The tech trial of the decade has officially kicked off, with Apple and Qualcomm meeting in court on Monday in their ongoing legal battle.
Apple and its partners have kicked off a jury trial facing chip provider Qualcomm in San Diego, alleging that Qualcomm took part in unlawful patent licensing practices.
Apple and four of its suppliers are collectively asking an incredible sum of roughly $30B in losses and other payments from Qualcomm, dwarfing even the largest of prior copyright and antitrust cases.
The world has witnessed many previous court clashes between the two tech giants, but the case which opened yesterday in San Diego is the climax.
The collaboration between the two companies supplied a vital source of earnings for Qualcomm, which received funds for every iPhone offered. But the relationship spoiled in the last few years following a series of back-and-forth suits.
The case could be devastating for Qualcomm’s business potential customers, according to Mark Patterson, a law teacher at Fordham University School of Law. It may even lead to rulings against Qualcomm’s licensing practices in general if it requires the company to limit the cost it can charge for certifying its patents.
The companies have sued one another in courts around the world, and both sides have won cases in an ongoing tit-for-tat.
At the heart of the conflict is one primary concern: just how much is Qualcomm’s technology deserving? Apple claims that Qualcomm has demanded extreme prices to employ its modems and intellectual properties, while Qualcomm alleges that Apple is using the legal system to try to get a discount on its technology.
It’s an important topic for the entire market– you can’t make a contemporary mobile phone without running into Qualcomm’s patents, so the result of these suits could have a huge effect on every company that produces phones, along with Qualcomm’s bottom line.
At the heart of the case are two problems. First being, Qualcomm’s policy of charging a patent license cost calculated as a percentage of the list price of the equipment in which it is used. Apple disputes that this is inequitable, as Qualcomm gain from all of the iPhone features which allows Apple to charge costs into four figures for some models.
Second, Apple implicates Qualcomm of charging twice for the very same chip.
Apple encouraged its suppliers to stop paying royalty dues to Qualcomm, and insured to finance the expenses of their defense when the chipmaker took them to court.
The two-year legal battle reaches a boiling point
The legal confrontation kicked off in January 2017 when Apple sued Qualcomm for almost $1 billion. Apple accused Qualcomm of charging “extreme royalties” and keeping payments as a punishment for Apple complying with a South Korean investigation into the chipmaker.
In January 2018, European antitrust officials ordered Qualcomm to pay a $1.2 billion fine. The European Commission said Qualcomm defied EU statutes by spending billions to persuade Apple not to use chips made by its competitors.
Likewise in 2018, Apple was ordered to stop offering iPhones in China, but the company looks to have found a little a trick versus the initial command. According to Apple, the patents in the matter are just being used in earlier variations of iOS– so phones with more recent forms of the operating system are still ok to build.
In the most recent chapter in the judicial battle, Qualcomm has actually accused Apple of taking valuable trade secrets and giving them to rival Intel to improve the efficiency of Intel’s chips on iPhones.
Lawyers representing the U.S. International Trade Commission (ITC) have released reports siding with Qualcomm’s claims regarding Apple’s alleged patent infringement, according to a report from Reuters. It is essential to note that this legal battle is just beginning, nevertheless.