Qualcomm accuses Apple of stealing its secrets to help Intel

(Reuters) - Qualcomm Inc on Tuesday alleged that Apple Inc stole its trade secrets and gave them to Intel Corp to improve its chips, paving the way for Apple to use them instead of Qualcomm chips, the latest salvo in a drawn-out legal dispute between the companies.

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

Qualcomm made the accusations in a motion to amend a complaint filed in November, when it alleged Apple had broken a software license contract by sharing confidential details about Qualcomm’s chips with Intel engineers.

Qualcomm provided modem chips for the iPhone, which helped the device connect to wireless data networks. Starting with the iPhone 7, however, Apple began using Intel modem chips in some of its models.

Tuesday’s allegations were made in a planned legal filing seen by Reuters.

They go further than the original complaint by alleging Apple stole Qualcomm trade secrets in a “multi-year campaign of sloppy, inappropriate and deceitful conduct ... for the purpose of improving lower-quality modem chipsets, including those manufactured by Intel, a competitor of Qualcomm, to render such chipsets useable in Apple devices with the ultimate goal of diverting Qualcomm’s Apple-based business to Intel.”

Apple declined to comment.

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

Last month, Apple alleged that Qualcomm had refused to answer its questions about which specific confidential information it had improperly shared with Intel. Apple also alleged at the time that it had given Qualcomm the chance to verify that Qualcomm’s software had been used properly.

Intel, which is not named as a defendant in Qualcomm’s lawsuit, did not immediately have a comment.

The San Diego County lawsuit is unfolding amid a wide-ranging legal dispute 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 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 so far confirmed that Intel is supplying the modem chips.

But during the years when Apple used Qualcomm modems, Qualcomm provided Apple access to its confidential software tools to help Apple integrate the modems into the iPhone, Qualcomm’s suit alleges.

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

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

Qualcomm, in its filing, asked Judge Jacqueline M. Stern to allow it to attach the new allegations to its existing complaint rather than force it to file a new lawsuit.

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

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