Apple Files $145 Million Patent Suit Against Qualcomm in Beijing
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Qualcomm’s legal woes continue to spread unabated across the globe. Just days after filing a $1 billion lawsuit against the global chipmaker in the US, Apple said Wednesday it has filed another suit against Qualcomm in Beijing’s Intellectual Property Court.
The iPhone maker’s complaint alleges the San Diego-based chip supplier abused its dominant position in the chip industry in violation of Chinese anti-monopoly law and seeks damages of 1 billion yuan ($145.32 million). Apple also filed another lawsuit against Qualcomm in Beijing charging the company of using unreasonable licensing practices.
Cupertino argued in its US lawsuit that Qualcomm had leveraged its monopoly in the baseband chip market to overcharge Apple and prevent it from choosing another chip supplier.
Qualcomm is the world’s largest supplier of mobile chips including baseband modem chips, a crucial component that connects smartphones to wireless networks. Its proprietary technology can be found in many Samsung and Apple devices, with the two companies accounting for nearly 40% of Qualcomm’s revenue in the most recent fiscal year. The bulk of this revenue comes from licensing this technology out to other chipmakers. Under its licensing structure, Apple pays Qualcomm a fee for the chipsets it purchases, and an additional fee for the intellectual property used in those chips.
Such licensing practices have brought Qualcomm under intense scrutiny across the globe in the past few months.
Earlier this month, the US Federal Trade Commission filed a lawsuit against Qualcomm in which it accused the company of adopting unlawful tactics to maintain its monopoly. Last month, South Korea’s antitrust regulator fined Qualcomm $854 million for anticompetitive patent-licensing practices. And, in February 2015, Qualcomm paid China a $975 million fine over its patent-licensing practices. Apple may have been emboldened to prosecute an international legal war against Qualcomm by these developments.
Qualcomm general counsel Don Rosenberg adopted a defiant posture in a statement responding to the latest Chinese lawsuits. “These filings by Apple’s Chinese subsidiary are just part of Apple’s efforts to find ways to pay less for Qualcomm’s technology,” said Rosenberg. “Apple was offered terms consistent with terms accepted by more than one hundred other Chinese companies and refused to even consider them.”
Rosenberg also added that “Qualcomm is prepared to defend its business model anywhere in the world. We are proud of our history of contributing our inventions to the development and success of the mobile communications ecosystem.”
While Qualcomm stated that it had yet to read the full complaints filed in China, it seems likely that the company will contest them in keeping with its promises to fight both the FTC and Apple lawsuits in the US.
