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The convoluted legal battle between Apple and chipmaker Qualcomm may be coming to an end. The companies Tuesday said they're dismissing all litigation against each other. Apple will pay Qualcomm an undisclosed sum as part of the settlement, which includes a six-year licensing agreement between the companies.
The settlement also covers suits brought by Apple's manufacturing partners, who wanted Qualcomm to repay $9 billion—a number that reportedly could have been tripled under antitrust law—they say the chipmaker overcharged them for patent royalties.
The announcement came while Qualcomm's lawyer was delivering his opening remarks in a trial of numerous claims and counter-claims that started Tuesday morning in San Diego, according to CNET. Qualcomm told investors last year that Apple would stop using its wireless chips, switching instead to chips made by competitors like Intel.
The dispute between Apple and Qualcomm revolved around the unusual way Qualcomm licenses its technology to other companies. Qualcomm generally charges handset makers like Apple and Huawei around 5 percent of the total price of a phone for the right to use its technology, up to about $20 per device, according to a legal brief filed by Qualcomm. In other words, if you pay $300 for a phone that uses Qualcomm patented technology, $15 of that might go to Qualcomm, even if there are no chips made by Qualcomm in the device. If you paid $1,000, Qualcomm would get $20. Those licensing fees come on top of what a manufacturer pays for Qualcomm’s chips. Apple referred to this as double dipping and argued that Qualcomm only got away with it because it effectively holds a monopoly on high-end wireless chip technologies.
Though terms of the agreement were not disclosed, investors viewed it as good news for Qualcomm. Its shares rose 23 percent. Apple shares were little changed.
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