Apple funds suppliers who fight back against Qualcomm

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And just when we thought this case was calming down!
Photo: orangesparrow/Flickr CC

Apple is reportedly paying the legal costs of four of its assemblers, Foxconn, Pegatron, Wistron and Compal, as they challenge Qualcomm in court.

In a filing made late Tuesday in the U.S. District Court for the Southern District of California, the Apple suppliers allege that Qualcomm has violated two sections of the U.S. antitrust law, the Sherman Act.

This is a response to previous moves that Qualcomm made to force the companies to pay license fees to Qualcomm after Apple asked the companies to stop paying royalties.

“Qualcomm has confirmed publicly that this lawsuit against our clients is intended to make a point about Apple and punish our clients for working with Apple,” Theodore J. Boutrous, a lawyer for the four companies, said in a statement. “The companies are bringing their own claims and defenses against Qualcomm.”

Qualcomm vs. Apple and friends

The dispute between Apple and Qualcomm broke out in January, when Apple sued Qualcomm for allegedly withholding $1 billion in rebates because Apple assisted South Korean regulators investigating Qualcomm’s business.

Qualcomm hit back back by claiming Apple was being purposely misleading, and that it had breached its contract with the company. Qualcomm then pulled the aforementioned Apple partners into the fight in an effort to secure their money.

In a statement given at the time, Qualcomm noted that while iPhone makers Foxconn, Pegatron, Wistron and Compal don’t dispute “their contractual obligations to pay for the use of Qualcomm’s inventions, the manufacturers say they must follow Apple’s instructions not to pay.”

The decision by Apple to withhold royalty payments to Qualcomm meant that the company was forced to revise its earnings forecasts to give a smaller number, due to Apple cutting off one of its major sources of revenue.

Yesterday’s filing came shortly after Qualcomm CEO Steve Mollenkopf hinted at deescalation of the Apple dispute; claiming that such things, “tend to get to resolved out of court, and there’s no reason why I wouldn’t expect that to be the case here.”

We guess that idea’s out the window, now!

Source: Reuters