During the roughly two years Apple was locked in a legal battle with one of its suppliers, Qualcomm, the iPhone maker publicly argued that the chip maker's technology was worthless.But according to an internal Apple memo Qualcomm showed during the trial this week between the two tech companies, Apple's hardware executives used words like "the best" to describe Qualcomm's engineering. Another Apple memo described Qualcomm as having a "unique patent share" and "significant holdings."The sealed documents, obtained by Qualcomm through the discovery phase ahead of the trial, offer a rare window into the decision-making process of one of the most secretive and powerful companies on the planet, and how Apple's internal discussions about Qualcomm differed from what it said publicly. Apple's criticism of Qualcomm underpinned more than 80 lawsuits around the world and influenced governments to change laws and regulations in Apple's favor. The emails and slide show presentation could soon be made available in the docket for all to see, since they were shown at trial. The two sides settled their dispute Tuesday, shortly after the trial began.


The documents also raise questions about the methods Apple used to inflict pain on Qualcomm and whether Apple really believed its own arguments to lawmakers, regulators, judges and juries when it tried to change not just its longstanding business agreement with Qualcomm but the very laws and practices that have allowed inventors to profit from their work and investments. Apple has argued that Qualcomm's patents were no more valuable than those of competitors like Ericsson and Huawei, but Qualcomm argued in court that the documents show otherwise."While it's very common for companies who are engaged in legal disputes to play hardball, the disclosure of these documents is very unsettling," said Adam Mosoff, a law professor at George Mason University and director of the Center for the Protection of Intellectual Property. "It potentially reveals that Apple was engaging in a bad faith argument both in front of antitrust enforcers as well as the legal courts about the actual value and nature of Qualcomm's patented innovation."


Qualcomm and Apple declined to comment. The settlement the two companies reached this week includes a six-year licensing agreement and a multiyear supply agreement. Apple will also make a payment of an unspecified amount to Qualcomm.For years, Apple had been buying Qualcomm's wireless modem chips for its iPhones, and paying the chip maker about $7.50 per device, according to court documents. An internal memo from an accountant in 2009 said Qualcomm is "widely considered the owner of the strongest patent portfolio for essential and relevant patents for wireless standards," according to a document revealed in court. In a March 2015 email that was part of the sealed documents, Apple's vice president of hardware Johny Srouji wrote of Qualcomm technology, "Engineering wise, they have been the best."But Apple began seeding plans to undermine Qualcomm, according to the sealed documents. An internal report obtained during the discovery process and cited by Qualcomm Tuesday showed Apple had been planning to sue Qualcomm as far back as 2014, but it had planned to wait until after the end of 2016, until after Qualcomm paid billions of dollars in payments to Apple as part of a business cooperation agreement. An Apple document from June 2016, called "Qualcomm Royalty Reduction," predates Apple filing suit against Qualcomm in San Diego federal court by more than six months.


The purpose was spelled out clearly: "Goal: Reduce Apple's net royalty to Qualcomm." Apple said in the document it planned to accomplish this in several ways, including "Hurt Qualcomm financially" and "Put Qualcomm's licensing model at risk."In the lawsuit Apple filed in 2017, it alleged that the chipmaker and wireless pioneer had a stranglehold on the market for wireless modem chips. Apple contends that Qualcomm leveraged its position to overcharge for its patent licenses.According to internal documents revealed in court, Apple wrote that it entered into the patent licensing agreement "based on Qualcomm's established and relatively transparent actual monetary collection of patent licenses."Apple made similar arguments about Qualcomm's alleged violation of FRAND obligations during a January trial in California federal court in which the Federal Trade Commission accused Qualcomm of antitrust violations. The outcome of the FTC trial, which has yet to be decided, has the potential to set precedent not just for Apple and Qualcomm but for any inventor whose innovation becomes part of technology standards, including universities and individual researchers.




Source : gadgets360