Foxconn not in settlement talks with Qualcomm in Apple battle -attorney
17/12/2018 04:00
By Stephen Nellis
SAN FRANCISCO, Dec 16 (Reuters) - The lead attorney for the
group of Apple Inc AAPL.O device assemblers seeking at least
$9 billion in damages from Qualcomm Inc QCOM.O said on Sunday
the contract manufacturers are not in settlement talks with the
mobile chip supplier and are "gearing up and heading toward the
trial" in April.
The conflict is but one aspect of the global legal battle
between regulators, Apple and Qualcomm, which supplies modem
chips that help phones connect to wireless data networks.
Last week, Qualcomm secured a preliminary victory in a
patent lawsuit in China that forced Apple to change its software
for iPhones in that country or else face a ban on selling phones
there. urn:newsml:reuters.com:*:nL3N1YJ24D
But Qualcomm was also handed another setback in an antitrust
lawsuit brought against it by the U.S. Federal Trade Commission
when a judge said it will not be able to mention that Apple
ditched Qualcomm chips for competing ones from Intel Corp
INTC.O when the case goes to trial next month. urn:newsml:reuters.com:*:nL1N1YI2G9
The group of contract manufacturers - which includes Foxconn
parent Hon Hai Precision Industry Co Ltd 2317.TW , Pegatron
Corp 4938.TW , Wistron Corp 3231.TW and Compal Electronics
Inc 6674.TW - became embroiled in the dispute between Apple
and Qualcomm last year.
In the supply chain for electronics, it is the contract
manufacturers who buy Qualcomm's chips and pay royalties when
they build phones, and they are in turn reimbursed by companies
like Apple. Qualcomm sued the group last year, alleging they had
stopped paying royalties related to Apple products, and Apple
joined their defense.
The contract manufacturers have since filed claims of their
own against Qualcomm, alleging the San Diego company's practice
of charging money for chips but then also asking for a cut of
the adjusted selling price of a mobile phone as a patent royalty
payment constitutes an anticompetitive business practice. The
manufacturers are seeking $9 billion in damages from Qualcomm
for royalties they allege were illegal. That figure could triple
if the manufacturers succeed on their antitrust claims.
Ted Boutrous, a high-profile partner at Gibson, Dunn &
Crutcher LLP who is representing the contract manufacturers,
said statements from Qualcomm executives suggesting there were
meaningful settlement talks with the contract manufacturers were
"false."
"To the extent Qualcomm has indicated there have been
licensing discussions with the contract manufacturers, they've
basically made the same sort of unreasonable demands that got
them to where they are right now, which impose significant
preconditions to even discuss a new arrangement," Boutrous told
Reuters on Sunday.
In July, Qualcomm’s chief executive, Steve Mollenkopf, told
investors on the company’s quarterly earnings call that Qualcomm
and Apple itself were in talks to resolve the litigation. Last
month, a source familiar with Apple's legal strategy told
Reuters there were "absolutely no meaningful discussion taking
place between us and Qualcomm, and there is no settlement in
sight." urn:newsml:reuters.com:*:nL2N1XI032
(Reporting by Stephen Nellis in San Francisco; editing by Chris
Reese)
((Stephen.Nellis@thomsonreuters.com; (415) 344-4934;))