IPhone Import Ban Could Happen If Qualcomm Gets Its Way

Posted: May 4 2017, 6:03am CDT | by , in News | Apple

iPhone Import Ban Could Happen if Qualcomm Gets Its Way

Apple says it can't pay if the amount is in dispute

Qualcomm and Apple are currently fighting a heated legal battle over royalties. Qualcomm owns the patents and intellectual property that are used in some of the most basic parts of smartphones and mobile devices built by manufacturers all around the world. Qualcomm's tech is so basic and requisite to mobile devices that even smartphones that use chips made by manufacturers other than Qualcomm still have to cough up royalties to Qualcomm.

As one of the largest smartphone makers in the world, Apple has to pay its share and the payouts are massive. Fortune reports that Apple has withheld paying those royalties in the second quarter of this year totaling about $500 million. Over the previous three quarters Apple refused to pay royalties that add up to another $1 billion.

Qualcomm is furious that Apple isn't ponying up the loot and is seeking an import ban by the International Trade Commission. The ITC has the power to block imports of devices that violate intellectual property rights into the US. In fact, Apple itself took advantage of the ITC's power back in 2013 when it had imports of some Samsung phones banned.

Apple says it is withholding payments because it doesn't know what to pay. Apple CEO Tim Cook said during an analyst call this week, "You can't pay something when there's a dispute about the amount–you don't know how much to pay. I don't believe anyone is going to decide to enjoin the iPhone based on that."

It's important to understand the dynamic between Apple and Qualcomm. Qualcomm doesn't have a royalty agreement in place directly with Apple, the royalty agreement is between Qualcomm and Apple's contract manufacturers. Apple says that it has been trying to negotiate a direct royalty agreement with Qualcomm for over five years with no success.

Apple alleges that Qualcomm is abusing its dominant position in the market to extract higher than normal royalty fees from it and other firms in the mobile world. The two firms are embroiled in legal action with Apple filing suit against Qualcomm in January and Qualcomm counter-suing in April.

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The Author

<a href="/latest_stories/all/all/3" rel="author">Shane McGlaun</a>
Tech and Car expert Shane McGlaun (Google) reports about what's new in these two sectors. His extensive experience in testing cars, computer hardware and consumer electronics enable him to effectively qualify new products and trends. If you want us review your product, please contact Shane.
Shane can be contacted directly at shane@i4u.com.




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