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Apple and Qualcomm Settle Sweeping Patent Suits

17 April 2019

Shares of Qualcomm jumped 23 percent to $70.45 in regular trading, their biggest gain in more than 19 years, then hit $75.25 in after-hours trading.

Apple has settled a lawsuit with Qualcomm, allowing the company to scramble to catch up with its competitors in the race to release 5G phones. Certainly, Apple has an incentive to move forward with 5G phones as soon as possible, without the specter of patent disputes hanging over its technology. "The settlement includes a payment from Apple to Qualcomm". Apple's iPhone suppliers, including Foxconn and Pegatron, wanted another $27 billion from Qualcomm.

Apple had been seeking at least $1 billion while Qualcomm was seeking $7 billion for unpaid royalties it contended it was owed for its patented technology in the iPhone.

The battle started two years ago when Apple accused Qualcomm of using their patents for extortion. Qualcomm sued Apple for royalties the company's suppliers were refusing to pay, claiming Apple had interfered with contracts Qualcomm had with companies such as Foxconn.

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It argued that its technology covers more than just these basic chips, called modems, and that is why it asked electronics firms to pay the fees. Apple and Qualcomm have both taken turns delivering blows to one another over the last couple of years, and just this past Monday, trial proceedings had begun in San Diego.

On the other hand, Qualcomm has talked about the settlement of all litigation against Apple in a blog post. Earlier this year, the company said that Qualcomm refused to sell parts to the iPhone-maker.

Based on the decision in the FTC suit, Apple was assumed to have the edge in its case.

In a surprise announcement, the two companies revealed that they have agreed to drop all litigation against each other, bringing an end to a dispute over royalities and patent infringements that spanned multiple countries.

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A jury of six men and three women was in the process of hearing opening arguments from Apple and Qualcomm when news of the settlement broke.

Intel said Tuesday it was exiting the phone modem business and would focus its 5G efforts on other devices such as networking gear.

Previously, Apple had used only Qualcomm's modem chips for its older model iPhones.

The news yesterday that the massive, multi-billion dollar legal fight between Apple and chip maker Qualcomm has come to an end has big-time ramifications for Apple - and for the rest of us who use smartphones every day (heck, nearly every minute of every day).

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Apple and Qualcomm Settle Sweeping Patent Suits