Qualcomm countersues Apple, seeks damages for breach of contract

Qualcomm is counter-suing Apple in the companies’ ongoing patent dispute, claiming Apple breached its contract and asking for an unspecified amount in damages, CNET reports. In the filing, Don Rosenberg, executive vice president and general counsel of Qualcomm, admits Apple has played a key role in bringing mobile technology to the masses, but argues “Apple could not have built the incredible iPhone franchise that has made it the most profitable company in the world, capturing over 90 percent of smartphone profits, without relying upon Qualcomm’s fundamental cellular technologies.” In its lawsuit, Apple claims Qualcomm is charging excessive royalties “despite being just one of over a dozen companies who contributed to basic cellular standards” and asked the court to declare Qualcomm’s patents invalid or reduce the royalty amounts the company is able to charge for their use.
Apple also claims Qualcomm is withholding $1 billion in rebate payments in retaliation for Apple’s cooperating with South Korean authorities who were investigating Qualcomm for monopolistic practices. In its rebuttal, Qualcomm accused Apple of “deliberately making false statements to government agencies about Qualcomm’s licensing practices and chipset business.” Under existing agreements, Apple is on the hook for paying royalties to Qualcomm for its technology whether or not the components themselves come from Qualcomm, so even when Apple is buying chips from Intel, the company is paying Qualcomm a royalty on those processors. In its initial filing, Apple said, “For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with. The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.” But Qualcomm argues that Apple is simply leveraging its power in the marketplace to secure a better deal, bullying “Qualcomm into accepting less than fair value for the patented technologies that have led innovation in cellular technology and helped Apple generate more than $760 billion in iPhone sales.”