By DON CLARK
SAN FRANCISCO — Nasty legal battles are nothing new in the tech industry. But Apple’s conflict with the wireless chip maker Qualcomm, headed for a crucial court showdown this coming week, has a special intensity.
The two companies, once partners of a sort, now disagree about nearly everything — including which one deserves the most credit for shaping the evolution of smartphones.
Their formidable legal teams are at war on three continents, in a struggle that could affect the division of billions of dollars of smartphone profits and, perhaps, even how much consumers pay for their phones.
Now, the action moves to a federal courtroom in San Diego, where jury selection is set to begin on Monday for a trial on an Apple lawsuit and Qualcomm’s counterclaims. The chief executives of both companies are likely to take the stand.
The stakes are reflected in the eye-popping damage claims. Four Asia-based contract manufacturers that assemble iPhones and iPads, whose suits have been merged with Apple’s, argue that they collectively overpaid Qualcomm roughly $9 billion in royalties over the years — a figure that could be tripled under antitrust laws to $27 billion.
Apple says Qualcomm should also repay $3.1 billion associated with patents whose rights Apple says are exhausted. It has already won a preliminary ruling that Qualcomm should pay nearly $1 billion in withheld rebates.
Qualcomm, in return, estimates that Apple’s partners — Foxconn, Pegatron, Wistron and Compal Electronics — owe more than $7.5 billion in unpaid royalties. And it contends that Apple, which reimburses the manufacturers’ royalty payments, should be liable for a doubled penalty that would take the total to $15 billion or more.
Qualcomm’s business practices have also attracted harsh scrutiny from regulators in multiple countries, including China and South Korea. A high-profile Federal Trade Commission antitrust suit is awaiting a judge’s verdict after a trial in San Jose, Calif.
The world-spanning legal struggle between Apple and Qualcomm touches on two crucial issues for the tech industry: What is the proper balance between patent rights and competition? And what is the proper role of the government in regulating tech giants?
“It’s a great deal more than just a legal case,” said Michael Wolf, who has tracked the issues for his management consulting firm Activate.
The fight is an existential one for Qualcomm, at least as it has operated for most of its nearly 34 years in…