Qualcomm Seeks Ban on iPhone Imports
Qualcomm's long-running legal dispute with Apple moved on to fresh ground late Thursday after the chip maker asked US authorities to ban imports of iPhones it claims infringe six of its patents.
It wants a ban on imports of iPhones that use cellular baseband processors "other than those supplied by Qualcomm's affiliates," arguing the six patents in question cover important features and functions in iPhones.
Any decision by the US International Trade Commission to impose a limited exclusion order (LEO) would therefore seem to affect iPhones using technology supplied by Qualcomm rival Intel Corp. (Nasdaq: INTC), and would open a new front in the battle between Qualcomm and Apple.
Besides seeking an LEO, Qualcomm Inc. (Nasdaq: QCOM) also wants the authorities to ban sales of the offending iPhones that have already been imported into the US from Asia, where they are made, and to prevent Apple Inc. (Nasdaq: AAPL) from promoting or using those products in the US.
The two companies are already at legal loggerheads over royalty payments after Apple sued Qualcomm for $1 billion at the start of the year, claiming the chip maker had overcharged it for years. (See Qualcomm Blasts Apple for Disrupting Deals in Legal Dispute.)
That move prompted a counter-attack from Qualcomm, which accused Apple of trying to upset its agreements with licensees and of misrepresenting the performance of its technology.
The six patents in question in the latest dispute do not represent so-called standard-essential patents but cover various high-performance features in the latest smartphones.
"Qualcomm's inventions are at the heart of every iPhone and extend well beyond modem technologies or cellular standards," said Don Rosenberg, the executive vice president and general counsel of Qualcomm. "The patents we are asserting represent six important technologies, out of a portfolio of thousands, and each is vital to iPhone functions.
"Apple continues to use Qualcomm's technology while refusing to pay for it," he added. "These lawsuits seek to stop Apple's infringement of six of our patented technologies."
By seeking to restrict any ban to devices that use Intel's technology, Qualcomm is trying to ensure that its own chip sales remain unaffected by any ruling. Analysts, however, believe the ITC would be unlikely to consider any ban that covered all iPhones, which would have major repercussions for Apple and iPhone consumers.
ITC investigations and rulings can take as long as 18 months and so any ban would probably not come into effect until late next year at the very earliest.
This is not the first time the ITC has been drawn into a dispute between Apple and one of its technology suppliers. In 2013, it decided that Apple had infringed patents owned by South Korea's Samsung Electronics Co. Ltd. (Korea: SEC) and banned imports of some iPhones and iPads, but the ruling was overturned by former US President Barack Obama.
Qualcomm, meanwhile, has frequently been accused of abusing its dominant intellectual property position for commercial gain, and not just in the US.
In the last couple of years, it has faced either legal action or fines in China, Europe and South Korea.
The broader issue of intellectual property rights has triggered vigorous lobbying from companies on opposite sides of the fence. (See Patents Prizefight Pending: Clash of the Tech Titans.)
A group called the FairStandards Alliance, which includes IP equipment giant Cisco Systems Inc. (Nasdaq: CSCO) as well as Google (Nasdaq: GOOG) and Intel, wants to see cuts to royalty rates for standard-essential patents, saying this would spur innovation and boost smaller players.
But the IP Europe group, whose members include Ericsson AB (Nasdaq: ERIC), Nokia Corp. (NYSE: NOK) and Qualcomm, insists the current system offers protection to R&D organizations and ensures that copycats cannot easily rip off innovators.
— Iain Morris, , News Editor, Light Reading