Qualcomm has to return nearly $815 million to BlackBerry for royalties the Canadian smartphone maker overpaid between 2010 and 2015.
The decision was made out of court as part of a binding arbitration agreement. Qualcomm says it disagrees with the decision, but the agreement is locked in and unable to be challenged. Interest and attorney fees will also be added the total.
The dispute was over royalties BlackBerry paid in advance to Qualcomm, seemingly for use of Qualcomm parts or patents in its smartphones. BlackBerry argued that there was suppose to be a cap on those royalty payments that didn’t get applied at the time, while Qualcomm argued that BlackBerry’s payments were supposed to be nonrefundable.
Qualcomm’s licensing business is having a bad year
While it’s not clear exactly how the royalty deal was structured, the settlement seems to show Qualcomm getting hit from yet another side in what’s turning into a global fight against its patent business.
Qualcomm is currently in a heated and escalating legal battle with Apple, which is suing the chip maker in three countries on claims it overcharged for patents. (Qualcomm filed a countersuit yesterday, complaining that Apple... made it look bad.) At the same time, the US Federal Trade Commission has a lawsuit out against Qualcomm for anti-competitive practices involving its licensing agreements.
It’s not clear exactly how much that ties into what’s happening here with BlackBerry, but the end result is yet another hit to Qualcomm’s licensing business. That’s looking to be an increasingly big problem: while Qualcomm is generally known for its chips, most of its profit comes through patent licensing — and this year, that profit source looks to be at risk.
Correction: Most of Qualcomm’s profit comes from its licensing business; this article previously stated that most of Qualcomm’s revenue came from licensing. Qualcomm’s products and services division accounts for more revenue.