Qualcomm, the chipset maker, is set to return nearly USD 815 million to the Canadian smartphone maker BlackBerry. This hard bargain from Qualcomm comes as a return on the royalties overpaid by BlackBerry between 2010 and 2015.
The dispute between the two has been over royalties BlackBerry paid in advance to Qualcomm. These royalties were seemingly for use of Qualcomm parts or patents used in BlackBerry smartphones. While BlackBerry’s argument is that that there was supposed to be a cap on those royalty payments, which was not applied at the time, Qualcomm is saying that BlackBerry’s payments were supposed to be non-refundable. In addition to the base amount, Qualcomm will also be paying BlackBerry an interest and the attorney fee.
The facts of the primary royalty deal between the two are not clear. But what is quite clear is that Qualcomm seems to just be tired of all that is going on with it lately. Qualcomm’s global business has been taking a lot of hits, with lawsuits and allegations, and it finds itself in a position where it is now working on self-preservation.
The decision, for a change, was not made in court but reached upon by the two parties in mutual agreement. While Qualcomm has made it clear that it does not agree with the agreement, it seems to be going ahead anyway, perhaps only to make the matter go away.
There have been a lot of similar matters that Qualcomm has been dealing with recently.
Their much-heated multi-country and multi-lawsuit battle with Apple, of course, deserves a mention. The U.S. Federal Trade Commission is also in binds with Qualcomm for alleged anti-competitive practices involving its licensing agreements. There’s even a matter of a commission finding Qualcomm’s “prenup” agreements to be unfair especially with agreements signed almost 20 years ago with Samsung.
Issues of this kind have lately been turning into a bigger and bigger problem for Qualcomm. While most of us know them for their chipsets in our devices, a major chunk of Qualcomm’s business is licensing patents. If issues of this kind keep creeping up, the latter might keep taking hit, or worse, might be in danger of something bigger.
We are not yet clear on how much of the Apple scene, or the FTC scene, actually feeds into Qualcomm’s battle with BlackBerry, but we can certainly say that this new deal is a hit to their global patents business.
Also published on Medium.