September 25, 2018 / 1:12 PM / 2 months ago

Qualcomm accuses Apple of stealing its secrets to help Intel

(Reuters) - Qualcomm Inc on Tuesday accused Apple Inc of stealing its chip-making secrets and giving them to rival Intel Corp, paving the way for Apple to switch to Intel’s improved semiconductors, which may have cost Qualcomm billions of dollars in lost sales.

FILE PHOTO: A sign on the Qualcomm campus is seen in San Diego, California, U.S. November 6, 2017. REUTERS/Mike Blake/File Photo

The accusation, made in a legal filing on Tuesday, is the latest salvo in a drawn-out patent dispute between the two tech heavyweights.

Qualcomm accused Apple of misusing secret Qualcomm software to share information about its chips with Intel engineers in a November lawsuit, but went further on Tuesday by saying Apple stole Qualcomm trade secrets as part of a “multi-year campaign of sloppy, inappropriate and deceitful conduct” designed to improve rivals’ chipsets and ultimately divert Qualcomm’s Apple-based business to Intel.

Apple declined to comment. Intel, which is not named as a defendant in Qualcomm’s lawsuit, declined to comment.

The world’s most valuable technology company previously used Qualcomm’s modem chips in its iPhone, which helped the device connect to wireless data networks. With the iPhone 7, launched in 2016, Apple began using Intel modem chips in some models instead.

Qualcomm told investors in July it believed its modem chips were completely removed from the newest generation of iPhones released this month, leaving Intel as the sole supplier. Teardowns of the new devices have confirmed that Intel is supplying the modem chips.

Apple has cast doubt on Qualcomm’s claims. Last month, it alleged that Qualcomm refused to answer its questions about which specific confidential information it had improperly shared with Intel. Apple has also alleged that it gave Qualcomm the chance to verify that Qualcomm’s software had been used properly.

The dispute, taking place in San Diego County Superior Court, is one strand of a wide-ranging legal battle in which Apple has accused Qualcomm of unfair patent licensing practices. Qualcomm, the world’s largest mobile phone chipmaker, has in turn accused Apple of patent infringement.

Qualcomm asked Judge Jacqueline Stern on Tuesday to allow it to attach the new allegations to its existing complaint rather than force it to file a new lawsuit.

DISCOVERY PHASE

Qualcomm has previously said it gave Apple access to its confidential software tools to help Apple integrate its modem chips into the iPhone.

On Tuesday, Qualcomm alleged that, since filing its lawsuit in November, it has discovered that Apple repeatedly used Qualcomm software to help Intel’s engineers “improve the sub-par performance of Intel’s chipsets.”

It did not present evidence or say how it found that out. The case is currently in the discovery phase, where parties can exchange evidence.

Qualcomm’s modems rely on a combination of chips and software to allow phones to receive wireless data. Qualcomm gave Apple access its source code and software development tools so Apple could modify Qualcomm’s software for use in the iPhone, on the condition that Apple did not use the code or tools to help another chipmaker.

In Tuesday’s filing, Qualcomm alleged that Apple used the tools to open so-called “log files” from Qualcomm and then gave those files to Intel engineers. Log files contain rows of data generated by computer hardware or software, and engineers often analyze them to pinpoint technical problems and optimize the performance of a chip.

“Intel engineers even complained to Apple engineers about being unable to open Qualcomm log files, which Apple had provided to Intel, for lack of the appropriate Qualcomm tools,” Qualcomm said in its filing.

Boxes of iPhones purchased by customers are pictured next to an iPhone XS on display at the Apple Store in Singapore September 21, 2018. REUTERS/Edgar Su

“In response, Apple engineers routinely used Qualcomm tools to create post-processed log files, which they sent to Intel engineers to use in improving Intel’s chipset solutions,” it added.

Qualcomm did not specify in its filing what within those log files, or within the other information Apple allegedly gave to Intel, constituted trade secrets. But it said the information helped Intel.

“It apparently improved Intel chipsets to the point where Apple decided to divert some of Qualcomm’s Apple-based business to Intel,” Qualcomm said in its filing.

Reporting by Stephen Nellis; Editing by Stephen Coates and Bernadette Baum

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