Sun, Oct 15, 2017 - Page 1 News List

Qualcomm seeks China iPhone ban in legal feud

ANTITRUST FIGHT:Qualcomm accused Apple of using its technologies without paying for them, while the latter expressed confidence the lawsuit would fail

Bloomberg

A woman looks at an Apple iPhone 8 Plus at an Apple store in Shanghai on Sept. 22.

Photo: AFP

Qualcomm Inc has filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple Inc so far in a sprawling and bitter legal fight.

The San Diego-based company aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made.

The product provides almost two-thirds of Apple’s revenue.

Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, company spokeswoman Christine Trimble said.

“Apple employs technologies invented by Qualcomm without paying for them,” Trimble said.

Qualcomm’s suits are based on three non-standard essential patents, it said.

They cover power management and a touch-screen technology called Force Touch that Apple uses in its iPhones, Qualcomm said.

The inventions “are a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits,” Trimble said.

Apple said the claim has no merit.

“In our many years of ongoing negotiations with Qualcomm, these patents have never been discussed,” Apple spokesman Josh Rosenstock said. “Like their other courtroom maneuvers, we believe this latest legal effort will fail.”

Qualcomm made the filings at the Beijing court on Sept. 29. The court has not yet made them public.

There is little or no precedent for a Chinese court taking such action at the request of a US company, Canaccord Genuity Inc analyst Mike Walkley said.

Chinese regulators would also be concerned that a halt of iPhone production would cause layoffs at Apple’s suppliers, such as Hon Hai Precision Industry Co (鴻海), which are major employers.

Conversely, supporting Qualcomm might help Chinese smartphone manufacturers, such as Guangdong Oppo Electronics Co (廣東歐珀), to gain market share against Apple, Walkley said.

Qualcomm and Apple are months into a legal dispute that centers on the former’s technology licensing business.

However, the latest suits come at a crucial time for Apple, as suppliers and assemblers in China are rushing to churn out as many iPhone 8 and iPhone X models as possible ahead of the holiday season, so any disruptions would likely be costly.

The Greater China region accounted for 22.5 percent of Apple’s US$215.6 billion sales in its most recent financial year.

The legal battle started earlier this year when Apple filed an antitrust suit against Qualcomm arguing that the chipmaker’s licensing practices are unfair, and that it abused its position as the biggest supplier of chips in phones.

Qualcomm has countered with a patent suit and argued that Apple encouraged regulators from South Korea to the US to take action against it based on false testimony.

Earlier this week, Qualcomm was fined a record NT$23.4 billion (US$775 million) by Taiwan’s Fair Trade Commission, a ruling the company is appealing.

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