Foxconn Technology, Compal Electronics, Pegatron Corp., and Wistron Corp are throwing their weight behind Apple’s fight with Qualcomm over patent licensing fees. The smartphone manufacturers filed a lawsuit claiming Qualcomm demands inappropriately high licensing fees for chips using its technologies, and that the company is violating antitrust laws.
The four companies filed their lawsuit in Federal District Court in San Diego on Tuesday. Apple is filing a motion to combine their case with its own, according to the Wall Street Journal.
The patent licensing fight started earlier this year when Apple filed a lawsuit against Qualcomm alleging the chip maker overcharges for its patent licensing. Apple demanded US$1 billion and stopped paying licensing fees to its manufacturing partners which happen to be Foxconn Technology, Compal Electronics, Pegatron Corp, and Wistron Corp.
Apple’s licensing payments pass through those companies, so when the money stopped coming in they quit paying Qualcomm. The chip maker countered by suing the four companies and requesting a ban on iPhone imports into the United States.
Yesterday’s lawsuit seemed inevitable considering how tightly intertwined the companies are with Apple. The plan to merge the cases into a single lawsuit isn’t a surprise, either.
Qualcomm maintains it charges fair and reasonable prices for its industry standard patents, and that it never threatens to stop chip supplies to force its payment terms. The U.S. government, however, isn’t ready to take Qualcomm’s statements at face value. The Federal Trade Commission filed its own lawsuit against the company for anti-competitive practices.
Qualcomm thinks the lawsuits will be settled out of court, which is still possible. Considering Apple is footing the legal bill for its manufacturing partners, however, the resources in this fight are nearly endless—and that means any out of court settlement will be on Apple’s terms, not Qualcomm’s.