Qualcomm sues iPhone makers in escalating patent war with Apple

Qualcomm sues iPhone makers in escalating patent war with Apple

Qualcomm filed a breach of contract complaint against Apple's manufacturers on Wednesday, almost one month after the iPhone maker stopped paying for the chip company's patent royalties.

In January, Apple sued Qualcomm for $1 billion alleging that the company has been "charging royalties for technologies they have nothing to do with".

In April, Qualcomm said in its second-fiscal quarter earnings results that its reported revenue had not been affected by the withheld royalties, as the suppliers continued to report the royalties and acknowledged that the money was still owed.

The chipmaker said the manufacturers were refusing to pay royalties on the Apple products produced.

The rub here is that Qualcomm says many of these licensing agreements were in place before Apple produced its first iPhone.

Apple doesn't have a patent license directly with Qualcomm, relying instead on licenses held by the contract manufacturers, whom Apple reimburses.

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The lawsuit, filed in U.S. District Court in San Diego, names Foxconn, formally known as Hon Hai Precision Industry Co., and its subsidiary, FIH Mobile Ltd; Pegatron Corp.; Wistron Corp. and Compal Electronics Inc. So far there has not been any comment from Apple or the companies mentioned in the latest lawsuit, but things are definitely turning ugly and pretty fast.

The case underscores the influence Apple wields over the companies that make its products and parts for them. Following that, Apple launched a lawsuit of their own in which they alleged that Qualcomm had withheld payments to them as a form of "punishment" amongst other things.

Last week, Bloomberg reported Qualcomm would ask the U.S. International Trade Commission to issue an injunction prohibiting iPhone imports, citing sources familiar with the company's plans.

The OEMs are continuing to pay license fees for non-Apple products that they make, but not for Apple products, even though the same agreements apply to both sets of devices.

Qualcomm said Apple has agreed to cover the costs incurred by the contract manufacturers. "You are responsible for paying that".

"Qualcomm seeks an order that would require the defendants to comply with their long-standing contractual obligations to Qualcomm, as well as declaratory relief and damages", the company said in a news release. A hearing on the dismissal motion is slated for mid-June.

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