Apple and Qualcomm will now dismiss all litigation they each filed against one another. The companies figured out a settlement for their patent royalties dispute and the agreement was announced on Tuesday via press release.
The note published by Apple states that there is an agreement to "end all ongoing litigation, including with Apple's contract manufacturers" plus both parties "have reached a global patent license agreement and a chipset supply agreement." It was said that payment from Apple was also included in the settlement but the amount was not mentioned.
As stated, with their legal battles all behind them now, Apple and Qualcomm also agreed to continue working together and they signed a six-year license contract for this. It also has an option for the contract to be extended for two more years. In addition, a multi-year chipset supply agreement was also discussed and agreed upon.
As CNN reported, Apple and Qualcomm appeared in a court trial on Monday. This was initially expected to last for four to six weeks and Tim Cook, Apple's CEO is also expected to take the stand. But apparently, the litigation ended earlier as both camps were able to reach an amicable agreement.
The legal battle between the chipset maker and tech giant began in January 2017 after Steve Jobs' company filed a $1 billion lawsuit against Qualcomm. Apple alleged that Qualcomm charged excessive royalties and withheld payments in an act of retaliation after the company cooperated in a South Korean investigation involving the American chipmaker.
From there, a series of accusations have led the two companies to file for lawsuits on different cases including patent disputes. At the height of the legal battle, Qualcomm even filed a request from the US federal judge to prohibit the sale of Apple's iPhones.
Meanwhile, CNBC reported that following the announcement of Apple and Qualcomm's settlement, the latter's stock price immediately shoot up by as much as 22 percent. Apparently, the deal boosted Qualcomm's shares market cap by approximately $14.5 billion to over $84 billion and this was the company's best day in Wall Stree since 1999.
On the other hand, Apple's stock slightly increased as well but with only 0.2 percent, it was still in line with the broader market. Qualcomm is now expecting a $2 increase in its revenues per share after its stock rose.
"This was a major win for Qualcomm as fears of a loss in the courts was a major overhang on the name with Apple going after this IP issue full steam ahead," Wedbush Securities analyst Dan Ives remarked. "A settlement is a surprise to investors as ultimately Apple realized this was more about two kids fighting in the sandbox and they have bigger issues ahead with 5G and iPhone softness rather than battling Qualcomm in court."
