Qualcomm is suing Apple’s suppliers

It seems that Qualcomm is suing Pegatron Corporation, Foxconn, Compal Electronics, and Wistron

Corporation. The reason? For breaching their license agreements.

This week, Qualcomm has declared that it had filed a counter suit against several iPad and iPhone
manufacturers. The company has declared these companies are failing to pay patent royalties.

Compared with other smartphone companies, it seems that Apple doesn’t have a direct license with the chip maker company. This means that Apple is paying contractors to make its devices. Moreover, some of these money are used by these companies to pay royalties to Qualcomm. So, the chipmaker company blames Apple for not paying money to these contractors, which eventually leads to not paying Qualcomm their royalties.

“Their gripe, their issue, appears to be with Apple,” has declared Don Rosenberg, Qualcomm General Counsel.

“We’re suing to make the point that others shouldn’t be used by Apple to advance this agenda they have of attacking us,” he added.

It seems that Apple is trying to put pressure on these manufacturers in purpose to make them break the contract with Qualcomm. Moreover, Apple assured them of paying any kind of damages the contract manufacturers may incur during their not paying period with Qualcomm. The lawsuit against Apple’s manufacturers was filed in the United States District Court for the Southern District of California.

The court order for these manufacturers was requiring them to continue paying the royalty fees to
Qualcomm.

"As Apple continues to collect billions of dollars from consumer sales of its Qualcomm-enabled products, it is using its market power as the wealthiest company in the world to try to coerce unfair and unreasonable license terms from Qualcomm in its global attack on the company" has declared Don Rosenberg in a statement.

"Our license agreements with Apple’s manufacturers remain valid and enforceable. The manufacturers must continue to live up to their obligations under these agreements and Apple should immediately cease its tortious interference.”

Moreover, Qualcomm revealed to its investors the issues that it has with Apple. The company said that the iPhone maker is withholding royalty payments to its contract manufacturers, which means that it will affect the financial guidance for the third quarter.

Qualcomm estimated that it will hit its earnings by approximately half-billion dollars. On other side, Apple has declared that it will withhold payments until a resolution of the legal dispute.

“We’ve been trying to reach a licensing agreement with Qualcomm for more than five years but they have refused to negotiate fair terms,” Apple has declared in a statement.

“Without an agreed-upon rate to determine how much is owed, we have suspended payments until the correct amount can be determined by the court. As we’ve said before, Qualcomm’s demands are unreasonable and they have been charging higher rates based on our innovation, not their own.”

“We are suing to get our money,” Don Rosenberg has declared. “Pay for what you take and if you don’t want to pay for it, don’t take it,” he ended.

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