Apple and Qualcomm have brought their global patent and licensing battles to an end with an out of court settlement.
A joint statement yesterday confirmed that an agreement had been reached to dismiss all ongoing litigation between the two companies worldwide, including with Apple’s contract manufacturers.
The settlement includes a payment of royalties from Apple to Qualcomm, details of which were not provided.
The companies also have signed a six-year global patent license agreement, taking effect 1 April 2019, with a two-year option to extend and a multiyear chipset supply agreement.
What was in dispute?
The dispute began in 2017 when Apple and its partners sued Qualcomm, claiming the chip maker’s licensing practices abused its dominant position in the market for mobile device modems by charging too much in royalties to use its cellular communications technology. Apple sought $27 billion (£21bn) in damages.
Qualcomm then countersued. It argued Apple was exploiting its position to secure a better deal, and launched a number of countersuits seeking bans on iPhone sales for alleged patent violations and $15bn in lost revenues resulting from Apple’s industry lobbying.
This led to more than 80 court conflicts around the globe.
IP decision to impact future of 5G
Qualcomm has been dealing with legal battles on a number of fronts in recent years.
The US Federal Trade Commission pursued a lawsuit against the company for anti-competitive tactics, the decision on which is awaited.
Regulators in South Korea, Taiwan and the EU have imposed competition fines on Qualcomm for its business practices and the Chinese government hit the company with a $975million fine for charging too much for technology royalties. Japanese authorities however found in Qualcomm’s favour.
The timing of the IP settlement is critical as companies are looking to make the shift to 5G. Following the agreement announcement, Intel has confirmed it is ceasing to build 5G modems for smartphones.
With the dispute now concluded, the Trump administration is said to be interested in supporting Qualcomm as a counter-balance to Chinese rivals.