Apple Steps Up Legal Battle With Qualcomm -- Update

By Tripp Mickle Features Dow Jones Newswires

Apple Inc. broadened its legal offensive against Qualcomm Inc. on Tuesday, arguing in a court filing that some of the chip supplier's patents were invalid and that its business model violates patent law.

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The filing, to a federal court in the Southern District of California, comes about five months after Apple's opening salvo against Qualcomm, claiming the chip company demanded unfair terms for the use of its technology.

Qualcomm, whose chips and patents are widely used in smartphones, has accused Apple of mischaracterizing its business and has sued four of Apple's contract manufacturers for withholding royalty payments on Qualcomm technology used in iPhones and iPads.

In its response on Tuesday, Apple said that about a dozen Qualcomm patents were invalid because they conflict with already established patents, while others weren't essential for cellular communication.

Qualcomm usually licenses its patents in a bundle that includes both patents deemed essential to cellular communications and others that aren't.

"We have brought this [filing] to highlight the issue that they want to collect patent royalties without identifying patents and the patents we have looked at in their portfolio certainly don't justify the kind of demands they have been making," an Apple executive said.

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Qualcomm General Counsel Don Rosenberg defended the company's patents in a statement, saying its "innovations are at the heart of every iPhone and enable the most important uses and features of those devices. It simply is untrue that Qualcomm is seeking to collect royalties for Apple innovations that have nothing to do with Qualcomm's technology."

Apple updated its arguments against Qualcomm to include the Supreme Court's recent affirmation that patent holders can't keep rights over a product after it is sold. The ruling came in May after a lawsuit brought by Lexmark International Inc. against printer stores that disabled microchips in its printer cartridges and sold toner refills.

Apple said the Supreme Court ruling showed a patent holder can only demand a single reward for its products and that Qualcomm is going against that principle by requiring anyone who wants to buy its chips to also pay royalties on the technology in them.

Apple's latest filing also asked the court to weigh in on the dispute with its contract manufacturers. Qualcomm has sought a court order to force the four Taiwanese companies to pay royalties on technology used in iPhones and iPads, according to their previous agreements with Qualcomm.

Apple says that it pays the entirety of those royalties for the manufacturers -- Compal Electronics Inc. Foxconn Technology Group, Pegatron Corp. and Wistron Corp. -- and argues that Qualcomm's licensing agreements with them aren't enforceable because the royalties includes invalid patents. It said it was prepared to pay a fair royalty fee but doesn't believe the current terms are reasonable.

Ted Greenwald

contributed to this article.

Write to Tripp Mickle at Tripp.Mickle@wsj.com

(END) Dow Jones Newswires

June 20, 2017 20:20 ET (00:20 GMT)