Jury Rules in Favor of Qualcomm, Says Apple Infringed on Three Qualcomm Patents [Updated]

Apple and Qualcomm this week wrapped up a patent trial where Apple was accused of infringing on three of Qualcomm's patents, and the verdict from the jury is in -- Apple violated Qualcomm's patents in its iPhones.

According to CNET, the jury today sided with Qualcomm and said that Apple needs to pay Qualcomm upwards of $31 million, which is the total that Qualcomm had asked for in damages.


The patents in question cover a method for allowing a smartphone to quickly connect to the internet once turned on, graphics processing and battery life, and a method for allowing apps to download data more easily by directing traffic between the processor and modem.

During the trial, Apple argued that one of its engineers, Arjuna Siva, had a hand in inventing the technology included in the first patent mentioned above in an attempt to get the patent invalidated, but the jury did not buy Apple's argument.

Apple will undoubtedly appeal the jury's ruling, and the legal battle between Qualcomm and Apple is far from over. Next month, the two companies will be back in court over a lawsuit that Apple levied against Qualcomm after Qualcomm refused to pay $1 billion in rebate payments.

Yesterday, a preliminary ruling went in Apple's favor, with a U.S. District Judge deciding that Qualcomm is obligated to make the rebate payments to Apple under the terms of the cooperation agreement between the two companies.

Update: In a statement to Bloomberg, Apple said that Qualcomm is trying to distract from "larger issues" with patent infringement claims: "Qualcomm's ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in US federal court, and around the world."



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Qualcomm Owes Apple Almost $1 Billion in Rebate Payments According to New Court Ruling

Qualcomm owes Apple close to $1 billion in rebate payments a U.S. District Judge for the Southern District of California said in a preliminary ruling today, siding with Apple in the ongoing Apple vs. Qualcomm legal battle.

Qualcomm, ruled the judge, is obligated to make the rebate payments to Apple as they were part of a business agreement between the two companies.


Today's ruling is unrelated to the patent trial that wrapped up this week and instead pertains to Apple's rebate lawsuit against Qualcomm. Two years ago, Apple sued Qualcomm and said that the chip company had been refusing to pay patent royalty rebates mandated by the agreement.

As explained by Reuters, Apple's suppliers would pay Qualcomm royalties to use Qualcomm's patented technology in iPhones, which Apple would reimburse. Qualcomm and Apple had an agreement that said Qualcomm would pay Apple a rebate on these iPhone patent payments if Apple did not attack it in court or with regulators.

Qualcomm said that it stopped making the required royalty payments to Apple because Apple broke the agreement by urging smartphone makers to complain to regulators and by making "false" statements to the Korean Fair Trade Commission, which was, at the time, investigating Qualcomm for antitrust allegations. Apple in turn said that it was providing lawful responses to Korean regulators as part of the ongoing investigation.

Apple was in the right according to the preliminary ruling, and Qualcomm should have continued to make the royalty payments. In a statement to Reuters, Qualcomm commented on the judge's decision.
"Although the Court today did not view Apple's conduct as a breach of Apple's promises to Qualcomm in the 2013 Business Cooperation and Patent Agreement, the exposure of Apple's role in these events is a welcome development."
Today's ruling was preliminary, and it won't be finalized until the two companies meet in court for the rebate lawsuit, which is set to begin next month. Reuters says that it is unlikely Qualcomm will make a new payment to Apple as Apple's contract factories have already withheld nearly $1 billion in payments to Qualcomm as a way for Apple to recoup its money.

Apple and Qualcomm have been embroiled in an increasingly bitter legal battle for more than two years now, with the fighting spanning multiple countries and covering everything from royalty payments to patent infringement. Right now, Apple and Qualcomm are awaiting the U.S. trial for the rebate dispute and the results of the recent patent infringement trial.


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Qualcomm Wants Apple to Pay $31 Million in Damages in Patent Battle

Qualcomm today told a San Diego jury that it wants Apple to pay $31 million in damages for patent infringement violations, which is allegedly equivalent to $1.40 per infringing iPhone.

The new information comes from CNET, which has been covering the Qualcomm vs. Apple patent trial that's in court this week.


$1.40 per iPhone and a total of $31 million in damages suggests that Qualcomm believes only 22 million iPhones are infringing on its technology. Qualcomm came up with that total with the help of economist Patrick Kennedy, who took the stand as an expert witness for Qualcomm today. Kennedy calculated the figure based on iPhones sold from July 2017 on that used chips by Intel. Apple started using a mix of chips from both Intel and Qualcomm in the iPhone 7, and later transitioned to all Intel chips due to the legal troubles with Qualcomm.

Qualcomm and Apple are fighting over three patents that Qualcomm says Apple infringed on with its iPhones. As CNET describes, one of the patents covers a method for allowing a smartphone to quickly connect to the internet once turned on, while another covers graphics processing and battery life. The third patent Apple is accused of violating allows apps to download data more easily by directing traffic between the apps processor and modem.

Apple just last quarter earned more than $20 billion in profit, so $31 million in damages wouldn't be a hit to the company's bottom line. If Qualcomm wins the trial, though, its claim that its technology is at the "heart of every iPhone" would be more credible.

Apple and Qualcomm have been fighting since January 2017, when Apple sued Qualcomm for $1 billion in unpaid royalty fees. Qualcomm countersued, and since then, the two companies have levied multiple lawsuits against one another. Two of Qualcomm's lawsuits have resulted in import bans in Germany and China, both of which Apple was able to skirt with hardware and software updates.

The current patent trial between Apple and Qualcomm will last through next week.


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Apple Adding 1,200 New Jobs in San Diego at Upcoming Engineering Hub

Apple is planning to add 1,200 new jobs in San Diego at an upcoming engineering hub, which is up from the 1,000 jobs that it promised when announcing the new facility in December.

San Diego mayor Kevin Faulconer and Apple officials announced the news at the Apple Store located in University City's UTC mall.


Apple is opening a tech hub in San Diego, and 200 of the 1,200 workers that it is planning on hiring will be in place "by the end of 2019." City officials say that Apple plans to make San Diego, which is the hometown of chipmaker Qualcomm, into a "principle engineering hub" with software and hardware positions "distributed across a number of specialty engineering fields."

Apple is working on its own modem technology and based on job listings, has been targeting Qualcomm employees, many of whom might not want to leave San Diego.

Apple CEO Tim Cook said the company is "proud" to establish a bigger presence in San Diego.
Apple has been a part of San Diego for nearly 20 years through our retail presence and small, fast-growing teams - and with this new investment we are proud to play an even greater part in the city's future. You don't have to try too hard to convince people that San Diego is a great place to live, work and do business, and we're confident our employees will have a great home among the community there."
While there's no official announcement on where Apple's new mini campus will be located, San Diego's KGTV says the company is said to be eyeing a building southwest of Qualcomm's main campus in University City. Wherever it's located, the building will include hundreds of thousands of square feet of office, lab, and research space.

Apple's vice president of Global Real Estate and Facilities said that after Apple made its initial announcement about plans to invest in a San Diego facility, the mayor offered details on all San Diego has to offer, leading Apple to increase its investment.
"We were excited to announce in December that we planned to grow our presence here and add one thousand jobs, and then Mayor Faulconer and members of his team very thoughtfully and convincingly walked us through everything the San Diego region has to offer," said Kristina Raspe, Apple Vice President of Global Real Estate and Facilities. "So we went back and sharpened our pencils and increased our investment."
Apple's move to San Diego is part of a wider effort to expand its business across the United States, which also includes a $1 billion campus in Austin, Texas along with new sites in Seattle and Culver City and an additional investment in U.S. data centers.


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Apple Claims Its Former Engineer Helped Invent Tech in Qualcomm Patent

Apple and Qualcomm have been squaring off in courts around the world, and this week, the first U.S. jury trial kicked off in San Diego, California, where Qualcomm's headquarters are located.

During today's legal proceedings, which were covered by CNET, Apple claimed that one of its former engineers, Arjuna Siva, had a hand in inventing the technologies covered in one of the patents that Qualcomm is accusing Apple of infringing on.


The patent in question covers a method that allows a smartphone to quickly connect to the internet once the device boots up. According to Apple, Siva came up with the concept for the patent and should be named on it.

Siva was an Apple employee prior to 2011, which was the year Apple released the first iPhone that used a Qualcomm chip. Prior to the release of that device, Apple and Qualcomm worked together for modem chips that would meet Apple's needs. Siva was involved in those discussions and proposed the technology that Qualcomm went on to patent.
Apple claims that while the two companies were in discussions, then-Apple engineer Arjuna Siva came up with the idea that Qualcomm would later patent. Siva, who now works at Google, will testify later in the trial.

"Does Qualcomm believe in giving credit where credit is due?" Apple's counsel, Joseph Mueller of Wilmer Hale, asked Monday.
Qualcomm director of engineering Stephen Haenichen said that Siva did not deserve to have his name on the patent and contributed "nothing at all" to the development of the feature, despite Apple's argument.

According to CNET, Apple's aim with the Siva argument is to prove that Qualcomm is hasty and careless when filing its patents. Qualcomm pays $1,500 to employees for filing a patent and another $1,500 when the patent is issued, which is another point Apple brought up to demonstrate Qualcomm's treatment of patents. Siva will testify later in the week to provide more detail on his role working with Qualcomm back before the first iPhone with a Qualcomm modem was released.

The current trial between Apple and Qualcomm will last through next week and we'll likely see additional interesting tidbits and arguments revealed as the legal battle goes on and the jury tries to decide if Apple is indeed guilty of infringing on Qualcomm technology.

Apple and Qualcomm have been fighting since January 2017, when Apple sued Qualcomm for $1 billion in unpaid royalty fees. Qualcomm countersued, and since then, the two companies have levied multiple lawsuits against one another. Two of Qualcomm's lawsuits have resulted in import bans in Germany and China, both of which Apple was able to skirt with hardware and software updates.


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First U.S. Jury Trial Begins Today in Apple-Qualcomm Legal Battle

In July 2017, Qualcomm filed suit against Apple in San Diego federal court, accusing the iPhone maker of infringing on six U.S. patents related to graphics processing architecture, power consumption, and envelope tracking technologies. Nearly two years later, the case is finally headed to trial.


The trial begins today with jury selection, with proceedings expected to take up to two weeks. It will be the first time a U.S. jury is involved in the major legal battle between the two companies, according to Bloomberg.

The legal battle between Apple and Qualcomm spans multiple countries. The dispute began in January 2017 when Apple sued Qualcomm for an alleged $1 billion in unpaid royalty rebates, just days after an FTC complaint alleged that Qualcomm engaged in anticompetitive patent licensing practices.

Qualcomm has countersued, alleging that its "innovations are at the heart of every iPhone" and "enable the most important uses and features of those devices," adding that it "simply is untrue that Qualcomm is seeking to collect royalties for Apple innovations that have nothing to do with Qualcomm's technology."

Last week, analysts at investment bank Barclays said that Qualcomm is seemingly "running out" of time to reach a settlement with Apple if it wants to win 5G modems orders for the first 5G-enabled iPhones, expected in 2020.


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Qualcomm ‘Running Out’ of Time to Win 5G Modem Orders in 2020 iPhones Amid Legal Battle With Apple

Qualcomm may be running out of time if it wants to supply Apple with 5G modems for its 2020 iPhones as some rumors suggest.


In a research note today, analysts at investment bank Barclays said that while they originally thought Qualcomm had an opportunity to supply the 5G modems to Apple, they now believe that time "seems to be running out" unless the two companies can settle their bitter legal battle in the next few weeks.

Back in November, it was reported that Apple will tap Intel as its 5G modem supplier instead, but Barclays analysts believe that the modem design for 2020 iPhones "needs to be set now," and that the expected late 2019 availability of Intel's first consumer 5G modem "does not work with Apple's timeline."

Apple recently testified that it held conversations with Samsung and MediaTek as potential alternative suppliers, but it's unclear if those companies would be able to meet Apple's production, quality, and cost demands.

Apple is also reportedly working on its own cellular modems, but research and development appears to be in the early stages.

Last week, Intel confirmed that it expects the first consumer products embedded with its 5G chips to be released in 2020, the same year Apple is rumored to release its first 5G-enabled iPhone, enabling faster data speeds.


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Intel’s 5G Chips Won’t Appear in Mobile Phones Until 2020

Reuters reports that Intel has confirmed that it does not expect their 5G chips to be in consumer products until 2020.
Intel Corp executives said on Friday its 5G modem chips will not appear in mobile phones until 2020, raising the possibility its biggest customer, Apple Inc, will be more than a year behind rivals in delivering a device that uses the faster networks.
Intel's timeline is tied closely with Apple's product plans due to Apple's reliance on Intel chips for their iPhone modems. Previously a Qualcomm customer, Apple and Qualcomm have been at odds due to an ongoing legal battle between the two companies. In fact, Qualcomm has been reportedly unwilling to sell their chips to Apple because of the conflict.

Intel 5G Modem
That has left Apple reliant on Intel for their modem chips in the latest line of iPhones, though Apple has been exploring other vendors, and even working to develop their own chips. That plan, however, isn't expected to produce results until 2021, at least.

Apple's waiting until 2020 to deliver 5G iPhones doesn't come as a surprise as previous rumors have said the same. This statement by Intel, however, does seem to confirm some of those previous rumors.

Related Roundup: 2019 iPhones

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Apple to Sell Modified iPhone 7 and iPhone 8 in Germany to Skirt Sales Ban

Apple today confirmed rumors that it will start selling modified iPhone models in its German stores to comply with a patent infringement lawsuit Qualcomm won against the company in December.

The California-based company said it had "no choice" but to replace Intel chips in the iPhone models with chips from Qualcomm in order to allow them to be sold again in the country.

"Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands. In many cases they are using patents they purchased or that have nothing to do with their cellular technology to harass Apple and other industry players," an Apple spokesperson said.

"To ensure all iPhone models can again be available to customers in Germany, we have no choice but to stop using Intel chips and ship our phones with Qualcomm chips in Germany. Qualcomm is working to eliminate competition by any means they can, harming consumers and stifling industry innovation along the way."
Sources in German retail hinted last week that Apple was working on new versions of the iPhone 7, 7 Plus, 8, and 8 Plus with updated modem hardware that does not violate the injunction levied against it in Germany that resulted in a sales ban on the devices.

Mobile chip supplier Qualcomm sued Apple in Germany alleging that some older iPhone 7 and iPhone 8 models violated Qualcomm patents related to so-called "envelope tracking," which helps mobile phones save battery power while sending and receiving wireless signals. The German court sided with Qualcomm and demanded Apple stop selling the offending iPhones in the country.

In its ongoing legal dispute with Qualcomm, Apple has also had some iPhone models banned in China. However, Apple was able to get around that ban with a software update and has continued selling iPhone 7 and iPhone 8 models in that country.

Related Roundups: iPhone 7, iPhone 8

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Qualcomm’s U.S. ITC Complaint Falling Apart as Apple Implements Workaround in iOS 12.1

Back in 2017, Qualcomm filed a complaint with the United States International Trade Commission (ITC) accusing Apple's iPhones of infringing on six Qualcomm patents.

Qualcomm was hoping to ban imports of select iPhone and iPad models using Intel modems, but as it turns out, the company's efforts have been a poor use of time and money.


As outlined by FOSS Patents, in a recent filing with the ITC Apple said that it has implemented an iOS 12.1 workaround to one key patent in the complaint, U.S. Patent No. 9,535,490, which covers "power saving techniques in computing devices."

Apple said that it introduced changes in iOS 12.1 to make sure that it does not violate the '490 patent, though the company claims the original design wasn't in violation to begin with.

Qualcomm's own Chief Technology Officer has said that there are alternate design options to skirt the '490 patent, which Apple submits as evidence that the '490 patent should not be valid in the ITC complaint.
Qualcomm's presentation at the hearing crystallized its theories regarding the scope and coverage of claim 31 of the '490 patent. Against that backdrop, Apple recently changed its software (i.e., iOS) to remove the functionality that Qualcomm has accused of infringing claim 31, by implementing a design change that Qualcomm's own witnesses conceded would fall outside the scope of the patent. [...]

This fall, after the close of the hearing record, Apple implemented a new software-based design for its Accused '490 Products that removed the accused UL/DL synchronization feature that Qualcomm emphasized could be 'simply remove[d]' to avoid infringement of the '490 patent. To be clear, the pre-change versions also do not infringe the '490 patent, and thus there is no legal need to 'design around' it. But to moot any possible allegation of infringement from Qualcomm, Apple changed its products to do precisely what Qualcomm's own witnesses testified would not infringe the '490 patent."
According to FOSS Patents' Florian Mueller, given Qualcomm's prior comments about the ease of implementing a suitable workaround, Qualcomm won't be able to credibly dispute Apple's plan.

Qualcomm's original ITC complaint against Apple mentioned "six inventions" iPhones use that infringed on Qualcomm patents, but as FOSS Patents outlines in the handy infographic below, many are no longer valid.


Qualcomm has dropped three of the six patents, the Administrative Law Judge (ALJ) in the case said that Apple did not infringe on another two, and as for the last, it's the one that Apple added a workaround for in iOS 12.1.

Given the weakness of Qualcomm's complaint, the company is not likely to win its case, and even if it does, it won't cover Apple's iPhones that have the iOS 12.1 software update.

Apple and Qualcomm will go to trial over the original dispute in April, with Qualcomm having been unable to establish leverage over Apple thus far with its U.S. ITC complaints. Apple and Qualcomm will be fighting over royalty payments and anticompetitive patent licensing practices.


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