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The dispute between Qualcomm and Apple over the licensed use of Qualcomm technologies in Apple products has escalated further, with Qualcomm now directly filing a complaint against Apple manufacturers. Qualcomm has registered a complaint against FIH Mobile Ltd, and Hon Hai Precision Industry Co Ltd, which are together known as Foxconn, as well as other contract manufacturers Pegatron Corporation, Wistron Corporation and Compal Electronics.
Together, the four companies produce all the iPhones and iPads sold worldwide. The complaint has been registered at the United States District Court for the Southern District of California. Qualcomm alleges that the manufactures are not paying Qualcomm for the use of Qualcomm technologies because of instructions from Apple. Qualcomm contends that the agreements drawn out for these manufacturers to pay Qualcomm for the use of its licensed technologies was in place before Apple even introduced the iPhone. Additionally, all four manufacturers continue to pay Qualcomm for its licensed technologies on producing devices for companies other than Apple.
Don Rosenberg, executive vice president and general counsel of Qualcomm, said “It is unfortunate that we must take this action against these long-time licensees to enforce our agreements, but we cannot allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed. As Apple continues to collect billions of dollars from consumer sales of its Qualcomm-enabled products, it is using its market power as the wealthiest company in the world to try to coerce unfair and unreasonable license terms from Qualcomm in its global attack on the company.”
Rosenberg goes on to point out that the agreements drawn up with the manufacturers of Apple remain valid and legally enforceable. “The manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference,” he said.
In January 2017, Apple slapped a $1 billion lawsuit against Qualcomm, asserting that the chipmaker was using its market dominance to extract an unfair price for providing key semiconductors for smartphones. Qualcomm countersued in April 2017, alleging that Apple had breached agreements, misrepresented its contracts, and was interfering with the manufacturing partners of Qualcomm. Qualcomm continues to supply to Apple despite the lawsuit, but its revenues have taken a hit.