Apple and its chip-making partner, Qualcomm, have been locked in a bitter legal battle for over two years with millions of dollars at stake between the two companies. Though the partnership provided a major source of revenue for Qualcomm, with the entity earning money for each iPhone sold, its relationship with Apple has gone south following several lawsuits between the two.
The legal fighting between the two companies began in January 2017 when Apple sued Qualcomm for nearly $1 billion after accusing the company of charging “excessive royalties” and withholding payments in retaliation for Apple cooperating with a South Korean investigation into Qualcomm. Then in January 2018, European antitrust officials ordered Qualcomm to pay a $1.2 billion fine, alleging it had defied EU regulations by paying billions to Apple to prevent them from utilizing chips made by its rivals.
The companies are also suing each other in several other patent disputes. In one particular case of Qualcomm Inc. v. Apple Inc., Case No.: 17cv1375 DMS (MDD), Qualcomm asked Judge MaryJoan McNamara of the International Trade Commission to ban the sale of iPhones entirely. Just last June, Judge McNamara found Apple had violated one of Qualcomm’s patents for battery-saving technology.
Now, the two entities are heading to court again, after Apple alleged Qualcomm has been charging an unfair amount for patent licensing. This could leave Qualcomm liable for as much as $27 billion in damages for charging Apple and its suppliers too much for licensing its patents that allow smartphones to place calls and connect to the internet. Meanwhile, Qualcomm is currently seeking over $7 billion in unpaid royalties, in addition to other damages totaling upwards of billions of dollars.
What Businesses Can Learn from the Disputes
While it’s not uncommon for business partnerships to go sour, oftentimes when disagreements turn into legal disputes they can put entities in financial binds and the issues at hand can prove to be more complex than they originally appeared. In order to mitigate this, both parties must ensure partnerships are set up with clear, legally binding contracts they both agree to, keeping things smooth from the beginning.
This way when conflict does arise, the parties can refer to formalized contracts and other related legal documents with regard to the terms and conditions of their agreements. In the event legal action is required, seeking out an experienced commercial litigation attorney is absolutely essential in ensuring a business’s best interests are kept in mind.
Attorneys for Partnership Disputes
Over the past 70 years, MehaffyWeber attorneys have adapted to the needs of our clients. We understand that businesses are now facing new risks, and our attorneys remain legal industry leaders in matters of commercial litigation. Contact one of our Texas litigation attorneys today to see how we can help you protect your business.