Qualcomm, Apple End Worldwide Legal Fights with Settlement Agreement
Wireless giant Qualcomm and smartphone maker Apple have been publicly feuding in courts around the globe, accusing one another of illegal business practices for more than two years.
On Tuesday, the companies announced that the litigation between the two tech firms would be dismissed. San Diego-based Qualcomm (NASDAQ: QCOM)—which, among other products, makes sophisticated components that power many smartphones, including some of those made by Apple (NASDAQ: AAPL)—will get some money from Apple as part of the agreement. The payment amount wasn’t disclosed.
The settlement, which is slated to be backdated to April 1, includes a patent license agreement and chipset supply agreement. The license agreement is a six-year contract with a two-year extension option. The companies described the chipset supply agreement as “multiyear,” but didn’t specify the exact time frame. Neither provided further details about the agreements.
The companies began the legal fight in earnest in 2017. Apple pursued claims against Qualcomm over its patent-licensing practices—including a $1 billion lawsuit over royalty fees. Qualcomm, in turn, sued Apple over accusations that the Cupertino, CA-based company was using some of its intellectual property without proper compensation.
Some recent decisions overseas had gone in Qualcomm’s favor, including a December ruling by a German court, which ordered Apple to stop selling phones that violated Qualcomm IP in that country.
But the recent couple years have been chaotic ones for Qualcomm, which is San Diego’s best-known tech outfit and one of its few Fortune 500 firms. Just over a year ago, the company removed Paul Jacobs, its former CEO, longtime board chairman, and one of the sons of Qualcomm co-founder Irwin Jacobs, from its board in the wake of his announcement that he planned to mount an attempt to take the company private. That news came shortly after President Donald Trump put the kibosh on a hostile takeover attempt by Broadcom (NASDAQ: AVGO), citing national security concerns—an attempt that put San Diego’s tech community on edge over the near certainty of deep cost-cutting in the aftermath of such a merger.
Earlier this month, however, the Wall Street Journal reported that Jacobs (the younger) had ended his attempt to scare up the billions that would be necessary to take the company private.
Following his 2018 ouster from the Qualcomm board, Jacobs and two other former executives from the company teamed up to launch a networking startup, dubbed Xcom. The company recently acquired another startup, Seattle’s M87, which is commercializing software invented at the University of Texas at Austin to improve the performance of wireless networks.