It feels like Apple is embroiled in battles from all sides at the moment. As well as managing expectations following a dramatic cut to revenue guidance earlier this week, Apple is also tied up with court battles around the world with Qualcomm.
Today, Qualcomm formally enforced the iPhone ban in Germany by posting a $1.6 billion bond. If the appeal rules in Apple’s favor, this fund will compensate Apple for lost sales. In China, Qualcomm continues to argue that Apple is flouting the court’s ruling as it continues to sell iPhones in China.
All of the responses and ramifications of these injunctions are complicated and muddled.
When the preliminary German ruling was announced, Apple said it would be immediately pulling iPhone 7 and iPhone 8 from sale in its retail stores for the duration of the appeal.
Today, Qualcomm has made this official by posting a 1.34 billion euro bond (about $1.6 billion). This fund will be used to compensate Apple for lost sales if, down the road, Apple wins the court suit.
In the original statement, Apple said that iPhone 7 and iPhone 8 models would continue to be available at third party resellers and carriers. Qualcomm (naturally) interprets the court ruling as applying to sales of all iPhones across Germany, regardless of the outlet at which they are sold. It isn’t clear what the next steps will be.
The Apple Store website in Germany was updated to remove references to the iPhone 7 and iPhone 8 models.
In China, Apple was served an iPhone ban at the end of 2018. However, the company never removed any iPhone models from sale, claiming it was not in infringement. It released a software update, iOS 12.1.2, to supposedly address any concerns relating to the patents.
Qualcomm says Apple is still in infringement and should stop selling iPhones in China immediately. This week, Apple posted new evidence to the Chinese courts to try and get them to overturn the ban.
A Chinese protest group, the China Anti-Infringement and Anti-Counterfeit Innovation Strategic Alliance, posted a statement that sides with Qualcomm, and piles on the pressure suggesting that Apple is in contempt of court.
Like all things related to patents and law, it is a big mess. In fact, in the German case, Qualcomm was granted the injunction with very little technical confirmation that Apple’s phones are actually infringing. Apple is obviously helping that it will be proven correct ultimately and help force Qualcomm to relent and reduce its patent loyalty rates.
Qualcomm is facing lawsuits from Apple and investigations from the FCC regarding if it charged fair fees for standard-essential patents relating to the way LTE modems work. Right now, Qualcomm charges a percentage of the device the modem is used in. Apple says this is unreasonable and that the fee should be based on the value of just the modem, not the overall phone.
Qualcomm began seeking iPhone injunctions to try and force Apple’s hand and give up on the patent royalty debate.
