Federal Jury has ordered Apple Inc. (NASDAQ:AAPL) and Broadcom to pay $837 million and $270 million respectively to Caltech. The verdict is after four years of appeal filed by the California Institute of Technology for infringing its four patents on Wi-Fi data transmission.
Caltech’s hypothetical estimate
If Apple and Broadcom struck a deal in 2010 with Caltech before using Broadcom Wi-Fi Chips in Apple devices, Caltech would have earned $1.1 billion revenues. The jury has agreed with the Caltech and ordered both the tech companies to pay $1.1 billion for infringement. According to Caltech, Apple would pay $1.40 for each device, whereas Broadcom pays 26 cents for licensing the patents to its 801.11ac and 802.11n chips.
Joseph J. Mueller, an attorney for Broadcom and Apple, said the patents are licensed only once. The inventor of Caltech has not even considering applying for the patent specifically for Wi-Fi. Co-inventor of Caltech has testified that he is considered to apply for patenting the technology until he heard that Broadcom and Apple might infringe them.
Apple argues not infringed the tech
The tech giant argued that it has not infringed the technology. It is using the off-the-shelf chips and should be sued. Jury has considered the arguments of Apple and Broadcom in its verdict. It said using Broadcom chips in Apple itself is an infringement. It is yet to be seen whether Caltech would sue other companies that have utilized the same technology.
Apple and Broadcom inked $15 billion deal
Broadcom won contracts worth $15 billion from Apple to supply wireless components. The new contract is in addition to the contracts signed in 2019 for RF ICs. Broadcom will receive payments of $15 billion in the next two years.
Broadcom is engaged in the sale of integrated Bluetooth, WiFi, and GPS chips and Radio Frequency Chips for use in smartphones. Apple will use the new chips purchased from Broadcom in the new devices in the next three and a half years. With this multiyear deal, Apple reduces dependence on other suppliers. Apple has designed and developed H series Bluetooth chips for use in Apple watches and AirPods.