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Blockbuster Qualcomm lawsuit claims Apple stole modem tech and gave it to Intel

Blockbuster Qualcomm lawsuit claims Apple stole modem tech and gave it to Intel

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Photo by James Bareham / The Verge

Qualcomm says that Apple has been stealing its wireless technology for several years in order to eventually rid itself of the need to rely on Qualcomm components. Apple is alleged to have given Qualcomm’s code to Intel, in order to boost Intel’s modem speeds, which are known to be slower.

The claims come in the latest update to Qualcomm and Apple’s blockbuster legal battle, which started close to two years ago with Apple claiming that Qualcomm was abusing its position as the dominant supplier of smartphone modems to demand unreasonable fees.

But now Qualcomm is trying to spin the suit back in Apple’s face, and it claims to have good evidence. Having entered the lawsuit’s discovery phase, Qualcomm says it’s been able to view documents showing that Apple and Intel engineers shared Qualcomm’s source code and other tools.

“Apple developed and carried out an intricate plan ... to steal vast swath’s of Qualcomm’s confidential information.”

“On information and belief, Apple developed and carried out an intricate plan, beginning at least several years ago and continuing through the present, to steal vast swaths of Qualcomm’s confidential information and trade secrets and to use the information and technology to improve the performance of non-Qualcomm chipset solutions and, in conjunction, the performance of iPhones based on such non-Qualcomm chipset solutions,” the complaint states.

Qualcomm initially made some of these claims last year, but they were much tamer at that point. Qualcomm had really just said that Apple failed to protect its secret code and had at some point shared it with Intel; now, Qualcomm claims, that discovery in the case shows Apple did this knowingly and continually.

The lawsuit says that, at one point, Intel’s engineers even complained to Apple that they were unable to open secret Qualcomm files they had been sent. Apple’s engineers are then said to have created new, viewable files for them using Qualcomm’s own tools.

Qualcomm says this practice began “at least several years ago” and has continued through today. The company believes that Apple succeeded in stealing its technology and using it to improve the speeds in Intel’s modems.

Qualcomm got a tip from an anonymous web posting

Apple declined to comment on today’s specific allegations. A spokesperson instead pointed to the comment Apple issued in June 2017, saying that Qualcomm is “taxing Apple’s innovation” and harming the entire industry. “We’ve always been willing to pay a fair rate for standard technology used in our products and since they’ve refused to negotiate reasonable terms we’re asking the courts for help,” the statement says.

Apple had access to secret Qualcomm code because of a deal the two companies are said to have struck back in 2009. Apple wanted access to Qualcomm code so that it could integrate it more deeply into the iPhone, according to the filing. Qualcomm says it agreed, but with some conditions: that it only be used in products with Qualcomm chips, couldn’t be shared with third parties, and would be robustly protected, in the same manner as Apple’s own code.

According to the lawsuit, Qualcomm was also supposed to be allowed to audit Apple’s security practices. Qualcomm claims to have asked to audit Apple last year, only to be shot down.

Qualcomm then requested that Apple do its own investigation into code sharing later that year, sparked by an anonymous posting on a website that collects comments from people who claim to have been laid off. The posting, claiming to be from an Intel employee, said that Intel engineers “were told to ignore intellectual property rights when designing the modem” and that there was “a conspiracy to copy Qualcomm’s technology” using help from Apple. Apple allegedly declined to investigate.

For the claimed violations of its intellectual property, Qualcomm asks the court to grant money lost as well as punitive damages to punish Apple. It also wants Apple to be forced to stop using Intel’s modems; it’s already seeking such a ban through the US International Trade Commission.

Qualcomm’s CEO thinks they could settle soon

The claims make for a dramatic twist in the ongoing legal battle. Apple — among other companies — has been unhappy with Qualcomm’s dominance of the smartphone modem market. If a company wants to make a smartphone at scale, especially one with the best wireless speeds, they’ve generally needed to talk to Qualcomm.

Qualcomm is said to have used its dominance in modems to charge unusually high fees to license associated patents. The combination is supposed to be part of the reason that Intel has struggled to break into the smartphone modem game, a sore point as the company also struggles with its laptop and desktop processors.

It would not be surprising to learn that Apple actively worked to bolster Intel as a competitor. But if these claims pan out, it would mean that the two companies achieved that in potentially illegal ways.

Or, the whole thing could get wrapped up out of the courtroom. As contentious as things sound, Qualcomm CEO Steve Mollenkopf recently told Bloomberg, “The environment is such that a deal could get done.” That’s because the companies will finally have to start presenting to juries and judges. “Traditionally, legal milestones create an environment for both parties to change their perspective,” he said.