Apple Files $1 Billion Lawsuit Against Qualcomm

CUPERTINO, CA -- Technology company Apple Inc. filed a $1 billion lawsuit against Qualcomm Inc. on Jan. 20, the latest move in an ongoing dispute between the two industry giants over the receiving and paying of royalties for telecommunication technologies.

Apple is alleging that the San Diego-based telecommunications company has been charging excessive royalties and has also withheld royalties in retaliation for Apple cooperating with a Korean antitrust investigation.

After the suit was filed, Cupertino-based Apple company released a statement explaining its actions.

"For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates ... the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations," the statement reads in part, also alleging that Qualcomm dominates the telecom industry via "exclusionary tactics and excessive royalties."

Qualcomm designs and markets wireless telecommunications products and services, but most of the Southern California-based company's profit comes from from patent licensing.

Apple's statement goes on to that that despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors that Apple agreements with combined.

"To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them."

The investigation referenced resulted in an $853 million fine levied by South Korea on Qualcomm in December 2016 for abusing patent commitments. Earlier this week, the U.S. Federal Trade Commission filed a lawsuit against Qualcomm also alleging financial patent abuses.

"Apple believes deeply in innovation and we have always been willing to pay fair and reasonable rates for patents we use. We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts," the statement concludes.

Qualcomm, which has previously denied any wrongdoing in the South Korean and FTC matters, has yet to respond to Apple's accusations and legal action, but if and when the company does, this article will be updated.

Image via Shutterstock