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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.
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.
Apple said that Qualcomm... what? You can't even finish sentences now? You just left and went to lunch, is that it?
Why? Was one of them claiming to be king or something?
Nope. You get a license for patents embodied in the hardware. You certainly do not get licenses for applications of that hardware.
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.
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.
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.
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.
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.
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.
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.
All companies are greedy. If a company is trying to tell you that they aren't, they're liars as well as greedy.
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.
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.
So was Qualcomm asking for 30% of all sales made on their modems?
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.
Correct, but by purchasing those components you are free to use them despite any patents related to thier manufacture or use.
...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.
QCOM jumped $13 (23%) the moment this news broke.
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.
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.
Had Intel not dropped the ball on 5G as was reported two weeks ago I think Apple would have taken this the whole way. /.) as a possible chip supplier but given the US stance on Huawei 5G tech the preferred outcome had to be Intel or Qualcomm.
Huawei was mentioned (on
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.
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.
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.