Qualcomm (QCOM) Sues Apple (AAPL) for Infringement as Legal Battle Drags On

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Qualcomm Inc. (NASDAQ:QCOM) has stepped up its legal battle with Apple Inc. (NASDAQ:AAPL) after the chipmaker announced that it will be suing the tech giant for patent infringement.

In a July 7 release, Qualcomm said it will be filing a complaint with the U.S. International Trade Commission (ITC), alleging that Apple infringes six patents covering several aspects of mobile technology, U.S. Patent No. 9,535,490U.S. Patent No. 8,633,936, U.S. Patent No. 8,487,658, U.S. Patent No. 8,838,949, U.S. Patent No. 8,698,558 and U.S. Patent No. 9,608,675

Qualcomm position and argument is that these patents enable high performance technology in a smartphone while also extending battery life.

Full info-graphic showing what the six inventions Apple uses everyday

The chipmaker will also request the ITC to ban imports of the infringing Apple devices into the U.S.

More specifically, the company will seek an order barring the importation of “iPhones that use cellular baseband processors other than those supplied by Qualcomm’s affiliates.”

Qualcomm did not name any company, but competitor Intel Corp. (NASDAQ:INTC) started supplying chips for some iPhones beginning with the iPhone 7.  The company expects the ITC to begin its investigation in August and the case to be tried next year.Qualcomm also filed a similar complaint in a California court seeking damages and injunctive relief.

“The patents we are asserting represent six important technologies, out of a portfolio of thousands, and each is vital to iPhone functions. Apple continues to use Qualcomm’s technology while refusing to pay for it,” said Don Rosenberg, executive vice president and general counsel of Qualcomm.

ITC cases normally take 16 months to finish and the case is not expected to put any pressure on Apple as it prepares for the 10th anniversary iPhone launch this fall, according to Bernstein analyst Stacy Rasgon.

Beginnings

Qualcomm was the only supplier of modem chips for Apple’s phones until the iPhone 7 launch in September 2016.

In January, however, Apple sued Qualcomm for $1 billion, arguing that the chipmaker overcharged for chips and refused to pay about $1 billion in rebates.

Qualcomm vehemently denied the allegations, and accused Apple of collaborating with regulators and other handset makers to launch a regulatory attack against it.

Tensions then flared in April when Apple announced that it will freeze royalty payments to its contract manufacturers until the tussle is resolved.

Apple pays its contract manufacturers, which in turn pay Qualcomm in the form of royalties.

In June, Apple claimed Qualcomm was running an ‘illegal business model’ based on invalid patents.

“It doesn’t bode well for a quick and easy agreement,” IDC Corp. analyst Will Stofega said.”The bottom line is Apple wants a lower price and Qualcomm says no.”

Qualcomm was up 0.11% in after-hours trading at $54.85 per share, while Apple was down 0.03% at $142.69.

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