Apple Seeking $27 Billion from Qualcomm in Patent Lawsuit

The Associated Press
Bebeto Matthews/ AP

A massive lawsuit between Apple and Qualcomm about illegal patent licensing is getting ready to begin in San Diego. Apple seeks $27 billion from Qualcomm, while that company’s counterclaims run to $15 billion, all centered on the relationship between the two companies about licensing patents key to Apple’s products.

Apple and Qualcomm are about to begin a massive jury trial in San Diego, according to a report from CNBC. Apple is seeking $27 billion in damages for illegal patent licensing by Qualcomm. Qualcomm is seeking $15 billion and it alleges that Apple improperly forced their partners to cease the payments of royalties.

Apple alleges that Qualcomm has unfairly charged them a patent license fee on the purchase of computer chips. Apple and other technology manufacturers have argued that Qualcomm’s policy on patent licenses are unfair. First, Qualcomm makes manufacturers sign a patent license, which is designed to ensure that Apple doesn’t violate the patents. Then, Qualcomm inflates the price of their chips to reflect the value of the patents. Industry leaders have criticized Qualcomm for this tactic.

Qualcomm alleges that Apple has wrongly violated its patents.

Gaston Kroub, a patent attorney with Kroub, Silbersher & Kolmykov, told CNBC that the lawsuit will finally force Qualcomm to embrace some of the business decisions that they have made. “This is the day of reckoning that Qualcomm has been very fortunate to avoid for many years,” Kroub said. “In Apple, they’ve finally come up against a potential licensee that has the resources and the will to put Qualcomm’s business model and licensing practices on trial.”

Stacy Rasgon, an equity analyst for Bernstein, told CNBC that a loss for Qualcomm could pose a serious threat to their business. “I don’t think (a Qualcomm victory) would be great for Apple, but if it’s about money, they’ve got plenty of money,” Rasgon said. “For Qualcomm, it’s an existential attack on the meat of their business model.”
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