Published: Thu, April 13, 2017
Markets | By Lucia Cruz

Qualcomm reacts to Apple lawsuit, files Answer and Counterclaims

"To try to prevent disclosure of the performance disparity between the Qualcomm chipset and the Intel chipset, Apple told Qualcomm that it would be "unacceptable" for Qualcomm to make or sponsor any public comparisons between the Qualcomm-based iPhone and the Intel-based iPhone", it alleged.

Qualcomm said that Apple withheld money owed under a contract to Qualcomm. Qualcomm is the global leader in the 3G and 4G chipset market. As Don Rosenberg, executive vice president and general counsel of Qualcomm stated, one reason the iPhone franchise has been incredibly successful is because the device is based on some of Qualcomm's fundamental cellular technologies.

Apple's complaint argued that Qualcomm abused its market power to demand unfair royalties, echoing charges by USA antitrust regulators and authorities around the world.

On top of that, Qualcomm is accusing Apple of butting into "long-standing agreements" it had with contract manufacturers that build iPhones and iPads, and using "false statements" to push government regulatory bodies around the world to investigate Qualcomm.

Qualcomm said Apple told the media there was no difference in the wireless performance of the devices. Interestingly, it appears that Apple did throttle the Qualcomm chipsets on certain networks, but this was said to be for the purposes of delivering consistency across all carriers. At the same time, Apple threatened Qualcomm to keep it from disclosing the superior performance of iPhones equipped with Qualcomm modems. In it Apple alleged that Qualcomm was withholding around $1 billion from Apple in retaliation for their cooperation with Korean authorities during an anti-trust investigation (another similar suit the U.S. with the FTC is ongoing) in addition to failing to adhere to FRAND licensing (fair, reasonable, and non-discriminatory).

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As you might recall, the Verizon and Sprint versions of the Apple iPhone 7 and Apple iPhone 7 Plus employ Qualcomm's X12 modem.

Apple's initial case claimed that it had been extorted by Qualcomm for what it referred to as "basic smartphone technology", something Rosenberg described as nonsensical.

Qualcomm seeks, among other things, damages from Apple for breaching several agreements and to enjoin Apple from further interference with Qualcomm's agreements with the companies that manufacture iPhones and iPads for Apple.

Qualcomm CEO Steven Mollenkopf suggested in February that the Apple Qualcomm dispute should be settled outside of courtroom and that he would not want the whole matter to be played out in the press.

Responding to the chipmaker's statement, Apple said it is reiterating its comments made in January that Qualcomm had overcharged royalties and gained from Apple's technologies not related to Qualcomm's patents.

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