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Judge Rules Qualcomm Owes Apple $1 Billion in Rebates

Judge Gonzalo Curiel of the U.S. District Court for the Southern District of California has issued a preliminary ruling that Qualcomm owes Apple nearly $1 billion in royalty rebate payments. The ruling comes prior to a court case on the subject which starts next month. Judge Curiel ruled that the agreement for the payment was made between the companies and there is an obligation to pay it. However, because of the pending case starting next month, it is highly unlikely that the chip maker will write a check to Apple.

In general, the contract factories that built Apple’s iPhones would pay Qualcomm billions of dollars per year for the use of Qualcomm’s patented technology in iPhones, a cost that Apple would reimburse the contract factories for. Separately, Qualcomm and Apple had a cooperation agreement under which Qualcomm would pay Apple a rebate on the iPhone patent payments if Apple agreed not to attack in court or with regulators.

Reuters

On paper, this is a good win for Apple as they battle the chip manufacture in multiple courts around the world, including here in the US. But is likely to not change much today. This all began two years ago when Apple sued Qualcomm over the payments. Qualcomm reportedly quit making the royalty payments after it claims the Cupertino company reported them to South Korean regulators. It was at that point that the legal battle between the companies escalated rapidly.

For their part, the San Diego chip manufacture has tried to put a positive note on the ruling. Don Rosenberg, executive vice president and general counsel of Qualcomm, told Reuters in a statement, “Although the Court today did not view Apple’s conduct as a breach of Apple’s promises to Qualcomm in the 2013 Business Cooperation and Patent Agreement, the exposure of Apple’s role in these events is a welcome development.”

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