About QualComm-Technology
Apple
was locked with one of its suppliers, QUALCOMM, the iPhone maker publicly
argued that the chip maker's technology was worthless. But according to an
internal Apple memo Qualcomm showed during the trial this week between the two
tech companies, Apple's hardware executives used words like "the
best" to describe Qual-comm's engineering. Another Apple memo described
Qual-comm as having a "unique patent share" and "significant
holdings. “The sealed documents, obtained by Qual-comm through the discovery
phase ahead of the trial, offer a rare window into the decision-making process
of one of the most secretive and powerful companies on the planet, and how
Apple's internal discussions about Qual-comm differed from what it said
publicly. Apple's criticism of Qual-comm underpinned more than 80 lawsuits
around the world and influenced governments to change laws and regulations in
Apple's favor. The emails and slide show presentation could soon be made
available in the docket for all to see, since they were shown at trial. The two
sides settled their dispute Tuesday, shortly after the trial began.
The
documents also raise questions about the methods Apple used to inflict pain on
Qual-comm and whether Apple really believed its own arguments to lawmakers,
regulators, judges and juries when it tried to change not just its longstanding
business agreement with Qual-comm but the very laws and practices that have
allowed inventors to profit from their work and investments. Apple has argued
that Qual-comm's patents were no more valuable than those of competitors like
Ericsson and Huawei, but Qual-comm argued in court that the documents show
otherwise. “While it's very common for companies who are engaged in legal
disputes to play hardball, the disclosure of these documents is very
unsettling," said Adam MOs off, a law professor at George Mason University
and director of the Center for the Protection of Intellectual Property.
"It potentially reveals that Apple was engaging in a bad faith argument
both in front of antitrust enforcers as well as the legal courts about the
actual value and nature of Qual-comm's patented innovation."
Qual-comm
and Apple declined to comment. The settlement the two companies reached this
week includes a six-year licensing agreement and a multiyear supply agreement.
Apple will also make a payment of an unspecified amount to QUAL-COMM. For
years, Apple had been buying Qual-comm's wireless modem chips for its iPhones,
and paying the chip maker about $7.50 per device, according to court documents.
An internal memo from an accountant in 2009 said Qual-comm is "widely
considered the owner of the strongest patent portfolio for essential and
relevant patents for wireless standards," according to a document revealed
in court. In a March 2015 email that was part of the sealed documents, Apple's
vice president of hardware Johnny Srouji wrote of Qual-comm technology,
"Engineering wise, they have been best. “But Apple began seeding plans to
undermine Qual-comm, according to the sealed documents. An internal report obtained
durings the discovery process and cited by Qual-comm Tuesday showed Apple had
been planning to sue Qual-comm as far back as 2014, but it had planned to wait
until after the end of 2016, until after Qual-comm paid billions of dollars in
payments to Apple as part of a business cooperation agreement. An Apple
document from June 2016, called "Qual-comm Royalty Reduction,"
predates Apple filing suit against Qual-comm in San Diego federal court by more
than six months.
The
purpose was spelled out clearly: "Goal: Reduce Apple's net royalty to
Qual-comm." Apple said in the document it planned to accomplish this in
several ways, including "Hurt Qual-comm financially" and "Put
Qual-comm's licensing model at risk. “In the lawsuit Apple filed in 2017, it
alleged that the chip maker and wireless pioneer had a stranglehold on the
market for wireless modem chips. Apple contends that Qual-comm leveraged its
position to overcharge for its patent licenses.According to internal documents
revealed in court, Apple wrote that it entered into the patent licensing
agreement "based on Qual-comm's established and relatively transparent
actual monetary collection of patent licenses."Apple made similar
arguments about Qual-comm's alleged violation of FRAND obligations durings a
January trial in California federal court in which the Federal Trade Commission
accused Qual-comm of antitrust violations. The outcome of the FTC trial, which
has yet to be decided, has the potential to set precedent not just for Apple
and Qual-comm but for any inventor whose innovation becomes part of technology
standards, including universities and individual researchers.
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