Apple contractors file lawsuit against chipmaker Qualcomm for antitrust violations

Apple's contract manufacturers Hon Hai Precision Industry Co, Wistron Corp, Compal Electronics Inc and Pegatron Corp have filed a US antitrust lawsuit against Qualcomm. The four companies assembling iPhones and other products for Apple Inc claim that Qualcomm violated two section of the Sherman Act. The lawsuit should come as a setback to Qualcomm whose CEO Steve Mollenkopf recently commented that Apple would eventually settle for an out of court settlement.

Reuters reports that Apple's contract manufacturers have filed the lawsuit as a countersuit to Qualcomm's lawsuit filed in May. Qualcomm had filed a lawsuit against Foxconn's parent Hon Hai Precision Industry Co and others seeking to pay royalties after Apple advised them to stop paying in April. The new lawsuit is part of the ongoing dispute between Qualcomm and Apple over patent use and royalties charged on the use of an individual patent. 

"Qualcomm has confirmed publicly that this lawsuit against our clients is intended to make a point about Apple and punish our clients for working with Apple," Theodore J. Boutrous, a lawyer for the four companies told Reuters in a statement.

Qualcomm and Apple are already engaged in a patent battle with Apple suing Qualcomm for nearly $1 billion in January for overcharging for basic patent use. Qualcomm countersued Apple in April for breach of the agreement and alleged threats followed by a lawsuit against four Apple contractors over non-payment of royalties. The battle escalated after Qualcomm filed a lawsuit against Apple last week requesting a temporary ban on US imports of iPhones using Intel modem.

Apple has reportedly joined the contractor case as a defendant and is helping them fund the legal defence. Apple's contractors are said to be working on their own claims and defences against Qualcomm while Apple continues to steer away from its dependence on Qualcomm's modem.

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Karthekayan Iyer