Qualcomm wins first U.S. jury trial against Apple

Edvard Pettersson and Bill Callahan, Bloomberg News

Qualcomm Centriq branding sits on a motherboard on display at the Qualcomm Inc. stand during day two of the Mobile World Congress (MWC) in Barcelona, Spain, on Tuesday, Feb. 27, 2018. At the wireless industry's biggest conference, more than 100,000 people are set to see the latest smartphones, artificial intelligence devices and autonomous drones exhibited by roughly 2,300 companies. , Photographer: Simon Dawson/Bloomberg

Qualcomm Inc. (QCOM.O) won the first U.S. jury trial in its global dispute with Apple Inc. (AAPL.O) over how much the iPhone maker should pay for using the chipmaker’s patented technology.

A federal jury in San Diego on Friday awarded Qualcomm about US$31.6 million in damages on its patent infringement claims, matching the amount Qualcomm had sought. The chipmaker’s shares rose as much as 3.5 per cent on the verdict to US$57.34.

The verdict boosts Qualcomm’s contention that its patent portfolio provides significant value to smartphones beyond the basic ability to connect to a telecommunications network. The disputed patents pertain to technology for graphics processing and battery power conservation, which the San Diego-based company says improve the efficiency and reduce the cost of smartphones.

Representatives of Apple and Qualcomm didn’t immediately respond to requests for comment on the verdict.

Qualcomm has lost billions of dollars in revenue after Apple, through its Asian manufacturers, stopped paying patent royalties in 2017. The companies had a falling out in 2016 when Qualcomm -- which had been the exclusive supplier of iPhone chipsets for five years -- halted quarterly royalty rebates it had been paying Apple. The chipmaker has said it ended the rebates because Apple instigated antitrust investigations of Qualcomm and lied to regulators.

Apple has switched to using Intel Inc. chips in its phones. The Cupertino, California-based company has accused Qualcomm of using its control over so-called standard essential patents, which covers technology uniformly adopted by telecommunications providers and equipment makers, to extract excessive royalties for the entire patent portfolio, including non-essential patents, that it licenses to smartphone makers.

Qualcomm will try to recover its lost revenue next month in a second jury trial in San Diego. Billions of dollars are at stake in that case, which goes to the heart of the dispute between the tech giants.

The case is Qualcomm Inc. v. Apple Inc., 17-cv-01375, U.S. District Court, Southern District of California (San Diego).