Apple’s iPhone manufacturers counter-sue Qualcomm over patent fees

Four Taiwan-based contract manufacturers that build iPhones and iPads have joined Apple in suing Qualcomm, alleging the San Diego company has illegally overcharged for use of its cellular patents.

Compal Electronics, Hon Hai Precision Industries (Foxconn,) Pegatron Corp and Wistron Corp. filed a counter-suit on Thursday in Federal Court in San Diego.

The legal action essentially makes the same allegations that Apple put forward in its lawsuit against Qualcomm in January. In fact, Apple filed a motion with the court Tuesday to fold the case between Qualcomm and the contract manufacturers into Apple’s original lawsuit.

This latest legal maneuver marks another step in the increasingly fierce legal war being waged by Apple and Qualcomm over patent licensing.

Apple has filed lawsuits against Qualcomm in the U.S., United Kingdom, Japan, Taiwan and elsewhere, alleging it engages in an illegal scheme to charge too much for patents.

This week, Qualcomm fired its own counter-attack in Germany, where it alleges Apple is infringing on two power amplification/power management patents and is seeking to ban iPhone 7 imports into Germany. Qualcomm is also seeking a ban on certain iPhone 7 imports into the U.S.

The contract manufacturers’ counter-suit comes as part of Qualcomm’s a breach of contract legal action filed in May, after the contract manufacturers stopped paying patent royalties on Apple devices. Counter-suits are a common tactic in civil legal actions between businesses.

In the past, the iPhone and iPad makers were reimbursed by Apple for royalties paid to Qualcomm under long-standing patent licensing contracts.

Apple stopped reimbursing the contract manufacturers after it sued Qualcomm early this year. And back in January, Apple agreed to pay legal costs and any liabilities that the contract manufacturers might incur if Qualcomm went to court to collect, said Qualcomm General Counsel Don Rosenberg.

“The curtain has finally been lifted,” said Rosenberg. “Apple is acknowledging that they in fact were behind the contract manufacturers’ failure to pay us. The world can see the orchestration effort on Apple’s part.”

Qualcomm also contends Apple is behind actions by anti-trust regulators globally. The Korean Fair Trade Commission fined Qualcomm more than $850 million late last year, and the U.S. Federal Trade Commission has filed a lawsuit alleging anti-competitive practices.

Qualcomm has appealed the South Korean fine in court and contends the FTC’s case, which was filed in the waning days of the Obama administration, is based on a flawed legal theory and fails to show harm.

Qualcomm likely would oppose Apple’s efforts to consolidate the cases, since it views its dispute with iPhone/iPad makers as a breach of contract action. That’s separate from Apple’s anti-trust charges surrounding patent licensing.

Qualcomm’s shares were up 53 cents at $56.82 in late day trading Wednesday on the Nasdaq exchange.

mike.freeman@sduniontribune.com;

Twitter:@TechDiego

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