4 ms·

> There is pretty much no way that Qualcomm could ever get an injunction to stop sales of iPhones... Qualcomm is planning to ask the federal government to ban i

> There is pretty much no way that Qualcomm could ever get an injunction to stop sales of iPhones... Qualcomm is planning to ask the federal government to ban imports of iPhones. This is the technology equivalent of a Hail Mary pass. It was unclear from the article why this is a Hail Mary, so I looked it up. It initially seemed to me that if Qualcomm offers Apple a licensing agreement, Apple agrees to it, and later decides not to adhere to the agreement, they should be able to seek injunctive relief. The relevant precedent is probably eBay Inc. v. MercExchange [1], which SCOTUS used to establish a four-factor test. Among the four are "that [the party seeking injunction] has suffered an irreparable injury;" and "that the public interest would not be disserved by a permanent injunction." Public can't live without that sweet new iPhone stuff ;) and QCOM can always get paid later. [1] https://en.wikipedia.org/wiki/EBay_Inc._v._MercExchange,_L.L.C https://en.wikipedia.org/wiki/EBay_Inc._v._MercExchange,_L.L.... [2] https://www.scribd.com/document/337216142/1-Apple-v-Qualcomm-Lawsuit-Patently-Apple https://www.scribd.com/document/337216142/1-Apple-v-Qualcomm...

IBM 10y ago
Apple doesn't receive a license from Qualcomm. They pay their third party manufacturers which pass it on to Qualcomm (and until recently, Apple was receiving a rebate for some of it in exchange for exclusivity). Also I doubt anyone is going to ban the iPhone over SEPs.
Animats 10y ago
If Apple manufactured in the US, they could rely on eBay vs. MercExchange. But Apple imports from China. The rules for imports are tougher. That's handled by the International Trade Commission.[1] ITC cases take about a year, and if Qualcomm wins, iPhone imports will be seized at Customs. ITC rules favor American manufacturers fighting illegal imports. Qualcomm could win this. To bring an ITC case, you have to be manufacturing the thing in the US, which Qualcomm does; they make and sell cellular radio ICs. ITC proceedings are thus not available to "patent trolls". This deals with most of the usual complaints about patents. ITC actions are entirely about blocking imports. There's no issue of what's a "reasonable royalty". Qualcomm can just say "no imports". The Trump administration might view this as a win, as it would force Apple to manufacture in the US. [1] https://apps.americanbar.org/litigation/committees/intellectual/roundtables/1106_outline.pdf https://apps.americanbar.org/litigation/committees/intellect...
- wyldfire 10y ago
  > it would force Apple to manufacture in the US. But wouldn't a decision to support the ITC injunction just bring Apple back to the negotiating table? Seems hard to believe that Qualcomm would go scorched earth on a customer like that. Especially one from whom it's getting big royalties from.
  - Animats 10y ago
    Cisco has done that to Arista in the past. Apple has done that to Samsung. Samsung tried to do it to Apple, but Obama overruled that. (The President can block ITC injunctions.) Usually what happens is a very fast settlement by the infringing party.
  - madeofpalk 10y ago
    Apple and Qualcomm hate each other, and have done for a while. Their contract is literally called 'Cooperation Agreement'. Apple says "For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with." Qualcomm says similar things.
tooltalk 10y ago
I'm a bit biased, having followed Apple's legal misadventures last few years. Apple believes that their frivolous patents (eg, slide-to-unlock) are worth $7-$8 per device, while everyone else's patents, especially when it comes to SEP, are $0.000000x. It's not surprising that Apple is doing what they are doing now. First, this Bloomberg article is somewhat misleading. IEEE and their recent policy statement on SSPUS has very little to do with what's at dispute here. ETSI regulates most wireless 3G, LTE patents and ETSI doesn't want to dictate how licensees and licensors come to FRAND rates or what they ought to be. IEEE is the first and the only one so far to have clarified their stance on SEP licensing, but most SSO, standard setting organization, don't want to meddle with licensing practices because they don't want to cross path with regulators (ie, anti-trust/competitive) or discourage potential contributing members from declaring their patents SEP. Second, Apple has never directly licensed Qualcomm's patents. Apple's contract manufacturer Foxconn has long been a legit licensee of Qualcomm wireless patents (even before Apple iPhone was released back in 2007) and pays royalty based on their manufacturing cost, not on the retail price ($600 or more). Apple pays nowhere close to what many people believe they are paying. Third, Apple technically breached the contract with Qualcomm by cooperating with KTC, Korean Fair Trade Commission, last year. Qualcomm essentially had a gag order on their contract forbidding their licensees from speaking out. While this is not uncommon -- Apple is notorious for doing the same to their suppliers (eg, GT Advanced?) and is much worse in many respects -- there are clearly some elements in Qualcomm's licensing practices that are quite troubling as well. Forth, SCOTUS's recent eBay's decision doesn't too much bearing on Qualcomm's ITC case. While SCOTUS opinions' are the supreme laws of the land, USITC is a quasi judicial agency that operates on different level. Their decision doesn't set legal precedence. They are not in the business of calculating damages, or determining royalty rates or basis -- their only power is to issue ITC import ban when infringement or breach of contract is found. Companies do prefer USITC because ITC cases move a lot faster and ITC is not encumbered by the same high standards that lower courts must consider.
- robocat 10y ago
  Your "second" item is probably wrong (brings doubt to your other 3 items...). From cbanek: "The fee is based on the total value of the device" and "the royalty is about $15 per phone" versus the "value of the chip (closer to $20)". see cbaneks comments for links to articles https://news.ycombinator.com/item?id=14302939 https://news.ycombinator.com/item?id=14302939 Maybe Apple has direct contracts with Qualcomm?

IBM 10y ago

Apple doesn't receive a license from Qualcomm. They pay their third party manufacturers which pass it on to Qualcomm (and until recently, Apple was receiving a rebate for some of it in exchange for exclusivity). Also I doubt anyone is going to ban the iPhone over SEPs.

Animats 10y ago

If Apple manufactured in the US, they could rely on eBay vs. MercExchange. But Apple imports from China. The rules for imports are tougher. That's handled by the International Trade Commission.[1] ITC cases take about a year, and if Qualcomm wins, iPhone imports will be seized at Customs. ITC rules favor American manufacturers fighting illegal imports. Qualcomm could win this. To bring an ITC case, you have to be manufacturing the thing in the US, which Qualcomm does; they make and sell cellular radio ICs. ITC proceedings are thus not available to "patent trolls". This deals with most of the usual complaints about patents. ITC actions are entirely about blocking imports. There's no issue of what's a "reasonable royalty". Qualcomm can just say "no imports". The Trump administration might view this as a win, as it would force Apple to manufacture in the US. [1] https://apps.americanbar.org/litigation/committees/intellectual/roundtables/1106_outline.pdf https://apps.americanbar.org/litigation/committees/intellect...

wyldfire 10y ago
> it would force Apple to manufacture in the US. But wouldn't a decision to support the ITC injunction just bring Apple back to the negotiating table? Seems hard to believe that Qualcomm would go scorched earth on a customer like that. Especially one from whom it's getting big royalties from.
- Animats 10y ago
  Cisco has done that to Arista in the past. Apple has done that to Samsung. Samsung tried to do it to Apple, but Obama overruled that. (The President can block ITC injunctions.) Usually what happens is a very fast settlement by the infringing party.
- madeofpalk 10y ago
  Apple and Qualcomm hate each other, and have done for a while. Their contract is literally called 'Cooperation Agreement'. Apple says "For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with." Qualcomm says similar things.

tooltalk 10y ago

I'm a bit biased, having followed Apple's legal misadventures last few years. Apple believes that their frivolous patents (eg, slide-to-unlock) are worth $7-$8 per device, while everyone else's patents, especially when it comes to SEP, are $0.000000x. It's not surprising that Apple is doing what they are doing now. First, this Bloomberg article is somewhat misleading. IEEE and their recent policy statement on SSPUS has very little to do with what's at dispute here. ETSI regulates most wireless 3G, LTE patents and ETSI doesn't want to dictate how licensees and licensors come to FRAND rates or what they ought to be. IEEE is the first and the only one so far to have clarified their stance on SEP licensing, but most SSO, standard setting organization, don't want to meddle with licensing practices because they don't want to cross path with regulators (ie, anti-trust/competitive) or discourage potential contributing members from declaring their patents SEP. Second, Apple has never directly licensed Qualcomm's patents. Apple's contract manufacturer Foxconn has long been a legit licensee of Qualcomm wireless patents (even before Apple iPhone was released back in 2007) and pays royalty based on their manufacturing cost, not on the retail price ($600 or more). Apple pays nowhere close to what many people believe they are paying. Third, Apple technically breached the contract with Qualcomm by cooperating with KTC, Korean Fair Trade Commission, last year. Qualcomm essentially had a gag order on their contract forbidding their licensees from speaking out. While this is not uncommon -- Apple is notorious for doing the same to their suppliers (eg, GT Advanced?) and is much worse in many respects -- there are clearly some elements in Qualcomm's licensing practices that are quite troubling as well. Forth, SCOTUS's recent eBay's decision doesn't too much bearing on Qualcomm's ITC case. While SCOTUS opinions' are the supreme laws of the land, USITC is a quasi judicial agency that operates on different level. Their decision doesn't set legal precedence. They are not in the business of calculating damages, or determining royalty rates or basis -- their only power is to issue ITC import ban when infringement or breach of contract is found. Companies do prefer USITC because ITC cases move a lot faster and ITC is not encumbered by the same high standards that lower courts must consider.

robocat 10y ago
Your "second" item is probably wrong (brings doubt to your other 3 items...). From cbanek: "The fee is based on the total value of the device" and "the royalty is about $15 per phone" versus the "value of the chip (closer to $20)". see cbaneks comments for links to articles https://news.ycombinator.com/item?id=14302939 https://news.ycombinator.com/item?id=14302939 Maybe Apple has direct contracts with Qualcomm?