Chennai: In a turn of events Apple Inc and Qualcomm Inc decided to drop all ongoing litigations and settle their royalty dispute. No sooner had the agreement been made, shares of both tech giants soared.
The firms reached an agreement on global patent license and chipset supply and the settlement also includes a payment from Apple to Qualcomm, whose size the two companies did not disclose. Shares of Qualcomm jumped 22 per cent on Tuesday, while Apple stock was up marginally.
According to reports, the settlement followed two years of legal conflict between the two companies and came as opening arguments took place at a trial in federal court in San Diego, US.
Apple had accused Qualcomm of using illegal patent practices to keep a monopoly on modem chips that connect phones to mobile data networks. Qualcomm had said Apple was using its technology without paying for it.
Apple filed a $1 billion lawsuit against Qualcomm in January of 2017, accusing the chipmaker of overcharging for chips and refusing to pay some $1 billion in promised rebates.
Later Qualcomm hit back with its own lawsuit, alleging that Apple used its heft in the electronics business to wrongly order contract factories such as Hon Hai Precision Co Ltd’s Foxconn to withhold royalty payments from Qualcomm that Apple had historically reimbursed to the factories.
Apple began using Intel modem chips in some iPhones in 2016. Apple later stopped paying licence fees to Qualcomm and completely stopped using its chips in iPhones in 2018.
A jury of six men and three women was in the process of hearing opening arguments from Apple and Qualcomm when news of the settlement broke.
Judge Gonzalo Curiel briefly dismissed the jury as reporters in the courtroom rushed to confirm the news. Apple’s litigation chief Noreen Krall chatted privately with Qualcomm attorney Mark Snyder before Judge Curiel called the jurors back into the courtroom, stated reports from Reuters.
“The two parties have reached the ideal conclusion,” Judge Curiel told the jury before dismissing them. “This development allows these tech companies to get back to business, and it will permit you to get back to your affairs.”
As part of the settlement, Qualcomm will also end litigation with Apple’s contract manufacturers.