Apple, Qualcomm legal tangle heading for clarity as trials begin

Bloomberg

After more than a year of vicious accusations and a flurry of lawsuits and counter claims, Apple Inc. and Qualcomm Inc’s multi-billion-dollar legal dispute is about to get serious.
Hearings in the three most important markets — US, China and Germany — will soon determine whether Apple’s attempt to save itself billions in technology licensing payments by forcing one of the world’s biggest chipmakers to change the way it does business is legal.
Apple may be the hook for $2.5 billion to $4.5 billion in unpaid fees, based on estimates for the amount per phone the company may be charged, a total that could be equivalent to about one-fifth of Qualcomm’s annual revenue. The iPhone maker has argued that Qualcomm uses its ownership of patents that cover the basics of how modern smartphones communicate to extract unfairly high payments and coerce it into buying chips. The chipmaker has countered that Apple is stealing its property by refusing to hand over fees for technology that the rest of the industry values and pays for.
“Trying to untangle the thicket of litigation with these two companies is a gargantuan task,” said Will Stofega, a mobile industry analyst at IDC.
The companies’ legal teams have been busy and are likely to stay that way. There are more than 50 separate intellectual property and antitrust proceedings filed across 16 jurisdictions in six countries, according to Bloomberg Intelligence analyst Matt Larson. While no single case will resolve everything, a number of decisions in the second half of 2018 may create an incentive to settle, Larson wrote in a recent research note.
Next week the International Trade Commission in Washington will begin a hearing on Qualcomm’s argument that Apple is infringing three patents. Qualcomm is asking the agency to ban imports of all iPhone 7 models that don’t have Qualcomm’s chips. The iPhone, which provides Apple with over 60 percent of its sales, is manufactured in Asia.