Qualcomm Inc yesterday filed breach of contract complaint against four Taiwanese firms —Hon Hai Precision Industry Co (鴻海精密), Pegatron Corp (和碩), Wistron Corp (緯創) and Compal Electronics Inc (仁寶), which are in Apple Inc’s supply chain — it said have not paid royalties.
The lawsuits, filed in in the US District Court for the Southern District of California, is part of an ongoing legal dispute between Apple and Qualcomm that began in January.
Qualcomm said in the complaint that the four Taiwanese manufacturers of iPhones and iPads breached longstanding licensing deals and it is seeking unspecified damages, as they refuse to pay for use of Qualcomm’s licensed technologies.
Qualcomm declined to disclose the amounts they owed.
“It is unfortunate that we must take this action against these long-time licensees to enforce our agreements, but we cannot allow these manufacturers and Apple to use our valuable intellectual property without paying fair and reasonable royalties to which they have agreed,” Qualcomm executive vice president and general counsel Donald Rosenberg said in the statement.
Under Apple’s instructions, the contract manufacturers stopped paying royalties on the Apple products they produce to Qualcomm last quarter, Rosenberg said in a teleconference with Taiwanese media yesterday.
It also appears that Apple, in order to seduce its manufacturers to comply with it, said it would pay any damages arising from not paying Qualcomm, Rosenberg said.
The agreements were entered into before Apple sold its first iPhone and Apple is not a party to the agreements, he said.
However, the Taiwanese firms are continuing to pay Qualcomm royalties for use of its technology in non-Apple products under the same agreements that apply to the Apple products, Qualcomm said.
“While we are aware of the lawsuit between Apple and Qualcomm, we have not received any formal communication related to this lawsuit and we do not have any further comments on the matter,” Hon Hai, which is known as Foxconn Technology Group (富士康) outside Taiwan, said in a statement late last night.
Pegatron, Wistron, and Compal issued similar statements.
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