Apple accuses Qualcomm“Disseminate false news”Refuse to reconcile
Qualcomm said Apple's new software updates were still infringing; Apple accused Qualcomm of diverting public attention.
“Disdained behavior”,“Fake news”Noreen Krall, Apple's chief litigation attorney and vice president, criticized Qualcomm as he described the company's recent progress in the global patent dispute. But before that, the whole mobile phone industry and even the telecommunications industry should look up to Qualcomm, because the latter's abundant patent reserves have affected the landscape of more than a decade.
At noon on January 17, Noreen Krall was interviewed by a Beijing News reporter by telephone. Noreen Krall revealed that Apple was in San Diego and Qualcomm, the United States, in a separate case involving much broader scrutiny than the Federal Trade Commission, including Qualcomm in the agreement.“Forbidden order”。 This led to a collective silence in an industry worth hundreds of billions of dollars.
Among them, in recent interviews with various media, Apple accused Qualcomm of abusing its market dominance and forced the company to accept it.“No Authorization and Chip Free”Policy. Noreen Krall said Qualcomm even asked the company not to complain to government departments and to be exclusive. Usually, Apple will choose two or more suppliers on the same part to control costs. So called“Forbidden order”Qualcomm's agreement requires customers not to complain to anyone, or they will stop supplying chips. This makes it difficult for Apple and some companies using Qualcomm chips to get back under financial pressure, because Qualcomm chips are essential parts of their main products and become a stubborn problem when looking for profit growth points.
Up to the time of the press release of the Beijing News, Qualcomm was right.“Forbidden order”There was no response, but Qualcomm stakeholders said that its business model posed a threat to Apple because the capabilities it gave the iPhone were also offered to Apple's competitors.
Resistance to Qualcomm
Apple took over Meizu“flag”
Apple was not the first to stand up against Qualcomm. In February 2015, China's National Development and Reform Commission announced that it would impose a fine of RMB 6.088 billion on Qualcomm, making it the largest anti-monopoly fine ever imposed by China. At that time, Qualcomm expected to reverse the 44% decline in quarterly net profit and save market share through new products, and the fine was also seen as an official licensing model for Qualcomm patent fees.
Third-party Strategy Analytics released a report at the time that Qualcomm ranked first and Apple third in the Smartphone Application Processor market, with a 24 percentage point difference. Unlike outside perceptions, Apple has been using self-developed processor chips in addition to its status as a mobile phone manufacturer, but there has been no breakthrough in the baseband market, so its development is still constrained by Qualcomm.
Before Apple, Meizu, a Chinese smartphone maker, fought with Qualcomm on its own. Li Nan, vice president of marketing, said Qualcomm's patent contract was opaque.“Black box”Manufacturers are not treated fairly. But Meizu finally reached with Qualcomm.“compromise”The agreement was signed.
Meizu succumbed, but Apple became a new leader in questioning Qualcomm's business model. It is worth noting that global smartphone shipments fell for the first time in 2017, but the overall price of Apple's new mobile phones rose and entered the era of $1,000. Like the Meizu, Apple questions Qualcomm's business model.
“Over the past decade, the whole industry has been kidnapped.”
At present, Apple and Qualcomm patent lawsuits are mainly concentrated in three countries. In China, Fuzhou Intermediate People's Court granted Qualcomm temporary injunctions in two lawsuits against Apple. However, Qualcomm has 20 cases against Apple patent infringement, which are currently being tried by Beijing Intellectual Property Court, Beijing High Court and Guangzhou Intellectual Property Court.
Jiang Hongyi, one of Qualcomm's principal litigation agents and lawyer of Beijing Liande Law Firm, said that the patents used in each case are different. The technical fields involved in the patents cover a wide range, including application management, photo editing, display mode, intelligent wake-up, accurate positioning, map display, fast charging, mobile phone power saving, system updating and processor. Device structure, etc.
The number and backlog of cases accepted by different courts are different, which affects the trial process. At present, the case of Fuzhou Intermediate Court is progressing fastest. It has completed the opening of the court pending judgment, and the court has issued an injunction in litigation. Jiang Hongyi explained that it is relatively easy to determine the infringement of software-related patents.
In addition, in other courts, some cases have entered or completed the substantive trial, and some cases have not entered the substantive trial stage because of the prosecution of Apple, involving diplomatic service.
In Germany, the Munich District Court ruled that Apple infringed Qualcomm's patents and ordered the suspension of the infringed products, but the Mannheim City District Court rejected Qualcomm's lawsuit in its preliminary oral judgment. Qualcomm responded to the Beijing News that the Mannheim court had interpreted some of the features of the patent too narrowly. Qualcomm strongly opposed this and would appeal.
In the United States, the monopoly litigation initiated by the Federal Trade Commission against Qualcomm has entered the trial stage. The court has heard many testimonies recently and will conclude the trial on February 1, 2019. Noreen Krall said the FTC evidence was very strong and Qualcomm had difficulty winning the lawsuit.
“Qualcomm has kidnapped the industry in the past decade.”Noreen Krall and Qualcomm will face off as“The confrontation between the whole industry and Express”。
Qualcomm Requires Apple
“Prohibitions must be enforced and related products must be suspended”
Founded in 1985, Qualcomm has invested more than tens of billions of dollars in R&D expenditure, and about 20% of its annual revenue is spent on R&D. According to the 2018 financial report, Qualcomm's R&D expenditure accounted for 24.7% of total revenue, and Huawei's only 14.9%. Qualcomm's advantage was established from 3G, and the time spent on research and development of 4G technology was 8 years earlier than that of standard organization 3GPP.
With its technological advantages, Qualcomm once became the only chip company to meet the requirements of Chinese telecom operators for terminal equipment, while other chip manufacturers mostly cross-authorized patents with Qualcomm to obtain corresponding patents. As for terminal manufacturers, their patents mainly focus on functional design and can be neglected in core patents.
Qualcomm adopts the technology licensing model, which is considered to be a commonly used method in the industry. That is to say, to purchase Qualcomm chips, terminal manufacturers must obtain at least one licensing for the production and sale of chip-supported technology standards. Moreover, Qualcomm's chip and licensing fees are separate.
Qualcomm officials say the fairness of this approach is that relatively low-cost terminals use fewer technologies and therefore pay lower licensing fees; more high-end terminals use more technology, so they pay higher licensing fees and limit the price of mobile phones that charge licensing fees to $400.
It can be seen that in the patent confrontation between Apple and Qualcomm, Qualcomm sued Apple mainly on the use experience, rather than the core of the basic communications patent. In response to Qualcomm's lawsuit in China, Apple chose to introduce new software upgrades to remove Qualcomm's claim of infringement.
Noreen Krall told the Beijing News that on December 27, 2018, two weeks after the ban, Apple engineers had developed, tested, distributed and installed the new software version, and all the iPhones sold in China had no infringement issues raised by Qualcomm. On January 3, 2019, Apple submitted a compliance report to Fuzhou Court, respecting the court's ruling and taking action.
But lawyer Jiang Hongyi told Xinjing News that although Apple submitted evidence of its compliance with the ban to Fuzhou court, it asked the court to keep it secret and not to make it public to Qualcomm. Such an act is very strange and has no legal basis, because the performance of the effective judgment is not a matter of confidentiality. In doing so, Apple can only prove that it has not actually fulfilled the ban and dared not disclose what it called to Qualcomm.“Discharge of injunction”Evidence of compliance.
“Apple's new software updates have been studied and are still infringing.”Jiang Hongyi said,“Before the court makes a new decision, Apple must comply with the ban and suspend the sale of related products.”。
In this case, Apple also admitted that the related patents are not core patents for mobile communications. Noreen Krall said that these are very old patents, not Qualcomm's own invention, but purchased from Sony and other companies, which have been in use for more than 10 years. Qualcomm aims to use these non-advanced patents to issue market bans, forcing Apple to sign unreasonable agreements on core patent licensing.
Apple's new charges
Qualcomm Disseminates False News to Divert Public Attention
In Apple's view, the dispute between the two sides does not involve technology, but Qualcomm still requires the court to enforce it. Noreen Krall says this hurts consumers'choices and has a big impact on China's employment, because most smartphones around the world are made in China. Apple also accused Qualcomm of hiring institutions to disseminate false news about Apple in order to divert public attention from its business model.
Noreen Krall told the Beijing News.“Qualcomm, in the United States and even outside the United States, disseminates speech through the network of false news, uses people's fear to distract attention, and avoids the government and the courts investigating its own violations as a company.”But Noreen Krall did not directly respond to whether journalists would sue Qualcomm for this.
In response to the Beijing News, the above-mentioned Qualcomm stakeholders said that Qualcomm never disseminates false or misleading news.“Qualcomm is doing its best to explain to the public our business model and how our inventions have profoundly influenced the rich functionality of all smartphones. Unlike Apple, which limits its technology to its own use, Qualcomm extensively supplies its technology to mobile phone manufacturers.”
How will the patent war develop next? Noreen Krall responded to the Beijing News reporter's statement“There is no possibility of reconciliation.”,“Qualcomm has to change its business model. Apple and Qualcomm have different views.”。 According to Noreen Krall, the controversy between the two sides mainly includes three aspects: firstly, Qualcomm requires a patent license to obtain chips, but Apple does not think it is reasonable; secondly, Qualcomm charges for the price of the whole machine, but Apple believes that such charges include the patents of Qualcomm, which is not reasonable; thirdly, Qualcomm takes chip supply as its priority. The negotiation process is not fair because the relevant provisions must be accepted.
Noreen Krall concluded that the global litigation situation is basically stable, and almost all rulings are against Qualcomm, especially the FTC case, whose evidence is very strong. Qualcomm's difficulty in winning a lawsuit will force Qualcomm to change its business model, not only for Apple, but also for the industry as a whole.“High pass tax”。
Qualcomm had not yet responded to Apple's latest complaint as of the time of the press release.