Legal News

Apple threatens to exit UK over $7-billion lawsuit

Tech giant Apple has threatened to quit the United Kingdom markets if asked to pay $7 billion by the local courts over a patent infringement lawsuit. Apple’s lawyers have said paying such an exorbitant amount over the patent infringement lawsuit filed by Optis Cellular is “commercially unacceptable.”

According to a report by This is Money, if forced to pay the amount by the courts in the UK, the US company could quit its operations in the region.

Optis Cellular Technology, which owns globally-distributed patent families relating to 3G and 4G LTE essential technologies, sued Apple for patent infringement after the iPhone creator refused to pay a licence fee worth $7 billion for using ‘standardised’ smartphone technology in its products.

According to the report by This is Money, though Apple is a leader in smartphones, it does not own the technology used in iPhones and pays licence fees to companies like Optis. A UK high court judge had passed a ruling last month confirming that Apple had infringed two Optis patents that help iPhones connect to 3G and 4G networks.

As per a Bloomberg Law report, Apple does not want to commit to taking a licence before the rate is determined. The trial date set for next week will focus on whether Apple is an “unwilling licensee.” If so, it could mean a possible sales ban in the UK. If the court rules in favour of Optis, this would result in companies committing to take a court-determined rate once a patent is found valid and infringed. Refusal to do so could lead to their products being banned in the UK.

The trial, among the first of its kind, has implications for companies sued in global disputes over patents essential to technological standards. They may have to commit to take a court-determined rate once a patent is found valid and infringed or risk their products being blocked from the UK markets.

If Apple decides to quit the lucrative UK market, it would not just spell an end to the sale of iPhones in UK but also discontinuation of services and upgrades to its existing customers.

This is not the first court battle that Apple is facing with Optis in the UK. Another case filed by Optis over patent infringement comes up for trial in 2022.

Last year, the UK Supreme Court had pronounced a ruling that a UK court should set the rate that Apple must pay for all of its iPhone patents worldwide though the court only considers the infringement of UK patents. If it is enacted, it is a sure sign of the British authorities trying to rein in the US giants who have a strong grip on the UK markets.

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