In Thursday’s worldwide patent battle with Apple Inc, the chip supplier Qualcomm Inc. won a second court skirmish with the iPhone maker saying it would pull some older models from its German stores.
The win of Qualcomm in Germany comes weeks after a court order was issued to ban the sale of certain iPhone models in China. Apple, which contests both decisions, has continued to offer its iPhones in China but has modified itsiOS operating system in accordance with the Chinese order.
The German victory can only affect a couple of millions of iPhones out of the hundreds of millions Apple sells. Nevertheless, it is a small but clear victory in a complex legal battle that will spin over in the coming months as antitrust regulators and Apple take Qualcomm to court in the USA.
Apple alleges that Qualcomm has committed illegal behavior to maintain a modem chip monopoly that helps mobile devices connect to wireless data networks. Qualcomm has accused Apple of using the vast stable technology innovations of the chip supplier without proper compensation.
While a sales ban in China could hurt the bottom line of Apple, it is unlikely that the two patent skirmishes will influence the outcome of the wider battle, in which Qualcomm has suffered a series of setbacks against US antitrust regulators. Apple’s shares fell by 2.3 percent to $ 157.12 in late trading and weighed more widely.
The share of Qualcomm fell by 0.2 percent to $ 56.69. In the Chinese case, Qualcomm does not pursue software patents in other jurisdictions and suffered a premature loss while pursuing a sales ban on the US version of the hardware patent in question in Germany.
OLDER PHONES PULLED
On Thursday, Apple said it would pull older iPhones from its German stores after a court ruled that Apple infringed Qualcomm Inc’s hardware patent and banned iPhone sales with Apple’s Qorvo Inc. chips.”
Two respected courts in two different jurisdictions just over the past two weeks have now confirmed the value of Qualcomm’s patents and declared Apple an infringer in order to ban iPhones in major German and Chinese markets, ” said Don Rosenberg, Qualcomm’s general counsel.
For each of the two Apple entities against which it received orders, Qualcomm must issue a bond of approximately EUR 668.4 million, or $ 765.9 million, before it can proceed to enforce the order, Qualcomm said it would do ” within a few days. ”
The smartphone manufacturer said that the decision was appealing, but the order comes into effect as soon as Qualcomm posts the bond.
Apple said he would pull some phones out of his shops while he appealed. “Of course, we’re disappointed by this verdict and we’re planning to appeal, ” Apple said.”
All iPhone models are still available to customers in 4,300 locations across Germany through carriers and resellers. iPhone 7 and iPhone 8 models will not be available in the 15 retail stores of Apple in Germany during the appeal process. In all our stores, iPhone XS, iPhone XS Max and iPhone XR will remain available.”
Stacy Rasgon, a research analyst at Bernstein, said in a note that Germnany was a small iPhone market for Apple, selling about 10 million units per year, with only half of the older models affected by the court order.
When Qualcomm posts the bond to enforce the order, legal experts said that it could seek to extend the ban to Apple’s resellers and the newer iPhone models not included so far.
Qualcomm said that the court granted its request to “recall and destroy all the accused devices from all retailers in Germany.”
RISKS
However, pressing for enforcement poses some risks to Qualcomm. In an earlier case before the United States United States International Trade Commission Regulators viewed a broader set of technical evidence as to whether Qorvo chips and Apple phones violated the patents of Qualcomm.
Those Americans Apple and Qorvo sided regulators. If higher courts in Germany do the same when Apple appeals, Qualcomm may be forced to withdraw its liability if the decision is made final.
The German case is Qualcomm’s third major effort to secure Apple’s lucrative iPhones against allegations of patent infringement following similar efforts in the United States and China.
In the United States, Qualcomm was seeking to ban the import of Intel Corp iPhones with chips.
Trade regulators found that Apple had infringed a Qualcomm patent, but have so far refused to ban Intel chip phones because regulators feared that it would harm competition on the chip market.
“Competition authorities around the world have repeatedly found the licensing practices of Qualcomm unlawful, but Qualcomm continues to endeavor to achieve the same results through a patent lawsuit campaign, ” said Steven Rodgers, Intel’s general counsel, in a statement following the German decision.
In Germany, the judge ruled that Apple chip phones Qorvo infringe one of Qualcomm’s patents on so-called envelope tracking, which helps mobile phones save battery power while sending and receiving wireless signals.
The Chief Intellectual Property Counsel of Qorvo, Mike Baker, said in a statement that the United States Trade regulators ruled that the chips of Qorvo did not infringe the United States. Patent version of Qualcomm and the inventor of the chip were not allowed to testify at the German hearing.”
We do not believe that our envelope tracking chip infringes the patent in suit and the court would have reached a different conclusion if all the evidence had been considered, “said Baker.
In China, Apple continues to pursue a so-called request to reconsider the bans issued by the court.
Apple said that its phones were still on sale and believed that it had complied with the order of the Chinese court, but it also made changes to its iPhone software following the decision. Qualcomm believes that despite the new software, Apple violates the Chinese court order and has to stop selling phones there.
