A Chinese court has ordered a sales ban of some older Apple Inc iPhone models in China for violating two patents of chipmaker Qualcomm Inc, though intellectual property lawyers said enforcement of the ban was likely still a distant threat.
The case, brought by Qualcomm, is part of a global patent dispute between the two U.S. companies that includes dozens of lawsuits. It creates uncertainty over Apple's business in one of its biggest markets at a time when concerns over waning demand for new iPhones are battering its shares.
Apple said on Monday that all of its phone models remained on sale in mainland China and that it had filed a request for reconsideration with the court, the first step in a long appeal process that could end up at China's Supreme Court.
"It's incredibly unlikely, I'd say almost impossible (that Apple would have to stop sales)," said a Beijing-based IP lawyer who is not directly connected with the Qualcomm case but has worked with large U.S. tech firms.
"In all likelihood it will drag on for some time. It's worth keeping in mind that this is just one battle in a larger rift", he said, referring to the legal fight between Qualcomm and Apple that stretches from European courts to South Korea.
Qualcomm said in a statement the Fuzhou Intermediate People's Court in China found Apple infringed two patents held by the chipmaker and ordered an immediate ban on sales of older iPhone models, from the 6S through the X.
Apple said the trio of new models released in September were not part of the case.
"Qualcomm's effort to ban our products is another desperate move by a company whose illegal practices are under investigation by regulators around the world," Apple said.
Reuters couldn't immediately reach the court for comment.
China, Hong Kong and Taiwan are Apple's third-largest market, accounting for about one-fifth of Apple's $265.6 billion in sales in its most recent fiscal year.
Qualcomm, the biggest supplier of chips for mobile phones, filed its case in China in late 2017, arguing that Apple infringed patents on features related to resizing photographs and managing apps on a touch screen.
COURT BATTLE OVER DETAILS
In July, the same court banned the import of some microchips by Micron Technology Inc into China, citing violation of patents held by Taiwan's United Microelectronics Corp (UMC).
In the provincial Chinese court, which is separate from China's specialized intellectual property courts in Beijing, one party can request a ban on an opponent's product without the opponent getting a chance to present a defense.
IP lawyers said that an appeal process could take the case up to the Fujian provincial high court and then go as far as the Supreme Court in Beijing, a process that would likely take many months given the high-profile nature of the case. To enforce the ban, Qualcomm separately will have to file complaints in what is known as an enforcement tribunal, where Apple will also have a chance to appeal.
Yiqiang Li, a patent lawyer at Faegre Baker Daniels, said the Chinese injunction could put pressure on Apple to reach a global settlement with Qualcomm.
Apple shares rose less than 1 percent to $169.60, recovering from an early drop when it became clear phones were still on sale, and Qualcomm stock rose 2.2 percent to $57.24.
TRADE WAR IMPACT?
The ruling comes as Beijing and Washington are locked in a tense trade dispute. The two sides have agreed to trade negotiations that must be concluded by March 1. While IP lawyers said the case wasn't directly political, most agreed it could be drawn into broader Sino-U.S. trade tensions, where technology and IP have been a core focus.
The specific iPhone models affected by the preliminary ruling in China are the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X. Erick Robinson, a patent lawyer in Beijing and former Qualcomm lawyer, said that while Chinese courts had become fairer in recent years, nationalism could sometimes be a factor in rulings.
Qualcomm is a key technology vendor to China's rising smart phone brands such as Xiaomi Corp, Oppo, Vivo and OnePlus, while Apple competes directly against Huawei Technologies Co Ltd [HWT.UL], China's top homegrown maker of premium-priced smartphones, whose CFO was arrested this month for allegedly violating U.S. sanctions.
"There is probably a political play here. Apple is a direct competitor to the biggest companies in China, whereas Qualcomm is a supplier," Robinson said.
Qualcomm officials said tensions between the two nations had no bearing on the ruling. The company has had its share of troubles in China, from an unfavorable 2014 antitrust ruling to regulatory limbo that doomed its $44 billion bid for Dutch chipmaker NXP Semiconductors.
Zimbabwe's President Emmerson Mnangagwa on Friday laid the foundation stone for huge new parliament to be built with Chinese funds outside the capital Harare.
The imposing circular complex will be built over 32 months by the Shanghai Construction group at Mount Hampden, 18 kilometres north-west of Harare, the Zimbabwe Broadcasting Corporation reported. Officials say the current colonial-era parliamentary building in the city centre is too small to accommodate lawmakers.
Mnangagwa said at the ceremony that China had provided a "grant, not a loan, to build a new parliament", without giving a figure.
"Other facilities like banks, hotels will be built around this place," Mnangagwa said adding that a "modern, smart city" was planned.
Mnangagwa took over from long-time ruler Robert Mugabe who was ousted by the military in November 2017.
He has vowed to revive Zimbabwe's economy that has been in ruins for nearly two decades.
China has funded and provided loans for many infrastructure projects across Africa in recent years, ranging from roads and power plants to sports stadiums and government institutions.
Critics say China's increasing sway over the continent undermines democracy and sovereignty.
President Donald Trump is succeeding in making China pay most of the cost of his trade war.
That’s the conclusion of a new paper from EconPol Europe, a network of researchers in the European Union. U.S. companies and consumers will only pay 4.5 percent more after the nation imposed 25 percent tariffs on $250 billion of Chinese goods, and the other 20.5 percent toll will fall on Chinese producers, according to authors Benedikt Zoller-Rydzek and Gabriel Felbermayr.
The trade dispute between the U.S. and China is showing slim hope of abating as the leaders of the two nations prepare to meet in Argentina this month. According to Zoller-Rydzek and Felbermayr, the tariffs will do what Trump has longed for: They will cut American imports of affected Chinese goods by more than a third, and lower the bilateral trade deficit by 17 percent.
The Trump administration selected products with the highest “price elasticity,” or high availability of substitutes, according to Zoller-Rydzek and Felbermayr. The Chinese products hit by Trump’s tariffs can mostly be replaced by other goods, forcing exporters to cut selling prices to keep buyers.
“Through its strategic choice of Chinese products, the U.S. government was not only able to minimize the negative effects on U.S. consumers and firms, but also to create substantial net welfare gains in the U.S.,” the researchers wrote.
The U.S. is due to raise duties on the largest $200 billion tranche of goods to 25 percent from 10 percent on Jan. 1. In retaliation, China has slapped tariffs on $110 billion in imports from the U.S. and effectively shut off its purchase of key American agricultural exports including soybeans.
With the economic costs shifted to China, the U.S. levies will lead to a $18.4 billion net gain for the American government, the researchers wrote.
“As the trade conflict escalates, however, the U.S. administration may not be able to restrict its selection to products with high import elasticities,” they wrote. “And U.S. welfare might decrease as more of the tariff incidence falls on U.S. consumers.”
The longest suspension bridge in Africa, the cross-sea Maputo Bay Bridge with its link roads in Mozambique, was officially open to traffic on Saturday.
The three-kilometer twin-tower suspension bridge extends with a main span of 680 meters over the Maputo Bay of the Indian Ocean. The bridge is part of the Maputo Bridge and Link Roads project built by the China Road and Bridge Corporation, with Chinese financing and standards.
Speaking at the inauguration, President of Mozambique Filipe Jacinto Nyusi said that the project will facilitate transport and connectivity between the country with other parts of the African continent.
The president expressed his gratitude to the government and friendly people of China for the support in funding this infrastructure and care given to the project.
Nyusi also highlighted that the bridge has fulfilled the wish of the people, with its potential to contribute to the sectors of tourism and logistics, the national economy and the global idea for regional integration.
Chinese Ambassador Su Jian said the project is a remarkable mark in the development process of Mozambique and it has potential to promote social and economic development by forming a transport artery from south to north across the country.
The ambassador also noted the project's domestic contribution, including jobs creation, transfer of technology to local people and auxiliary projects such as building classrooms for local schools, houses for resettled families and actions for environment protection.
Maputo-Catembe Bridge impact on South Africa
The Maputo-Catembe Bridge is guaranteed to cut travel time between Maputo in Mozambique and KwaZulu-Natal in South Africa.
KwaZulu-Natal’s Department of Economic Development, Tourism and Environmental Affairs confirmed that this development, which involved South African engineers, would stimulate trade and tourism between the two countries, saying:
“The road will see the travel time between Maputo to Kosi Bay, KwaZulu-Natal’s East coast border post, drastically reduced, from 6 hours to 90 minutes.
This is a huge achievement. It will boost trade and tourism between South Africa and Mozambique.”