Apple dealt legal blow as jury awards Qualcomm $31 million

The verdict gives Qualcomm momentum as it heads into a bigger showdown with Apple next month.

Richard Nieva Former senior reporter
Richard Nieva was a senior reporter for CNET News, focusing on Google and Yahoo. He previously worked for PandoDaily and Fortune Magazine, and his writing has appeared in The New York Times, on CNNMoney.com and on CJR.org.
Richard Nieva
3 min read

Apple and Qualcomm have been in a heated legal battle.

James Martin/CNET

Apple violated three Qualcomm patents and should pay the chipmaker $31 million for infringing on its technology, a jury decided Friday, giving Qualcomm momentum as it heads into another legal skirmish with the iPhone maker next month.

Qualcomm, which filed the suit in July 2017, alleged that Apple had used its technology without permission in some versions of its popular iPhone. The jury awarded Qualcomm the full amount it had requested at the start of the two-week trial, which took place in San Diego.

One disputed Qualcomm patent covers technology that lets a smartphone quickly connect to the internet once the device is turned on. Another deals with graphics processing and battery life. The third addresses technology that shifts traffic between a phone's apps processor and modem.

The $31 million in damages -- or $1.41 per infringing iPhone -- is a drop in the bucket for Apple, a company that briefly became a $1 trillion company last year. But it marks an important victory for Qualcomm, burnishing its reputation as a mobile components innovator. The win also lends credibility to the notion that much of the company's innovation is reflected in iPhones.

Watch this: Apple vs. Qualcomm: Court battles explained

The verdict sets the stage for a highly anticipated trial between the two companies scheduled for next month in San Diego. The dispute, over Qualcomm's patent royalties with Apple, involves billions of dollars and will be a crescendo in the tech giants' wide-ranging legal saga. 

The clash between Apple and Qualcomm began two years ago, when the Federal Trade Commission, with help from Apple and Intel , accused Qualcomm of being a monopoly power in modem chips. The FTC argued that Qualcomm's royalty rates stopped competitors from entering the market and drove up phone prices. That trial took place in January, and the parties are currently awaiting a decision

The trial next month will examine Qualcomm's licensing business, too. 

The patent case decided Thursday, presided over by US District Judge Dana Sabraw, is more technical and less high-profile than the other parts of the legal battle. Still, it could have implications for how your phone is made and how much it costs.

Qualcomm general counsel Don Rosenberg applauded the decision. 

"Today's unanimous jury verdict is the latest victory in our worldwide patent litigation directed at holding Apple accountable for using our valuable technologies without paying for them," Rosenberg said in a statement. "The technologies invented by Qualcomm and others are what made it possible for Apple to enter the market and become so successful so quickly."

Apple said it was "disappointed" with the verdict.

"Qualcomm's ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in US federal court, and around the world," a spokesman said in a statement.

The witness twist

The two sides spent a big portion of the trial fighting over the boot-up patent. Apple argued that one of its then-engineers, Arjuna Siva, made key contributions to the technology and should be named on the patent as well. Apple said Qualcomm stole the idea when the two companies were working together to bring Qualcomm's chips into iPhones. The trial took a striking twist last week when Siva, who now works for Google, seemingly backed out of appearing, then reversed the decision to testify on Monday.

The jury struck down Apple's argument that Siva should have been named as an inventor.

Apple argued the trial wasn't solely about patents. During closing arguments Wednesday, Apple counsel Juanita Brooks said the "real motivation" for the lawsuit was retaliation for Apple bringing on Intel as a second chip supplier in 2016. She said Qualcomm was upset because the two companies had previously had an exclusive relationship, since 2011.

Now Intel has replaced Qualcomm in iPhones altogether.

"Qualcomm went into a drawer, dusted off some old patents, and threw them against the wall to see if they'd stick," Brooks said. In response, Qualcomm counsel David Nelson said, "We're entitled to get return on our intellectual property." 

Correction, March 15, 4:10 p.m. PT: An earlier version of this story misstated the day of the verdict. It was Friday.