Chip manufacturer Qualcomm sues Apple for breach of contract

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American chip-maker Qualcomm is suing four Apple contract manufacturers for failing to pay royalties on licensed agreements.

In a complaint filed with the United States District Court Southern District of California, Qualcomm demanded relief for the breach of contract, as well as a jury trial for the case.

Qualcomm’s suit against Apple’s manufacturers is no doubt a response to Apple’s statement that it will withhold royalty payments until their ongoing legal battle is resolved.

According to the most recent complaint, Apple itself has interfered in the existing relationship between Qualcomm and the four manufacturers — including Foxconn — and has withheld its own payments to its manufacturers.

“Apple is attempting to inflict severe, immediate, and permanent harm on Qualcomm to force Qualcomm to agree to Apple’s unreasonable demand for a below-market direct license,” reads an excerpt from the court filing.

Qualcomm also asserts that Apple has ordered the manufacturers to avoid making payments on behalf of Apple to Qualcomm.

The complaint further states that Apple has promised to compensate its four manufacturers for any money lost as a result of the legal conflict between Apple and Qualcomm.

“It is unfortunate that we must take this action against these long-time licensees to enforce our agreements, but we cannot allow these manufacturers and Apple to use our valuable intellectual property without paying the fair and reasonable royalties to which they have agreed,” said Don Rosenberg, executive vice president and general counsel of Qualcomm, in a media release.

Qualcomm’s latest lawsuit is the most recent turn-of-events in the ongoing financial and legal battle between the two companies.

The source of the animosity between both companies is an unsuccessful negotiation on Apple’s part to arrange a direct licensing agreement with Qualcomm.

“They have refused to negotiate fair terms,” Apple said in an earlier 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.”

In January 2017, Apple sued Qualcomm on the grounds that the chip manufacturer was overcharging the software and hardware giant, as well as refusing to pay almost $1 billion USD in rebates.

In May 2017, Qualcomm reportedly tried to seek a U.S. import ban on all iPhones. However, there is no evidence to suggest that the chip manufacturer actually went through with its rumoured plans.

Source: Qualcomm