The years-long legal battle between Apple and chipmaker Qualcomm is finally settled. The two companies agreed Tuesday to end all litigation, including with Apple's contract manufacturers, in a settlement that involves Apple paying Qualcomm an undisclosed amount. The companies also came to six-year license agreement, effective April 1, as well as a multiyear chipset supply agreement. Shares of Qualcomm were up nearly 15 percent on the news.
The two companies had been locked in a patent dispute going back to January 2017, when Apple filed a suit against Qualcomm accusing the semiconductor giant of overcharging for chips and withholding nearly $1 billion in contractual rebate payments. Apple's suit also claimed that Qualcomm created an "abusive licensing model" that enabled the company to demand excessive royalties.
Qualcomm then filed a complaint with the ITC asking it to bar the import of some iPhones and other products into the US. That complaint was tied to Apple's decision to withhold royalty payments to contract manufacturers until the legal dispute with Qualcomm was resolved -- which led to another counter suit filed by Apple's suppliers. In that suite, Qualcomm was accused of violating two sections of the Sherman Act, a landmark US antitrust law.
Qualcomm eventually convinced the ITC to open a probe into whether the importation of the iPhone 7, along with various device components like baseband processor modems, violates the Tariff Act of 1930.
In March, Apple faced rulings in two separate ITC hearings and narrowly avoided an import ban of its iPhone after the ITC rejected Qualcomm's patent infringement claim. The ITC said that a Qualcomm battery-saving feature is invalid. In a notice, the ITC explained its ruling. Just hours earlier another ITC judge said Apple infringed on another patent dealing with power management in computing devices and recommended a limited import ban.
PREVIOUS AND RELATED COVERAGE:
Apple vs Qualcomm latest: Qualcomm alleges Apple could have shared source code with rival Intel.
Apple vs Qualcomm: Apple might choose Intel and MediaTek to supply modem components for 2018 iPhones and iPads, instead of Qualcomm, according to new reports.