Compal, Hon Hai Precision/Foxconn, Pegatron, and Wistron have filed a countersuit against iPhone LTE modem supplier Qualcomm in an attempt to prevent Qualcomm from successfully forcing them to pay certain licensing fees related to the iPhone's assembly (via Bloomberg). The move is a response to a lawsuit from May when Qualcomm sued the four suppliers for "breaching their license agreements" by failing to pay royalties on the use of Qualcomm's technology in the assembly of Apple's devices.

Now, in a court filing today, the four companies have claimed that Qualcomm is asking for payments "massively in excess" of what it would normally receive. If the countersuit is successful, Apple said that it could cost Qualcomm billions in refunded fees and damages. For the manufacturers' part, the companies described the Qualcomm suit as "yet another...anticompetitive scheme" by Qualcomm.

qualcomm iphone
According to The Wall Street Journal, Apple is said to be covering the legal fees associated with the four manufacturers' defense, and that it would soon file a separate motion to combine the new countersuit with its own suit against Qualcomm, creating one unified case.

Apple’s key contention is that Qualcomm is asking the court to force the contract manufacturers to pay licensing fees due on iPhones above the level the chipmaker normally receives.

The manufacturers -- Compal, Hon Hai Precision and its Foxconn subsidiary, Pegatron Corp., and Wistron Corp. -- denied violating any payment agreements. They called the Qualcomm suit against them “yet another chapter of Qualcomm’s anticompetitive scheme to dominate modem chip markets, extract supracompetitive royalties, and break its commitments to license its cellular technology on fair, reasonable and non-discriminatory terms.”

Apple and its manufacturing partners have also responded to a separate Qualcomm court filing, in which the LTE modem supplier requested an injunction to force Apple's iPhone manufacturers to keep paying royalties during the legal battle. Apple, Compal, Foxconn, Pegatron, and Wistron have objected to the request, stating that "there's no harm to Qualcomm waiting to get paid" until the end of the case, when the court determines the correct amount.

Earlier this week, Qualcomm CEO Steve Mollenkopf said that an out of court settlement for the case could still happen, although he had no specific confirmation or update on the legal battle that suggested a settlement was coming between Qualcomm and Apple. The two companies have been embroiled in the court case since January, sparked by an FTC complaint about Qualcomm's anticompetitive patent licensing practices, and continued with Apple's own lawsuit against the supplier, and then Qualcomm's countersuit response.

If there is no settlement between Apple and Qualcomm, the case is expected to continue for the next few years.

Top Rated Comments

morcutt11 Avatar
63 months ago
Lets not forget Samsung, Intel, and the US FTC have also filed suit earlier this year against Qualcomm. It seems universally agreed that Qualcomm has essentially been extorting technology manufactures and hampering innovation with anti-competitive practices. At this point it looks like Qualcomm v. The World. I don't predict Qualcomm to be a winner in that battle.
Score: 14 Votes (Like | Disagree)
morcutt11 Avatar
63 months ago
Is Qualcomm the real threat here? Everyone is attacking Qualcomm, but who copies and steals the most?!
Oh it's Qualcomm. Let's take a look at what they are doing:
1) They charge licensing fees for patented technology not only from people that make a competing chip (e.g. Intel), but also companies that use those chips (e.g. Apple) in devices.
2) The fee that they charge for someone using a chip (even competing chip) that uses Qualcomm's patented technology is based on the price the device sells for. So Apple pays pays $15/iPhone for the entry-level iPhone, but more for iPhones that sell at higher rates due to more RAM/storage. Remember, this is the case even if Apple isn't using Qualcomm chips.
3) Because of this licensing scheme, it makes it difficult for other chip manufacturers to compete against Qualcomm, hence the US FTC anti-trust lawsuit. The FTC has said that Qualcomm is effectively taxing every cell phone sold.
4) There is also issues with Qualcomm refusing to license its technology to other chip manufacturers, promoting an anti-competitive market.
5) Along the anti-competitive line, Qualcomm has also successfully prevented Apple from implementing technology like WiMAX because it competes with Qualcomm technology.

In the end it will be a court(s) deciding if Qualcomm's technology patents fall under the "fair, reasonable, and non-discriminatory" requirements, which other manufacturers are claiming they do as the patents reflect technology that is part of the standards of mobile carrier services.
Score: 6 Votes (Like | Disagree)
Cronowerx Avatar
63 months ago
This will not end well for Qualcomm. They better settle out of court ASAP ;)

One of the big advantages of having your partners dependent on you means that your enemies are their enemies.
Score: 3 Votes (Like | Disagree)
blcamp Avatar
63 months ago
Game over, QCOM. Have a nice day.
Score: 3 Votes (Like | Disagree)
Kaibelf Avatar
63 months ago
Contract manufacturers.
Any competent judge will see through the case stacking with Apple footing the legal fees for all parties.
Doesn’t matter. Qualcomm opened the door to this very thing the minute they tried to sue the suppliers when Apple fought back. Now they will take it in the chin and likely end up paying a lot more in the end.
Score: 3 Votes (Like | Disagree)
joelypolly Avatar
63 months ago
Is Qualcomm the real threat here? Everyone is attacking Qualcomm, but who copies and steals the most?!
Well considering everyone is sueing Qualcomm they do appear to be the problem here. Lets not confuse anticompetitive behavior with something completely unrelated.
Score: 3 Votes (Like | Disagree)

Popular Stories

Prosser Series 8 3

Apple Watch Series 8 Rumored to Feature New Design With Flat Display

Wednesday May 18, 2022 6:21 am PDT by
The Apple Watch Series 8 could feature an all-new design with a flat display, according to the leaker known as "ShrimpApplePro." In his latest video on the YouTube channel Front Page Tech, Jon Prosser highlighted information from ShrimpApplePro that suggests the Apple Watch Series 8 could feature a flat display in what seems to be a design originally rumored for the Apple Watch Series 7. ...
anker 563 dock ports

Anker's Latest USB-C Docking Station Brings Triple-Display Support to M1 Macs

Wednesday May 18, 2022 7:06 am PDT by
While Apple's early M1-based Macs can only officially support a single external display, there are ways around the limitation. Anker is launching a new 10-in-1 USB-C docking station today which delivers just that. The Anker 563 USB-C dock includes two HDMI ports and a DisplayPort port, and it leverages DisplayLink to carry multiple video signals over a single connection. Given that this hub...
macOS Monterey 2

Apple Releases macOS Monterey 12.4 With Support for Studio Display Webcam Update

Monday May 16, 2022 10:10 am PDT by
Apple today released macOS Monterey 12.4, the fourth major update to the macOS Monterey operating system that launched in October 2021. macOS Monterey 12.4 comes over two months after the launch of macOS Monterey 12.3, an update that added Universal Control. The ‌‌‌‌‌macOS Monterey‌‌ 12.4 update can be downloaded on all eligible Macs using the Software Update section of System...
Whatsapp Feature

WhatsApp to Let Users Leave Group Chats 'Silently' and View Rich Link Previews in Status Updates

Tuesday May 17, 2022 3:07 am PDT by
WhatsApp is working on a new feature that will allow users to "silently" leave group chats hosted by the messaging platform instead of all members of the group being notified when they do. As it stands, when someone leaves a group chat, WhatsApp announces their exit to the entire group, making the act of leaving very public. It's not possible right now to leave a group quietly, but WhatsApp...
apple data auction iphone privacy ad

Apple Highlights iPhone's Latest Privacy Features in New 'Data Auction' Ad

Wednesday May 18, 2022 9:00 am PDT by
Apple today shared a new ad highlighting iPhone privacy features like App Tracking Transparency and Mail Privacy Protection that are designed to give users more transparency and control when it comes to their personal data being collected. The ad revolves around a young woman named Ellie who discovers that her personal data is being sold at an auction house, with bids being placed on her...
airpodsproinear

Apple Facing Lawsuit After AirPods Allegedly Ruptured Child's Eardrums With Amber Alert

Tuesday May 17, 2022 11:40 am PDT by
Apple's AirPods ruptured the eardrums of a 12-year-old boy in 2020 when a loud Amber Alert was issued, according to a lawsuit filed against Apple in California (via Law360). The child, identified as B.G. in the filing, was watching a movie on Netflix on his iPhone in 2020 while wearing AirPods Pro. The AirPods Pro were allegedly set at a low volume, but an Amber Alert sounded without warning ...
apple store palo alto

Apple Reinstating Employee Mask Mandate at Approximately 100 U.S. Retail Stores

Tuesday May 17, 2022 11:11 am PDT by
Apple retail employees at around 100 stores will need to go back to wearing a mask while working, according to Bloomberg's Mark Gurman. Apple is mandating masks for employees again due to a rising number of COVID cases across the United States. Customers who visit an Apple Store are not required to wear a mask at this time, but Apple is continuing to recommend masks for all Apple Store...