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Apple, Qualcomm Settle Royalty Dispute (cnbc.com)

Apple and Qualcomm have settled their royalty dispute, the companies said on Tuesday. From a report: The settlement includes a payment from Apple to Qualcomm as well as a chipset supply agreement, suggesting that future iPhone may use Qualcomm chips. The two companies started proceedings in a trial in federal court in San Diego on Monday, which was expected to last until May. Both sides were asking for billions in damages. In November, Qualcomm CEO Steve Mollenkopf said that he believed that the two companies were on the "doorstep" to settling. Apple CEO Tim Cook contradicted him shortly after, saying that Apple hasn't been in settlement discussions since the third calendar quarter of 2018.

The complicated legal battle centered around modem chips and had been raging in courts around the world since 2016. For years, Apple bought modem chips from Qualcomm, but chafed under Qualcomm's prices and requirement that any company using its chips would also pay licensing fees for its patents. New iPhone models released in 2018 used Intel modem chips, and Apple said in a previous FTC trial that Qualcomm.
UPDATE: Intel announced this afternoon that it plans to exit the 5G smartphone modem business, leaving Qualcomm as the only supplier for Apple's iPhones.

59 comments

  1. Except by Anonymous Coward · · Score: 0

    Apple never bought any Qualcomm chips

    1. Re: Except by Anonymous Coward · · Score: 0

      Apple fanbois think it is royalty. Ghey!

    2. Re:Except by Anonymous Coward · · Score: 0

      apple got the chips, they just tried not to pay for them, Classic apple

  2. What? by Anonymous Coward · · Score: 1

    New iPhone models released in 2018 used Intel modem chips, and Apple said in a previous FTC trial that Qualcomm.

    Apple said that Qualcomm... what? You can't even finish sentences now? You just left and went to lunch, is that it?

    1. Re:What? by Bobrick · · Score: 1

      Just wait for it... it's gonna be amazing!

    2. Re:What? by Anonymous Coward · · Score: 0

      You're hyping it wrong!

    3. Re:What? by PPH · · Score: 1

      Please insert 25 cents for another minute.

      --
      Have gnu, will travel.
    4. Re:What? by Penguinisto · · Score: 1

      New iPhone models released in 2018 used Intel modem chips, and Apple said in a previous FTC trial that Qualcomm.

      Apple said that Qualcomm... what? You can't even finish sentences now? You just left and went to lunch, is that it?

      ...would you like to know more?

      (said in an ominous TV announcer voice.)

      --
      Quo usque tandem abutere, Nimbus, patientia nostra?
    5. Re:What? by Anonymous Coward · · Score: 0

      You mean $0.002 per minute that you pay Verizon (if you pay them $90/month) isn't cheap enough for you?

      Have you tried Google Fi or Republic? you can get that down to $0.00069 per minute or less if you don't use too much data...

    6. Re: What? by Type44Q · · Score: 1

      You can't even finish sentences now?

      Obviously it'd be even better if Msmash wouldn't even start a sentence... but I'm sure we're grateful for what we can get.

    7. Re:What? by Anonymous Coward · · Score: 0

      The only good bug is a dead bug!

  3. So the takeaway... by Anonymous Coward · · Score: 0

    Is that Intel sucks THAT BAD.

  4. Apple is not a fair company. by Anonymous Coward · · Score: 0

    They have become yet another greedy US mega corp like Cisco/Google/MS/IBM... Very sad.

    1. Re:Apple is not a fair company. by Anonymous Coward · · Score: 0

      ...and like Qualcomm.

    2. Re:Apple is not a fair company. by alvinrod · · Score: 3, Informative

      All companies are greedy. If a company is trying to tell you that they aren't, they're liars as well as greedy.

    3. Re:Apple is not a fair company. by Anonymous Coward · · Score: 0

      Feel free to start a non-profit corporation to provide low cost goods and services. I dare you to do more than point your fingers, actually throw your hat into the ring.

      Little bitches like you never ante up. All you know is how to bitch about those who do. Cry me a fucking river.

  5. Double dipping by Anonymous Coward · · Score: 0

    I am siding with apple here. Qualcomm is trying to double dip - if you sell a piece of hardware the cost should include all associated licenses

    1. Re:Double dipping by Anonymous Coward · · Score: 0

      So, when I buy an Intel CPU for my computer, that should give me a license to use any Intel technology in any other manner which I chose?

    2. Re:Double dipping by bws111 · · Score: 1

      Nope. You get a license for patents embodied in the hardware. You certainly do not get licenses for applications of that hardware.

    3. Re: Double dipping by Anonymous Coward · · Score: 0

      Not any intel technology. Just to use the technology that is already embedded in the CPU within the limits of the CPU itself using it while operating.

    4. Re: Double dipping by Anonymous Coward · · Score: 0

      And it is double dipping. When you buy a model you expect the model manufacturer to have paid whatever licenses were needed for the RF implementation. When they sell the modem (cpu) to you, they transfer a use license related to that hardware piece.

    5. Re: Double dipping by Anonymous Coward · · Score: 0

      Get real Qualcomm. Could be difficult since you never have before.

    6. Re:Double dipping by Anonymous Coward · · Score: 1

      if you sell a piece of hardware the cost should include all associated licenses

      They only sell the hardware if you license the patents. Qualcomm had already informed Apple the details of the deal. Apple went ahead with the deal, and then later Apple ordered Foxconn to withhold royalty payments. Apple also had internal presentations with slides about wanting to hurt Qualcomm financially.

      Qualcomm might be at fault in other areas, but on this, Apple is getting a dose of their own medicine. Apple grabs 30% of sales of their App developers for running a damn FTP site and a keyword search engine. What is the operational cost of running a digital asset repository ? 30% of sales.. really?

      "If you think its so easy to run an App Store, why don't you do it?" - Apple won't let anyone else do it.

    7. Re: Double dipping by burtosis · · Score: 2

      Exactly. It's legal to take the CPU (or whole computer in this case) repackage it and sell it as part of another product without paying anything at all ever as long as you didn't sign anything when you bought the CPU (or whole computer). At least in the US, I'm not sure about other countries.

    8. Re:Double dipping by burtosis · · Score: 1

      Exactly. Imagine having to get a fucking license for every transistor, diode, modem, or multi media chipset in your design, then licenses on the injection molding, alloy composition and manufacturing, fastners, on and on. It would be a nonsensical nightmare. You may not take those, rip off the design, not pay royalties and go on to use them in your own products. That's the difference.

    9. Re: Double dipping by bws111 · · Score: 1, Troll

      Do you think when you buy a transistor you automatically have a license to build any circuit imaginable with that transistor? A piece of hardware and an application using that hardware are two separate things.

      Your example is odd. Yes, when you buy a modem you expect the modem manufacturer to have paid any required licenses. No shit. But that is not what this is about. This is you bought a modem and wish to use it in a particular way that is also patented. Buying the modem does not give you that license, no matter how you want to spin it.

    10. Re:Double dipping by bws111 · · Score: 1

      When you take those components and put them together to make some sort of useful circuit you are creating something else. And that something else may well be covered by someone's patent, and buying those components sure as hell doesn't negate that.

    11. Re: Double dipping by bws111 · · Score: 1

      Of course it's legal to do that. BUT, the 'other product' you are repackaging into may ALSO be covered by a patent, and just buying a CPU does not give you the license to make that other product, in the US or probably anywhere else.

    12. Re:Double dipping by burtosis · · Score: 1

      Correct, but by purchasing those components you are free to use them despite any patents related to thier manufacture or use.

    13. Re:Double dipping by Anonymous Coward · · Score: 0

      Still not a licensing problem.

      If Qualcomm delivered the goods prior to payment and Apple refused to pay that is teft, not a licensing issue.
      If Qualcomm delivered goods that can be used in ways A, B, C for a certain price, the buyer using these parts to perform A, B, C has already paid whatever licenses they needed to pay. Otherwise Qualcomm should adjust their price book.

    14. Re: Double dipping by Areyoukiddingme · · Score: 2

      ...just buying a CPU does not give you the license to make that other product, in the US or probably anywhere else.

      Yes it does. It's called patent exhaustion, and the Supreme Court has ruled on it before, and is likely to rule on it again. One of the Federal Circuits has been getting extremely creative about how 'sticky' patents are, and at least some of their rulings have been fairly directly contradicted by the Supreme Court already. It isn't over, but it's fairly clear that SCOTUS is determined to defend patent exhaustion, and they always win in the end.

    15. Re: Double dipping by bws111 · · Score: 2

      Your knowledge of patent exhaustion is laughable. Patent exhaustion says that the seller of a product can not control the product once it is sold. In no way does patent exhaustion allow you to infringe on OTHER patents, whether or not they use the product in question.

      For instance, suppose you invented the transistor, and also a particular amplifier that used that transistor. Patent exhaustion would prevent you from saying 'this transistor may not be used in anyone else's amplifier', but it would NOT prevent you from asserting your patent rights if someone used it to make your patented amplifier.

    16. Re: Double dipping by Anonymous Coward · · Score: 1

      Apple is hardly smelling of roses from this. They stopped buying chips from Qualcomm, and also stopped paying any patent royalties at all, amounting to wilful IP theft. They attempted to renegotiate their contract with their supplier by holding a large chunk of their revenue to ransom, while also helping that supplier's competitor reach performance parity.

      If Apple had picked a slightly smaller vendor, this bullying probably would have worked. Apple already have a huge profit margin, it's unlikely any significant cost savings would have been passed along to the end user.

      There are no good guys here.

    17. Re:Double dipping by MachineShedFred · · Score: 1

      No, but it should give you license to use the x86 instruction set to run software on the chip. And license to use technologies involved in talking to various RAM, PCI, USB, and other device interconnects.

      And you know what? It does.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
    18. Re: Double dipping by Areyoukiddingme · · Score: 1

      In no way does patent exhaustion allow you to infringe on OTHER patents, whether or not they use the product in question.

      I misread your original post, because your original post is a total non sequitur. Qualcomm didn't take Apple to court for infringing some patent they own that wasn't embodied in the chips they were selling. They tried to claim that their battery life management patent was somehow independent of the chip they were selling which... implemented the battery life patent.

      We were talking about the seller of the product. It doesn't matter how many patents are embodied in the product, from the transistor to the amplifier, all of the patents are exhausted after the seller of the product has sold the chip, even if some of those patents were licensed by the maker of the actual product rather than owned by them. But it's not me saying that. It's the Supreme Court:

      We conclude that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale... [R]estrictions and location are irrelevant; what matters is the patentee’s decision to make a sale.

      Emphasis mine.

      In any case, Qualcomm didn't go to court to defend some random other company's patents, licensed or otherwise. They went to court to demand more money from Apple, and the legal theory they were using was shaky at best, and flat out unlawful at worst. Apple folding here was them getting the deal they were after, not any indication of the strength of Qualcomm's legal position.

  6. Royalty dispute? by Anonymous Coward · · Score: 1

    Why? Was one of them claiming to be king or something?

  7. Big whoop about 5G by ilsaloving · · Score: 1

    It frustrates me greatly that all the various publications seem to be fighting over who can crow about 5G the loudest, yet when you look at the current pace of rollout, most of us won't see 5G for many years yet if ever.

    Verizon for example is struggling to get it working well in even dense urban centres where the value is greatest, so I expect it will probably take at least a decade before suburban areas get it, and rural areas probably not at all.

    And even if it does work.... yeah so what? The performance boost will have virtually zero practical impact unless you intend to stream 4K movies while commuting to work, and even then only maybe.

    In Canada, the telecoms won't even bring up 5G in passing conversation.

    Heaven forbid the tech press got a little perspective on new technologies.

    1. Re:Big whoop about 5G by Anonymous Coward · · Score: 0

      > unless you intend to stream 4K movies while commuting to work

      I don't know why anyone would ever do this. Data caps and the prices the carriers charge are too great. It would be cheaper just to get an unlimited landline and download the movies over the night.

    2. Re:Big whoop about 5G by burtosis · · Score: 1

      It's line of sight only and this creates a large amount of problems. It barely penetrates anything. The upside is the far higher frequency increases bandwidth, but without phone data plans getting an upgrade it's possible to blow through a months allowance of data in a handful of minutes. All in all cool, but I'm not holding my breath it's going to be soon either.

    3. Re:Big whoop about 5G by MachineShedFred · · Score: 1

      You will if you aren't in the United States.

      The US carriers are playing their usual games of rebranding existing shitty services as "5G", or dicking around with fringe-of-the-standard garbage instead of just going and buying equipment and deploying.

      Handset manufacturers are launching 5G handsets literally next month, but you won't see one on offer from US carriers, because they just aren't ready.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
  8. It's sausage in the making... by Anonymous Coward · · Score: 1

    The old adage about sausage-making is very true when corporations put their stake in the ground and demand their terms.

    To be honest, if greed were set to the side and companies would settle for a reasonable profit rather than the greatest profit they could possibly attain, then this wouldn't be an issue. But the greatest force in a capitalist economy is greed.

    Qualcomm and Apple both could have come to terms on this issue years ago if only one or the other could have had sane and reasonable leadership able to meet in the same room. Instead, we had a lot of brinkmanship and ultimatums that ultimately ended with Intel getting dragged into the middle of this mess. I'm sure Intel would have been happy to just find the door, any door, as long as they could get out intact...

    To be honest, if I'm buying hardware from a manufacturer with the express purpose of using it for what it was designed to do, I would assume that license to use said hardware was implicit in the agreement. But if this had to be negotiated by contract, Qualcomm soured the deal by close-calling the terms rather than being generous. It's these kind of actions that makes other companies leery of signing a contract with you. You pull this shit enough times, and your competition will be glad to take care of your customers for you.

    As and aside, when talking about companies you don't want to sign contracts with...yes, I'm looking at you Oracle...you've pretty much made your bed because the only customers who still buy your shit are the ones who are so entrenched that the only way they can dig themselves out is to rewrite everything. The rest of us are quickly distancing ourselves from your technology to anything else. May your business shrink and shrivel away to nothing.

    Apple didn't make anything easy, either. They pushed back hard against Qualcomm, and when their bluff was called, they switched vendors to Intel. And with that, Intel got dragged right into the middle of this dispute. Hard to not get covered in shit when you are in the middle of a shit-fight.

  9. Finally by Anonymous Coward · · Score: 2, Informative

    I'm not sure if Apple plans on using its own radio hardware, but the Intel chips sucked including being about 2-3 dBm worse reception. The front end design in the ten plus also had issues, which can be seen straight from the FCC filing (6-7 dBm underperformance in receive) making the modem lose signal where older Apple phones with Qualcomm chips still worked ok. It was around the same time Apple removed the test mode and all software access to actual received cellular signal strength and only lets you see bars. Hopefully Apple brings Qualcomm chips back, one of the main things people use a phone for is the ability to send voice/data - or not as modern phones would work far better with 90s style antennas and apparently that's not an option.

  10. Natural extension of the itunes tax by budsetr · · Score: 1

    So was Qualcomm asking for 30% of all sales made on their modems?

  11. Qualcom had a crappy bussiness model by goombah99 · · Score: 3, Informative

    Actually it was a great bussiness model but not an ethical one-- possibly not even legal.

    Promise FRAND licesncing in return for getting your patents made part of a standard.

    Force companies to license your patents too if they want to be first in line for your chips. Add on things like a cut of the revenue of the devices the chips are used in. Definitely not FRAND. Sue them if they re-implement anything that evades the patent restrictions.

    To make this stick you cut cozy deals with a few companies so that their competitors can't compete if they have to pay full price to Qualcom. Again, blowing the F in FRAND.

    --
    Some drink at the fountain of knowledge. Others just gargle.
    1. Re: Qualcom had a crappy bussiness model by Anonymous Coward · · Score: 0

      Fair only means that you offer the same terms to everyone. If you ask for 90% of the sale price, that's fair as long as everyone pays the same.

      You want to argue about what is reasonable.

    2. Re:Qualcom had a crappy bussiness model by Anonymous Coward · · Score: 0

      Promise FRAND licesncing in return for getting your patents made part of a standard.

      Force companies to license your patents too if they want to be first in line for your chips. Add on things like a cut of the revenue of the devices the chips are used in. Definitely not FRAND. Sue them if they re-implement anything that evades the patent restrictions.

      To make this stick you cut cozy deals with a few companies so that their competitors can't compete if they have to pay full price to Qualcom. Again, blowing the F in FRAND.

      Remember, POLITICS trumps all !

      Qualcomm gets to do all that because the US politicians gave its "go-ahead" to Qualcomm.

      To hell with fairness.

      To hell with the laws.

      As long as the US politicians say it's okay, IT'S OKAY !!

    3. Re:Qualcom had a crappy bussiness model by vbdasc · · Score: 1

      Qualcomm has learned these tricks from Intel all too well. It's indeed ironic that Intel is at the receiving side right now. Bad karma is a b!tch.

    4. Re:Qualcom had a crappy bussiness model by MachineShedFred · · Score: 1

      You know that Apple and Intel are both US companies too, right?

      You're kind of an idiot.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
  12. android vs ios by Anonymous Coward · · Score: 0

    android vs ios which is great os
    https://betanom.com/android-vs-ios-best-os-for-smartphone/

  13. Best Antivirus For Android by Anonymous Coward · · Score: 0

    Android is an operating system which is mostly used in the world and that means we use an antivirus to protect from malware or threats but nowadays her operating system is powerful because of it if we install a apps that contain a risk so her system shows a popup window which shows this is risk for phone it contains malware or threats but if you want an antivirus I list up the best Android software..
    https://betanom.com/best-antivirus-for-android/

    1. Re:Best Antivirus For Android by Anonymous Coward · · Score: 0

      Best Antivirus For Android

      Is iOS

    2. Re:Best Antivirus For Android by Anonymous Coward · · Score: 0

      iOS is slow outdated garbage that also can have malware

  14. Fuck apple by Anonymous Coward · · Score: 0

    all a bunch of crooks.

  15. Qualcomm Stockholders enjoyed that news... by PrimaryConsult · · Score: 1

    QCOM jumped $13 (23%) the moment this news broke.

  16. Apple's dilemma by seoras · · Score: 1

    Had Intel not dropped the ball on 5G as was reported two weeks ago I think Apple would have taken this the whole way.
    Huawei was mentioned (on /.) as a possible chip supplier but given the US stance on Huawei 5G tech the preferred outcome had to be Intel or Qualcomm.
    The really interesting detail is "The companies also have reached a six-year license agreement, effective as of April 1, 2019" because it suggests that Apple's own silicon workshop isn't anywhere near ready to deliver their own mobile radio silicon.
    I doubt much money will go from Apple to Qualcomm as Apple says the settlement includes a payment from Apple to Qualcomm will need to be offset by the $1 Billion payout recently award in court to Apple.
    What hasn't come out in any detail yet is if Qualcomm will change the business model that Apple claimed to be unfair.
    Will Apple continue to pay a percentage of the device value which they got upset about or will they pay a fixed licensing fee for themselves and their suppliers?
    That's the bit that will tell who really won here.
    Also don't forget the FTC antitrust lawsuit against Qualcomm was actually the catalyst for Apple's own lawsuit against the company just a few weeks later.
    How does today's new affect that? I suspect both companies were in a pickle and needed each other in the end.

    1. Re:Apple's dilemma by MachineShedFred · · Score: 1

      You bring up an interesting point - if Apple now gets separate licensing terms, doesn't that violate the F/RAND licensing that every other Qualcomm customer adopted in order to use this stuff?

      Apple was bitching about the 'R' in F/RAND, and basically just got Qualcomm to agree to violate the 'F' by making a special deal for Apple. Unless other companies are not having to pay a percent of device value, in which case Apple may have had a sound case.

      --
      Slashdot still doesnâ(TM)t support Unicode after it was added to the HTML standard in 1997.
    2. Re:Apple's dilemma by TheOldestGit · · Score: 0

      The biggest dilemna facing Apple was that it was Tim Cook who negotiated the original agreement with Qualcomm, thus making life in this court case rather difficult to maintain their complaints.

      --
      Having Leeched on /. for years I thought Hmmmmm-Subscribe!