Apple accused of sharing Qualcomm's software secrets with Intel in new lawsuit
Qualcomm has once again escalated the legal war with Apple surrounding modem chips in the iPhone and iPad, with the chip manufacturer now claiming that Apple is in breach of contract because of how it works with Intel -- and what software has been shared with the competition.
The new lawsuit was filed on Wednesday in San Diego, Calif, courts. Bloomberg reports that the suit alleges Apple is in breach of contract regarding the software that governs how the modem chip that supplies wi-fi and LTE connectivity to the devices has been supplied to Intel, in violation of long-standing contracts prohibiting that exchange.
It is not clear when the newest suit will be heard.
A South Korean antitrust ruling in 2016 spawned the battle. Apple subsequently sued Qualcomm, accusing it of withholding nearly $1 billion in rebates as retaliation for cooperating with Korean officials.
Since then, Apple has ordered its manufacturing partners, like Foxconn, to stop paying royalties. Qualcomm returned fire and launched countersuits to challenge Apple's action.
At a hearing in August, a Qualcomm attorney said that the company has seen a 20 percent drop in market capitalization since Apple launched its lawsuit, and that another, unspecified client recently stopped paying royalties as well while waiting for the outcome of Apple's suit. At the same time, an Apple lawyer stated that the company is suing over 18 specific patents, and won't consent to adjudication on a worldwide FRAND license.
The Taiwanese Fair Trade Commission leveled a $773 million fine against Qualcomm over exactly what Apple is claiming Qualcomm is guilty of. The ruling also mandates that Qualcomm remove terms in contracts involving sharing of customer data.
Two days later, Qualcomm filed a lawsuit in a Beijing intellectual property court that alleged Apple infringes the chip maker's copyrights. At the time, it wasn't clear what patents were being asserted -- but the revelations from Tuesday show it to be non-LTE modem related technologies.
On Thursday, Qualcomm declared a 89.7 percent decline in profits between the $778 million fine from Taiwanese regulators, and the ongoing legal scrum with Apple.
The new lawsuit was filed on Wednesday in San Diego, Calif, courts. Bloomberg reports that the suit alleges Apple is in breach of contract regarding the software that governs how the modem chip that supplies wi-fi and LTE connectivity to the devices has been supplied to Intel, in violation of long-standing contracts prohibiting that exchange.
It is not clear when the newest suit will be heard.
A South Korean antitrust ruling in 2016 spawned the battle. Apple subsequently sued Qualcomm, accusing it of withholding nearly $1 billion in rebates as retaliation for cooperating with Korean officials.
Since then, Apple has ordered its manufacturing partners, like Foxconn, to stop paying royalties. Qualcomm returned fire and launched countersuits to challenge Apple's action.
At a hearing in August, a Qualcomm attorney said that the company has seen a 20 percent drop in market capitalization since Apple launched its lawsuit, and that another, unspecified client recently stopped paying royalties as well while waiting for the outcome of Apple's suit. At the same time, an Apple lawyer stated that the company is suing over 18 specific patents, and won't consent to adjudication on a worldwide FRAND license.
The Taiwanese Fair Trade Commission leveled a $773 million fine against Qualcomm over exactly what Apple is claiming Qualcomm is guilty of. The ruling also mandates that Qualcomm remove terms in contracts involving sharing of customer data.
Two days later, Qualcomm filed a lawsuit in a Beijing intellectual property court that alleged Apple infringes the chip maker's copyrights. At the time, it wasn't clear what patents were being asserted -- but the revelations from Tuesday show it to be non-LTE modem related technologies.
On Thursday, Qualcomm declared a 89.7 percent decline in profits between the $778 million fine from Taiwanese regulators, and the ongoing legal scrum with Apple.
Comments
On the first item, it is not proof that Apple was sharing secrets with Intel. I guess they plan to call the Intel engineer as a witness -- good luck with that. There are a lot of reasons why that might have happened.
On the second item, which is it -- is Apple sharing Q's secrets, or trying to steal them? This seems like two different lawsuits. The latter seems more problematic, but it does not sound like the competitor provided the information, so you're basically suing someone for asking a question.
Mostly this just shows what a nightmare it is to work with Q.
Reports just earlier this year indicated that parent company, UNICOM Systems was attempting to position itself for a buyout, but had no serious interest. While no official change to financial guidance has been offered, shares were up over 90% in trading after market-close amidst rumors that Apple, Inc. has purchased a 15% stake in the company.
Calls for comment to Qualcomm, Inc. were not immediately returned.
At least one major blogger for WSJ.com opined that, if true, this Apple/U.S.Robotics deal could sound a death-knell for Qualcomm, Inc., and by extension considering Apple's reported stake in UNICOM Systems, could bode poorly for competing platforms who would either need to stay on a sinking ship, or pledge fealty to company partially owned by their chief competitor. While the industry did not take quite as dire a view of Qualcomm, Inc's future if the rumors held true, it was clear that game had changed, Qualcomm, Inc. had found itself somewhere outside the playing field, likely being regulated to a chip foundry rather than an IP licensing corporation.
But I love tech. drama! Looks like Appple is buying time at Qualcomm’s expense.
Honestly from what I see, new 5G modem from Intel is very good, they’ve cought up quick!
Thats the great thing about civil lawsuits. Information can be subpoenaed, testamony can be gathered.
I'm going to reserve passing judgement until facts are admitted. This *is* Apple, and the only reason why Intel bought Infineon was because it made Dead Steve Jobs "very happy".
Its hard for me to agree with you. It seems Intel is too busy trying to make chips for Server and Desktop formfactors.
If you read the LTE 3GPP/GSM RAN and network standards documents, engineers from Qualcomm are constantly listed as active participants. Intel is hardly anywhere, and Apple isn't involved at all.
So I too would be very wary like Qualcomm and question how technology and know-how is being disclosed.
Apple can drag this out for 20 years and not blink, hope Qualcomm loves to suffer.
If their tech gets into the standard, Apple will make sure to always have some backup to put pressure on Qualcomm and sue at the first breach.
The current suits are not only about the past, they're a big warning to Qualcomm about their future actions.
Also, Qualcom is getting their ass kicked all over the place in court and that's a fact.
This look like something they pulled out of their ass... They're welcome to subpeonas but Apple will also deep fishing into Qualcomm and what they've done over the last decade will only get them in even deeper trouble than they are now.
Apple now has the money to bankroll whatever competition they can prop up to Qualcomm and for the next few years, Intel makes a pretty good sandbag against their malfeasance.
I agree that Intel is a buffer for now, but after the Qualcomm debacle, I think Apple will try to become more vertical with respect to the modem chipsets. Apple may forge an alliance with Mediatek (which I think have licensed CDMA2000) until Apple can complete their own chipset.
Apple should hire the brightest chip designers from Qualcomm to design Apple-designed modem chipsets, similar to Apple's hiring of the brightest from PA Semi, Imagination, etc. Let Qualcomm keep the (arrogant) managers. Let Qualcomm keep the cellular system architects there (for development of 5G and beyond), as future cellular systems (4G, 5G, etc.) will now be designed by an alliance of companies (and Qualcomm can't impose their licensing IP shenanigans again).
Since Qualcomm is losing in the courts, one would think Qualcomm’s significantly overpaid suits and Board would see the writing on the wall and preserve stockholders value, at least for now. Long term, they’re dead, as they’ve gone cheap and decided to make most of their money in ip rather than innovation.
I dont see any reason to hold on to qcom as a stock. Apple isn’t going to buy them; Apple will innovate around them.