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Apple Potential Patent Violation: Supplier Imagination Technologies Launches Dispute Process With iPhone Maker

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Apple is having trouble with yet another supplier. Imagination Technologies said Thursday it launched a “dispute resolution procedure” with Apple after the companies were unable to resolve a licensing disagreement.

In April, Apple ended its contract with Imagination Technologies, which supplied graphics-related components. The British firm supplied Apple with its PowerVR graphics processing units (GPUs), which were integrated in every iPhone. Imagination receives royalties from every sale of an Apple gadget that sports its designs, including the iPhone and iPad.

Read: Qualcomm Wants To Stop Apple From Importing iPhones Into US, Report Says

Imagination said Thursday it failed to make satisfactory progress with Apple on an alternative commercial arrangement for the current license and royalty agreement.

“Imagination has, therefore, commenced the dispute resolution procedure under the license agreement with a view to reaching an agreement through a more structured process,” the firm said.

Imagination Technologies said Apple would no longer use Imagination’s processing designs in 15 months to two years time, according to Reuters. Apple is Imagination Technologies’ biggest customer, making up about half of its revenue.

Apple notified the British company it was developing its own graphics processors for iOS devices last month, causing the firm’s shares to drop. However, Imagination Technologies said last month it doubted Apple could go on without violating its patents.

“Apple has not presented any evidence to substantiate its assertion that it will no longer require Imagination’s technology, without violating Imagination’s patents, intellectual property and confidential information,” Imagination Technologies said in a statement last month. “This evidence has been requested by Imagination but Apple has declined to provide it.”

Read: Apple Vs. Qualcomm: Apple Ceases Royalty Payments Amid Lawsuits, Qualcomm Stock Price Plummets

The company added it believes it “would be extremely challenging to design a brand new GPU architecture from basics without infringing its intellectual property rights. Accordingly, Imagination does not accept Apple’s assertions.”

Imagination Technologies also said Thursday it will be selling its MIPS embedded processor technology and mobile connectivity Ensigma units.

Apple Cutting Its Need Of Suppliers For Products

Apple recently has been looking to get rid of its dependence on suppliers. The company reportedly is developing its own power management chips, cutting the need to use chips from Dialog Semiconductor. Karsten Iltgen, an analyst at Bankhaus Lampe, said Apple could have its own power chips ready by 2019’s iPhone generations, adding the iPhone seller is working on facilities in the U.S. and Germany. Engineers from Dialog have been switching over to Apple, the report added. Dialog Semiconductor saw its stock plunge by 20 percent in Frankfurt after the news.

Apple is also designing its own smartphone processors, which will cut its dependence on Qualcomm or other chip suppliers. Apple is currently in a legal battle with Qualcomm after hitting the company with lawsuits. Qualcomm countersued last month, saying the iPhone’s success would not have been possible without the chip supplier’s technologies.

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