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Qualcomm accuses Apple of stealing chip secrets and giving them to Intel

CNBC logo CNBC 9/25/2018 David Faber
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Qualcomm has unveiled explosive charges against Apple for stealing "vast swaths" of its confidential information and trade secrets for the purpose of improving the performance of chip sets provided by Qualcomm competitor Intel, according to a filing with the Superior Court of California.

The allegations are contained in a complaint that Qualcomm hopes the court will amend to its existing lawsuit against Apple for breaching the so called master software agreement that Apple signed when it became a customer of Qualcomm's earlier this decade.

The two companies have been embroiled in direct and indirect litigation around the globe centered on Apple's unwillingness to have its suppliers pay Qualcomm royalties it deems excessive for the iPhone.

Monday's filing can be seen as the latest salvo in that dispute, designed to put pressure on Apple to settle. But Qualcomm's general counsel, Donald Rosenberg, told CNBC this case stands on its own and would have been filed regardless of the on-going dispute between the two companies.

"Unlawful use of Qualcomm's valuable trade secrets to try to help a competitor catch up irreparably harms us and must not be allowed to continue," he said.

The new charges are part of a separate lawsuit filed in November of last year which alleged that Apple was in violation of the agreement it signed with Qualcomm when it began work to use Qualcomm's chips in the iPhone. That agreement required Apple to allow Qualcomm to periodically insure that the source code software and tools it was sharing with Apple as part of the agreement were being appropriately protected.

Provided to Intel engineers

Qualcomm argues it was being prevented from auditing Apple's use of its source code and sued. Now it is alleging a far larger misdeed: the stealing of that same source code and tools, for the express purpose of helping Intel overcome engineering flaws in its chips that led to their poor performance in iPhones.

In its complaint, Qualcomm says it is making the latest charges after discovery in the current lawsuit allowed it to unearth evidence that Apple engineers repeatedly provided source code and other confidential information to Intel engineers so they could improve the performance of Intel's chip sets.

Qualcomm does not provide direct evidence to support the allegations, but does make reference to back and forth between Apple and Intel engineers that are based on correspondence between those engineers that was found during discovery.

Qualcomm is hoping its latest charges will be added to the current lawsuit against Apple and that the case will still be on track for its current court date of April of next year.

Apple hasn't yet responded to a request for comment.

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