Imagination Tech starts Apple ‘dispute resolution’

Imagination Technologies Group said on Thursday it “commenced a dispute resolution procedure” with its largest customer Apple after failing to resolve a licence and royalty standoff.

Imagination said last month that Apple told the British firm it was developing its own graphics chips and would no longer use Imagination’s intellectual property in its new products in 15 months’ to two years’ time.

Shares of Imagination Technologies fell more than 60% on that news.

“Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement,” said Imagination Technologies on Thursday.

“Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process.

“Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights.”

Imagination has said it believes it would be “extremely challenging” for Apple to design a brand new graphics processor units (GPU) architecture from basics without infringing Imagination’s intellectual property rights.

“Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information,” said Imagination last month.

Imagination said Apple had used its technology and intellectual property for many years. 

Imagination said its technology and intellectual property “has formed the basis of graphics processor units (GPUs) in Apple’s phones, tablets, iPods, TVs and watches.”

Some analysts have speculated that Apple’s actions could be a bargaining move to reduce royalty payments.