
Qualcomm says Apple is $7B behind in royalty payments - robin_reala
https://www.bloomberg.com/news/articles/2018-10-26/qualcomm-says-apple-is-7-billion-behind-in-royalty-payments
======
GeekyBear
The article doesn't really mention the argument that Apple is making in court.

They are seeking a judgement based on the legal concept of patent exhaustion.

[https://www.wikipedia.org/wiki/Exhaustion_doctrine_under_U.S...](https://www.wikipedia.org/wiki/Exhaustion_doctrine_under_U.S._law)

If Apple buys a cellular modem from Intel, for instance, and Intel has already
paid Qualcomm to use their standards essential parents to manufacture those
cell phone modems, then patent exhaustion holds that Qualcomm cannot force
Intel's customers to pay to license those patents all over again.

Until a judge rules on this, you really can't say that Apple owes Qualcomm
anywhere near that figure.

There is more information on the FOSS patent blog:

[http://www.fosspatents.com/2018/10/patent-exhaustion-
keeps-q...](http://www.fosspatents.com/2018/10/patent-exhaustion-keeps-
qualcomm-on-run.html)

Edit: I think this FOSS patent blog entry from last month does a better job of
laying out the basic issues.

[http://www.fosspatents.com/2018/09/apple-foxconn-et-al-
want-...](http://www.fosspatents.com/2018/09/apple-foxconn-et-al-want-to-
end.html)

~~~
gpm
I wouldn't trust FOSS patents and the author Florian Mueller as far as I could
throw him. He has a long history of being a paid shill, lying about it, and
being flat out wrong.

(Paid by oracle)
[http://www.groklaw.net/article.php?story=20120419070127103](http://www.groklaw.net/article.php?story=20120419070127103)

(Paid by microsoft) [http://techrights.org/2012/08/18/vile-
lobbyist/](http://techrights.org/2012/08/18/vile-lobbyist/)

(Paid by apple? I can't find other/primary sources to back up this claim
though it does seem likely.) [https://mrpogson.com/2012/08/21/apples-paid-
shillconsultant-...](https://mrpogson.com/2012/08/21/apples-paid-
shillconsultant-caught-out/)

(More examples of him being wrong)
[http://www.groklaw.net/article.php?story=20120820111527257](http://www.groklaw.net/article.php?story=20120820111527257)

Refuting legal arguments takes time and expertise I don't have. He's good at
his job, and I have no knowledge about this case. So while I put no faith
whatsoever in his analysis I can't tell you how it is wrong, and yes this is
an ad hominem.

~~~
Twisell
I didn’t spend time to read all articles related to him. But I read his blog
from time to time notably because of his Oracle vs Google coverage. While he
may not be impartial (and who really is?) he impressed me quite a few time
notably when he was consistently stating against all odds and other analysts
that ruling against copyrightability of Java API would be overturned on
appeal.

He was right, and even if at time everybody was mad because it hurt Android. I
think this ruling was ultimately a good thing for FOSS.

He was also one of the first to criticize half-FOSS approach of Android.
Whereas today everybody seems to regret that we still lack a popular real FOSS
OS for smartphone.

One can only wonder now if Firefox OS or another could have superseeded
Android should Google reinterpretation of Java copyright had been deemed
unfair sooner.

PS: sorry for this long rant about your ad-hominem. Next time I’d better
simply downvote.

~~~
gpm
I'm strongly of the opinion that that is a case of a stopped clock being right
twice a day. If you say every argument Oracle makes will go in favor of
Oracle, and Oracle wins an argument, of course you will have predicted it.

You have to remember that Oracle mostly lost that case, and he was
consistently predicting they would win. The copyright portion was a sideshow
to the patent portion (originally) and only became a focus when they lost the
patent side of things.

Either way, I appreciate the reply.

~~~
gpm
PS:

For those interested, there is still a possible supreme court appeal pending
for the copyright side of the case. I'm not too familiar with supreme court
scheduling but I think we should find out if cert is granted (the supreme
court will hear the case) in March or April. Google files by January 25th,
Oracle briefs in February (30 days after Google, though it's possible they
will get an extension), Google files a reply brief (~10 days), then Cert
review occurs.
[https://www.supremecourt.gov/search.aspx?filename=/docket/do...](https://www.supremecourt.gov/search.aspx?filename=/docket/docketfiles/html/public/18a417.html)

The supreme court only grants cert in ~1% of cases, so assuming they deny cert
this then goes back to the district judge for yet another trial on damages and
probably new motions for attorney's fees. It wouldn't surprise me to find that
one (or both) parties find something to appeal about that damages trial too.

This case started way back in 2010, the justice system moves very slowly...

------
drb91
> They’re trying to destroy our business," Qualcomm lawyer Evan Chesler said
> at a hearing Friday in federal court in San Diego.

If only they would succeed!

~~~
maccio92
Why do you want Qualcomm to fail?

~~~
StudentStuff
Qualcomm has bullied players like Samsung to prevent them from using their own
LTE modems, and has done everything possible to ensure they are the only
reasonable choice for LTE chipsets.

In Samsung's case, only Samsung branded devices can have their LTE modem per
the settlement with Qualcomm, and US bound phones always ship with a Qualcomm
SoC (part of that whole home territory thing for Qualcomm).

Another affected group is Mediatek, they only recently got LTE support, and
their ability to get chips with LTE is entirely controlled by Qualcomm. There
is no competition in the modem space, which is absolutely appalling.

~~~
yogrish
“Qualcomm bullied Samsung” you got to be kidding. Samsung has internal Modem
team working hard to replace QC chipsets, but never successful wrt
performance, it was pathetic. So Samsung took approach of using QC chipset in
premium market segments and dumped their own modem chipsets in countries like
India, Korea.

~~~
yogrish
can I know why i am being down voted. I gave the information that I am
familiar with.

~~~
gsich
Because it's wrong?

------
umvi
Qualcomm is such an annoying company to work with. They are rapidly turning
into rent-seeking trolls (I've heard co-workers joke that Qualcomm is a law
firm with a few engineers)

~~~
pentae
Reminds me of a certain company who runs the most profitable smart phone app
store. Except Qualcomm ask for only 5% per device.

~~~
ksec
Well not really a fair comparison, Qualcomm is only part of the 3GPP patents
profile, and LTE is only part of the iPhone package function. Not to mention
5% is equal or more to all other 3GPP patents cost combined.

Having said that, looking at Samsung, Mediatek, CEVA IPs, Intel Modem, so far
it seems Qualcomm's baseband and IPs is actually quite value for money in
terms of performance and cost.

------
theDoug
For perspective, $7Bn is 1.25x Qualcomm's quarterly revenue. This is a big
gap.

[https://www.cnbc.com/2018/07/25/qualcomm-
earnings-q3-2018.ht...](https://www.cnbc.com/2018/07/25/qualcomm-
earnings-q3-2018.html)

~~~
megaremote
Except $7bn isn't for one quarter, it is for almost 2 years now.

~~~
paulddraper
15% is still a big gap.

------
fouc
>Apple argues that Qualcomm is using its intellectual property to bully
customers into paying excessive royalties even as it tries to duck scrutiny
over whether its patents are valid. “You can’t just let Qualcomm walk away
from this,” Apple’s lawyer, Ruffin Cordell, told the judge at Friday’s
hearing.

~~~
kevin_thibedeau
Qualcomm did all of the groundwork to develop CDMA. No way are all of the
applicable patents invalid. Seems like Apple dropped the ball on this one.

~~~
btian
CDMA parents have probably all expired since it's over 20 years old.

~~~
kevin_thibedeau
The original ones, but I will bet that there are follow on patents that still
apply.

~~~
josteink
But nobody uses CDMA anymore except for some fringe, legacy operators.

Everyone else is on the GSM, UMTS and LTE bandwagon.

~~~
batiudrami
Verizon still operates a legacy CDMA network which iPhones are compatible
with, no? Or are newer models now only compatible with their LTE network?

~~~
merb
not all iphones are compatible, tough. List is here:
[https://www.apple.com/iphone/LTE/](https://www.apple.com/iphone/LTE/) i.e.
for america there are special models that support cdma, but most countries do
not need that.

------
jrockway
When Apple owes you $7 in royalties, that's Apple's problem. When Apple owes
you $7,000,000,000 in royalties, that's your problem.

~~~
Dylan16807
It's also your problem at $7, because extracting that isn't worth the time it
takes.

For $7,000 you can use small claims and probably make it their problem. But
the range where it's in your favor might be pretty small; they can afford a
lot of lawyers.

~~~
DoreenMichele
I think they were being witty:

[https://hn.algolia.com/?query=thats%20the%20banks%20problem&...](https://hn.algolia.com/?query=thats%20the%20banks%20problem&sort=byPopularity&prefix&page=0&dateRange=all&type=comment)

~~~
Dylan16807
I know that.

I'm just giving a few more data points to show how in this situation it's
extra biased toward Apple.

It's often quoted with a million and a billion and I think Apple has the
advantage for both of those...

------
azhenley
Would it ever be worthwhile to do this as a means of devaluing a company so
that you could purchase it? In this case, if Apple wanted to buy Qualcomm,
would this be an effective means of reducing their valuation?

~~~
wyldfire
Apple isn't doing this because they want to acquire Qualcomm. They don't like
having their biggest competitor in their supply chain but there's few viable
modem vendors.

~~~
vlozko
I doubt it would pass antitrust review were that the case. Qualcomm is the
only viable US market chip company that high-end phones can use. All the
existing patents and agreements don’t go away if it were to be acquired.

~~~
wyldfire
Maybe you misunderstood my comment, here's some additional context for what I
wrote: (1) Apple competes with Qualcomm today (indirectly via many vendors who
ship snapdragon-based phones). (2) Apple is pretty good at supply chain
controls. (3) Apple uses [until recent designs] Qualcomm modems in their
iphone/ipad.

------
RickSanchez2600
Apple should have dealt with Qualcomm when they first started to make a smart
phone and wanted to base it on the Apple Newton:

[https://myapplenewton.blogspot.com/2013/01/qualcomm-
newton-c...](https://myapplenewton.blogspot.com/2013/01/qualcomm-newton-could-
have-been-first.html)

Apple could then patent the Newton IP for Qualcomm to use and Qualcomm would
pay Apple for it.

------
neonate
[https://outline.com/DHJaLL](https://outline.com/DHJaLL)

~~~
comboy
OT, it's useful sometimes, but is outline legal? I mean, whatever the purpose
it looks like stealing somebody's else content.

~~~
fouc
how come no one complains when it's an archive.is/ link?

~~~
tyingq
Iceland based hosting is often suggested for sites with potential copyright
issues because of their freedom of speech laws. No idea if that's actually
true, but it is used as a selling point. See
[https://www.orangewebsite.com/articles/freedom-of-speech-
ame...](https://www.orangewebsite.com/articles/freedom-of-speech-amendment/)
for one example.

------
wyldfire
Apparently the royalty terms predate Apple's entry into the marketplace! I was
pretty surprised to learn that Apple's manufacturers are the ones [still]
paying this royalty that existed before the first iPhone.

------
wnevets
Apple complaining about others abusing patents always makes me laugh

~~~
eletious
Didn't they patent the corners on iPads and iPhones? Just a rumour that I've
heard as a reason we couldn't get parts a few years back, but still.

~~~
gumby
A design patent and a utility patent are utterly different things; about the
only thing they have in common is the trace of the Elizabethan term "Letters
Patent".

Q'comm is asserting that Apple isn't paying for _utility_ patents.

------
microtherion
They're still looking for a sufficiently large truck to repossess Apple
Park...

------
NotAmazin
apple should definitely reconsider itself, if true it is very unethical for
this company to simply give out code it doesn't have a right to share. It
would simply be that apple has to pay the fee and a fine.

------
cronix
Get an injunction to prevent Apple from selling their products with stolen
Qualcomm tech until they pay. I mean, it's stolen if they didn't pay for it,
right? You know, just like Apple does to companies like Samsung who they claim
use stolen Apple IP. [https://www.mercurynews.com/2015/09/17/apple-v-samsung-
samsu...](https://www.mercurynews.com/2015/09/17/apple-v-samsung-samsung-
slapped-with-injunction/)

~~~
gehsty
If they think they are correct stopping Apple selling products would have a
huge negative effect on their royalty collection, they need to walk a line
that does not impact revenue but does not undermine their belief that Apple
are wrong.

~~~
cronix
I'm not in this business so I don't know the answer to this. Does Apple only
have to pay Qualcomm a royalty for sold devices, or manufactured devices? To
me, it seems it should be for the quantity of manufactured devices since the
tech is in the phone regardless of whether it has been sold or not.

~~~
mygo
That should be up to Qualcomm how they price their royalties / construct their
payment agreements

~~~
syshum
Their FRAND Agreements with the standards bodies says other wise which
Qualcomm voluntary committed to when they submitted their patented technology
for consideration into international standards

~~~
mygo
learn something every day thanks

