Apple has been forced to pull the iPhone 7 and 8 from sale in Germany following a court battle with Qualcomm last month. Apple was found to infringe on a Qualcomm patent related to smartphone power management. Once Qualcomm put up a €1.34 billion security bond, the ban against Apple went into effect and Apple has pulled down the offending devices.
Apple has been ordered to recall its devices from third-party resellers in addition to ceasing to sell the iPhone 7 and 8 itself. The degree to which this will practically happen is unclear; we’d expect most third-party companies to continue to make what inventory they have available through other channels if nothing else.
Qualcomm and Apple have been locked in legal battles around the world for the past few years, due to a long-running dispute about royalties, licensing fees, and payment structures. Apple has sued Qualcomm for $1B in the United States and filed suit against the company in China for $145M. There’s also a lawsuit pending in the UK, and of course, Qualcomm has filed its own suits against Apple.
Qualcomm recently won a lawsuit against Apple in China, but Apple claims it can avoid the problem with a software update that will avoid it needing to suspend sales of any devices. Of course, Qualcomm has faced its own problems throughout this process. The company faced off with the FTC on Friday, January 4 in a case brought by the federal regulator alleging that Qualcomm has abused its customers with predatory patent licensing requirements. The FTC’s original case against Qualcomm argues that it maintains a “no license, no chips” policy that forced other companies to pay above market rates or be cut out of purchasing necessary equipment. Apple is alleged to have been pushed into an anticompetitive deal that paid it rebates for buying only from Qualcomm, making it harder for potential competitors like Intel to break into the market.
Qualcomm, meanwhile, has accused Apple of feeding Intel secrets and sharing information in violation of its licensing agreements with Qualcomm in order to help Intel compete more effectively. In short, whatever happy agreements once existed between the two firms, they’ve been replaced by a whole lot of globe-spanning litigation. The patent licensing decisions haven’t gone Qualcomm’s way, with the company fined by multiple regulatory bodies, including a $1.18B fine in January 2018 from the EU, which found that Qualcomm had acted improperly in areas of patent licensing and fee structures.
Apple, of course, has been on the other side of this debate as well. It was found to have acted illegally when it entered the market for ebooks in an attempt to break Amazon’s market power and fined $450M back in 2015.