A group of Taiwanese manufacturers are joining Apple’s legal battle against Qualcomm in a countersuit, claiming the chipmaker charges excessive fees for patent licenses and violates anti-trust laws, according to The Wall Street Journal. Apple is covering the legal expenses associated with the companies’ defense, and said it would file a separate motion to consolidate the manufacturer’s countersuit with its own.
Contract manufacturers Foxconn Technology, Compal Electronics, Pegatron Corp, and Wistron Corp had planned to file a lawsuit against Qualcomm in the Federal District Court in San Diego on Tuesday night. Notably, the companies assemble iPhones and iPads for Apple. Qualcomm is the market leader in smartphone modems and a primary supplier to Apple, yet Apple doesn’t have a direct patent deal with Qualcomm; it pays licensing fees to the four manufacturers who then pay Qualcomm. Apple stopped making payments to the four after it sued Qualcomm in January for $1 billion, thus making the manufacturers’ involvement in the legal tussle seemingly inevitable.
Excessive patent licences
It’s the latest episode in a long and sordid saga. In May, Qualcomm sued the four Taiwanese manufacturers for “failing to provide royalty payments.” In July, Qualcomm asked the US government to ban new iPhones from coming into the country, and stop sales of devices that were already in the US.
Qualcomm is also being sued by the United States Federal Trade Commission for anti-competitive practices. Qualcomm had previously said that it has “never withheld or threatened to withhold chip supply in order to obtain agreement to unfair or unreasonable licensing terms,” despite accusations to the contrary by Apple and now others.