Qualcomm Thinks It Holds ‘High Ground’ in Its Legal Fight With Apple, CEO Says
Qualcomm believes “we hold the high ground” in the patent fight with Apple, CEO Steve Mollenkopf said on a Wednesday earnings call. Qualcomm will take whatever actions it needs to “appropriately defend the tremendous value that our innovations bring to this industry -- innovations which enable a competitive ecosystem to thrive,” he said.
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Those actions include the complaint Qualcomm filed last week at the International Trade Commission requesting an import ban on iPhones that don't contain Qualcomm baseband processors (see 1707120023), Mollenkopf said. “We do not take these challenges lightly and we are focused on achieving the right long-term results for the licensing business, which also is in the best interest of our stockholders. We know that fundamentally these issues are driven by commercial interests and contract negotiations and we will continue to work to reach resolutions as we have.”
Qualcomm has had “a strong relationship with Apple for many years and they have been a long-standing and valued customer," Mollenkopf said. “We intend to continue to provide them with our industry-leading products and technologies as we always have and do our best to remain a good supplier to Apple even while this dispute continues.”
The dispute typifies “a number of the ones we have resolved in the past and we expect to be able to do that again here,” Qualcomm President Derek Aberle said. Apple “has interfered with our license agreement with its contract manufacturers by instructing them not to pay the royalties they owe” to Qualcomm for sales of Apple product, Aberle said. “If Apple hadn't interfered with the licenses and instructed the contract manufacturers to take these actions, the contract manufacturers would not be contesting the licenses now. It is important to remember that in most cases our license agreements were negotiated and entered into with the contract manufacturers before Apple ever entered the smartphone market.”
Apple’s claims are “quite obviously wrong” that this is just a dispute about uncertainty over how much in patent royalties are owed to Qualcomm, Aberle said. The “long-standing and valid contract manufacturer licenses clearly specify the royalties that are due and payable on Apple products, yet Apple is interfering with those contracts,” he said. Qualcomm has made “several offers to Apple to have an independent third-party” step into the dispute and “set the royalty terms of a direct license between Qualcomm and Apple once and for all,” he said. “Apple has refused those offers each time.” Apple representatives didn’t comment Thursday.