Comments on: Apple vs. Qualcomm – Proxy war

By: Tim Nash

Tim Nash — Mon, 01 May 2017 10:00:25 +0000

Hi Richard
While precedence is important in US and UK case law, it is less so in the East and EU. I expect a cascade effect where China and S.Korea, then Japan, decide that FRAND only applies to components. This will protect their industries and potentially reduce prices for their consumers – from their POV a Win-Win. Other countries will follow their lead for the same reasons.

Also courts take a dim view of what they see as pressure being applied to not cooperate with regulatory authorities. IMO Qualcomm is playing its hand poorly and will lose out, no matter how marginal the effect on Apple.

By: windsorr

windsorr — Mon, 01 May 2017 09:33:41 +0000

Hi Tim
I agree that Apple must think that it has grounds for cancelling the contract.
SEPs – yes thats true BUT there is 20 years of precedent which is criticslly important in saying whats reasonable. the weight of evidence is in QCOM’s favour here.

One can make that argument but in practice it has never worked that way but its just not practical to administer. Again precedent is on Qualcomm’s side.

Thats already seems to be happening, certainly in China and maybe Korea.

By: Tim Nash

Tim Nash — Mon, 01 May 2017 08:32:03 +0000

Lets look at some of the other issues:-

Qualcomm stopped paying Apple rebates, presumably due under a legal agreement, after regulatory authorities became involved. Breach of contract?

The patents involved are SEPs which have to be FRAND licensed. No general FRAND rate has been set and Apple wants the courts to set it, not Qualcomm.

The patents only apply to certain components. Should the FRAND rate only apply to those and not the whole handset?

Qualcomm’s business model has made it too reliant on large royalty payments. Even if their business model is supported by the US courts, the FRAND rates are likely to be reduced elsewhere, especially in those countries with local manufacturers.