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Qualcomm Fires Back Against Apple Lawsuit Over Patent Licensing

Qualcomm fired back late Monday against Apple’s legal attack on its patent licensing business — accusing the world’s largest tech company of egging on anti-trust regulators with misleading information and meddling with Qualcomm’s long-standing patent agreements with contract manufacturers that build iPhones.

Qualcomm also claims Apple violated California’s unfair competition law by throttling the performance of Qualcomm’s modems and then claiming there was “no discernible difference” in performance between iPhone 7s using Qualcomm’s cellular modems and iPhone 7s with Intel chips. Apple threatened to retaliate if Qualcomm publicly made a case that its chips were better.

The San Diego wireless giant filed its counter-claims in response to Apple’s lawsuit in January in a San Diego federal court. Apple alleges that Qualcomm uses its market dominance in cellular modems to squeeze excessive patent royalties out of smartphone makers.

Apple also says Qualcomm is withholding nearly $1 billion it owes Apple in retaliation for its cooperation with anti-monopoly regulators investigating Qualcomm.

In its court filing, Qualcomm denies Apple’s charges. The San Diego company also contends that Apple is refusing to make payments it owes to Qualcomm.

Apple’s lawsuit attacks the foundation of Qualcomm’s patent licensing business model by challenging the value of its patents and the practice of charging royalties based on the wholesale price of the smartphone instead of the modem chip itself.

Patents are a key part of Qualcomm’s business. While it makes most of its revenue selling chips used in mobile devices, it earns the bulk of its profit from patent licensing.

In court filings, Qualcomm takes pains to paint Apple as a Goliath with immense power over suppliers, saying the company has more money and influence than many countries.

Qualcomm contends Apple’s aim is to pay less for the Qualcomm intellectual property that allowed Apple to prosper in smartphones with little or no investment in the…

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