); they don't get to decide that particular would-be users aren't allowed to use those SEPs at all. Whatever advantage they might apprehend from preventing some would-be users from using them at all, the FRAND-encumbered SEP holder has already contractually agreed to give up. So a damages award would, in almost all cases, repair whatever harm they suffered as a result of infringement.
The DOJ and USPTO have weighed in on this issue of patent holders being able to get injunctions or exclusion orders when there is SEP infringement. U.S. courts have also provided (what amounts to controlling) guidance on the issue. The bottom line is that, while they may be appropriate in some extreme circumstances, they are not in most circumstances. In part that's because of the difficultly SEP holders would generally have in establishing irreparable harm owing to the particular circumstances generally present with regard to those kinds of patents.
On a related note, I think it's more likely that Qualcomm could be found liable for damages (i.e. litigation costs) for seeking this import ban than it is that Qualcomm will be able to get such a ban (at least, one that survives appeals). That's not to say that I think the former is likely. I don't, I just think it's more likely than the latter. Such damages would be based on a breach of contract. Normally someone who petitions the government (e.g. a court or regulatory body) for actions which might be considered anticompetitive is shielded from liability for doing so under what's known as the Noerr-Pennington doctrine, which is based on First Amendment rights. However, when someone has agreed by contract not to do something (e.g. not to pursue injunctions against SEP infringers except under certain circumstance), that doctrine doesn't really apply. For more color on that notion see, e.g., Microsoft v Motorola (Ninth Circuit, 2015).
Sure, if Qualcomm can prove that their IP's drive sales (or market demand) of the $100,000 iPhone, they could and should collect $500 per device no problem. While there is no rigid legal framework on how royalty rate or basis is determined, US courts use some sort of GF (Georgia Pacific) factors or similar frameworks to determine what is reasonable or if royalty should be apportioned. So they would look for strong correlation between the patented features and market demand, how much comparable licenses cost, and other common sensical stuff.
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What I'm saying is the case you brought up was with Samsung.
Ah yes, the Trump administration. Destroying the internet one day at a time. I admit that Qualcomm has a better chance under Trump, but I don't think the ban will happen.
why not? USITC has done this before -- eg, in Apple v Samsung (2012). Of course, Apple is not going to wait for that to happen. They would lobby for a presidential veto before the ban becomes effective (60 days after the final decision) and would eventually open up their wallet if Apple couldn't work out a deal with Trump. This is all legit -- Trump can make or break Apple for policy/public interest reasons.
Also note that USITC is not in the business of setting rates or determining royalty basis, picking jury, etc, etc -- their sole enforcement power is an import ban (granted under Section 337 of the Tariff Act). Further, USITC cases move much faster and is not encumbered by the same set of higher standards against injunctive relief (sales ban) that lower district courts must consider. If Apple fails to prove that Qualcomm's license terms are unreasonable and in violation of FRAND -- and Apple has made similar arguments against Samsung without really much evidence and failed -- Apple has to say bye bye to iPhones made in China (or pay up to avoid ITC import ban).
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it's ok apple has plenty of on hand cash to burn for years to come fighting this. without any money being paid to qualcomm than qualcomm will eventually go bankrupt trying to fight it. Large companies eat other companies this way all the time.
ehh...Apple has about $60B cash to burn (the rest is stashed away in Ireland) and Qualcomm has about $19B. Neither company is going to go bankrupt due to legal fees anytime soon.
Heh. I think Presidents call it something more like, offering a deal that you can't refuse
In this case, probably something like, "Okay we'll lift the ban if you build in a secret backdoor for us". Although I wouldn't be surprised if something like that had already happened with the previous administration.
Yeah, that's the common boogeyman argument, yet it doesn't exist in reality.
As I've mentioned before, with ETSI patents there are caps. And there are now more patent licensing groups to try to make it easier for all the smartphone companies which have sprung up.
For instance, if you combine all the known ETSI royalty starting rates, then yes we're talking something ridiculous like 30-40% of the device!
But in real life, most of the patents can be had from a consortium for 15% (capped at only $10 !), plus Qualcomm at about 3%, with an unknown cap, and apparently some really nice optional rebates in return for long term commitments and exclusivity.
(Apple complains about those requirements for getting billions in rebates, which is like looking a gift horse in the mouth! Not to mention that Apple has engaged in other exclusive deals. Remember AT&T? )
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stopped payments = apple paid before. not free.
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i wonder what a rhetorical statement is.
All of that is all well and good, but it seems to me, the simple answer, is it's in the court system (like so many other suits) and we shall see.Heh. I think Presidents call it something more like, offering a deal that you can't refuse
In this case, probably something like, "Okay we'll lift the ban if you build in a secret backdoor for us". Although I wouldn't be surprised if something like that had already happened with the previous administration.
Yeah, that's the common boogeyman argument, yet it doesn't exist in reality.
As I've mentioned before, with ETSI patents there are caps. And there are now more patent licensing groups to try to make it easier for all the smartphone companies which have sprung up.
For instance, if you combine all the known ETSI royalty starting rates, then yes we're talking something ridiculous like 30-40% of the device!
But in real life, most of the patents can be had from a consortium for 15% (capped at only $10 !), plus Qualcomm at about 3%, with an unknown cap, and apparently some really nice optional rebates in return for long term commitments and exclusivity.
(Apple complains about those requirements for getting billions in rebates, which is like looking a gift horse in the mouth! Not to mention that Apple has engaged in other exclusive deals. Remember AT&T? )
Looks like Tim Crook and Apple are on a roll with scamming another supplier.
https://arstechnica.com/tech-policy...nologies-apple-ip-dispute-resolution-process/
https://arstechnica.com/tech-policy...nologies-apple-ip-dispute-resolution-process/
It's quite a bit different. Qualcomm is providing one component in their phones. Apple built the whole environment that allows people to build apps.