Qualcomm faces $647M UK lawsuit over inflated royalties

San Diego-based chipmaker Qualcomm faces a £480 million ($646.8 million) lawsuit in London, filed on behalf of smartphone users. The case claims Qualcomm abused its dominant position to force Apple and Samsung to pay inflated royalties.

The lawsuit was brought by Which?, the UK’s largest independent consumer organization. Its lawyers argue that roughly 29 million people who purchased iPhones or Samsung devices since 2015 are entitled to compensation.

UK Consumer Group accuses Qualcomm of misusing its powerful position against Apple and Samsung

Earlier, the UK consumer organization claimed that Qualcomm had forced manufacturers to pay higher royalties even when they did not use the company’s chips in their devices. This action occurred under a global policy called “no license, no chips.”

In response to their client’s claims, lawyers for Which? presented the case in front of the court and pointed out in court documents prepared for a five-week trial that this practice functions like an “industry-wide private tax,” which enhances Qualcomm’s profitability and increases the prices of devices.

Qualcomm denied the allegations against it, stating that the lawsuit incorrectly describes its long-established regulations, which require manufacturers to obtain a license for its standard essential patents before purchasing chipsets.

In the meantime, when the consumer organization suggested that the company could charge certain royalties on Apple and Samsung, as they are high-net-worth buyers, Qualcomm’s lawyers rejected the proposal.

This case, filed at London’s Competition Appeal Tribunal, aims to assess and determine whether Qualcomm is liable for the claims of the claimant class. If, by any chance, the UK consumer organization wins the case, another trial will be set up to determine damages. 

Qualcomm faces several lawsuits questioning its patent licensing practices

It is worth noting that this is not the first lawsuit against Qualcomm questioning its patent licensing. Earlier in 2023, a similar lawsuit was filed against the company. The lawsuit alleged that the chipmaker’s deals with device manufacturers unfairly inflated mobile phone prices, potentially violating U.S. antitrust rules.

Regarding this case, a California federal court ruled in favor of Qualcomm in the consumer lawsuit. This was after U.S. District Judge Jacqueline Scott Corley in San Francisco granted the motion to dismiss, issuing a 15-page order in favor of the company.

The decision marked another setback for the plaintiffs in a protracted legal battle over the company’s patent licensing and exclusive agreements with Apple and other smartphone manufacturers.

This came after Qualcomm’s defeat in a lawsuit brought by the United States Federal Trade Commission in 2020, accusing the company of similar behavior. The 9th U.S. Circuit Court of Appeals in San Francisco disagreed with the agency’s claims.

In a court ruling, the judge emphasized that consumer plaintiffs were attempting to introduce or alter evidence from an earlier phase of the case that had already been concluded. Judge Corley observed that if he ruled in favor of the plaintiffs, it would result in an infinite number of retrials. He said the court decided not to allow this.

The case is titled In re: Qualcomm Antitrust Litigation, and it was heard in the U.S. District Court for the Northern District of California, case number 3:17-md-02773. The plaintiffs were actively represented by Kalpana Srinivasan of Susman Godfrey and Joseph Cotchett of Cotchett, Pitre & McCarthy.

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