Apple has threatened to pull the iPhone from the UK market over a £5 billion patent row although few people believe it will actually press the nuclear option.
According to a report by This is Money, if forced to pay the amount by the courts in the UK, the US company could quit its operations in the region.
Optis Cellular Technology, which owns globally-distributed patents relating to 3G and 4G LTE essential technologies (“a patent troll” to its enemies), sued Apple for infringement after the iPhone creator refused to pay a licence fee worth $7 billion for using ‘standardised’ smartphone technology in its products.
Apple and Optis already had one run-in last year, when a jury in Texas ordered the company to pay $506 million in royalties to sister company PanOptis for “willfully infringing patents covering 4G LTE technology.”
Ultimately, this was overturned on appeal leading pro-Apple commentators like idropnews to declare: “U.S. patent laws prevent patent holders from playing games with licensees or holding them hostage by charging exorbitant rates.”
UK law appears less lenient. The UK Supreme Court ruled last year that a UK court is able to set the rate Apple should pay for all of its iPhone patents worldwide, even though the court only considers the infringement of UK patents.
Apple faces a trial in July 2022 over how much it should pay. In the next couple weeks though, there will be a separate court case over whether Apple should make a legally-binding pledge to abide by the payout rate decided at that later trial.
According to This is Money, Apple could be banned from selling iPhones in the UK if it refuses to make undertakings to the court.
Calling the $5bn demand “commercially unacceptable” Apple's lawyers have said Apple should be able to reflect on the terms and decide whether commercially it is right to accept them or to leave the UK market.
Brexit Britain needs all the help it can get. In the unlikely event Apple were to pull out then 330,000 Apple store jobs are at risk. Idropnews further points out that the patents in question cover the 4G/LTE technologies that are used in every modern smartphone.
“If the UK courts were to find in favour of Optis in the case against Apple, it would almost certainly use that judgement as a precedent to go after every other smartphone marker for similar fees.”
Probably worthwhile viewing this as the latest skirmish of national governments versus big tech. Facebook, Microsoft and Amazon have been challenged for anti-competitive or tax-averse corporate behaviour. Elsewhere in media, governments across the EU, India, Australia and South Korea are introducing legislation aimed at curtailing the cultural and economic power of US-based streamers like Netflix.