Apple Inc. heightened its legal offense against San Diego-based-company, Qualcomm, and saying in court that its chip patents are invalid and its business model breaches the patent law.
Attack Can Weaken Qualcomm
Apple said that nearly a dozen patents of Qualcomm were recognized to be invalid as there are discrepancies with the existing patents. Apple also claims that the patents are not really crucial for cellular communications.
If Apple went successful on this, the attack can weaken a central tenet of Qualcomm’s business pattern.
Apple Was Said to Violate Contract
Back in January, Apple sued Qualcomm, claiming that the latter had improperly held back $1 billion in rebates after Apple aided Korean Investigators investigate on the chip maker’s business practices.
No License, No Chips
Qualcomm has a practice of requiring customers to sign patent license agreements first before being able to purchase chips. The “no license, no chips” policy of Qualcomm gives it an advantage to take a percentage of the total selling price of the iPhone in place of the chips that allows the phones to connect to cellular data networks.
Apple is arguing that for the intellectual property and products of Qualcomm, it is only entitled to a one-time remuneration. That means that only one between the patent license and chip should be charged by Qualcomm. However, the current situation involves the chip maker charging both. Apple sees it as an unfair practice for the use of its technology.
Apple Requests to Drop the Charges
Qualcomm filed charges against Foxconn Technology Group and three other contractors that assemble the iPhone and are also buyers of chips from Qualcomm, since there is no issue with such against the existing contract. The court charges must solely be between them (Apple) and Qualcomm.
Since Qualcomm is the major supplier for chips and patents broadly used for smartphones, it also accused Apple of misrepresenting its business. It also has a present concern with regard to the royalty payments for the technology used in iPads and iPhones.
However, Qualcomm’s Executive Chairman, Paul Jacobs is accustomed to legal conflicts. He further added that from 2005 to 2014 he encountered parallel fights.
“People want to get around, they see intellectual property as a cost in their billable materials, and they just want to pay less. But for us, we want to continue to drive technology forward, and importantly, we want to spread it across a very broad ecosystem as well,” Jacobs said in a statement.
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