In a federal lawsuit filed July 6, Qualcomm has thrown a counter-punch in its legal battle with Apple. The giant chipset making San Diego-based company filed a new patent infringement lawsuit, seeking to have imports of some iPhones and iPads banned from coming into the US. Since all iPhones and iPads are manufactured in China, Apple has to import its devices into the U.S. in order to sell them. Qualcomm manufactures the systems-on-a-chip used by many of the smartphone makers around the world including Apple.
The legal battle started when Apple decided it was going to stop paying billions in licensing fees on the chips made by Qualcomm, as well as its patents and patent applications. Apple, according to CEO Timothy D. Cook, claims that Qualcomm is not offering fair terms for using its patents. Apple had withheld a portion of the fees owed to Qualcomm, totaling $1 billion over the past three quarters and then stopped paying completely this business quarter. The complete halt in revenue this quarter resulted in Qualcomm, to announce reducing its revenue outlook by $500 million last week.
The dispute started last year over money of course, after Apple replaced Qualcomm modem chips with those from Intel in about half of the new iPhones. Apple, which is a much larger company revenue wise, went on the offensive and sued Qualcomm in January, accusing Qualcomm of excessive royalties, imposed on iPhones. Qualcomm counter-sued, asserting Apple harmed its business and broke deals between the two companies. Qualcomm hopes that the International Trade Commission could rule on the issue faster than other courts, to get some leverage back on Apple.