In an escalation of its patent battle with Apple, Qualcomm said it is suing “the four manufacturers of all Apple iPhones and iPads sold worldwide” for non-payment of royalties.
Qualcomm said it filed a complaint in the US District Court for the Southern District of California against FIH Mobile Ltd and Hon Hai Precision Industry Co. Ltd. — together known as Foxconn — as well as Pegatron Corporation, Wistron Corporation, and Compal Electronics, Inc. “for breaching their license agreements and other commitments with Qualcomm and refusing to pay for use of Qualcomm’s licensed technologies.”
Qualcomm said it is seeking an order that would require the defendants to comply with their long-standing contractual obligations to Qualcomm, as well as declaratory relief and damages.
“Despite a long history of consistently paying royalties under their license agreements with Qualcomm, the manufacturers now are refusing to pay royalties on the Apple products they produce,” said Qualcomm.
“While not disputing their contractual obligations to pay for the use of Qualcomm’s inventions, the manufacturers say they must follow Apple’s instructions not to pay.
“The license agreements with the manufacturers in many cases were entered into before Apple sold its first iPhone and Apple is not a party to the agreements.
“Further, the defendants are continuing to pay Qualcomm royalties for use of Qualcomm’s technology in non-Apple products, under the very same agreements that apply to the Apple products.
“Qualcomm has already filed a separate claim against Apple for its unlawful interference with the license agreements between Qualcomm and these manufacturers.”
Qualcomm general counsel Don Rosenberg 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.
“Our license agreements with Apple’s manufacturers remain valid and enforceable.
“The manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference.”
Apple responded by repeating the following statement: “We’ve been trying to reach a licensing agreement with Qualcomm for more than five years but they have refused to negotiate fair terms.
“Without an agreed-upon rate to determine how much is owed, we have suspended payments until the correct amount can be determined by the court.
“As we’ve said before, Qualcomm’s demands are unreasonable and they have been charging higher rates based on our innovation, not their own.”