Apple will stop selling some iPhone models in its stores in Germany following ruling in Qualcomm patent case

Key Points
  • Last week, a Chinese court ordered an injunction against Apple over an alleged patent violation filed by chipmaker Qualcomm.
  • Now, a Munich court has ordered an injunction against Apple for another claim in Germany.
  • Apple says it will stop selling the iPhone 7 and iPhone 8 at its stores in Germany. But all iPhone models will be available at third-party retailers in the country.
Tim Cook, CEO, Apple 
Brendan McDermid | Reuters

Qualcomm was granted a second injunction against Apple on Thursday, banning it from selling some iPhone models in Germany that use chips from Intel and parts from another supplier, Qorvo. There was no clear reaction to the news in Apple's stock price, but it finished the day down 2.5 percent as tech stocks overall took a plunge.

In a statement, Apple said it plans to appeal the ruling. Under this condition, Judge Matthias Zigann told the court earlier Thursday, the ruling would not go into immediate effect. However, Apple said that throughout the appeal process, iPhone 7 and iPhone 8 models will not be sold in its 15 retail stores in Germany. Its newest models, iPhone XS, iPhone XS Max and iPhone XR, will still be sold in those stores, Apple said in the statement. All iPhone models will still be sold through carriers and other third-party retailers in Germany, Apple said.

But Qualcomm said in a press release that the injunction will be in effect as soon as it posts the required bonds. It said it would complete the process "within a few days."

The German case is Qualcomm's third major effort to secure a ban on Apple's lucrative iPhones over patent infringement allegations after similar court efforts in the United States and in China. This is the second major win for Qualcomm against Apple after a Chinese court granted an injunction against Apple for an alleged patent violation on Dec. 10.

In Germany, Qualcomm is seeking a ban on some iPhones with chips from Intel. The judge ruled that phones that contain a combination of chips from Intel and Apple supplier Qorvo violated one of Qualcomm's patents around so-called envelope tracking, a feature that helps mobile phones save battery power while sending and receiving wireless signals.

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Apple said in a statement, "Qualcomm's campaign is a desperate attempt to distract from the real issues between our companies. Their tactics, in the courts and in their everyday business, are harming innovation and harming consumers. Qualcomm insists on charging exorbitant fees based on work they didn't do and they are being investigated by governments all around the world for their behavior. We are of course disappointed by this verdict and we plan to appeal. All iPhone models remain available to customers through carriers and resellers in 4,300 locations across Germany. During the appeal process, iPhone 7 and iPhone 8 models will not be available at Apple's 15 retail stores in Germany. iPhone XS, iPhone XS Max and iPhone XR will remain available in all our stores."

In a statement, Qorvo's chief intellectual property counsel, Mike Baker, said: "We believe our envelope tracking chip does not infringe the patent in suit, and the court would have come to a different conclusion if it had considered all the evidence. We're disappointed that the inventor and designer of our chip, who attended the hearing, wasn't given the opportunity to testify or present other evidence that disproves Qualcomm's claim of infringement. The International Trade Commission has already determined that our envelope tracker chip does not infringe the U.S. counterpart to the patent at issue in this case. We currently do not expect that this decision will have any impact on our business with Apple."

Steven Rodgers, Intel's general counsel, said in a blog post that "Qualcomm's goal is not to vindicate its intellectual property rights, but rather to drive competition out of the market for premium modem chips, and to defend a business model that ultimately harms consumers."

In a press release, Don Rosenberg, Qualcomm's general counsel and an executive vice president, said, "Two respected courts in two different jurisdictions just in the past two weeks have now confirmed the value of Qualcomm's patents and declared Apple an infringer, ordering a ban on iPhones in the important markets of Germany and China."

Qualcomm sued Apple in the regional court in Munich in July of last year, seeking an injunction to halt some iPhone sales in Germany as well as monetary damages. The case is part of a broader court conflict between the two, in which Apple has alleged that Qualcomm engaged in anti-competitive business practices to protect a monopoly on its modem chips, which help mobile phones connect to wireless data networks. The U.S. Federal Trade Commission has also sued Qualcomm over its business practices in a case set to go to trial in California next month.

Apple had tried to pre-empt a ban based on a different feature by altering its software in Germany, the Financial Times reported Wednesday.

— Reuters contributed to this report.

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