Patent disputes come with the territory in tech, with companies often taking each other to the court to figure out who has the rights to what technology — and who needs to pay for using it. This kind of legal wrangling usually doesn't draw much attention unless you're a new junkie or patent attorney. But every so often, a patent feud spills out of the courtroom and into the public view.
Such is the case with Apple and Qualcomm, who find themselves fighting on multiple fronts over the patents covering how your mobile connects to the rest of the world when you're out and about.
"This is exactly the type of intellectual property fight that we have seen before in the smartphone era between Qualcomm and Nokia and Apple and Samsung and Huawei and Google/Motorola," said Avi Greengart, research director for consumer devices at GlobalData. "Just because it is not unusual does not mean it doesn't have big implications for the industry."
Indeed, with Qualcomm scoring a couple legal wins in December — including rulings that could block iPhone sales in some countries — the chip maker's ongoing legal battle with Apple is drawing more attention. Here's what you need to know about the Apple-Qualcomm dispute and how it might impact you and your next smartphone.
Latest News (Updated Feb. 6)
- Qualcomm and the FTC have made closing arguments in their antitrust trial, and we're awaiting a ruling from U.S. District Judge Lucy Koh.
- The same German court that granted an injunction which stopped Apple from selling the iPhone 7 and 8 in that country has dismissed four other patent claims by Qualcomm against Apple.
- A judge ruled in favor of Apple, agreeing to limit potential damages in an upcoming legal case to the period after Qualcomm filed its lawsuit against Apple; one of the patent claims in that case was also dismissed.
What are Apple and Qualcomm fighting over?
The current dispute dates back to January 2017, when Apple sued Qualcomm for $1 billion. Apple contends that Qualcomm charges royalties for "technologies they have nothing to do with" and has accused the chip maker of withholding rebates as punishment for cooperating with Korean regulators looking into antitrust allegations against Qualcomm.
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Qualcomm holds patents for some of the technology that phones use to connect to cellular networks. It licenses that to phone makers who pay Qualcomm royalties for using its intellectual property even if they aren't using chips supplied by Qualcomm. Even with Apple using Intel-built modems on some of its devices, the iPhone maker still has to pay Qualcomm a licensing fee — the dispute seems to be over just how much.
Qualcomm countersued Apple, and the dispute has spread to other courts and countries, culminating in another lawsuit last fall in which Qualcomm accused Apple of handing over information and trade secrets to Intel to boost the performance of the latter's chips.
An overview of the ongoing dispute published in Bloomberg last June said that Qualcomm and Apple are involved with more than 50 different legal proceedings in 16 different jurisdictions in six countries.
What's happening with all these legal cases?
Apple and Qualcomm are due in court on April 15, 2019, when their patent dispute goes to trial before a federal judge. Apple won a victory this month when a judge agreed to limit damages in that case to the period after Qualcomm filed its countersuit.
Qualcomm just wrapped up a court date with the Federal Trade Commission — the two sides completed closing arguments on Jan. 29 — with regulators alleging that Qualcomm uses anti-competitive practices in how it licenses its patents. The case is in a judge's hands now, though a quick verdict is not expected.
Meanwhile, the U.S. International Trade Commission is reviewing a September ruling that Apple violated one of Qualcomm's patents while recommending against an import ban on iPhones. The ITC will not only look at whether any infringement took place, but whether it should impose an import ban, as Qualcomm is demanding. A decision is expected in March.
But the reason you're probably hearing a lot about the Qualcomm-Apple dispute these days is due to a pair of legal wins Qualcomm scored overseas in December 2018.
That was when a Chinese court banned the sale of iPhones in that country, though the ban doesn't impact recent models like the iPhone XR, iPhone XS and iPhone XS Max. Apple is appealing the ruling. Because the patents center around software, Apple has said that software updates can bring its older iPhones into compliance with the Chinese court's ruling. (This might explain the recent spate of iOS updates that have come out during December.) As of this writing, Apple's iPhones remain on sale in China.
That's not the case in Germany, where a Munich court granted an injunction against iPhones that use chips from Intel as well as parts from a second supplier. As a result, Apple said it's stopped selling the iPhone 7 and iPhone 8 at its own retail stores in Germany while it appeals the ruling. Those older models remain available from third-party retailers in Germany, and Apple will continue to sell the iPhones it released in 2018. (A report out of Germany claims Apple may come out with redesigned versions of the iPhone 7 and 8 that replace the part at the heart of the injunction with a different component.)
In January, another German court — this one in Mannheim — dismissed a Qualcomm patent suit against Apple, though Qualcomm's appealing that decision. The court in Munich that previously ruled in Qualcomm's favor, has since dismissed four more patent claims by the chip maker, though it still hasn't ruled on four additional claims.
What impact will this have on consumers?
If you're about to stroll into Apple's retail store in Munich to grab an iPhone 8, you're out of luck for now. Here in the U.S., though, consumers aren't really feeling any consequence from the ongoing court fights between Qualcomm and Apple.
That may not always be the case, though, especially with those two big court cases coming up this year.
"Obviously, when there are sales injunctions, these fights impact consumers in those jurisdictions, but mostly the impact to consumers is indirect," Greengart said. "There are embedded costs that get passed along - no fight with lawyers and fees comes free - and you could make the argument that innovation is harmed when companies are focused on fighting about IP rather than licensing it broadly and inventing new things."
What's the outlook?
It's impossible to say right now, pending any further injunctions or court rulings. "You would have thought that this would have been resolved a while ago. It hasn't been," Greengart said. "So I make no predictions on whether Apple and Qualcomm will come to terms in the near future."
For now, though, keep an eye peeled on the verdict in that FTC-Qualcomm case and on the upcoming Qualcomm-Apple trial. Both sides have indicated a settlement isn't imminent, so expect this dispute to continue to play out in courtrooms around the world in 2019.
