Qualcomm wins preliminary China import ruling against some iPhone models

By Stephen Nellis

(Reuters) - Chip supplier Qualcomm Inc on Monday said it had won a preliminary order from a Chinese court banning the sale of several Apple Inc iPhone models in China due to two patent violations around software features, though Apple said its phones remain available in the country.

The preliminary order from the Fuzhou Intermediate People's Court affects the iPhone 6S through the iPhone X originally sold with older versions of Apple's iOS operating system.

Qualcomm, the biggest supplier of chips for mobile phones, filed its case in China in late 2017, arguing that Apple infringed patents on features related to resizing photographs and managing apps on a touch screen.

In a ruling issued last week, the Chinese court sided with Qualcomm, but the immediate impact of the order was not clear.

In a statement, Apple said that all iPhone models remain available for its customers in China, one of the company's biggest markets in terms of iPhone sales. Those phones use the latest version of the company's mobile operating system, iOS 12.

"Qualcomm's effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world," Apple said in its statement on the Chinese court order.

But Qualcomm general counsel Don Rosenberg said in a statement the Chinese court orders are effective now and apply to all of Apple's operating systems, including iOS 12. He said Apple's infringement stemmed from specific features, not the specific operating system on the phone.

Rosenberg said the company would seek enforcement of the Chinese orders if it determines Apple is violating them and that Qualcomm will challenge any assertion that its patents do not apply to Apple's current iPhones.

The court that handed down the ruling in China's Fujian province earlier this year banned the import of some of memory chip maker Micron Technology Inc's chips into China.

Apple shares were down 1.9 percent to $165.30. Qualcomm shares were up 3.2 percent to $57.80.

The Chinese case is part of a global patent fight between Apple and Qualcomm that takes in lawsuits filed in several jurisdictions around the world. Qualcomm has also asked regulators in the United States to ban the importation of several iPhone models over patent concerns, but U.S. officials have so far declined to do so.

"Apple continues to benefit from our intellectual property while refusing to compensate us," Rosenberg said in a statement.

Yiqiang Li, a patent lawyer at Faegre Baker Daniels not involved in the case, said the Chinese injunction could put pressure on Apple to reach a global settlement with Qualcomm.

The specific iPhone models affected by the preliminary ruling in China are the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X.

(Reporting by Stephen Nellis; Additional reporting by Jan Wolfe; Editing by Anthony Lin and Susan Thomas)