Apple accuses Qualcomm of operating illegal business model

[Jos]

Apple has fired a new salvo in its ongoing legal battle with Qualcomm over wireless patent royalties. In a federal court filing Tuesday, the company cited a Supreme Court ruling last month that a printer-cartridge maker's patent rights end with the initial sale of the cartridges. This precedent, Apple says, strengthens its argument that Qualcomm cannot continue to demand royalties for the patents after selling its chips.

In that case the court found that patent law cannot be used to prevent the resale of Lexmark printer cartridges refilled with toner by other suppliers.

Apple likened this to how Qualcomm requires customers to sign patent license agreements before purchasing chips, which the US Federal Trade Commission called in its own complaint a “no license, no chips” model. The license allows Qualcomm to take a percentage of the overall iPhone selling price in exchange for supplying the modem chips that let phones connect to cellular data networks.

“This is precisely the kind of double-dipping, extra-reward system that the Court’s decision in Lexmark forbids,” Apple argues in its filing. The company wants to be able to buy chips without signing the license agreement that forces it to pay a part of the overall iPhone sale price.

While Apple and its contractors signed agreements to pay licensing fees this way, the company said it had no choice but to do so because Qualcomm chips were essential to Apple's products. However, the company is now less dependent on Qualcomm because Intel makes similar chips.

Apple argues it is entitled to restitution of all excessive license fees it has paid and wants to set a “fair and reasonable” royalty. It is also asking the court to declare invalid a selection of Qualcomm patents the chipmaker has deemed “essential” to the 3G and 4G standards.

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https://www.techspot.com/news/69788-apple-accuses-qualcomm-operating-illegal-business-model.html

 

[EEatGDL]

Wow, I'm surprised I'm on Apple's side of the argument.

 

[Raoul Duke]

The words Apple and 'wanting something fair and reasonable' don't belong in the same sentence

 

[Hasbean]

Two comments I'd like to make,

1) If Apple didn't like the terms of the license they had every right not to sign it.

2) As I suspect Apple would have paid a few cents or even a couple of bucks for each chip that was essential to their products marketability, which it then put a massive and significant premium on for their profits. What is wrong with Qualcomm saying 'your making a truck load of money with a product only saleable because of our IP, we want a share in that'.

 

[JudasSheep]

Qualcomm sold the product, what happens after is out of their hands and pockets, unless it is warranty related. However, Apple should know better themselves. They have many lawyers and knew what they were getting into. Qualcomm has every right to demand what they want if they are the only supplier. If Apple's hands are tied because Qualcomm is the only supplier, too damn bad, either make it yourself or try and go somewhere else, like they are doing now. I don't necessarily agree with Qualcomm's practice, however, when you are the only supplier, you can't blame them for what they did. I think Apple is crying because someone beat them at their own game.

So if Apple now pays less overall for the chips from Intel, does that mean iPhone prices are going to be lower? HAHA hell no, because they are just d*ckish as Qualcomm.

 

[ForgottenLegion]

F*** off apple. The sooner you lose market share the better.

 

[Evernessince]

Two comments I'd like to make,

1) If Apple didn't like the terms of the license they had every right not to sign it.

2) As I suspect Apple would have paid a few cents or even a couple of bucks for each chip that was essential to their products marketability, which it then put a massive and significant premium on for their profits. What is wrong with Qualcomm saying 'your making a truck load of money with a product only saleable because of our IP, we want a share in that'.

That's the problem. You cannot make a license agreement that violates current laws. It would be like if Microsoft added "and you must agree to be microsoft's slave" somewhere random in their agreement. You can't force people to do something that is regularly illegal.

In this case Qualcomm is selling hardware for a price AND is charging an additional royalty on top of that. So essentially Apple purchases their hardware and then has to pay an additional fee to even use that hardware that they already bought. By all legal standards, selling a product and then requiring the customer pay again is a POS move.

 

[tonylukac]

I paid the $99 to join the iphone app store, and my app was rejected 5 times. In what they don't usually do, I got others to refund it in their company. This app goes to various web sites, and I see no difference in making, say, a facebook app or just going to the facebook web site. Listen to the sh-t they wrote as I quote,
"there are no hard and fast rules to define useful or entertaining, but Apple and Apple customers expect apps to provide a really great user experience. Apps should provide valuable utility or entertainment, draw people in by offering compelling capabilities or content, or enable people to do something they couldn't do before or in a way they couldn't do it before." I guess they want it to teleport, which if people were kinder I could possibly do.