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Qualcomm Accuses Apple of Stealing Chip Secrets And Giving Them To Intel

Qualcomm has unveiled explosive charges against Apple, accusing it of stealing “vast swaths” of confidential information and trade secrets for the purpose of improving the performance of chips provided by rival Intel, according to a court filing.

Qualcomm hopes the court will amend allegations in its existing lawsuit against Apple accusing it of breaching the so called master software agreement that Apple signed when it became a customer of Qualcomm’s earlier this decade.

The two companies have been embroiled in direct and indirect litigation around the globe centered on Apple’s unwillingness to have its suppliers pay Qualcomm royalties it deems excessive for the iPhone.

The filing, made overnight in Superior Court in San Diego, is the latest salvo in that fight, designed to put pressure on Apple to settle. But Qualcomm’s general counsel, Donald Rosenberg, told CNBC the case stands on its own and would have been filed regardless of the on-going dispute.

“Unlawful use of Qualcomm’s valuable trade secrets to try to help a competitor catch up irreparably harms us and must not be allowed to continue,” he said.

The new charges are part of a separate lawsuit filed in November alleging that Apple was in violation of the agreement it signed with Qualcomm when it began work to use Qualcomm’s chips in the iPhone. That agreement required Apple to allow Qualcomm to periodically insure that the source code software and tools it was sharing with Apple as part of the agreement were being appropriately protected.

Provided to Intel engineers

Qualcomm argues it was being prevented from auditing Apple’s use of its source code and sued. Now, it is alleging a far larger misdeed: the stealing of that same source code and tools, for the express purpose of helping Intel overcome engineering flaws in its chips that led to their poor performance in iPhones.

In its complaint, Qualcomm says it is making the latest charges after discovery in the current lawsuit allowed it to unearth evidence that Apple engineers repeatedly provided source code and other confidential information to Intel engineers so they could improve the performance of Intel’s chips.

Qualcomm does not provide direct evidence to support the allegations but does make reference to back and forth between Apple and Intel engineers that was found during discovery. Sources say the evidence includes not just email correspondence, but Apple’s source code development history and the code used in Intel-based phones.

Qualcomm is hoping its latest charges will be added to the current lawsuit against Apple and that the case will still be on track for its current court date of April.

Apple did not yet respond to CNBC’s requests for comment. Intel declined to comment. – CNBC

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