Speaker 1: And now time for our daily Bloomberg Law Brief, exploring
Speaker 1: legal issues in the news. Today, Bloomberg Law hosts June
Speaker 1: Grasso and Michael Best discuss a lawsuit between Apple and
Speaker 1: Qualcom over Qualcom's pricing structure. They speak to Matt Larson.
Speaker 1: The litigation analysts were Bloomberg Intelligence and Andrea matuition professor
Speaker 1: at Northeastern University. Matt, let's start with the basics. Explain
Speaker 1: why Qualcom is allowed to charge phonemakers like Apple, whether
Speaker 1: or not they use its chips, and what those charges are.
Speaker 1: Certainly so, Qualcom's business is fairly unique. It's it's two fold.
Speaker 1: The first part is the chip sets. They sell chips
Speaker 1: that um they go into wireless devices and basically allow
Speaker 1: the phones to communicate with with radio and wireless networks.
Speaker 1: And the other half of their business, um about a
Speaker 1: third of their business by revenue realistically, is patent licensing.
Speaker 1: So Qualcom invests a tremendous amount of money and doing
Speaker 1: research and development and then participates in standard setting organizations
Speaker 1: that essentially dictate what kind of technologs are going to
Speaker 1: be put into three G standards, four G l t
Speaker 1: e UM. You know there are groups talking about five G.
Speaker 1: So Qualcom participates in these groups. It contributes the technology
Speaker 1: that it's done, that it's developed through its research programs,
Speaker 1: and then in turn, once companies start implementing those technologies, UH,
Speaker 1: Qualcom asks for compensation in the form of patent licensing.
Speaker 1: So it says, we'll let you use these technologies. UH.
Speaker 1: In fact, you have to use them because they're required
Speaker 1: to communicate with other devices, and in return, you pay
Speaker 1: us licensing fees for the use of our patented tech.
Speaker 1: So Andrea, before we get to Qualcom's lawsuit that follows
Speaker 1: on the heels of a lot of litigation by Apple.
Speaker 1: So what what is Apple suing Qualcom about. They're allegedly
Speaker 1: not getting a stream of payments back from Qualcom in
Speaker 1: accordance with what were the previously stipulated deal terms pursuant
Speaker 1: to their agreements, which the court will undoubtedly dig into
Speaker 1: the minutia of those contracts and will learn a lot
Speaker 1: about the nature of this relationship as the case moves forward.
Speaker 1: And so this relationship between Apple and Qualcom also was
Speaker 1: part of the concerns that are reflected in the Federal
Speaker 1: Trade Commissions Recent and Activity filing. UH against Qualcom in California,
Speaker 1: accusing Qualcom of anti competitive practices and violation of Section
Speaker 1: five of the Fair Trade of the FTC Act as well.
Speaker 1: That is Andrea Matuien, the professor at Northeastern University, and
Speaker 1: Matt Lawson, a litigation analyst for Bloomberg Intelligence, speaking to
Speaker 1: Bloomberg Law host Grosso and Michael Best. You can listen
Speaker 1: to Bloomberg Law weekdays at one pm Wall Street Time
Speaker 1: here on Bloomberg Radio Now. Among the top legal stories
Speaker 1: from Bloomberg Law, the passenger who was dragged off that
Speaker 1: United Airlines flight earlier this week wants a judge to
Speaker 1: preserve evidence that be used in a case. David Dowell
Speaker 1: has asked that the airline and the city be required
Speaker 1: to preserve surveillance videos, crewe lists, and other information. The
Speaker 1: Department of Homeland Security faces illegal blitz over President Trump's
Speaker 1: travel ban. The a c l U filed thirteen lawsuits
Speaker 1: demanding to see records on how the agency's field offices
Speaker 1: interpreted the ban against certain Muslim majority nations. Federal courts
Speaker 1: have thou put that ban on hold. And that's this
Speaker 1: morning's Bloomberg Lawbrary. If you can find more legal news
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Speaker 1: Attorneys will find exceptional legal research and business development tools
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