Qualcomm (9th) defeated Apple's judicial battle for the first time, RBC analyst Amit Daryanani believes that Qualcomm is facing "rising risks" in this patent war.
The US federal judge (9th) told Qualcomm that the company "has no legally sufficient reason" to stop the lawsuit filed by the Apple contract manufacturer, and therefore rejects its motion to continue to pay the license fee.
Apple's 4th generation of industrial and commercial Hon Hai (2317-TW), Wistron (3231-TW), Compal (2324-TW) and Heshuo (4938-WT) filed a procedural charge to Qualcomm in the Southern District Court of California. , in violation of the US Sherman Act.
In May of this year, Qualcomm sued the four major manufacturers for refusing to pay royalties and seeking to recover costs. The four companies filed a lawsuit against the procedural lawsuit filed by Qualcomm in May.
Qualcomm shares closed down 74 cents today or 1.5% to $49.64.
The Wall Street Journal reported that these vendors are now free to pay for patents that Qualcomm claims Apple should pay.
"Barron's" reported that Apple and Qualcomm have been in litigation since the beginning of the year, when Apple filed a complaint with Qualcomm accusing it of charging patent fees to Apple for improper and anti-competitive licensing practices. Qualcomm counterclaimed Apple’s breach of the terms of the agreement and instructed Apple contract manufacturers such as Foxconn to stop paying Qualcomm’s royalties on the iPhone.
The Wall Street Journal believes that today's verdict can be seen as Apple's little victory. On Monday, Qualcomm also faced a request from South Korean regulators to stop orders, prompting Qualcomm to appeal.
ABC Daryanani, an analyst at RBC Capital, reiterated the industry performance rating for Qualcomm stock and a target price of $55, but believes that Qualcomm has "rising risk" in the dispute.
Daryanani wrote: "We believe that Qualcomm's risk will increase significantly, not just from Apple, but from potential customers of other patent license fees."
He pointed out that "the judge specifically mentioned that Qualcomm did not submit any legally sufficient grounds for the court to agree to its request before the court had an opportunity to learn more about similar cases."
Daryanani is worried that the case will continue to drag on, which may eventually force Qualcomm to make significant concessions on patent licensing fees.
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