Qualcomm Inc has been ordered to pay an $814.9 million settlement to BlackBerry Ltd. for a dispute which started in 2016, and involved royalty overpayments on certain technology contained in smartphones. The dispute was centered around a licensing agreement, and whether Qualcomm was required to cap certain fees following an unexpected slump in demand for BlackBerry devices. The payment must be made after a hearing which will take place on May 20th. The final award to BlackBerry will also include legal fees and interest. Qualcomm said in a statement on Wednesday that it “does not agree with the decision of the arbitration panel.” They will not be able to appeal against it as the decision is binding and they have no right to appeal.
Qualcomm owns patents on much of the technology used in today’s modern smartphones, including semiconductors. BlackBerry no longer produces the devices that used the Qualcomm technology – all of the design, production, and sales of new handsets are now outsourced to various companies, including Alcatel’s parent company TCL. The company has recently shifted their focus from producing smartphones to software and they have a range of new security-focused products.
The Chief Executive Officer of BlackBerry Ltd., John Chen stated, “we are pleased the arbitration panel ruled in our favor and look forward to collaborating with Qualcomm.” He also said that the two companies have a “long-standing relationship and would continue to work together.” Following the statement on Wednesday, Qualcomm’s shares dropped by approximately 2.2%, while BlackBerry’s shares soared up to 19%. Qualcomm currently has other legal troubles too – they are currently involved in legal disputes over royalties with a number of other companies, including LG Electronics and Apple Inc. Apple has filed disputes stating that Qualcomm “illegally tried to control the market for chips.” In December last year, they were given a record fine of $902 million by South Korea’s Anti-Trust regulator for violating laws. Qualcomm is also under investigation at this time by the US Federal Trade Commission for forcing Apple to use only their chips, which unfairly cut out their competitors. The US Government have said that Qualcomm has a monopoly over the technology and accused them of “resorting to anticompetitive tactics.”