Tim Cook, CEO of Apple talks at the European Parliament in Brussels.
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Apple is pausing sales of some older iPhones in Germany during a patent fight with chipmaker Qualcomm.
On Thursday, the District Court of Munich found that Apple infringed Qualcomm’s technology for power savings in smartphones and ruled that the iPhone maker must halt sales of the device in Germany, according to Qualcomm’s release.
Apple said in a statement that it plans to appeal the ruling, with the aim of delaying — and eventually overturning — the court’s injunction against sales. Apple said, though, that during the appeals process, it won’t sell the older iPhone 7 and iPhone 8 at its 15 retail stores in Germany.
The recent iPhone XS models and iPhone XR will still be for sale, Apple told CNBC, and all iPhone models will still be available through its carriers and third-party retailers in 6,000 German locations.
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“Qualcomm’s campaign is a desperate attempt to distract from the real issues between our companies,” Apple said in a statement. “Their tactics, in the courts and in their everyday business, are harming innovation and harming consumers. Qualcomm insists on charging exorbitant fees based on work they didn’t do, and they are being investigated by governments all around the world for their behavior.”
The Qualcomm patent found to infringe enables smartphones to use power more efficiently and can extend a phone’s battery life.
Qualcomm said the ban will go into effect as soon as it can post bonds covering potential damages incurred by Apple should the judgment be overturned or amended on appeal. It expects that to happen within a few days. The company said Apple also is liable for monetary damages in am amount to be determined later.
“Two respected courts in two different jurisdictions just in the past two weeks have now confirmed the value of Qualcomm’s patents and declared Apple an infringer, ordering a ban on iPhones in the important markets of Germany and China,” Don Rosenberg, executive vice president and general counsel at Qualcomm, said in a release. The company declined to comment further.
Patent spat
The German ban comes after Qualcomm won preliminary injunctions earlier this month in a Chinese court, which ordered four of Apple’s Chinese subsidiaries to stop importing or selling iPhones due to patent infringement. The patents involved technology that lets iPhone users adjust and reformat the size and appearance of photographs, and manage applications using a touchscreen when viewing, navigating and dismissing applications, according to Qualcomm.
Apple reportedly plans to issue a software update in China to alter its technology so it no longer infringes Qualcomm patents. But the patent at issue in Germany relates to hardware and can’t be easily tweaked.
Qualcomm is the world’s biggest provider of mobile chips, and it has created technology that’s essential for connecting phones to cellular networks. The company derives a significant portion of its revenue from licensing those inventions to hundreds of device makers, with the fee based on the value of the phone, not the components. Because Qualcomm owns patents related to 3G and 4G phones — as well as other features like software — any handset maker building a device that connects to the newer networks has to pay it a licensing fee, even if they don’t use Qualcomm’s chips.
Apple and Qualcomm have been fighting over patents since January 2017, when Apple filed suit against Qualcomm for roughly $1 billion, saying the company didn’t offer fair licensing terms for its technology. Apple wants to pay less to use Qualcomm technology in its devices. Qualcomm responded by suing Apple for patent infringement and seeking a ban on iPhone sales. The company maintains that no modern handset, including the iPhone, would’ve been possible without its cellular technologies.
In April, Qualcomm said it hoped to reach a settlement with Apple. The chipmaker lowered the cap on royalties it charges handset makers for using its technology in an effort to solve the dispute. But in September, Qualcomm accused Apple of stealing confidential information and trade secrets and providing that info to rival chipmaker Intel. And Apple reportedly has said it’s not in talks with Qualcomm.
Originally published at 11:43 a.m. PT
Update at 3:03 p.m. PT to add Apple comment and additional details.
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