Apple Under US Trade Commission Scrutiny In Qualcomm Claim It Illegally Used IP In Certain iPhones
Apple is now under investigation by the US International Trade Commission (USITC) after Qualcomm was able to convince the commission that the company should be investigated. This is the first official step by the USITC into the legal war between Apple and Qualcomm. The USITC will investigate Qualcomm's allegations that Apple has been illegally using cellular technology in some iPhone models by including modems that were made by Intel.
Qualcomm is wanting to see all iPhone devices that operate on the AT&T and T-Mobile networks hit with limited exclusion and a cease and desist orders. The initial investigation aims to be completed within 45 days of its start, but the actual decision in the case could take much longer. CNET reports that Qualcomm's own General Counsel, Don Rosenberg, said back in July that a final decision could take as long as 18 months to be handed down.
Back in July, we talked about the impact that a Qualcomm win would have on Apple's US operations, which accounts for 40 percent of all iPhone sales alone. Qualcomm at the time was seeking an import ban on all iPhone models with modems "other than those supplied by Qualcomm affiliates."
Apple isn't alone in this fight and has in its corner tech titans like Google, Amazon, Microsoft, and Facebook. Those companies all believe that the demands Qualcomm is making in this case are unreasonable. Those demands are the reason Apple stopped paying Qualcomm licensing fees, which it believed were too high. The crux of the argument between Apple and Qualcomm is that Apple wants to pay fees based on the cost of the modems in question, while Qualcomm wants fees to be paid based on the value of the phone.
If Qualcomm wins the import ban of the iPhone, only models operating on the Verizon and Sprint networks would be imported into the US. "Qualcomm is pleased with the ITC's decision to investigate Apple's unfair trade practices and the unauthorized importation of products using Qualcomm's patents," said Don Rosenberg, executive vice president and general counsel of Qualcomm. "We look forward to the ITC's expeditious investigation of Apple's ongoing infringement of our intellectual property and the accelerated relief that the Commission can provide."
Intel, the maker of the modems at the heart of this battle has offered no official comment. Apple simply reiterated a statement it made in June, "Qualcomm's illegal business practices are harming Apple and the entire industry. They supply us with a single connectivity component, but for years have been demanding a percentage of the total cost of our products - effectively taxing Apple's innovation."