Apple Suppliers Countersuing Qualcomm Over Excess Licensing Fees

The legal battle between Qualcomm, Apple, and the Cupertino company’s supplier keep getting worse. Qualcomm sued four of Apple’s suppliers in May this year after they stopped paying the chip maker licensing fees for using its IP. Now, the same four suppliers — Compal, Hon Hai Precision, Pegatron, and Wistron — have countersued Qualcomm over its excess licensing fees.

The four suppliers argue that Qualcomm is asking for significantly higher licensing fees than what it deserves. While the amount is not yet known, Qualcomm could end up losing billions of dollars if it loses the lawsuit.

Qualcomm is asking for payments massively in excess of what it would normally receive, Apple, Compal Electronics Inc., Hon Hai Precision Industry Co. and others said early Wednesday in court filings.

When Qualcomm first sued four of Apple’s suppliers, they said that this move from the chipmaker was an “anticompetitive scheme to dominate modem chip markets, extract supracompetitive royalties, and break its commitments to license its cellular technology on fair, reasonable and non-discriminatory terms.”

Interestingly, this seems to be an all out attack on Qualcomm from Apple as the Cupertino company is the one covering the associated legal expenses for its suppliers in their lawsuit. The company would also be filing a separate motion to combine the countersuit with its own suit against Qualcomm for one case. This should help Apple’s case and put Qualcomm at a disadvantage.

Apple as well as its suppliers have already started withholding their payments to Qualcomm. To this, the chip maker had filed an injunction to force Apple and its suppliers to continue paying royalties irrespective of the ongoing legal battle between them. However, Apple and its vendors have already objected to Qualcomm’s request saying that there is no harm if they pay Qualcomm once the case ends and the court determines the correct amount.

Despite the intense legal battle between Apple and Qualcomm, the latter’s CEO believes that there is still a possibility of out of court settlement between the two.

[Via Bloomberg]