Chinese court orders ban on old iPhone models in Qualcomm patent dispute

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Posted

December 11, 2018 19:47:52

A Chinese court has ordered a ban on the sale of several Apple iPhone models in China for violating two patents of chipmaker Qualcomm Inc, although Apple said all of its phone models remained on sale on the mainland.

Key points:

  • iPhone models from the iPhone 6S through to iPhone X are affected
  • Qualcomm alleges Apple infringed patented features related to resizing pictures and managing apps on a touch screen
  • Apple calls the move “desperate”, says iPhones still on sale in China

The case, brought by Qualcomm, is part of a global patents dispute between the two US companies that includes dozens of lawsuits.

It creates uncertainty over Apple’s business in one of its biggest markets at a time when its falling share prices reflect concerns over waning demand for new iPhones.

Qualcomm said the Fuzhou Intermediate People’s Court in China found Apple infringed two patents held by the chipmaker and ordered an immediate ban on sales of older iPhone models that use the chip.

Apple said it had filed a request for reconsideration with the court, the first step in appealing against the ban.

The specific iPhone models affected by the preliminary ruling in China are the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.

But Apple said all iPhone models remained on sale in China and the trio of new models released in September were not part of the case.

China, Hong Kong and Taiwan are Apple’s third-largest market, accounting for about one-fifth of Apple’s $356.4 billion in sales in its most recent fiscal year.

Qualcomm, an American multinational company and the biggest supplier of chips for mobile phones, filed its case in China in late 2017, arguing Apple infringed patents on features related to resizing photographs and managing apps on a touch screen.

Apple responded by saying, “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”.

In July, the same court banned the import of some microchips by Micron Technology Inc into China, citing violation of patents held by Taiwan’s United Microelectronics Corp (UMC).

In the provincial Chinese court, which is separate from China’s specialised intellectual property courts in Beijing, one party can request a ban on an opponent’s product without the opponent getting a chance to present a defence.

To enforce the ban, Qualcomm separately will have to file complaints in what is known as an enforcement tribunal, where Apple will also have a chance to appeal.

The ruling comes as Beijing and Washington are locked in a tense trade dispute, with the two sides having agreed to trade negotiations that must be concluded by March 1.

Erick Robinson, a patent lawyer in Beijing and former Qualcomm lawyer, said while Chinese courts had become fairer in recent years, nationalism could sometimes be a factor in rulings.

Qualcomm is a key technology vendor to China’s rising smartphone brands such as Xiaomi, Oppo, Vivo and OnePlus, while Apple competes directly against Huawei, China’s top homegrown maker of premium-priced smartphones.

Huawei’s chief financial officer, Meng Wanzhou, the daughter of its founder, was arrested on December 1 in Canada at the behest of the United States for allegedly violating US sanctions.

A Canadian court is weighing up whether to grant bail to Ms Meng, who is facing possible extradition to the US.

Beijing demanded her immediate release and threatened “consequences” for Canada.

Mr Robinson said the iPhone ban, “is probably a political play” as, “Apple is a direct competitor to the biggest companies in China, whereas Qualcomm is a supplier”.

Qualcomm officials said tensions between the two nations had no bearing on the ruling.

The company has had its share of troubles in China, from an unfavourable 2014 antitrust ruling to regulatory limbo that doomed its $44 billion bid for Dutch chipmaker NXP Semiconductors.

Reuters

Topics:

mobile-phones,

information-and-communication,

china,

united-states,

asia



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