Qualcomm sues Apple's contract manufacturers for withholding royalties

Earlier this year Apple filed a billion dollar lawsuit against Qualcomm for allegedly abusing its patent portfolio to unfairly obtain royalties from manufacturers. Contract manufacturers working for Apple were asked to stop paying royalties to Qualcomm in the wake of the lawsuit, which resulted in Qualcomm cutting back its profit and revenue forecast. Now, the chipmaker has sued Foxconn and three other contract manufacturer for withholding royalties for patents.

As the financial situation of Qualcomm stands affected by the withheld payments from various contract manufacturers, it was just a matter of time that the company would take some action against them as they have at least some sort of agreement between them albeit unfair according to Apple and the FTC. The chipmaker revealed that the manufacturers stopped paying royalties as per Apple's instructions and has filed a complaint in the United States District Court for the Southern District of California.

The four manufacturers include the manufacturing giant Foxconn Technology Group, Pegatron Corporation, Wistron Corporation, and Compal Electronics Inc. As per Qualcomm, Apple is demanding an unreasonable below-market direct license and is supposedly increasing the pressure through these manufacturers. Qualcomm is seeking a court order to continue receiving payments from the contract manufacturers as per its agreements with them.

For now, both Apple and Qualcomm have made their moves and we will have to wait to see what the courts decide for each of the lawsuits.

Source: Reuters

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