CNET News - Tuesday, August 8, 2017 at 12:34 PM
Apple faces US agency investigation in Qualcomm legal spat - CNET
Things are heating up between Apple and Qualcomm.
A key US agency has officially stepped into the legal battle between Apple
The US International Trade Commission, which has the power to ban products
from entering the country, confirmed on Tuesday it will investigate
Qualcomm's complain that Apple was illegally using its cellular technology
in iPhones powered by modems made by Intel. Qualcomm is seeking to bar all
iPhones using Intel modems, which run on the AT&T and T-Mobile networks.
While there's no specific timing, the ITC said it would set a target date to
complete the investigation within 45 days after its start. Qualcomm General
Counsel Don Rosenberg warned in July that any decision from the ITC likely
wouldn't happen for about 18 months.
The ITC stepping in is the latest turn of the legal drama that is the
Apple-Qualcomm spat, which began when Apple decided it was paying too high a
licensing fee for Qualcomm's mobile technology. Apple believes it should be
paying a licensing fee based on the value of the modem, while Qualcomm
argues it should be based on the value of the phone, considering all of the
other technology it's helped developed.
Going to the ITC is a common tactic when engaging in battles over patents
because the prospect of a product ban is often devastating enough to get
both sides to the bargaining tables. Tech companies who involve the ITC in
their disputes often figure out a resolution before any ban is put into
It's a common route for Qualcomm, the world's largest provider of mobile
chips, which is no stranger to patent battles. The company in July filed its
complaint with the ITC, accusing Apple of infringing on six mobile patents.
A ban would allow iPhones using its own chips to enter the US. Those models
run on Verizon's and Sprint's networks.
"Qualcomm is pleased with the ITC's decision to investigate Apple's unfair
trade practices and the unauthorized importation of products using
Qualcomm's patents," said Don Rosenberg, executive vice president and
general counsel of Qualcomm. "We look forward to the ITC's expeditious
investigation of Apple's ongoing infringement of our intellectual property
and the accelerated relief that the Commission can provide."
Intel declined to comment.
Apple pointed to this prior statement from June: "Qualcomm's illegal
business practices are harming Apple and the entire industry. They supply us
with a single connectivity component, but for years have been demanding a
percentage of the total cost of our products - effectively taxing Apple's
Apple actually drew the support of companies like Google parent Alphabet,
Facebook, Amazon and Microsoft, which said the ban would hurt customers.
Intel also criticized the suit as harmful to competition. Qualcomm said the
critics of its lawsuit are misdirecting the ITC, and that the lawsuit wasn't
about its competition with Intel.
Updated at 2:35 p.m. PT: To include a response from Apple.
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