By Stephen Nellis
(Reuters) – Apple Inc’s
Qualcomm and Apple are facing off in federal court over Qualcomm’s licensing for modem chips, which provide mobile data connectivity to devices like the iPhone.
Because those chips have become a standard across the mobile phone industry, Qualcomm is required to license them on fair terms.
Apple has alleged that Qualcomm is charging unfair prices for the technology and is engaging in anticompetitive practices. Qualcomm, for its part, has said that it provided fair terms for the parts of technology where it is obligated to do so and that it is within its rights to determine pricing on patents that are not bound by the standards rules.
Qualcomm had sought what is known as an “anti-suit” injunction against Apple, seeking to temporarily halt 11 separate lawsuits against Qualcomm and its subsidiaries in the United Kingdom, Japan, China and Taiwan over many of the same pricing and practices issues as the U.S. case.
But Judge Gonzalo Curiel ruled against Qualcomm and said Apple could proceed with those actions while the U.S. case plays out.
“Apple’s declarations make evident that it has sought to challenge Qualcomm’s patent licensing practices and anticompetitive conduct territory by territory,” Curiel wrote. “While Qualcomm may object to this litigation strategy as duplicative, the Court will not conclude that Apple’s exercise of its rights under foreign laws is vexatious.”
Christine Trimble, vice president of public affairs at Qualcomm, said in a statement, “While we are disappointed by today’s rulings, we recognize that the motions involved high procedural hurdles.”
Apple praised the ruling.
“We are pleased the federal court in San Diego decided Qualcomm must establish the fair value of its technology and defend its business practices in court before forcing Apple and others to pay exorbitant and unfair rates, which amount to a tax on our own inventions,” Apple spokesman Josh Rosenstock said in a statement.
Qualcomm has also brought an action against Apple before the U.S. International Trade Commission seeking to ban imports of some iPhones. Qualcomm filed a separate civil lawsuit accusing Apple of infringing the patents at issue in that action.
Qualcomm also faces an antitrust complaint from the U.S. Federal Trade Commission. Meantime, four of Apple’s contract manufacturers sued Qualcomm on antitrust allegations, and Apple joined that lawsuit.
(Reporting by Stephen Nellis; Editing by Cynthia Osterman)