Apple and Qualcomm’s long-standing legal feud is set to go to court in the coming week, with opening testimonies beginning on Tuesday. In light of the approaching events, Wall Street Journal has published a report which details the tense interaction between Tim Cook and Steve Mollenkopf, CEOs of Apple and Qualcomm respectively.
The meeting took place a year ago at Apple’s headquarters was to discuss the growing hostility between the two companies. WSJ reports that according to people familiar with the events of the meeting, Mr Mollenkopf initially did not speak, leaving matters to Qualcomm’s General Counsel. This is because Mr Mollenkopf suspected Apple of backing the failed hostile take over of Qualcomm by Broadcom.
The original agreement between Apple and Qualcomm was struck between the late Steve Jobs and then Qualcomm CEO, Paul Jacobs. The agreement said that Apple would pay Qualcomm $7.5 per iPhone sold. However, when Tim Cook took over as Apple CEO in 2012, he found the deal to be ‘egregious,’ saying that it was unfair that Apple paid Qualcomm “more than every other iPhone licensee combined, people familiar with the negotiations said.”
Qualcomm earns a certain percentage off every iPhone sold, in addition to the royalties the chipmaker earns from the use of its patents. This, Apple claims, is an unfair practice which in ways has Apple paying twice for the same thing. The lawsuit that began a year ago is now shaping up to be quite the fight spanning multiple countries. Apple lost the battle in China and Germany, with an injunction being placed in the former, and Apple losing the right to sell iPhones with Intel modems in the latter. Qualcomm later accused Apple of selling the chip-maker’s proprietary modem secrets to Intel at some point, a claim that largely remains unsubstantiated. In the meantime, Qualcomm was fined $1.2 billion for paying Apple to exclusively use its chips between 2011 and 2016.
The last year of the legal tussle between Apple and Qualcomm has made one thing clear; that neither company is willing to back down from the fight. In fact, the WSJ report states that Tim Cook is so frustrated with Qualcomm’s unfair licensing practices that he has expressed his intentions to testify in court. With the legal proceedings set to commence on Tuesday, there is no guarantee that the matter would be resolved any time soon. Either company is likely to challenge the judgement laid down by the San Diego court, further prolonging the legal tussle. In the meantime, reports have suggested that Apple has begun work on its own modems for the 2021 iPhones in case Intel isn't able to deliver.