Published: Sun, March 17, 2019
Industry | By Dora Warner

Judge rules Qualcomm owes Apple nearly $1B rebate payment

Judge rules Qualcomm owes Apple nearly $1B rebate payment

The disputed patents pertain to technology for graphics processing and battery power conservation, which the San Diego-based company says improve the efficiency and reduce the cost of smartphones.

It's unlikely a payment will be forthcoming as Reuters notes that Apple's contract factories have already withheld the $1 billion in payments to Qualcomm. The damages date back to July 6, 2017, when Qualcomm filed its lawsuit, and covers technology used in the iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.

On another front in the complex legal battle between two United States companies a federal judge in Southern California on Thursday issued a preliminary ruling that Qualcomm owes Apple almost a billion dollars in patent royalty rebate payments the chip maker is withholding, according to USA media reports.

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Judge Gonzalo Curiel of the U.S. District Court for the Southern District of California on Thursday ruled that Qualcomm, the world's biggest supplier of mobile phone chips, was obligated to pay almost $1 billion in rebate payments to Apple, which for years used Qualcomm's modem chips to connect iPhones to wireless data networks.

Don Rosenberg, executive vice president and general counsel of Qualcomm, told Reuters in a statement, "Although the Court today did not view Apple's conduct as a breach of Apple's promises to Qualcomm in the 2013 Business Cooperation and Patent Agreement, the exposure of Apple's role in these events is a welcome development".

Qualcomm also suffered a setback with US trade regulators who found that some iPhones infringed one of the San Diego-based company's patents but declined to bar their importation into the United States, citing the damage such a move would inflict on rival Intel Corp.

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Apple and Qualcomm have other court cases to come, including a trial that is scheduled for April.

In a statement, Apple said it was disappointed with the outcome. Qualcomm's patent licensing model relies on charging phone makers a cut of the selling price of the phone, a practice Apple has alleged is unfair and illegal. Qualcomm was then supposed to reimburse Apple for the fees, provided the company didn't complain to regulators or attack Qualcomm in court. Qualcomm believes they were justified in halting rebate payments, as Apple made "false and misleading" complaints to the Korean Fair Trade Commission, violating their agreement.

While the damages awarded Friday aren't significant to either company, from Qualcomm's perspective, valuing just three of its more than 10,000 patents at $1.41 per phone shows the overall worth of its inventions.

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