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Apple and Qualcomm bury the hatchet in royalties battle royal

AFP  |  San Francisco 

and American said Tuesday they have agreed to "dismiss all litigation" against each other worldwide in what had been a sprawling battle over royalty payments.

The last-minute settlement cut short a courtroom clash between the tech giants just as it was getting underway in

For two years, the had fought a multi-front brawl that could have required to pay billions.

The sent Qualcomm's stock price soaring more than 23 percent on Wall Street, its best one-day performance in nearly 20 years.

The deal includes a six-year license agreement with the option to extend for two years, and a payment to from Apple, the said.

At the heart of the battle were the royalties Qualcomm charges for its patented chips, which enable to connect to mobile networks.

accused Qualcomm, which holds the most patents for chips, of taking advantage of its dominant position to charge exorbitant amounts for its chips or access to its patents.

Qualcomm denied the allegations and accused of abusing its position and of taking legal action to negotiate prices down.

"I believe both Apple and Qualcomm got deeper into this than they wanted to," of & Strategy said in a statement.

"This settlement should be good for the as should feel free to invest in research, get paid a fair price for those inventions, and consumers take advantage of those innovations at a very rapid pace." Several hours after the deal was announced, said it was withdrawing from the 5G modem business, without indicating whether its decision was a cause or consequence of the agreement its rival signed with Apple.

The stakes had been especially high for Qualcomm, given that it earns a significant chunk of its revenue from royalties paid by manufacturers for its patented

Apple had argued that Qualcomm's royalty demands meant it was effectively insisting on payment for innovations by Apple -- such as touch ID or Apple Pay -- that Qualcomm "had nothing to do with." Apple said it had been overcharged by billions as a result and, following its initial US lawsuit, the maker filed two more suits in on the same basis. Qualcomm counter-sued.

Also in early 2017, the sued Qualcomm for in the sale of certain components and licenses to makers, including Apple.

In April 2017, it was forced to pay $815 million to Canada's in a royalties dispute.

And since 2015, through both convictions and settlements, it has paid high antitrust fines in China, South Korea, and the

This has led to contradictory legal rulings. In March, a ruled in Apple's favor, a few hours after a of the same court ordered a partial ban of imports.

Meanwhile, by the end of 2018, Qualcomm had secured a ban on the sale of certain iPhones in and -- again for patent violations.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, April 17 2019. 08:55 IST