China court slaps ban on some iP

By Tim Bradshaw

Qualcomm is claiming a key victory in its sprawling legal battle with Apple, after a Chinese court slapped a ban on sales of certain iPhone models in the world’s largest mobile market.

The Intermediate People’s Court in Fuzhou, China, has granted a preliminary injunction against Apple after finding it in violation of two Qualcomm patents related to photo manipulation and using apps on a touchscreen.

Qualcomm said the ruling, made on November 30, means Apple’s four Chinese subsidiaries are barred from importing and selling seven iPhone models, ranging from 2015’s iPhone 6s to last year’s iPhone X.

But Apple may design around the infringing patents through software updates, and its latest models, including the iPhone XS and XR, are not caught by the ruling.

“We deeply value our relationships with customers, rarely resorting to the courts for assistance, but we also have an abiding belief in the need to protect intellectual property rights,” said Don Rosenberg, Qualcomm’s executive vice-president and general counsel. “Apple continues to benefit from our intellectual property while refusing to compensate us. These court orders are further confirmation of the strength of Qualcomm’s vast patent portfolio.”

Despite Mr Rosenberg’s insistence the injunction was “effective now” and not confined to iPhones running older versions of the iOS operating system, Apple said the ruling would not affect the availability of its devices in China.

“Qualcomm’s effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world,” Apple said. “All iPhone models remain available for our customers in China...We will pursue all our legal options through the courts.”

China is a vital market for Apple, accounting for more than $50bn in annual revenues and a fifth of its total sales. Analysts at RBC Capital Markets estimate that as much as 40 per cent of iPhones sold there are older models, suggesting Apple could stand to lose some $12bn in annual revenues if the ban were upheld.

Apple and Qualcomm have become embroiled in a series of lawsuits over the past two years, spanning the US, China and Europe. Apple has accused Qualcomm of abusing its position in mobile chips, prompting the San Diego-based supplier to retaliate with a series of allegations including breach of contract and patent infringement.

The case in Fuzhou was first filed in November 2017. Another key decision will come later this month in Germany.

Steve Mollenkopf, Qualcomm’s chief executive, has pointed to a series of legal milestones that he hopes will encourage Apple to seek a settlement but lawyers for the iPhone maker told a judge in San Diego last month that there have not been any such talks “in months”.

Apple has been one of Qualcomm’s most valuable customers for several years, and the legal cases have deprived the chipmaker of billions of dollars in revenues.