A CHINESE court has banned the sale and import of most iPhone models in a stunning decision amid the trade war between the United States and China.
The ban does not cover the new iPhone XS, iPhone XS Plus or iPhone XR, which were not yet available when Qualcomm filed its lawsuit. The phones covered by the ban make up about 10% to 15% of current iPhone sales in China, according to Daniel Ives, analyst at Wedbush Securities.
The court granted a pair of preliminary injunctions requested by Qualcomm, an American microchip maker. Qualcomm claims that Apple violates two of its patents in the iPhone 6S, iPhone 6S Plus, iPhone 7, iPhone 7 Plus, iPhone 8, iPhone 8 Plus and iPhone X. The patents allow people to edit and resize photos on a phone and to manage apps by using a touchscreen, according to Qualcomm.
The practical effect of the injunction is not yet clear. The ruling was announced publicly Monday but put into effect last week, but Apple said in a statement that all iPhone models remain available in China.
If Apple is violating the orders, Qualcomm will seek enforcement of the orders through enforcement tribunals that are part of the Chinese court system,” Don Rosenberg, general counsel for Qualcomm, said in a statement.
Apple accused Qualcomm of playing dirty tricks, including asserting a patent that had already been invalidated by international courts, and other patents that it had never before used. Apple said it will pursue a legal response in court.
“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.
Apple on Monday filed a request for the court to reconsider its decision. Qualcomm applauded the ruling, saying Apple owes it money for using its technology.
“We deeply value our relationships with customers, rarely resorting to the courts for assistance, but we also have an abiding belief in the need to protect intellectual property rights,” Don Rosenberg, general counsel for Qualcomm, said in a statement. “Apple continues to benefit from our intellectual property while refusing to compensate us.”
Investors were mostly unmoved. Apple’s (AAPL) stock closed up nearly 1% Monday. Qualcomm’s (QCOM) stock rose 2%.
The ruling was a surprise. Product injunctions are rarely granted, and China was widely expected to reject Qualcomm’s request for a ban.
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