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Qualcomm urges Chinese court to enforce Apple iPhone sales ban

Krystal Hu
Reporter

A week after Qualcomm won a preliminary injunction in China to ban the sale of older iPhone models, Apple is still selling them is usual. Qualcomm, which won a legal battle with Apple for now, is not going to let the iPhone maker get away with it.

The San Diego-based chipmaker has filed a motion of enforcement in the Chinese court, a Qualcomm spokesperson told Yahoo Finance on Wednesday. Qualcomm (QCOM) even submitted a video showing the purchase of an iPhone 8 from an Apple Store in Beijing to the court as evidence. While urging the enforcement of the existing ban, Qualcomm also seeks to expand the ban as it plans to use the same patents to file another lawsuit against Apple about its three new iPhone models, XS, XS Max and XR, according to the Financial Times.

Apple (AAPL) filed a request for “reconsideration” to the court on the sales ban on Monday and is awaiting the court’s decision. In China, there is no appeal process on injunctions and most “reconsideration” requests have been denied. Apple hasn’t responded to a request for comment.

The ban on selling iPhones in Apple’s second-largest market, if enforced, could have a major impact on the company’s bottom line. Apple has argued that the patent infringement only applies to its iOS 11 system and its latest operating system iOS 12 isn’t pertinent. However, the court ruling reviewed by Yahoo Finance doesn’t mention any specific version of iOS.

A man tries out a latest iPhone next to iPhone 8 and 8 Plus on display for sale at an Apple Store in Beijing, Tuesday, Dec. 11, 2018. (AP Photo/Andy Wong)

Lin Wei, an intellectual property lawyer at Beijing-based Dare & Sure Law Firm, said there are some legitimacies to Apple’s argument. “When Qualcomm sued Apple, it submitted an appraisal report, which is based on the mobile phone and system version reviewed by the agency at the time. Apple could argue the court decision is based on the old system. Now if you want to ban products with the new system, you should resue me or update your claims.”

In China, there is no independent governmental agency like the U.S. Marshall Services to enforce court rulings, but an internal department in the court, in this case, an intermediate court in China’s southeastern city of Fuzhou, is responsible for the enforcement. There are some questions over how the regional court is going to make sure four Apple subsidiaries outside the province abide by the ban.

While it’s unlikely that Apple will risk hurting its reputation and relationship with the Chinese government by publicly and blatantly ignoring the country’s court order, it could question the feasibility of enforcing the ban later, according to Lin.

“Apple has other ways to appeal during the procedure,” Li told Yahoo Finance. “Qualcomm wants to pressure Apple back to the negotiation table. So there is still a chance for them to reach an agreement.”

Krystal Hu covers technology and trade for Yahoo Finance. Follow her on Twitter.

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