Qualcomm seeks China iPhone ban, escalating Apple legal fight

Chipmaker files patent suit against its customer in China

Qualcomm filed lawsuits in China seeking to ban the sale and manufacture of iPhones in the country, the chipmaker’s biggest shot at Apple so far in a sprawling and bitter legal fight.

The San Diego-based company aims to inflict pain on Apple in the world’s largest market for smartphones and cut off production in a country where most iPhones are made. The product provides almost two-thirds of Apple’s revenue. Qualcomm filed the suits in a Beijing intellectual property court claiming patent infringement and seeking injunctive relief, according to Christine Trimble, a company spokeswoman.

“Apple employs technologies invented by Qualcomm without paying for them,” Trimble said. An Apple spokesman didn’t immediately respond to a request for comment on Friday. Apple shares gave up some gains from earlier on Friday, while Qualcomm stock maintained small losses.

Qualcomm’s suits are based on three non-standard essential patents, it said. They cover power management and a touch screen technology called Force Touch that Apple uses in current iPhones, Qualcomm said. The inventions “are a few examples of the many Qualcomm technologies that Apple uses to improve its devices and increase its profits,” Trimble said.

The company made the filings at the Beijing court on September 29. The court has not yet made them public.

The two companies are months into a legal dispute that centres on Qualcomm’s technology licensing business. While Qualcomm gets the majority of its sales from making phone chips, it pulls in most of its profit from charging fees for patents that cover the fundamentals of all modern phone systems.

The latest suits come at a crucial time for Apple. It just introduced iPhone 8 and X models aimed at reasserting leadership in a market that’s steeped in competition from fast-growing Chinese makers. Suppliers and assemblers in China are rushing to churn out as many new iPhones as possible ahead of the key holiday season, so any disruptions would likely be costly. The Greater China region accounted for 22.5 per cent of Apple’s $215.6 billion sales in its most recent financial year.

The legal battle started earlier this year when Apple filed an antitrust suit against Qualcomm arguing that the chipmaker’s licensing practices are unfair, and that it abused its position as the biggest supplier of chips in phones. Qualcomm charges a percentage of the price of each handset regardless of whether it includes a chip from the company, and Apple is sick of paying those fees.

Qualcomm has countered with a patent suit and argued that Cupertino, California-based Apple encouraged regulators from South Korea to the US to take action against it based on false testimony.