Apple has filed suit against the world’s biggest chip maker and supplier company, Qualcomm, and suing it for over $ 1 billion, for “charging royalties for technologies they have nothing to do with”. The suit follows the U.S. Federal Trade Commission’s lawsuit against Qualcomm earlier this week over unfair patent licensing practices.
The company said in its suit that Qualcomm should be paid royalties based on the value of its particular contribution, not for contributions from other patent holders. Currently, Qualcomm’s royalties are based off the selling price of a phone, rather than what portion Qualcomm’s technology enabled.
Apple also stated that “The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.” It further added that Qualcomm has taken radical steps, including withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them.
The chip maker company charges Apple almost 5 times more than other cellular patented licencors combined. Qualcomm observed a downfall in the share prices by almost 2.5%, which were up by 1% the earlier day.
Meanwhile, Qualcomm has fired back on Apple and has deemed all their allegation to be baseless. Don Rosenberg, the executive vice president of the company said in a statement: “Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program”.
The company further added “We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.“
Qualcomm derives a notable amount of its funds from licensing their technology to other chip makers, of providing and creating essential standards for connecting phones to cellular networks, making it the world’s biggest provider of mobile chips. Apple designs the processors in its iPhones and iPads, but it buys chips from Qualcomm to connect to 4G LTE and other cellular networks.