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Case 3:17-cv-01010-WQH-JMA Document 35 Filed 05/24/17 PageID.

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1 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
2 echesler@cravath.com
CRAVATH, SWAINE & MOORE LLP
3 825 Eighth Avenue
New York, NY 10019
4 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
5
David A. Nelson (pro hac vice)
6 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
7 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
8 Chicago, Illinois 60661
Telephone: (312) 705-7400
9 Facsimile: (312) 705-7401
10 Karen P. Hewitt (State Bar No. 145309)
kphewitt@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, CA 92121.3134
Telephone: (858) 314-1200
13 Facsimile: (844) 345-3178
14 [Additional counsel identified on signature page]
15 Attorneys for Plaintiff
QUALCOMM INCORPORATED
16
17 UNITED STATES DISTRICT COURT
18 SOUTHERN DISTRICT OF CALIFORNIA
19 QUALCOMM INCORPORATED, NO. 3:17-CV-1010-WQH-JMA
20 Plaintiff, PLAINTIFF’S NOTICE OF
MOTION AND MOTION FOR
21 v. PRELIMINARY INJUNCTION
22 COMPAL ELECTRONICS, INC., FIH Date: June 26, 2017
MOBILE LTD., HON HAI
23 PRECISION INDUSTRY CO., LTD, Courtroom: 14B
PEGATRON CORPORATION, and
24 WISTRON CORPORATION, Judge: Hon. William Q. Hayes
25 Defendants. No Oral Argument Unless Requested
by the Court.
26
27 (ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28
PLAINTIFF’S NOTICE OF MOTION FOR CASE NO. 3:17-CV-1010-WQH-JMA
PRELIMINARY INJUNCTION
Case 3:17-cv-01010-WQH-JMA Document 35 Filed 05/24/17 PageID.195 Page 2 of 4

1 PLEASE TAKE NOTICE THAT on June 26, 2017 in the above-referenced
2 Court, Plaintiff Qualcomm Incorporated (“Qualcomm”) will and hereby does move
3 this Court pursuant to Federal Rule of Civil Procedure 65 for a preliminary
4 injunction enjoining Compal Electronics Inc., FIH Mobile Ltd., Hon Hai Precision
5 Industry Co., Ltd., Pegatron Corporation, and Wistron Corporation from violating
6 their license agreements during the pendency of this litigation.
7 A preliminary injunction is necessary because Qualcomm is likely to prevail
8 on the merits in this breach of contract action, Qualcomm will continue to suffer
9 irreparable harm in the absence of an injunction, the balance of harms weighs
10 strongly in favor of Qualcomm, and the public interest supports the entry of a
11 preliminary injunction in the circumstances of this case. This motion is based upon
12 this Notice of Motion and Motion for Preliminary Injunction, the accompanying
13 Memorandum of Points and Authorities in Support of Plaintiff Qualcomm
14 Incorporated’s Motion for Preliminary Injunction, the supporting Declarations of
15 Alex Rogers, Abbaseh Samimi, James Cathey, Vanessa A. Lavely, and the exhibits
16 thereto, as well as the argument of counsel, the files and records in this action, and
17 such oral and documentary evidence as may be presented to the Court.
18 WHEREFORE, Qualcomm respectfully requests that this Court preliminarily
19 enjoin defendants Compal Electronics Inc., FIH Mobile Ltd., Hon Hai Precision
20 Industry Co., Ltd., Pegatron Corporation, and Wistron Corporation from violating
21 the terms and conditions of their license agreements during the pendency of this
22 litigation.
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PLAINTIFF’S NOTICE OF MOTION FOR CASE NO. 3:17-CV-1010-WQH-JMA
PRELIMINARY INJUNCTION -2-
Case 3:17-cv-01010-WQH-JMA Document 35 Filed 05/24/17 PageID.196 Page 3 of 4

1 Dated: May 24, 2017 Respectfully submitted,
2
3 By: /s/ Evan R. Chesler
4
CRAVATH, SWAINE & MOORE LLP
5 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
6 echesler@cravath.com
Keith R. Hummel (pro hac vice)
7 (N.Y. Bar No. 2430668)
khummel@cravath.com
8 Richard J. Stark (pro hac vice)
(N.Y. Bar No. 2472603)
9 rstark@cravath.com
Antony L. Ryan (pro hac vice)
10 (N.Y. Bar No. 2784817)
aryan@cravath.com
11 Gary A. Bornstein (pro hac vice)
(N.Y. Bar No. 2916815)
12 gbornstein@cravath.com
J. Wesley Earnhardt (pro hac vice)
13 (N.Y. Bar No. 4331609)
wearnhardt@cravath.com
14 Yonatan Even (pro hac vice)
(N.Y. Bar No. 4339651 )
15 yeven@cravath.com
Vanessa A. Lavely (pro hac vice)
16 (N.Y. Bar No. 4867412)
vlavely@cravath.com
17 Worldwide Plaza, 825 Eighth Avenue
New York, NY 10019
18 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
19
QUINN EMANUEL URQUHART &
20 SULLIVAN, LLP
David A. Nelson (pro hac vice)
21 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
22 Stephen Swedlow (pro hac vice)
(Ill. Bar No. 6234550)
23 stephenswedlow@quinnemanuel.com
500 West Madison St., Suite 2450
24 Chicago, Illinois 60661
Telephone: (312) 705-7400
25 Facsimile: (312) 705-7401
26
27
28
PLAINTIFF’S NOTICE OF MOTION FOR CASE NO. 3:17-CV-1010-WQH-JMA
PRELIMINARY INJUNCTION -3-
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1 Alexander Rudis (pro hac vice)
2 (N.Y. Bar No. 4232591)
alexanderrudis@quinnemanuel.com
3 51 Madison Ave., 22nd Floor
New York, New York 10010
4 Telephone: (212) 849-7000
Facsimile: (212) 849-7100
5
Sean S. Pak (SBN 219032)
6 seanpak@quinnemanuel.com
50 California St., 22nd Floor
7 San Francisco, CA 94111
Telephone: (415) 875-6600
8 Facsimile: (415) 875-6700
9
JONES DAY
10 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
11 Randall E. Kay (SBN 149369)
rekay@jonesday.com
12 4655 Executive Drive, Suite 1500
San Diego, California 92121
13 Telephone: (858) 314-1200
Facsimile: (858) 345-3178
14
Attorneys for Plaintiff
15 QUALCOMM INCORPORATED
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PLAINTIFF’S NOTICE OF MOTION FOR CASE NO. 3:17-CV-1010-WQH-JMA
PRELIMINARY INJUNCTION -4-
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.198 Page 1 of 32

1 Evan R. Chesler (pro hac vice) (N.Y. Bar No. 1475722)
echesler@cravath.com
2 CRAVATH, SWAINE & MOORE LLP
825 Eighth Avenue
3 New York, NY 10019
Telephone: (212) 474-1000
4 Facsimile: (212) 474-3700
5 David A. Nelson (pro hac vice) (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
6 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
7 Chicago, Illinois 60661
Telephone: (312) 705-7400
8 Facsimile: (312) 705-7401
9 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
10 JONES DAY
4655 Executive Drive, Suite 1500
11 San Diego, California 92121
Telephone: (858) 314-1200
12 Facsimile: (858) 345-3178
13 [Additional counsel identified on signature page]
14 Attorneys for Plaintiff
QUALCOMM INCORPORATED
15
UNITED STATES DISTRICT COURT
16
SOUTHERN DISTRICT OF CALIFORNIA
17
18 QUALCOMM INCORPORATED, Case No. 3:17-CV-01010-WQH-JMA
Plaintiff, REDACTED MEMORANDUM
19
v. OF POINTS AND
20 AUTHORITIES IN SUPPORT
COMPAL ELECTRONICS, INC., OF PLAINTIFF QUALCOMM
21 FIH MOBILE LTD., HON HAI INCORPORATED’S MOTION
PRECISION INDUSTRY CO., LTD, FOR PRELIMINARY
22 PEGATRON CORPORATION, and INJUNCTION
WISTRON CORPORATION,
23 Date: June 26, 2017
24 Defendants. Courtroom: 14B
Judge: Hon. William Q. Hayes
25
No Oral Argument Unless Requested
26 by the Court.
27
(ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28 QUALCOMM’S MEMORANDUM OF POINTS CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.199 Page 2 of 32

1 TABLE OF CONTENTS

2 Page
3 TABLE OF AUTHORITIES ................................................................................ ii 
4 INTRODUCTION ................................................................................................ 1 
5 FACTUAL BACKGROUND ............................................................................... 5 
A. The Parties and Their Contractual Relationships. .............................. 5 
6
B. ................. 8 
7
ARGUMENT.......................................................................................................11 
8
I. Applicable Legal Standards. ......................................................................11 
9 II. Qualcomm Is Highly Likely to Succeed on the Merits. ..............................12 
10 A. Qualcomm Has a Valid Contract with Each Defendant. ...................12 
11 B. Defendants Have Breached Their License Agreements. ...................12 
12 C. Qualcomm Has Performed Its Obligations. ......................................13 
13 D. Qualcomm Is Entitled to Specific Performance. ...............................13 
III. Qualcomm Will Suffer Irreparable Harm Absent a Preliminary
14 Injunction...................................................................................................16 
15 A. Indefinite Non-Payment of Royalties Is Irreparable Harm. ..............16 
16 B. ...............17 
17 1. Damage to Goodwill, Reputation and Customer
Relations. ...............................................................................17 
18
2. Threatened Disruption
19 Program and a Multitude of Lawsuits. ...................................20 
20 3. Decreased Competitive Advantage and Intellectual
Property Development Due to Lost R&D Opportunities. .......22 
21
C. Difficulties in Collecting Future Damages Awards from
22 Foreign Defendants. .........................................................................23 
23 IV. The Balance of Hardships Weighs Decidedly in Qualc ........24 
24 V. The Public Interest Supports a Preliminary Injunction. ..............................25 
25 CONCLUSION ...................................................................................................25 
26
27
28
QUALCOMM S MEMORANDUM OF POINTS -i- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.200 Page 3 of 32

1 TABLE OF AUTHORITIES
Cases Page(s)
2
3 Aevoe Corp. v. Shenzhen Membrane Precise Electron Ltd.,
No. 2:12-CV-00054-GMN, 2012 WL 1532308 (D. Nev. May 1,
4 2012) .............................................................................................................. 23
5 Alliance for the Wild Rockies v. Cottrell,
632 F.3d 1127 (9th Cir. 2011) ............................................................. 11, 16, 25
6
, Inc.,
7 No. C 10-3428, 2013 WL 557102 (N.D. Cal. Feb. 12, 2013) .......................... 25
8 Brown v. Grimes,
9 120 Cal. Rptr. 3d 893 (Ct. App. 2011) ............................................................ 14
Chemular, Inc. v. Ford,
10
No. S-CV-0039036, 2017 WL 1510025 (Cal. Super. Ct. Apr. 6,
11 2017) ........................................................................................................ 18, 22
12 ,
107 F.2d 27 (3d Cir. 1939) .............................................................................. 25
13
Commonwealth Sci. & Indus. Research Org. v. Buffalo Tech. Inc.,
14 492 F. Supp. 2d 600 (E.D. Tex. 2007)................................................. 21, 22, 23
15 Cordelia Lighting, Inc. v. Zhejiang Yankon Grp. Co.,
No. EDCV14881JGBSPX, 2015 WL 12656241 (C.D. Cal. Apr.
16
27, 2015)............................................................................................. 22, 23, 24
17 Disney Enters., Inc. v. VidAngel, Inc.,
18 No. 216CV04109ABPLAX, 2016 WL 8292206, at *11 (C.D. Cal.
Dec. 12, 2016) ................................................................................................ 18
19
Donahue Schriber Realty Grp., Inc. v. Nu Creation Outreach,
20 181 Cal. Rptr. 3d 577 (Ct. App. 2014) ...................................................... 16, 17
21 dge, Inc.,
100 F. Supp. 2d 1058 (N.D. Cal. 2000) ........................................................... 18
22
Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,
23 915 F. Supp. 2d 1138 (C.D. Cal. 2012) ............................................... 18, 19, 20
24 Greater Yellowstone Coal. v. Timchak,
25 .................................................................... 12
Hand & Nail Harmony, Inc. v. ABC Nail & Spa Prods.,
26
No. SACV160969 ..................................................................................... 18, 19
27
28
QUALCOMM S MEMORANDUM OF POINTS -ii- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 ,
634 F.2d 1197 (9th Cir. 1980) ......................................................................... 16
2 Lansmont Corp. v. SPX Corp.,
3 No. 5:10-CV-05860 EJD, 2012 WL 6096674 (N.D. Cal. Dec. 7,
2012) .................................................................................................. 12, 14, 15
4
Leiva-Perez v. Holder,
5 640 F.3d 962 (9th Cir. 2011) ..................................................................... 11, 16
6 ,
107 Cal. Rptr. 2d 645 (Ct. App. 2001) ............................................................ 12
7
Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd.,
8 518 F. Supp. 2d 1197 (C.D. Cal. 2007) ..................................................... 17, 21
9 NaturaLawn of Am., Inc. v. W. Grp., LLC,
10 484 F. Supp. 2d 392 (D. Md. 2007)................................................................. 20
PPG Indus., Inc. v. Guardian Indus. Corp.,
11
75 F.3d 1558 (Fed. Cir. 1996) ......................................................................... 25
12 Pharmacia & Upjohn Co. v. Ranbaxy Pharm., Inc.,
13 ........................................................ 22, 23, 24
14 Reuland Elec. Co. v. Burgi E ,
No. CV1309499SJOJCX, 2015 WL 12683953, at *12 (C.D. Cal.
15
Apr. 24, 2015)................................................................................................. 15
16 Right Site Coal v. Los Angeles Unified Sch. Dist.,
17 160 Cal. App. 4th 336, 338-39 (2008) ............................................................. 11
18 Rosendahl Corp. v. H. K. Ferguson Co.,
27 Cal. Rptr. 56 (Ct. App. 1962) ..................................................................... 13
19
Tamarind Lithography Workshop, Inc. v. Sanders,
20 193 Cal. Rptr. 409 (Ct. App. 1983) ................................................................. 15
21 Tanner Motor Livery, Ltd. v. Avis, Inc.,
22 316 F.2d 804 (9th Cir. 1963) ........................................................................... 24
Vanda Pharm. Inc. v. Roxane Labs., Inc.,
23
203 F. Supp. 3d 412, 436 (D. Del. 2016)......................................................... 22
24 ,
25 824 F. Supp. 2d 1003 (C.D. Cal. 2011) ..................................................... 18, 20
26 Winter v. Natural Res. Def. Council, Inc.,
555 U.S. 7 (2008)............................................................................................ 11
27
28
QUALCOMM S MEMORANDUM OF POINTS -iii- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 Statutes & Rules

2 Cal. Civ. Proc. Code § 526 ................................................................................... 21
3
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QUALCOMM S MEMORANDUM OF POINTS -iv- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 INTRODUCTION
2 Plaintiff brings this motion for
3 preliminary injunctive relief to prevent the irreparable harm it otherwise would
4
5 Apple has instructed Defendants to stop paying billions of dollars in
6 royalties to Qualcomm. Qualcomm is highly likely to succeed on the merits of its
7 claims against Defendants, and the preliminary relief that Qualcomm seeks is
8 nothing more than maintaining the long-standing status quo. Moreover, without
9 preliminary relief, Qualcomm will suffer irreparable harm, including (i) ongoing,
10 indefinite non-payment of very large amounts of royalties; (ii) injury to its core
11 licensing business, including loss of goodwill and harm to its commercial
12 relationships with other licensees; (iii) less cash on hand for ongoing research and
13 development; and (iv) the risk of an unenforceable judgment against foreign
14 Defendants. On the other hand, Defendants face no hardship from preliminary
15 relief they agreed many years ago to precisely the relief that Qualcomm now
16 seeks, and Apple will indemnify them for any payments they are ordered to make.
17 The balance of hardships weigh
18 Qualcomm is the leading innovator in cellular communications and
19 other advanced mobile technologies. For nearly three decades, Qualcomm has
20 created and brought to market core technologies that enable 2G, 3G, and 4G
21 systems and smartphones and is now leading the industry to 5G. Qualcomm owns
22 luable patent portfolios, including thousands of patents
23 that are technically essential to various cellular standards (cellular standard-
24 essential patents, or ). Qualcomm also owns thousands of patents that,
25 while not technically essential to any cellular standard, are essential to other
26 industry standards ( non-cellular SEPs ) or are not technically essential to any
27 industry standard (non-standard- ) but are highly
28
QUALCOMM S MEMORANDUM OF POINTS -1- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 valuable and practiced by most cellular devices.
2 Defendants are four non-U.S. electronics manufacturers, each of which
3 makes and sells wireless products (such as phones and tablets) that comply with
4 3G and 4G LTE cellular standards. As a result, each Defendant makes and sells
5 devices that necessarily practice Qualcomm cellular SEPs. Those devices also
6 practice many Qualcomm NEPs. E
7 intellectual property, and each entered into a license agreement with Qualcomm
8 many years ago. The license agreements are straightforward and unambiguous.
9 In exchange for consideration, including quarterly royalty payments to Qualcomm
10 (calculated as a percentage of the net selling price, or NSP, of each device sold by
11 Defendants), Qualcomm grants Defendants the right to use certain Qualcomm
12 intellectual property to manufacture and sell cellular devices. Each quarter,
13 Defendants send Qualcomm royalty reports detailing the amount of royalties owed
14 for that quarter and, until now, each quarter Defendants have followed through
15 and paid the royalties reported and owed.
16 Defendants do not sell many devices to consumers under their own brands;
17 rather, they sell the vast majority of their devices to other companies that rebrand
18 and then resell the devices to consumers. Apple is each Defendant largest
19 cellular customer. Apple does not manufacture any cellular devices itself. Rather,
20 Apple has hired Defendants to manufacture the iPhones and iPads it designs.
21 Defendants manufacture for Apple virtually every iPhone and iPad sold
22 worldwide. Each Defendant also manufactures cellular devices for other
23 companies, such as . license agreements require them
24 to pay royalties to Qualcomm on Apple and non-Apple devices alike.
25 Apple does not have a patent license from Qualcomm to make and sell
26 iPhones or iPads. Instead, s
27 agreements and has, until now, advanced
28
QUALCOMM S MEMORANDUM OF POINTS -2- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 payments to Defendants each quarter for the royalties that Defendants owe
2 to Qualcomm for the manufacture and sale of Apple products. Apple knows that
3 it relies s. In fact,
4
5
6
7
8 For many years, the above-described arrangement worked well. Apple paid
9 Defendants the royalties owed to Qualcomm on Apple devices, and Defendants
10 remitted those payments to Qualcomm. Defendants consistently paid royalties to
11 Qualcomm each quarter for Apple products (and non-Apple products).
12 That all changed at the end of 2016. As a result of a dispute between Apple
13 and Qualcomm concerning a different agreement to which Defendants are not
14 parties (the Business Cooperation and Patent Ag
15 royalties equal to the
16 amount that Apple (incorrectly) claims that Qualcomm owes to Apple under the
17 Cooperation Agreement. Apple did pay some royalties due to Qualcomm for sales
18 during the fourth quarter of 2016, only deducting off the top the specific amount
19 at issue in the Cooperation Agreement dispute between Apple and Qualcomm.
20 In so doing, Apple demonstrated that it was willing to use Defendants to try to
21 gain leve
22 Qualcomm the same amount Apple withheld from them in total, nearly
23 $1 billion.
24 agreements, it appeared to be a one-time event arising from the Cooperation
25 Agreement dispute.
26 That turned out not to be the case. Toward the end of January 2017,
27 Apple (i) filed lengthy and wide-ranging complaints around the world challenging
28
QUALCOMM S MEMORANDUM OF POINTS -3- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 (ii) refused to pay Defendants
2 any Qualcomm royalties; (iii) instructed Defendants not to pay any royalties to
3 Qualcomm, at all, for Apple products, withholding from Qualcomm hundreds of
4 millions of dollars in royalties for sales during the first quarter of 2017 alone; and
5 (iv) agreed to indemnify Defendants against claims that Qualcomm might assert.
6 Moreover, Apple stated that it will continue to withhold all Qualcomm
7 royalties contrary to nearly a decade of past practice and with the deliberate
8 purpose of forcing the Defendants to violate their license agreements until
9 t
10 Qualcomm indefinitely; it has virtually unlimited resources (more than
11 $256 billion in cash reserves) and already has filed multiple cases against
12 Qualcomm not just in this Court, but around the world. And when those cases
13 end, Apple can file more cases. What Apple really means is: Apple will continue
14 to withhold Qualcomm royalties until Apple feels like paying them again, or until
15 Qualcomm surrenders .
16 ch severe, immediate,
17 and permanent harm on Qualcomm that Qualcomm will be forced to agree to
18 licensing demands without first having its day in court.
19 Having filed a complaint with this Court challenging certain aspects of
20 licensing business, Apple is now unwilling to wait for that complaint
21 to be heard. It has chosen commercial ransom over judicial process. At bottom,
22 Apple seeks to pay less than fair value
23 property; it has now shown that it will seek to achieve that result through coercion
24 enabled by its enormous market power.
25 But .
26 Defendants know this. They have consistently paid Qualcomm royalties since the
27 first license agreement was entered into nearly 17 years ago and, tellingly,
28
QUALCOMM S MEMORANDUM OF POINTS -4- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 continue to pay Qualcomm royalties for non-Apple devices today, under the very
2 same license agreements that govern the Apple products.
3 Qualcomm is in an untenable position. Defendants are manufacturing and
4 selling Apple devices using Qualcomm’s patents under a valid license; Apple is
5 making extraordinary profits selling those Qualcomm-enabled devices to
6 consumers; meanwhile, Qualcomm is receiving no royalties for the use of its
7 patented technology in those Apple devices; and
8
9 .
10 That harm will continue indefinitely. Qualcomm’s core business operations
11 will suffer ongoing injury, and its licensing business may be called into question
12 as Apple takes a free ride while other licensees watch. Situations like this are why
13 courts have equitable powers. The proper remedy is to maintain the status quo by
14 immediately enjoining Defendants from violating the terms and conditions of their
15 license agreements during the pendency of this litigation.
16 FACTUAL BACKGROUND
17 A. The Parties and Their Contractual Relationships.
18 Since its founding in 1985, Qualcomm has been designing, developing,
19 and improving cellular communications systems, networks, and products—
20 successfully inventing numerous core technologies that have transformed how the
21 world communicates. Qualcomm invented technologies at the heart of 2G, 3G
22 and 4G cellular communications, and is leading the industry to 5G. Every modern
23 cell phone relies upon important Qualcomm technology and practices numerous
24 Qualcomm patents.
25 Qualcomm has invested more than $43 billion in research and development.
26 From 2010 to the present, Qualcomm consistently spent more than 20% of its
27 revenue per year on R&D; in 2016 alone, Qualcomm spent $5 billion on R&D.
28 QUALCOMM’S MEMORANDUM OF POINTS -5- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 (Ex. 31 at 14.) Qualcomm now owns more than 130,000 issued patents and patent
2 applications relating to cellular and other advanced technologies, including
3 thousands of cellular and non-cellular SEPs and NEPs. Qualcomm voluntarily
4 licensed its patents to device manufacturers, including Defendants.
5 Separate from licensing business, Qualcomm Technologies,
6 Inc. QTI , designs industry-leading components, such as cellular baseband
7 chips
8 associated software is licensed) for use in making and operating cellular devices.
9 Each Defendant1 like virtually every other major cellular device
10 manufacturer in the world has a royalty-bearing license agreement with
11 Qualcomm. (Lavely Decl. s ) 1-5.) Defendants have enjoyed the
12 benefits of, and have paid royalties under, those agreements for many years now:
13 Compal for nearly 15 years; Foxconn for more than 11 years; Pegatron for nearly
14 7 years; and Wistron for more than 3 years. (Samimi Decl. ¶¶ 9-12.)
15 manufactured by
16 Defendants, including Apple devices, would infringe numerous Qualcomm
17 patents. it the right to manufacture
18 and sell certain cellular devices that practice certain Qualcomm intellectual
19 property, including thousands of Qualcomm cellular and non-cellular SEPs and
20 NEPs. (Exs. 1-2, 4-5 §§ 1, 5.) In exchange for the right to use
21 intellectual property, each Defendant agrees to pay royalties to Qualcomm on each
22 device it sells. Specifically,
23
24
25
26
1
27 Defendants are FIH Mobile Ltd. and Hon Hai Precision Industry Co., Ltd., (together,
.
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QUALCOMM S MEMORANDUM OF POINTS -6- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
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1 in no way
2 contingent or conditioned on whether Apple pays Defendants.
3 Following execution of their respective license agreements, Defendants
4 began manufacturing cellular devices under the agreements for many of the
5 suppliers of wireless handsets and tablets, including
6 . Each Defendant manufactured non-Apple products before manufacturing
7 Apple products. (Samimi Decl. ¶¶ 9-12.) Compal, for example, manufactured
8 (and paid royalties on) non-Apple products for 12 years before manufacturing
9 Apple products. (Id. ¶ 9.) The material terms of the license agreements remained
10 consistent before and after Apple became a customer. (Id. ¶ 13.)
11 Apple was a late-comer to the cellular industry. In 2008, Apple released its
12 first 3G iPhone, which used a cellular patented
13 technologies. Apple did not take a direct license from Qualcomm. Instead, Apple
14 outsourced the manufacturing of its iPhones and iPads to Defendants, relying on
15 their existing license agreements with Qualcomm. (Rogers Decl. ¶ 6.) Foxconn
16 began manufacturing iPhones (and later iPads) for Apple in 2007; Pegatron began
17 manufacturing iPhones for Apple in 2011; and both Wistron and Compal began
18 manufacturing Apple devices (iPhones by Wistron; iPads by Compal) in 2014.
19 (Samimi Decl. ¶¶ 8-11.) Today, Defendants manufacture virtually every iPhone
20 and iPad worldwide, as well as many non-Apple devices.
21 Apple first began procuring Qualcomm chips and licensing associated
22 software for use in its fourth-generation iPhone, released in 2011. Qualcomm
23 faced fierce competition for those (and later) sales. Taking advantage of that
24 competition, in 2015,
25
26
27
28
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1
2
3
4 For many years, until the fourth quarter of 2016, each Defendant
5 consistently paid royalties under its license agreement. (Samimi Decl. ¶ 15.) For
6 Apple devices, Defendants received payments from Apple and, in turn, paid the
7 royalties due to Qualcomm. Based on this lengthy course of dealing, Defendants
8 and Apple know that Defendan royalty payments to
9 Qualcomm, and by their consistent payment of those royalties, for years and
10 without protest, they have acknowledged the validity of those obligations.
11 B. .
12 On January 20, 2017, Apple sued Qualcomm in this Court. In rapid
13 succession, Apple then filed other lawsuits against Qualcomm in the United
14 Kingdom, China, Japan, and Taiwan.
15 In its January 20 complaint, Apple the wealthiest company in the world,
16 with a quarter of a trillion dollars in cash reserves claimed that
17 from Defendants a substantial portion of Q4 2016
18 royalties due to Qualcomm. Specifically, Apple engaged in unlawful self-help by
19 withholding from Defendants the exact amount it claims Qualcomm owes under
20 the Cooperation Agreement. Apple paid to Defendants the amounts owed in
21 royalties for Q4 2016 sales that exceeded the amount that Apple claims it is owed
22 by Qualcomm under the Cooperation Agreement. (Samimi Decl. ¶ 16.) In other
23 words, for Q4 2016 sales, Apple reimbursed Defendants for some royalties owed
24
25 2

26
27
28
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1 to Qualcomm under licensing agreements, withholding only the
2 (significant) amount at issue in the Cooperation Agreement dispute, despite Apple
3 already having filed a complaint challenging certain aspects of Qualcomm
4 licensing practices.
5 As Apple intended, Defendants withheld from Qualcomm the same amount
6 of Q4 2016 royalties that Apple withheld from them: Foxconn withheld more
7 than ; Pegatron withheld more than ; and Wistron
8 withheld more than . (Id. ¶¶ 17-19.) Qualcomm made payment
9 demands to these Defendants for Q4 2016 royalties and gave them notice of their
10 non-compliance with their license agreements. (Id.) Certain Defendants admitted
11 that they owed additional royalties but claimed that Apple had prevented full
12 payment. (Id.)
13 Then Apple implemented the next step of its plan. On April 25, 2017,
14 Apple notified Qualcomm that it had not remitted any funds to Defendants for
15 royalties due to Qualcomm for Q1 2017 sales, and that it would not make any
16 royalty payments with respect to royalties owed to Qualcomm until the litigation
17 between Apple and Qualcomm is resolved. (Ex. 16.) Apple then instructed
18 Defendants not to pay Qualcomm royalties for Apple products. (Cathey Decl.
19 ¶ 7.) And Apple agreed to indemnify Defendants for their breaches. (Id. ¶ 6.)
20 After Apple refused to pay Defendants and instructed them not to pay
21 Qualcomm, Defendants refused to pay any Q1 2017 royalties for Apple devices
22 even though they admittedly owe Qualcomm hundreds of millions of dollars. For
23 example, on April 17, 2017, Foxconn certified in its royalty report owes
24 in royalties to QUALCOMM for [Q1 2017] sales [of Apple
25 iPhones] (Samimi Decl. ¶ 23; Ex. 20.) A week later, however, Foxconn told
26 Qualcomm
27 [Foxconn] can release pa[y]ment to you. (Ex. 23.) Foxconn later informed
28
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1 Qualcomm that it would not pay its Apple royalties, and that Apple had instructed
2 (Samimi Decl. ¶ 23.)
3 Similarly, in an April 27, 2017 email, Compal stated
4 recently formally requested [C]ompal to stop the royalty payment to [Q]ualcomm
5 that [is] associated to their business until legal action is completed. Samimi
6 Decl. ¶ 22; Ex. 18.) Apple will
7 not be transmitting funds to [Compal] for the [Q1 2017] quarterly royalty payment
8 will only submit non-
9 (Samimi Decl. ¶ 22; Ex. 19.)
10 were required to remit Q1 2017 royalty
11 payments by . (Samimi Decl. ¶¶ 23-25.) was required to
12 remit its Q1 2017 royalty payment by . (Id. ¶ 22.) For Apple
13 devices, Defendants admittedly owe Qualcomm approximately for
14 Q1 2017. (Id. ¶¶ 22-24.) Qualcomm made payment demands to each Defendant
15 for Q1 2017 royalties and gave them notice of their non-compliance with their
16 license agreements. (Id. ¶¶ 22-25.) But Defendants still have not paid any
17 royalties for Apple products. (Id. ¶¶ 22-25.)
18 not make royalty payments to Defendants f
19 multi-front litigation offensive against Qualcomm -payment will
20 add up to billions of dollars annually
21 breaches of their patent license agreements, Qualcomm cannot prevent its losses
22 by
23 . Nor should it have to. The agreements between
24 Qualcomm and Defendants are valid and legally binding they should be
25 respected, not just by Defendants, but by third parties, particularly Apple.
26 In the meantime, Qualcomm is receiving no compensation for
27 . While Qualcomm is punished for not
28
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1 subm , Defendants collect billions of dollars in revenue
2 from selling iPhones and iPads to Apple,
3 promise to indemnify them for any claims arising from their breaches. (Cathey
4 Decl. ¶ 6.) And Apple continues to make billions of dollars each week from
5 consumers from the sales of those same Qualcomm-enabled products.
6 ARGUMENT
7 I. Applicable Legal Standards.
8 plaintiff seeking a preliminary injunction must establish that he is likely
9 to succeed on the merits, that he is likely to suffer irreparable harm in the absence
10 of preliminary relief, that the balance of equities tips in his favor, and that an
11 injunction is in the public interest. Alliance for the Wild Rockies v. Cottrell,
12 632 F.3d 1127, 1131 (9th Cir. 2011) (quoting Winter v. Natural Res. Def. Council,
13 Inc., 555 U.S. 7, 20 (2008)).
14 Under the sliding scale approach to preliminary injunctions observed in
15 the Ninth Circuit, the elements of the preliminary injunction test are balanced, so
16 that a stronger showing of one element may offs
17 Wild Rockies, 632 F.3d at 1131; see Leiva-Perez v. Holder, 640 F.3d 962, 966 (9th
18 Cir. 2011) authority to balance the elements of the
19 preliminary injunction test, so long as a certain threshold showing is made on each
3
20 Although the Supreme Court in Winter
21 a plaintiff to show a mere possibility of irreparable harm in order to prevail on his
22 request for preliminary injunctive relief, Winter did not reject the sliding scale
23
3
24 There is some debate in the Ninth Circuit district courts about whether to apply the federal or
state standard for a preliminary injunction on a claim under state law. However, California state
25 courts also apply a sliding-scale standard. See, e.g., Right Site Coal v. Los Angeles Unified Sch.
Dist., 160 Cal. App. 4th 336, 338-
26 prevail, the less severe must be the harm that they allege will occur if the injunction does not
. Thus, the choice is immaterial because the tests are largely the same, and Qualcomm
27 satisfies either test here.
28
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1 approach [the Ninth Circuit] employ[s] in the alternative . . . . under which relief is
2 sometimes awarded based on a lower likelihood of harm when the likelihood of
3 success is very high Greater Yellowstone Coal. v. Timchak, 323 F. 512,
4 513-14 n.1 (9th Cir. 2009) (internal citations and quotation marks omitted).
5 II. Qualcomm Is Highly Likely to Succeed on the Merits.
6 Defendants are refusing to pay billions of dollars in royalties that they admit
7 they owe under their license agreements. That is a classic breach of contract.
8 Qualcomm can readily prove (i) the license agreements are valid contracts;
9 (ii) Qualcomm performed its obligations; (iii) Defendants breached; and
10 (iv) Qualcomm suffered injury as a result. Lansmont Corp. v. SPX Corp.,
11 No. 5:10-CV-05860 EJD, 2012 WL 6096674, at *3 (N.D. Cal. Dec. 7, 2012).
12 Qualcomm is highly likely to succeed on the merits of its claims.
13 A. Qualcomm Has a Valid Contract with Each Defendant.
14 Each Defendant has a valid and enforceable license agreement with
15 Qualcomm. (Exs. 1-5.) For many years, Defendants paid Qualcomm royalties
16 under the terms of those license agreements. (Samimi Decl. ¶¶ 9-12, 15.) In fact,
17 Defendants continue to pay royalties under the terms of those license agreements
18 for non-Apple products. (Id. ¶¶ 15-19, 21-25.) That long (and continuing) course
19 of dealing proves the validity of the contracts. E.g., Marin Storage & Trucking,
20 g, Inc., 107 Cal. Rptr. 2d 645, 651 (Ct. App.
21 2001) ( By its conduct in paying the invoices generated from the Work
22 Authorization and Contract forms, Benco acknowledged the existence of a
23 contract. Defendants do not contest the validity and enforceability of the
24 contracts, admitting instead that they are following the instructions of their largest
25 and most powerful customer Apple.
26 B. Defendants Have Breached Their License Agreements.
27 Defendants are required to pay Qualcomm royalties on a quarterly basis.
28
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1 (Exs. 1-2, 4-5 § 5.) For Q4 2016 sales, according to their own royalty reports,
2 Foxconn withheld more than in royalties; Pegatron withheld more
3 than in royalties; and Wistron withheld more than in
4 royalties. (Samimi Decl. ¶¶ 17-19.)
5 failed to pay any royalties to Qualcomm on Apple devices sold during
6 Q1 2017. (Id. ¶¶ 23-25.) And, on Compal followed suit.
7 (Id. ¶ 22.) Collectively, Defendants admit (based on their own royalty reports)
8 that approximately in royalties are due but not paid on Apple
9 products for Q1 2017. (Id. ¶¶ 22-25; Exs. 17, 20-22, 24.) Defendants and Apple
10 have made plain that they will continue withholding royalties on Apple devices
11 indefinitely. (Samimi Decl. ¶¶ 21-23; Ex. 16, 18-19, 23, 25.)
12 Defendants have breached by not paying royalties on Apple products.
13 That is clear under the contracts, and is further demonstrated by
14 long history of full payment on all reported sales, their partial payment on sales of
15 Apple devices in Q4 2016, and their continued full payment for non-Apple
16 devices. See Rosendahl Corp. v. H. K. Ferguson Co., 27 Cal. Rptr. 56, 58 (Ct.
17 App. 1962)
18 to be bound by contract terms).
19 C. Qualcomm Has Performed Its Obligations.
20 Qualcomm has performed its obligations under the license agreements.
21 Qualcomm granted Defendants licenses to use certain of its intellectual property in
22 exchange for royalty payments. And Qualcomm has not sued Defendants or their
23 customers for using the intellectual property covered by the agreements. No
24 Defendant has ch
25 D. Qualcomm Is Entitled to Specific Performance.
26 To obtain specific performance after a breach of contract, a plaintiff must
27 generally show: (1) the inadequacy of his legal remedy; (2) an underlying
28
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1 contract that is both reasonable and supported by adequate consideration; (3) the
2 existence of a mutuality of remedies; (4) contractual terms which are sufficiently
3 definite to enable the court to know what it is to enforce; and (5) a substantial
4 similarity of the requested performance to that promised in the contract.
5 Lansmont Corp., 2012 WL 6096674, at *5. Each factor is met here.
6 First, under the particular f
7 inadequate. In a typical contract case, damages are a sufficient remedy because,
8 if
9 continue performance under the contract is excused, Brown v. Grimes, 120 Cal.
10 Rptr. 3d 893, 902-03 (Ct. App. 2011) (collecting cases), and the plaintiff can
11 terminate the contract and seek monetary damages. In other words, once the
12 harms have been inflicted, the wronged plaintiff can walk away.
13
14 Qualcomm is
15
16
17 Further, the license agreements cover
18 other products that Defendants make for companies aside from Apple. Qualcomm
19 is entitled to continue to maintain the agreements in place.
20 Apple has publicly stated that it will withhold payments from Defendants
21 until its litigation against Qualcomm is resolved (see Exs. 16, 25), and Defendants,
22 and express instructions to them, have told
23 Qualcomm that they will not pay until Apple pays (see, e.g., Exs. 18, 23). In other
24 but Defendants will
25 continue to breach the license agreements indefinitely. If Qualcomm were limited
26 to an award of backward-looking money damages (the legal remedy), Qualcomm
27 would be forced to file a new suit (or amend its complaint) each and every quarter.
28
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1 Qualcomm is entitled to specific performance to avoid that continuous breach of
2 contract[, which] create[s] the danger of an untold number of lawsuits Tamarind
3 Lithography Workshop, Inc. v. Sanders, 193 Cal. Rptr. 409, 412 (Ct. App. 1983);
4 see also Reuland Elec. Co. v. Burgi Eng rs LLC, No. CV1309499SJOJCX, 2015
5 WL 12683953, at *12 (C.D. Cal. Apr. 24, 2015) (awarding specific performance
6 where the legal remedy is inadequate because s] continuous
7 possession or use of [confidential work file] information could constitute a
8 continuous breach of contract ).
9 Second, the parties long history of operating under the license agreements
10 makes clear that the agreements are reasonable and supported by adequate
11 consideration. As noted, as to non-Apple products, Defendants continue to
12 perform under the same terms that apply to Apple products.
13 Third, there is a mutuality of remedies under the license agreements
14 because Defendants would be able to obtain specific performance to enforce the
15 agreements if it were Qualcomm that was breaching.
16 Fourth, the contract terms are sufficiently definite such that the Court can
17 enforce the agreements. In fact, it will be simple to do so. Prior to Q4 2016,
18 Defendants always paid royalties for Apple and non-Apple devices under the
19 terms of the licensing agreements. (Samimi Decl. ¶ 15.) Defendants continue to
20 pay royalties on non-Apple devices under the terms of the licensing agreements.
21 (Id.) If Defendants do not want to pay royalties on Apple products, they should
22 stop making and selling Apple products. But there is no ambiguity concerning the
23
24 Fifth, there is a substantial similarity between the remedy requested and the
25 promises given
26 Lansmont Corp., 2012 WL
27 6096674, at *6.
28
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1 III. Qualcomm Will Suffer Irreparable Harm Absent a Preliminary
Injunction.
2
Because Qualcomm is highly likely to prevail on its breach claims the
3
4
Qualcomm need show only some likelihood of irreparable harm to receive a
5
preliminary injunction under the sliding scale standard. See Wild Rockies,
6
632 F.3d at 1131; Leiva-Perez, 640 F.3d at 966. Qualcomm easily satisfies that
7
standard; in fact, Qualcomm is virtually certain to suffer immense irreparable
8
harm starting almost immediately, including (i) ongoing, indefinite non-payment
9
of very large amounts of royalties; (ii) injury core licensing
10
business, and loss of goodwill among other licensees that also make smartphones
11
(and compete with Apple) and yet observe Apple cutting off royalties in an
12
attempt to strong-arm Qualcomm into discriminatorily favorable licensing terms;
13
and (iii) potential difficulties in collecting future damages because Defendants are
14
foreign companies with virtually all of their assets overseas.
15
A. Indefinite Non-Payment of Royalties Is Irreparable Harm.
16
The typical remedy for a breach of contract is monetary damages, and
17
normally
18
Commc l Football League, 634 F.2d 1197, 1202 (9th Cir. 1980)
19
(emphasis added). But that is not always the case.
20
could
21
continue indefinitely, the plaintiff has shown irreparable harm. In a case involving
22
recurring trespass on real property, the California Court of Appeal explained that
23
24
that an injunction may issue to prevent wrongs of a repeated and continuing
25
character, or which occasion damages estimable only by conjecture and not by
26
any accurate standard . Donahue Schriber Realty Grp., Inc. v. Nu Creation
27
Outreach, 181 Cal. Rptr. 3d 577, 587 (Ct. App. 2014) (emphasis added).
28
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1 trespass of a continuing nature, whose constant recurrence renders the remedy
2 at law inadequate, unless by a multiplicity of suits, affords sufficient ground for
3 relief by injunction . Id.
4 That is the situation here. Qualcomm is entitled to a preliminary injunction
5 for the same reason it is entitled to specific performance to avoid ongoing,
6 repeated, and indefinite non-payment of royalties, and the multiplicity of lawsuits
7 that inevitably would follow. See Donahue, 181 Cal. Rptr. 3d at 587; see also
8 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 518 F. Supp. 2d 1197, 1219
9 (C.D. Cal. 2007) (providing that
10 of an
11
12 Again, in the ordinary case, a licensor could terminate its license agreement
13 if a licensee refuses to pay royalties. But this is not the ordinary case.
14
15
16 In any event, Qualcomm should not be forced to terminate the
17 agreements; among other reasons, they also apply to non-Apple products.
18 Defendants plainly intend to continue breaching the license agreements
19 going forward with respect to Apple products. Qualcomm is left with no recourse,
20 other than indefinite, multiple, serial lawsuits which the law recognizes is an
21 insufficient remedy. Without a preliminary injunction, Qualcomm will experience
22 repeated non-payment of nearly , on average, every calendar quarter into
23 the indefinite future. (See Samimi Decl. ¶ 14.) That harm is irreparable.
24 B. H Core Business Is Irreparable Harm.
25 1. Damage to Goodwill, Reputation and Customer Relations.
26 As courts have recognized in a variety of contexts, intangible injuries such
27 as damage to goodwill and reputation, and dissatisfaction among customers
28
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1 constitute irreparable harm because such damages are not easily calculable or
2 compensable. See eBay, In , 100 F. Supp. 2d 1058, 1066
3 (N.D. Cal. 2000) (
4
5 and lost customer goodwill is irreparable because it is neither easily calculable,
6 nor easily compensable and is therefore an appropriate basis for injunctive
7 relief accord Chemular, Inc. v. Ford, No. S-CV-0039036, 2017 WL 1510025,
8 at *2 (Cal. Super. Ct. Apr. 6, 2017) (granting plaintiff a preliminary injunction in
9 misappropriation of information suit
10 ).
11 Loss of goodwill is particularly detrimental in the intellectual property
12 context, where a licensor cultivates relationships with its licensees, customers, and
13 distributors. For example, in Fox Television Stations, Inc. v. BarryDriller Content
14 Systems, PLC, 915 F. Supp. 2d 1138, 1147 (C.D. Cal. 2012), plaintiffs, which
15 produced on-air television content, obtained a preliminary injunction against
16 unlicensed streaming content providers. In finding irreparable harm, the Court
17 emphasized that the availability of free and unlicensed content from other sources
18 Id.; see also, e.g., Warner
19 , 824 F. Supp. 2d 1003, 1012-14 (C.D. Cal.
20 2011) (granting a preliminary injunction in a copyright action in part because of
21 interference with the goodwill th customers);
22 Disney Enters., Inc. v. VidAngel, Inc., No. 216CV04109ABPLAX, 2016 WL
23 8292206, at *11 (C.D. Cal. Dec. 12, 2016) (granting a preliminary injunction in a
24 eat to the
25
26 relationships with them and the goodwill Plaintiffs have worked to create ); Hand
27 & Nail Harmony, Inc. v. ABC Nail & Spa Prods., No. SACV160969 DOCJEMX,
28
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1 2016 WL 3545524, at *7 (C.D. Cal. June 28, 2016) (finding irreparable harm for
2 purposes of a temporary restraining order
3 activities threaten and are already harming the business relationships with
4 ishing the value of their distributorships).
5 The essence
6 critical to the function of cellular networks, contributing technologies to standard-
7 development organizations, patenting its inventions, demonstrating the value and
8 effectiveness of that technology in commercial implementations, and licensing its
9 patents to cellular device manufacturers. Qualcomm has spent decades cultivating
10 the goodwill of its licensees; in order to develop that goodwill, Qualcomm strives
11 to treat similarly situated licensees fairly and to maintain consistency in its
12 licensing program. Without a preliminary injunction, Defendants, under the
13 direction of Apple, threaten to undo that work. (Rogers Decl. ¶¶ 8, 11.)
14 By paying no royalties at all patents,
15 Apple and Defendants have (unless enjoined by this Court) improperly secured for
16 themselves more favorable terms during the
17 e. (Id. ¶¶ 9-10.)
18 . (Id. ¶ 9.) Thus, by means of
19 their breaches, Apple and Defendants have seized for themselves a cost advantage
20 over their competitors, which will allow Apple to take for itself an even greater
21 share of industry profits. (Id. ¶ 9.) -payment of royalties
22 -payment as leverage to argue
23 (improperly) that they may also decline to pay under their respective agreements,
24 or may use the non-payment as leverage in renegotiations. (Id. ¶ 10.) At a
25 minimum, Qualcomm will suffer reputational damage, harm to the goodwill it has
26 developed over many years, and customer dissatisfaction. (Id. ¶¶ 8-10.) That is
27 irreparable harm. See BarryDriller, 915 F. Supp. 2d at 1147.
28
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1 2. Threatened Disruption Licensing Program and
a Multitude of Lawsuits.
2
Courts have found a sufficient showing of irreparable harm where a
3
harm severely For
4
example, in the franchise context, a court granted a preliminary injunction against
5
a former franchisee, noting that allowing the franchisee to continue operating in
6
violation of its non- send a signal to other disgruntled
7
8
NaturaLawn of Am., Inc. v. W. Grp., LLC, 484 F. Supp. 2d
9
392, 402 (D. Md. 2007) (describing prior oral ruling finding irreparable harm).
10
Courts have applied these principles to cases involving licensing businesses
11
as well. For example, in BarryDriller, the c
12
13
prospective licensees will demand concessions to make up the loss of viewership
14
to non-paying alternatives, and may push additional players away from license-fee
15
. 915 F. Supp. 2d at 1147. Similarly, in WTV, the court
16
17
paying the normal licensing fees, they deprive Plaintiffs of revenue, and even
18
824 F.
19
Supp. 2d at 1013.
20
So too here. Qua its ability to
21
license its tens of thousands of patents in return for royalties. Qualcomm has
22
hundreds of other licensees in addition to Defendants, many of which are
23
competitors of Apple and Defendants. By refusing to pay royalties for
24
25
significant competitive imbalance
26
improperly seek to capitalize. In fact, -payment of
27
royalties may undermine
28
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1 (Rogers Decl. ¶¶ 9, 11.) Cf. Commonwealth Sci. & Indus. Research Org. v.
2 Buffalo Tech. Inc., 492 F. Supp. 2d 600, 603 (E.D. Tex. 2007) (recognizing, in
3 granting a permanent injunction in a patent infringement suit, that [a]
4 own licensing payments would put [that licensee] at a competitive disadvantage
5 who would not be paying).
6 Given its level of sophistication, Apple undoubtedly knows this. The
7 industry will see Apple (i) dictate the conduct of the Defendants; (ii) completely
8 cut off Qualcomm from licensing revenue; and (iii) attempt to strong-arm a
9 favorable, discriminatory licensing agreement for itself. Apple is the most
10 profitable company in the cellular industry. Everyone is watching. Apple knows
11 that everyone is watching. A
12 concerned that Apple has dictated that no royalties be paid to Qualcomm for
13 Apple products. This threatens to cause substantial harm to Qualcomm not
14
15
16 l
17 attempt to gain bargaining leverage over Qualcomm and force Qualcomm to
18 surrender, Apple wants to cause as much disruption as possible.
19 While Qualcomm has valid and enforceable license agreements with other
20 licensees, that itself does not eliminate the risk that Qualcomm will face
21 irreparable harm, given the potential consequences of
22 unlawful conduct. See, e.g., Metro-Goldwyn-Mayer Studios, 518 F. Supp. 2d at
23 1219 he very need to file multiple lawsuits as a consequence of [d
24 copyright] inducement is itself supportive of an irreparable harm finding. ); Cal.
25
26 cf. Donahue, 232
27 Cal. App. 4th at 1184.
28
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1 3. Decreased Competitive Advantage and Intellectual Property
Development Due to Lost R&D Opportunities.
2
In patent infringement suits, courts have recognized that lost opportunities
3
for research and development constitute irreparable harm. See Buffalo Tech. Inc.,
4
492 F. Supp. 2d at 604-05 (granting permanent injunction and holding that
5
6
e to
7
lost opportunities for research and development); see also Pharmacia & Upjohn
8
Co. v. Ranbaxy Pharm., Inc.
9
finding of irreparable harm for purposes of preliminary injunction because, among
10
other things,
11
; Vanda Pharm. Inc. v. Roxane
12
Labs., Inc., 203 F. Supp. 3d 412, 436 (D. Del. 2016) (ordering a permanent
13
injunction in a patent infringeme would also suffer
14
15
16
formulations of [the aforementioned drugs] and dev ).
17
Courts have also recognized that the potential to lose a competitive
18
advantage from forgone research and development is irreparable harm. See
19
Cordelia Lighting, Inc. v. Zhejiang Yankon Grp. Co., No. EDCV14881JGBSPX,
20
2015 WL 12656241, at *7 (C.D. Cal. Apr. 27, 2015) (finding in patent
21
deleterious effects such as loss of market share to a
22
competitor . . . can support a finding of irreparable harm accord Chemular, Inc.,
23
2017 WL 1510025, at *2 (granting plaintiff a preliminary injunction in
24
misappropriation of information suit
25
plaintiff to lose its competitive advantage). As one court has articulated in a
26
patent infringement action, elays in research are likely to result in important
27
knowledge not being developed at all or [plaintiff] being pushed out of valuable
28
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1 fields as other research groups achieve critical intellectual property positions.
2 Thus, the harm of lost opportunities is irreparable. They cannot be regained with
3 future money because the opportunity that was lost already belongs to someone
4 Buffalo Tech. Inc., 492 F. Supp. 2d at 604.
5
6 (Rogers Decl. ¶ 7.) In 2016, Qualcomm spent $5 billion on research and
7 development, which made it a leader among high tech firms, both in absolute
8 terms and as a percentage of its revenue. (Ex. 31 at 14.) Based on Apple sales in
9 recent years, , on average, nearly
10 , every year, for however long Apple decides it does not
11 want to pay Qualcomm royalties. (Samimi Decl. ¶ 14.)
12 threatens to wipe out funds that equal a substantial portion of
13 massive R&D spending. That is the very definition of irreparable harm. See
14 Cordelia, 2015 WL 12656241, at *7; see also Pharmacia at 215;
15 Buffalo Tech. Inc., 492 F. Supp. 2d at 604-05.
16 C. Difficulties in Collecting Future Damages Awards from Foreign
Defendants.
17
18
[a] Defendant currently is a foreign entity and this alone is sufficient to show that
19
[a Plaintiff] will likely be irreparably harmed. Aevoe Corp. v. Shenzhen
20
Membrane Precise Electron Ltd., No. 2:12-CV-00054-GMN, 2012 WL 1532308,
21
at *5-6 (D. Nev. May 1, 2012) (emphasis added) (finding, for purposes of
22
23
foreign status alone); see also Pharmacia & Upjohn Co.
24
25
26
harm); Cordelia Lighting, Inc., tential
27
28
QUALCOMM S MEMORANDUM OF POINTS -23- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.226 Page 29 of 32

1 difficulty inherent in collecting damages from a foreign defendant with limited
2
3 Defendants are all non-U.S. companies with their primary assets located
4 overseas. (See Ex. 26 at 97; Ex. 27 at 200; Ex. 28 at 220; Ex. 29 at F-82; Ex. 30 at
5 17.) The potential difficulty Qualcomm may have in enforcing any future
6 damages award against these foreign Defendants constitutes, in and of itself, a
7 likelihood of irreparable harm.
8 IV. The Balance of Hardships Weighs
9 Defendants seek to overturn more than 15 years of practice between the
10 parties without legal justification, and in the process to inflict irreparable harm on
11 Qualcomm. None of the harms described above can be remedied by after-the-fact
12 monetary damages. By contrast, Defendants would be required only to do what
13 they have been doing for years paying under their patent license agreements.
14 For its part, Apple has become the most valuable company in history while
15 Apple should continue
16 paying Defendants what it owes them for the devices they manufacture for Apple
17 (relief Qualcomm has requested in a related action). But if Apple refuses to do so,
18 Defendants should stop manufacturing devices for Apple. Or Defendants should
19 pay the royalties owed to Qualcomm out of their own pockets to be repaid by
20 Apple based on its indemnification promise to Defendants. Either way,
21 Qualcomm simply asks the Court to order that the Defendants comply with their
22 contracts with Qualcomm. See Tanner Motor Livery, Ltd. v. Avis, Inc., 316 F.2d
23 804, 808 (9th Cir. 1963) It is so well settled as not to require citation of authority
24 that the usual function of a preliminary injunction is to preserve the status quo ante
25 litem pending a determination of the action on the merits.
26 Defendants would prefer to derive the full benefit of the license agreements
27 without paying anything on Apple devices, but that would be fundamentally
28
QUALCOMM S MEMORANDUM OF POINTS -24- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.227 Page 30 of 32

1 unfair. On the other hand, there is nothing unfair about holding Defendants to
2 their promises, especially given their indemnification arrangement with Apple.
3 See, e.g., , 107 F.2d 27,
4 32-33 (3d Cir. 1939) has been partly performed and equity
5 requires that it be completed by supplying the amount which United must pay for
6 the license in accordance wit ). The balance of the
7 favor. See Wild Rockies, 632 F.3d at 1131.
8 V. The Public Interest Supports a Preliminary Injunction.
9 There is a strong public interest in protecting intellectual property rights.
10 See, e.g., PPG Indus., Inc. v. Guardian Indus. Corp., 75 F.3d 1558, 1567 (Fed.
11 Cir. 1996) (recognizing the
12 patent rig injunction, the Northern District of
13
14 and [has] recognize[d] the role of protecting intellectual property rights as part of
15
16 Networks, Inc., No. C 10-3428, 2013 WL 557102, at *7 (N.D. Cal. Feb. 12, 2013).
17 ents with Qualcomm allow them to manufacture
18 devices that practice thousands (Rogers Decl. ¶¶ 5-6.)
19 Protecting those property rights is in the public interest.
20 CONCLUSION
21 For the foregoing reasons, Qualcomm respectfully requests that the Court
22 enjoin Defendants from violating the terms and conditions of their license
23 agreements during the pendency of this litigation.
24 Dated: May 24, 2017 Respectfully submitted,
25 By: /s/ Evan R. Chesler
26 Evan R. Chesler
27
28
QUALCOMM S MEMORANDUM OF POINTS -25- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.228 Page 31 of 32

1
CRAVATH, SWAINE & MOORE LLP
2 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
3 echesler@cravath.com
Keith R. Hummel (pro hac vice)
4 (N.Y. Bar No. 2430668)
khummel@cravath.com
5 Richard J. Stark (pro hac vice)
(N.Y. Bar No. 2472603)
6 rstark@cravath.com
Antony L. Ryan (pro hac vice)
7 (N.Y. Bar No. 2784817)
aryan@cravath.com
8 Gary A. Bornstein (pro hac vice)
(N.Y. Bar No. 2916815)
9 gbornstein@cravath.com
J. Wesley Earnhardt (pro hac vice)
10 (N.Y. Bar No. 4331609)
wearnhardt@cravath.com
11 Yonatan Even (pro hac vice)
(N.Y. Bar No. 4339651)
12 yeven@cravath.com
Vanessa A. Lavely (pro hac vice)
13 (N.Y. Bar No. 4867412)
vlavely@cravath.com
14 Worldwide Plaza, 825 Eighth Avenue
New York, NY 10019
15 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
16
17 QUINN EMANUEL URQUHART &
SULLIVAN, LLP
18 David A. Nelson (pro hac vice)
(Ill. Bar No. 6209623)
19 davenelson@quinnemanuel.com
Stephen Swedlow (pro hac vice)
20 (Ill. Bar No. 6234550)
stephenswedlow@quinnemanuel.com
21 500 West Madison St., Suite 2450
Chicago, Illinois 60661
22 Telephone: (312) 705-7400
Facsimile: (312) 705-7401
23
24 Alexander Rudis (pro hac vice)
(N.Y. Bar No. 4232591)
25 alexanderrudis@quinnemanuel.com
51 Madison Ave., 22nd Floor
26 New York, New York 10010
Telephone: (212) 849-7000
27 Facsimile: (212) 849-7100

28
QUALCOMM S MEMORANDUM OF POINTS -26- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-1 Filed 05/24/17 PageID.229 Page 32 of 32

1 Sean S. Pak (SBN 219032)
seanpak@quinnemanuel.com
2 50 California St., 22nd Floor
San Francisco, CA 94111
3 Telephone: (415) 875-6600
Facsimile: (415) 875-6700
4
5 JONES DAY
Karen P. Hewitt (SBN 145309)
6 kphewitt@jonesday.com
Randall E. Kay (SBN 149369)
7 rekay@jonesday.com
4655 Executive Drive, Suite 1500
8 San Diego, California 92121
Telephone: (858) 314-1200
9 Facsimile: (858) 345-3178
10 Attorneys for Plaintiff
QUALCOMM INCORPORATED
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
QUALCOMM S MEMORANDUM OF POINTS -27- CASE NO. 3:17-CV-1010-WQH-JMA
AND AUTHORITIES
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.230 Page 1 of 6

1 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
2 echesler@cravath.com
CRAVATH, SWAINE & MOORE LLP
3 825 Eighth Avenue
New York, NY 10019
4 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
5
David A. Nelson (pro hac vice)
6 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
7 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
8 Chicago, Illinois 60661
Telephone: (312) 705-7400
9 Facsimile: (312) 705-7401
10 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, California 92121
Telephone: (858) 314-1200
13 Facsimile: (858) 345-3178
14 Attorneys for Plaintiff
QUALCOMM INCORPORATED
15
16 UNITED STATES DISTRICT COURT
17 SOUTHERN DISTRICT OF CALIFORNIA
18 QUALCOMM INCORPORATED, Case No. 3:17-CV-1010-WQH-JMA
19 Plaintiff, DECLARATION OF VANESSA
A. LAVELY IN SUPPORT
20 v. OF PLAINTIFF QUALCOMM
INCORPORATED’S MOTION
21 COMPAL ELECTRONICS, INC., FIH FOR A PRELIMINARY
MOBILE LTD., HON HAI INJUNCTION
22 PRECISION INDUSTRY CO., LTD,
PEGATRON CORPORATION, and Date: June 26, 2017
23 WISTRON CORPORATION,
Courtroom: 14B
24 Defendants.
Judge: Hon. William Q. Hayes
25
No Oral Argument Unless Requested
26 by the Court.
27 (ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28
Case No.: 3:17-cv-1010-WQH-JMA
Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.231 Page 2 of 6

1 I, Vanessa A. Lavely, declare as follows:
2 1. I am an attorney at the law firm of Cravath, Swaine & Moore LLP, and
3 I am one of the attorneys representing Plaintiff Qualcomm Incorporated in this
4 action. I am a member of the bar of the State of New York and am admitted to
5 appear pro hac vice before this Court in the above-captioned action.
6 2. I submit this declaration in support of Plaintiff Qualcomm
7 Incorporated’s Motion for a Preliminary Injunction.
8 3. Attached hereto as Exhibit 1 is a true and correct copy of the
9 Subscriber Unit License Agreement between Compal Electronics, Inc. and
10 Qualcomm Incorporated, dated February 10, 2000, and amendments thereto.
11 4. Attached hereto as Exhibit 2 is a true and correct copy of the
12 Subscriber Unit License Agreement between Foxconn International Holdings Ltd.
13 (now known as FIH Mobile Ltd.) and Qualcomm Incorporated, dated October 18,
14 2005, and amendments thereto.
15 5. Attached hereto as Exhibit 3 is a true and correct copy of the Request
16 for Consent to Sublicense between Foxconn International Holdings Ltd. (now
17 known as FIH Mobile Ltd.), Hon Hai Precision Industry Co., Ltd. and Qualcomm
18 Incorporated, dated October 18, 2005.
19 6. Attached hereto as Exhibit 4 is a true and correct copy of the
20 Subscriber Unit License Agreement between Wistron Corporation and Qualcomm
21 Incorporated, dated May 23, 2007.
22 7. Attached hereto as Exhibit 5 is a true and correct copy of the
23 Subscriber Unit License Agreement between Pegatron Corporation and Qualcomm
24 Incorporated, dated April 29, 2010, and amendments thereto.
25 8. Attached hereto as Exhibit 6 is a true and correct copy of the
26 Statement of Work for Qualcomm Chipsets between Apple Inc. and Qualcomm
27 Incorporated, dated December 7, 2015, and attachments thereto, including the STA
28 Assignment Agreement as Attachment C.
Case No.: 3:17-cv-1010-WQH-JMA
-2- Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.232 Page 3 of 6

1 9. Attached hereto as Exhibit 7 is a true and correct copy of a letter from
2 BJ Watrous to Alex Rogers, dated February 3, 2017.
3 10. Attached hereto as Exhibit 8 is a true and correct excerpted copy of
4 the Q4 2016 iPhone Royalty Report for Hon Hai Precision Industry Co., Ltd., dated
5 January 21, 2017.
6 11. Attached hereto as Exhibit 9 is a true and correct excerpted copy of
7 the Q4 2016 iPad CD Royalty Report for Foxconn International Holdings Limited
8 (now known as FIH Mobile Ltd.), dated December 31, 2016.
9 12. Attached hereto as Exhibit 10 is a true and correct excerpted copy of
10 the Q4 2016 iPad LH Royalty Report for Foxconn International Holdings Limited
11 (now known as FIH Mobile Ltd.), dated December 31, 2016.
12 13. Attached hereto as Exhibit 11 is a true and correct copy of an email
13 from Anny Tong to Vivian Wen, dated February 7, 2017.
14 14. Attached hereto as Exhibit 12 is a true and correct copy of the Q4
15 2016 iPhone Royalty Report for Pegatron Corporation.
16 15. Attached hereto as Exhibit 13 is a true and correct copy of the Q4
17 2016 iPhone Royalty Report for Wistron Corporation, dated February 10, 2017.
18 16. Attached hereto as Exhibit 14 is a true and correct copy of an email
19 from Allie Wu to Grace Tai, dated February 15, 2017.
20 17. Attached hereto as Exhibit 15 is a true and correct excerpted copy of
21 the Q4 2016 iPad Royalty Report for Compal Electronics Inc.
22 18. Attached hereto as Exhibit 16 is a true and correct copy of a letter
23 from Bruce Sewell to Don Rosenberg, dated April 25, 2017.
24 19. Attached hereto as Exhibit 17 is a true and correct excerpted copy of
25 the Q1 2017 iPad Royalty Report for Compal Electronics Inc.
26 20. Attached hereto as Exhibit 18 is a true and correct copy of an email
27 from Shawn Tien to Yunhui Chae-Banks, dated April 27, 2017.
28 21. Attached hereto as Exhibit 19 is a true and correct copy of an email
Case No.: 3:17-cv-1010-WQH-JMA
-3- Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.233 Page 4 of 6

1 from Jack Chang to Grace Tai, dated May 3, 2017.
2 22. Attached hereto as Exhibit 20 is a true and correct excerpted copy of
3 the Q1 2017 iPhone Royalty Report for Hon Hai Precision Industry Co., Ltd., dated
4 April 13, 2017.
5 23. Attached hereto as Exhibit 21 is a true and correct excerpted copy of
6 the Q1 2017 iPad CD Royalty Report for Foxconn International Holdings Limited
7 (now known as FIH Mobile Ltd.), dated March 31, 2017.
8 24. Attached hereto as Exhibit 22 is a true and correct excerpted copy of
9 the Q1 2017 iPad LH Royalty Report for Foxconn International Holdings Limited
10 (now known as FIH Mobile Ltd.), dated March 31, 2017.
11 25. Attached hereto as Exhibit 23 is a true and correct copy of an email
12 from Anny Tong to Vivian Wen, dated April 27, 2017.
13 26. Attached hereto as Exhibit 24 is a true and correct copy of the
14 Q1 2017 iPhone Royalty Report for Pegatron Corporation.
15 27. Attached hereto as Exhibit 25 is a true and correct copy of the Axios
16 article titled “Apple Confirms It Won’t Make Royalty Payments to Qualcomm
17 Until Dispute Settled”, by Paul Sakuma, dated April 28, 2017, available at
18 https://www.axios.com/apple-confirms-it-wont-make-royalty-payments-to-
19 qualcomm-until-dispute-2383383892.html.
20 28. Attached hereto as Exhibit 26 is a true and correct excerpted copy of
21 the 2016 Annual Report of FIH Mobile Ltd., released April 12, 2017, available at
22 http://www.fihmb.com/investors/Investors.aspx.
23 29. Attached hereto as Exhibit 27 is a true and correct excerpted copy of
24 the 2015 Annual Report (Hon Hai English Translation) of Hon Hai Precision
25 Industry Co., Ltd., dated April 30, 2016, available at http://www.foxconn.com/
26 Files/annual_rpt_e/2015_annual_rpt_e.pdf.
27 30. Attached hereto as Exhibit 28 is a true and correct excerpted copy of
28 the 2015 Annual Report (Pegatron English Translation) of Pegatron Corporation,
Case No.: 3:17-cv-1010-WQH-JMA
-4- Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.234 Page 5 of 6

1 dated March 22, 2016, available at http://investor.pegatroncorp.com/annual/
2 2015/EN/2015_Annual_Report_eng_bCnmQmjCemLJ.pdf.
3 31. Attached hereto as Exhibit 29 is a true and correct excerpted copy of
4 the 2016 Annual Report (Wistron English Translation) of Wistron Corporation,
5 dated April 30, 2017, available at http://www.wistron.com/images/acrobat/
6 annual_reports/2016/annual_report_entire_report.pdf.
7 32. Attached hereto as Exhibit 30 is a true and correct excerpted copy of a
8 report titled "Leading Multinationals from Taiwan Increase Their Foreign Assets
9 Despite the Global Crisis", by the College of Management, Fu Jen Catholic
10 University, and Vale Columbia Center on Sustainable International Investment,
11 dated November 3, 2011, available at http://ccsi.columbia.edu/files/
12 2013/11/Taiwan_2011 .pdf.
13 33. Attached hereto as Exhibit 31 is a true and correct excerpted copy of
14 Qualcomm Incorporated's Form 10-K for the fiscal year ending September 25,
15 2016.
16
17
18
19 Pursuant to 28 U.S.C. § 1746,1 declare under penalty of perjury that the
20 foregoing is true and correct and that I executed this declaration on May 24, 2017 in
21 New York, New York.
22
23
24
25
26
27
28
Case No.: 3:17-cv-1010-WQH-JMA
Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-2 Filed 05/24/17 PageID.235 Page 6 of 6

1 Table of Exhibits
2 Exhibit No. Pages
3 1 1-75
2 76-167
4
3 168-169
5 4 170-205
6 5 206-271
6 272-299
7
7 300-301
8 8 302-304
9 9 305-309
10 10 310-314
11 315-317
11 318-358
12
12 13 359
13 14 360-362
15 363-366
14
16 367-368
15 17 369-372
16 18 373
19 374
17
20 375-378
18 379-382
21
19 22 383-386
20 23 387-388
24 389-475
21
25 476
22 26 477-488
23 27 489-499
28 500-513
24
29 514-525
25 30 526-532
26 31 533-548
27
28
Case No.: 3:17-cv-1010-WQH-JMA
-6- Declaration of Vanessa A. Lavely
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.236 Page 1 of 118

Exhibit 1

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.237 Page 2 of 118

Exhibit 2

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.238 Page 3 of 118

Exhibit 3

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.239 Page 4 of 118

Exhibit 4

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.240 Page 5 of 118

Exhibit 5

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.241 Page 6 of 118

Exhibit 6

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.242 Page 7 of 118

Exhibit 7

EXHIBIT SUBMITTED
PARTIALLY UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.243 Page 8 of 118
,
Febrnary 3, 2017

By Overnight Delivery & email to arogers@gualcomm.com

Alex Rogers
EVP & President, QTL
QUALCOMM Incorporated
5775 Morehouse Drive
San Diego, CA 92121-1714

Confidential - Subject to Party Mutual Confidentiality Agreement

Dear Alex,

I am writing to follow-up on earlier conespondence regarding the BCPA.

As Apple stated it would do in its Complaint on Januaiy 20, 2017, Apple has
withheld a total of approximately $963 million from Apple's January payments to certain
of its contract manufacturers. The amount covers BCPA payments Qualcomm withheld
from Apple for CQ2 and CQ3, as well as the BCPA payment Qualcomm indicated it
would not pay for CQ4.

In the interest of transparency, we wanted to share with Qualcomm just how these
deductions applied to the royalty payments recently made by Apple to our contract
manufacturers for the fourth quarter of 2016.

Contract TOTAL
Manufacturer PAID

Hon Hai

Pegatron

Wistron

Compal

Apple
1 Infinite loop, MS 169-31 Pl
Cupertino, CA 95014

T 408996-10 10
F 408 996-0275

EXHIBIT 7
PAGE 300
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.244 Page 9 of 118

By making these payments to its CMs, Apple has paid the full
and through all of 2016, consistent with the BCPA, even
though we continue to believe these amounts are excessive and inconsistent with
FRAND.

As I shared with you in November, Apple was (and is) interested in a reasonable
and good faith offer from Qualcomm to resolve the parties’ BCPA dispute. What we
received in Qualcomm’s December 2 letter was not acceptable. As I noted in my reply of
December 22, Qualcomm’s demands sought to effectively hold the BCPA funds hostage
pending remedial measures that have no basis in the BCPA and that would undermine
Apple’s responsibility to respond truthfully to law enforcement agencies. Once Apple
raised these legitimate concerns, Qualcomm chose not to reply – whether to clarify its
conditions, withdraw them, or otherwise. Accordingly, it should have come as no
surprise when Apple repeated these same concerns in its Complaint.

I value our personal and professional relationship of many years. In candor, that
is what has made Qualcomm’s actions all the more disappointing. Qualcomm chose to
take actions that violate both our contract and the law. I wish that had not been the
case. Even so, I continue to remain optimistic that we will be able to work together to
help our companies resolve this dispute swiftly and professionally.

Sincerely,

BJ Watrous
Vice President & Chief IP Counsel

2
EXHIBIT 7
PAGE 301
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.245 Page 10 of 118

Exhibit 8

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.246 Page 11 of 118

Exhibit 9

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.247 Page 12 of 118

Exhibit 10

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.248 Page 13 of 118

Exhibit 11

EXHIBIT SUBMITTED
PARTIALLY UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.249 Page 14 of 118
Message
From: anny.ch.tong@foxconn.com [anny.ch.tong@foxconn.com)
Sent: 2/7/2017 3:49:16 AM
To: Wen, Vivian [/o=Qualcomm/ou=Exchange Administrative Group (FYDIBOHF23SPDLT)/cn=Recipients/cn=swen);
Mesa, Celina [/o=Qualcomm/ou=San Diego Admin Group/cn=Recipients/cn=cmesa)
CC: hellen.y.wang@foxconn.com; Graves, Eva [/o=Qualcomm/ou=San Diego Admin Group/cn=Recipients/cn=egraves]
Subject: Q~:HON HAI PRECISION INDUSTRY CO LTD 2017-01-31

Hi Vivian

Have confinned with internal team. from customer until now. so please revise invoice as below:

remainder amount not be issued . Iffurtber illformation I get will let you know at once.

Best Regards

Anny

swen@qualcomm.com ToiG anny.ch.tong@mail.foxconn.com,cmesa@qualcomm.com
CciG hellen.y.wang@mail.foxconn.com,egraves@qualcomm.com
2017/2/4 i:tWi:tE
RE: Aa§e:HON HAI PRECISION INDUSTRY co LTD 2017-01-31
06:40:53
Hi Anny,

Thank you, but t o clarify our question: Please explain how each of the three amounts was calculated?

Thank you!

Vivian Wen (i:ta 2 a,A¢)
Qualcomm Technology licensing
5775 Morehouse Dr.
San Diego, CA92121
Tel: 858-651-0776
Fax:858-651-1975
swen@qualcomm.com

From: anny.ch.tong@foxconn.com [mailto:anny.ch.tong@foxconn.com ]
Sent: Thursday, February 02, 2017 9:43 PM
To: Wen, Vivian <swen@qualcomm.com>; Mesa, Celina <cmesa@qualcomm.com>
Cc: hellen.y.wang@foxconn.com
Subject: Re: Aa§e:HON HAI PRECISION INDUSTRY co LTD 2017-01-31

EXHIBIT 11
PAGE 315
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.250 Page 15 of 118
Hi Vivian

For China custom due to deferent import way.

Best Regards

Anny

swen@gualcomm.com ToiG anny.ch.tong@mail.foxconn.com ,cmesa@gualcomm.com
CciG hellen.y.wang@mail.foxconn.com
2017/2/3
¥D : ®iG Re: Aa§e:HON HAI PRECISION INDUSTRY co LTD 2017-01-31
1:1W1:1E 11:42:31

Hi Anny,

Can you please explain why Foxconn requests three separate invoices for the 2016 0 4 iPhone Royalty report?

Thanks, Vivian

----- Reply message -----
From: " anny.ch .tong@foxconn.com" <anny.ch.tong@foxconn.com>
To: "Wen, Vivian" <swen@qualcomm.com>, "Mesa, Celina" <cmesa@qualcomm.com>
Cc: " hellen.y.wang@foxconn.com" <hellen.y.wang@foxconn.com>
Subject: Aa§e:HON HAI PRECISION IN DUSTRY co LTD 2017-01-31
Date: Tue, Jan 31, 2017 4:41 PM

Dear Vivian and Celina

Have received invoice as attached for iPhone Royalty report in 201604 , Could you please help to revise as below.

Best Regards

Anny

mail from ip-->10.195.151.150
mail from pc->f2829267a
Version: Super Notes 1.6.9.88

mail from ip-->10.195.151.150
mail from pc->f2829267a

EXHIBIT 11
PAGE 316
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.251 Page 16 of 118

EXHIBIT 11
PAGE 317
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.252 Page 17 of 118

Exhibit 12

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.253 Page 18 of 118

Exhibit 13

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.254 Page 19 of 118

Exhibit 14
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.255 Page 20 of 118
Message
From: ALLIE_WU@WISTRON.COM [ALLIE_WU@WISTRON .COM]
Sent: 2/15/2017 2:09:35 AM
To: Tai, Grace [/o=Qualcomm/ou=Exchange Administrative Group (FYDIBOHF23SPDLT)/cn=Recipients/cn=gtaia22)
CC: ALBERT_CHANG@WISTRON.COM; Chae-Banks, Yunhui [/o=Qualcomm/ou=San Diego Admin
Group/cn=Recipients/cn=t_yunhui]; Wen, Vivian [/o=Qualcomm/ou=Exchange Administrative Group
(FYDIBOHF23SPDLT)/cn=Recipients/cn=swen); Pilgram, Ryan [/o=Qualcomm/ou=E xchange Administrative Group
(FYDIBOHF23SPDLT)/ cn=Recipients/cn=c_rpilgr)
Subject : RE: Wistron CY16Q4 Report

Hi Grace,

The current information of report are what customer allowed us to provide.

What I can do now is to help to push our FIN team to speed up the payment as urgent case once receiving invoice for
your team.

Thank you,

Allie

From: Tai, Grace [mailto:gtai@qualcomm.com ]
Sent: Tuesday, February 14, 2017 3:53 PM
To: Allie Wu/WHO}Wistron <ALLI E_WU@WISTRON.COM>
Cc: Albert Chang/WHO}Wistron <ALBERT_CHANG@WISTRON.COM>; Chae-Banks, Yunhui <yunhu ic@qualcomm.com>;
Wen, Vivian <swen@qualcomm.com>; Pilgram, Ryan <rpilgram@qualcomm.com>
Subject: Re: Wistron CY16Q4 Report

Hi Allie,

The 201604 roya lty report you provided is missing information about Wistron's sales. Can you please resend the royalty
report with complete and accurate information for 2016Q4?

Thanks,

EXHIBIT 14
PAGE 360
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.256 Page 21 of 118
Grace

From: ALLIE WU@WISTRON.COM <ALLIE WU@WISTRON .COM >
Sent: Monday, February 13, 2017 2:03 AM
To: Tai, Grace
Cc: ALBERT CHANG@WISTRON.COM ; Chae-Banks, Yunhui; Wen, Vivian; Pilgram, Ryan
Subject: RE: Wistron CY16Q4 Report

Hi Grace,

Please find the attachment for 201604 royalty report of Apple products.

Thanks,

Allie

From: Tai, Grace [mailto:gtai@qualcomm.com ]
Sent: Saturday, February 11, 2017 7:20 AM
To: Allie Wu/WHQ}Wistron <ALLIE WU@WISTRON.COM >
Cc: Albert Chang/WHQ}Wistron <ALBERT CHANG@WISTRON.COM >; Chae-Banks, Yunhui <yunhuic@qualcomm.com >;
Wen, Vivian <swen@qualcomm.com >; Pilgram, Ryan <rpilgram@qualcomm.com >
Subject: RE: Wistron CY16Q4 Report

Hi Allie,

Could you please advise if there is any updates regarding Wistron CY16Q4 Apple royalty report?

Thanks,

Grace Tai (~$)

EXHIBIT 14
PAGE 361
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.257 Page 22 of 118
Tel: 858-845-6244

gtai @gualcomm.com

EXHIBIT 14
PAGE 362
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.258 Page 23 of 118

Exhibit 15

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.259 Page 24 of 118

Exhibit 16

EXHIBIT SUBMITTED
PARTIALLY UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.260 Page 25 of 118

April 25, 2017

Donald Rosenberg

EVP, General Counsel & Corporate Secretary
QUALCOMM Incorporated


Dear Don:

As you may have already heard from our contract manufacturers, Apple has not remitted
funds to those contract manufacturers for royalty payments for the quarter ending March 31,
2017. This should come as no surprise to Qualcomm. Derek and I have discussed this
eventuality at various times in the past few years. Qualcomm’s refusal to license on a fair,
reasonable, non-discriminatory basis is harming not only Apple, but our contract
manufacturers, other chipset companies and the wider industry. We believe Qualcomm is
charging the contract manufacturers, who in turn pass back to Apple and its customers,
royalties based on an illegal manipulation of the market for cellular enabled
chipsets. Withholding these royalty payments from the contract manufacturers is consistent
with the very public legal claims we have made against Qualcomm, and is also very
appropriate given the nature of our current dispute.

Our legal filings make clear that Qualcomm has been charging royalties for technologies they
have nothing to do with for years. The more Apple innovates with unique features the more
money Qualcomm collects for no reason, and the more expensive it becomes for Apple to
fund these innovations. Despite being just one of over a dozen companies that contributed to
basic cellular standards, Qualcomm forces the contract manufacturers and Apple to pay
many times more in royalty payments than all the other cellular patent licensors
combined! This is grossly unfair and needs to be reviewed by the courts and appropriate
antitrust agencies - activities which are now underway.

Until these matters are resolved Apple feels it has no choice but to take this step. As I have
said many times, Apple values its commercial relationship with Qualcomm but we also want
to continue innovating and providing our customers with the very best products we can at
prices that are fair. Qualcomm's refusal to meet its FRAND commitments and its insistence
on taxing our innovation is both illegal and anticompetitive. We cannot support this behavior.

Apple Inc.
1 Infinite Loop
Cupertino, CA 95014

T 408 996-1010
F 408 996-0275
www.apple.com
EXHIBIT 16
PAGE 367
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.261 Page 26 of 118

Apple is not entitled to a free ride - we have never claimed that. We stand ready to pay a fair
and reasonable amount for the use of Qualcomm’s patented technologies. I specifically refer
you to the
that was attached to the last offer we made to Qualcomm in January. We
believe this action shows our commitment to pay FRAND royalties once the amount is finally
determined by the courts on a fair, reasonable and non-discriminatory basis.

Best regards,

Bruce Sewell

Senior Vice President and General Counsel
Apple Inc.

Apple Inc.
1 Infinite Loop
Cupertino, CA 95014

T 408 996-1010
F 408 996-0275
www.apple.com
EXHIBIT 16
PAGE 368
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.262 Page 27 of 118

Exhibit 17

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.263 Page 28 of 118

Exhibit 18
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.264 Page 29 of 118

From: Tien. Shawn (GSM) [mailto:Shawn_Tien@compal.com]
Sent: Thursday, April 27, 2017 5:01 AM
To: Yunhui Chae-Banks <yunhuic@qualcomm.com>
Subject: QTL royalties

Hi Yunhui,

Long time and how are you….? Hope this mail find you well.

I am writing you the early headup in considering of QTL royalty reporting and payment issue
recently.
We were informed by our shared key client, who are also under major legal action with
qualcomm mutually.
Our customer has recently formally requested compal to stop the royalty payment to
qualcomm that associated to their business until legal action is completed. We may have to
take some action about this to revise the Q1 report.

This is for your early notice, let me know if you need quick conversation about this.

Thanks,
Shawn

Shawn Tien
Sr. Director of Marketing and Product Mgmt.
Product Innovation
Smart Device Business Group
Compal

Office: +886-2-8751-6228 ext 13575
Address: 385 Yangguang Str. Neihu, Taipei

=====================================================================
=====================================================================
======================
This message may contain information which is private, privileged or confidential of Compal
Electronics, Inc. If you are not the intended recipient of this message, please notify the sender
and destroy/delete the message. Any review, retransmission, dissemination or other use of, or
taking of any action in reliance upon this information, by persons or entities other than the
intended recipient is prohibited.
=====================================================================
=====================================================================
======================

EXHIBIT 18
PAGE 373
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.265 Page 30 of 118

Exhibit 19
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.266 Page 31 of 118
Message

From: Chang. JackRF (GSM) [JackRF _Chang@compal.com]
Sent: 5/3/2017 2:04:52 AM
To: Grace Tai [/o=Qualcomm/ou=Exchange Administrative Group (FYDIBOHF23SPDLT)/cn=Reci pients/cn=gtaia22]
CC: Vivian Wen [/o=Qualcomm/ou=Exchange Administrative Group (FYDIBOH F23SPDLT)/cn=Recipients/cn=swen]; Chiu.
Antony (GSM) [Antony_Chiu@compal.com]; Chang. Jill (GSM) Uill_chang@compal.com]
Subject: RE: Compal Q1'17 royalty report
Attachments: 2017Ql-Qualcomm Royalty Report 20170414-Revised.xls

Dear Grace

We received the notification from Apple about royalty payment .

Apple will not be transmitting funds to CEI for the quarterly royalty payment to Qualcomm since 201701.

So we will only submit non-Apple ' s report/payment.

Please refer to the attachment for 17' Ql non-Apple' s report ,and revised invoice for 17' Ql payment to us.

Thank you !

~-Jack Chang
f=~~H~I~!Rf5Hnl~0~ (irH/\$)
Compal Electronics, Inc.
TEL : (02)8751-6228 Ext.18094
FAX: (02)8751-8518

Address: i:l'jtm 11491 ~~~~@1Clli3855Jj~6fl (SDBG*tl)
E-Mail: JackRF Chang@compal.com

EXHIBIT 19
PAGE 374
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.267 Page 32 of 118

Exhibit 20

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.268 Page 33 of 118

Exhibit 21

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.269 Page 34 of 118

Exhibit 22

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.270 Page 35 of 118

Exhibit 23

EXHIBIT SUBMITTED
PARTIALLY UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.271 Page 36 of 118
Message

From: anny.ch.tong@foxconn.com [anny.ch.tong@foxconn.com)
Sent: 4/27/2017 12:11:16 AM
To: Vivian W en [/o=Qualcomm/ou=Exchange Administrative Group (FYDIBOHF23SPDLT)/cn=Recipi ents/cn=swen]
CC: hellen.y.wang@foxconn.com
Subject: RE: Q1'17 Fox iPhone royalty

Hi Vivian

Still watiting for funds from customer , I bave no idea when can release patment to you .

Best Regards

Alllly

swen@qualcomm.com ToiG anny.ch.tong@mail.foxconn.com
CciG hellen.y.wang@mail.foxconn.com
2017/4/26 i:tWi:tE
RE: Q1'17 Fox iPhone royalty
08:32:25
Hi Anny,

When can we expect to receive Qli: 17 royalty payment? Thanks.

Thank you.

Vivian Wen (oa ' OA0)
Qualcomm Technology Licensing
5775 Morehouse Dr.
San Diego, CA92121
Tel : 858-651-0776
Fax:858-651-1975
swen@gualcomm.com

From: anny.ch.tong@foxconn.com [mailto:anny.ch.tong@foxconn.com ]
Sent: Monday, April 17, 2017 5:42 PM
To: Vivian Wen <swen@qualcomm.com>
Cc: hellen.y.wang@foxconn.com
Subject: Q1'17 iPhone royal ty

Hi Vivian

Please refer HH iPhone Ql 2017 royalty report, Total amount i s · · · · · · ·' please issue 2 pcs
invoice, since one of it need to be submitted to china custom.

EXHIBIT 23
PAGE 387
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.272 Page 37 of 118

Best Regards

Anny

mail from ip--> I0. 195.151.150
mail from pc-->f2829267a
Version: Super Notes l.6.9.8B

mail from ip-->10.195. 15 1.150
mail from pc-->f2829267a
Version: Super Notes l.6.9.8B

EXHIBIT 23
PAGE 388
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.273 Page 38 of 118

Exhibit 24

ENTIRE EXHIBIT
SUBMITTED UNDER SEAL
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.274 Page 39 of 118

Exhibit 25
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.275 Page 40 of 118

(/)

Sign In

Ina Fried (/Community/Ina) Apr 28

Apple confirms it won't make royalty payments to Qualcomm
until dispute settled

Paul Sakuma / AP

Apple confirmed Friday that it won't make any further royalty payments to Qualcomm until a court weighs in on
the dispute between the two companies. Earlier on Friday Qualcomm lowered its quarterly earnings forecast
(https://www.axios.com/qualcomm-cuts-earnings-forecast-after-apple-withholds-more-royalty-pay-
2383327440.html), noting that Apple, via its suppliers, had stopped making payments.

"We've been trying to reach a licensing agreement with Qualcomm for more than five years but they have refused
to negotiate fair terms," Apple told Axios in a statement. "Without an agreed-upon rate to determine how much is
owed, we have suspended payments until the correct amount can be determined by the court. As we've said
before, Qualcomm's demands are unreasonable and they have been charging higher rates based on our innovation,
not their own."

The context: Apple is suing Qualcomm for $1 billion and Qualcomm has filed a countersuit of its own. The legal
battle is fraught for both sides, though, with Apple being one of Qualcomm's biggest customers and Apple needing
Qualcomm's modems for the Verizon and Sprint versions of the iPhone.

https://www.axios.com/apple-confirms-it-wont-make-royalty-payments-to-qualcomm-until-dispute-2383383892.htm...
EXHIBIT 25
PAGE 476
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.276 Page 41 of 118

Exhibit 26
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.277 Page 42 of 118

EXHIBIT 26
PAGE 477
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.278 Page 43 of 118

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PAGE 478
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EXHIBIT 26
PAGE 479
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EXHIBIT 26
PAGE 480
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.281 Page 46 of 118

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IRH WQEVX TLSRIW XIRHIH XS EHSTX LMKL WTIGMJMGEXMSRW FYX [MXL E QSVI EJJSVHEFPI TVMGI 8LIWI GYWXSQIV
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0SSOMRKELIEHXLIWPS[HS[RSJ'LMREvWIGSRSQ][MPPYRHSYFXIHP]GSRXVMFYXIXSEFYQTMIVJMRERGMEPIRZMVSRQIRX
FYXMXMWWXMPPERXMGMTEXIHXSFIXLIPEVKIWXGSRXVMFYXSVXSKPSFEPKVS[XLEWMXWIGSRSQ]XVERWMXWXSLMKLIVZEPYIEHHMRK
QERYJEGXYVMRKWIVZMGIWERHFIGSQIWQSVIGSRWYQIVHVMZIR8LI+VSYTLEWXSQEOIGSRXMRYSYWMQTVSZIQIRXERH
VIQEMRGSQTIXMXMZI;IEMQXSFIXXIVWIVZISYVWXVEXIKMGGYWXSQIVWF]RSXSRP]SJJIVMRKLEVH[EVIMRXIKVEXIHHIWMKR
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SJIRHXSIRHWIVZMGITPEXJSVQXSSXLIVTEVXWSJXLIZEPYIGLEMRPMOIEJXIVWEPIWWIVZMGIWERHJYPJMPPMRKSYVSFPMKEXMSRW
EWERIRZMVSRQIRXEPJVMIRHP]GSVTSVEXISVKERMWEXMSR

%QMHXLIHS[RXYVRSJIGSRSQ]ERHFYWMRIWWMRXLIJMVWXLEPJSJXLI+VSYTvWIRXMVIWXEJJLEZITIVJSVQIHXLIMV
VSPIWZMKMPERXP]ERH[SVOIHHMPMKIRXP]ERHWXVMZIHLEVHXSQIIXXLILIEH[MRHWHYVMRKFEHXMQIWERHQMRMQMWIHXLI
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XLEROWXSXLIGYWXSQIVWvWLEVILSPHIVWvFYWMRIWWTEVXRIVWvERHXLIFSEVHSJHMVIGXSVWvWYTTSVXXSXLIQEREKIQIRX
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',-,=Y=ERK
%GXMRK'LEMVQER

,SRK/SRK1EVGL

 *-,13&-0)0-1-8)(%229%06)4368

EXHIBIT 26
PAGE 481
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238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
*SVXLI]IEVIRHIH(IGIQFIV

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G  *EMVZEPYIQIEWYVIQIRXWSJJMRERGMEPMRWXVYQIRXW 'SRXMRYIH
*EMVZEPYISJXLI+VSYTvWJMRERGMEPEWWIXWERHJMRERGMEPPMEFMPMXMIWXLEXEVIQIEWYVIHEXJEMV
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*MRERGMEPEWWIXW *EMVZEPYI :EPYEXMSRXIGLRMUYI W  7MKRMJMGERX SJYRSFWIVZEFPI
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97v 97
      
0MWXIHIUYMX]MRZIWXQIRXW 0MWXIHIUYMX] 2MP 0IZIP 5YSXIHFMHTVMGIWMR 2% 2%
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z z I\GLERKIWEXXLIIRH
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 FIEVMRKMRWXVYQIRXW MRXIVIWXFIEVMRK MRXIVIWXFIEVMRK GEWLJPS[QIXLSH[EWYWIHXS MRXIVIWXVEXIQEMRP] I\TIGXIH
 GPEWWMJMIHEWWLSVXXIVQ MRWXVYQIRXW MRWXVYQIRXW GETXYVIXLITVIWIRXZEPYISJXLI XEOIRMRXSEGGSYRX KYEVERXIIHMRXIVIWX
 MRZIWXQIRXWHIWMKREXIH z z I\TIGXIHVIXYVRSRETVYHIRX HMJJIVIRXGSYRXIVTEVX VEXIXLILMKLIVXLI
 EWJMRERGMEPEWWIXWEX FEWMWEWWYQIHXSETTVS\MQEXI JMRERGMEPMRWXMXYXMSR JEMVZEPYIERH
 *:840MRXLIGSRWSPMHEXIH XLIQMRMQYQVIXYVRFEWIHSR [LMGLVERKIHJVSQ ZMGIZIVWE
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HITSWMXW[LMGLLEZIQEXYVIH  XS
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 HIWMKREXIHEWJMRERGMEP RSXIW   RMP  I\TIGXIHZSPEXMPMX]
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 GSRWSPMHEXIHJMRERGMEP XLILMWXSVMGEPZSPEXMPMX] [SYPHVIWYPXMRER
 WXEXIQIRXW 7LEVITVMGI97 RMP SJWLEVITVMGIWSJ MRGVIEWIMRXLIJEMV
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)\IVGMWITVMGI97 RMP GSQTERMIWXLEXEVI SJXLIGSRZIVXMFPI
GSRWMHIVIHXSFI RSXIW
GSQTEVEFPI

'2-- HIJMRIHMRRSXI  'SRZIVXMFPI 2MP 0IZIP *EMVZEPYIHIVMZIHJVSQQEVOIX 2% 2%
 HIWMKREXIHEWJMRERGMEP RSXIW ZEPYISJXLIWLEVIWSJ1ERKS
 EWWIXWEX*:840MRXLI z -RXIVREXMSREPMRVIGIRX
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 WXEXIQIRXW

8LIVI[IVIRSXVERWJIVWFIX[IIRPIZIPXSHYVMRKXLI]IEVWIRHIH(IGIQFIVERH

*SV XLI SXLIV JMRERGMEPEWWIXWERHJMRERGMEP PMEFMPMXMIW XLI HMVIGXSVWSJ XLI 'SQTER]GSRWMHIV XLEX XLI
GEVV]MRK EQSYRXW SJ JMRERGMEP EWWIXW ERH JMRERGMEP PMEFMPMXMIW VIGSKRMWIH MR XLI GSRWSPMHEXIH JMRERGMEP
WXEXIQIRXWETTVS\MQEXIXLIMVJEMVZEPYIW

 *-,13&-0)0-1-8)(%229%06)4368

EXHIBIT 26
PAGE 482
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.283 Page 48 of 118

238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
*SVXLI]IEVIRHIH(IGIQFIV

 *-2%2'-%0-278691)287 'SRXMRYIH
H  *MRERGMEPEWWIXWERHJMRERGMEPPMEFMPMXMIWWYFNIGXXSSJJWIXXMRK
8LIHMWGPSWYVIWWIXSYXMRXLIXEFPIFIPS[MRGPYHIJMRERGMEPEWWIXWERHJMRERGMEPPMEFMPMXMIWXLEXEVISJJWIXMR
XLI+VSYTvWGSRWSPMHEXIHWXEXIQIRXSJJMRERGMEPTSWMXMSR

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MRZIWXQIRXW[MXLFEROFSVVS[MRKWEXXLIWEQIFEROXLEXEVIHYIXSFIWIXXPIHSRXLIWEQIHEXIERHXLI
+VSYTMRXIRHWXSWIXXPIXLIWIFEPERGIWSRERIXFEWMW

%WEX(IGIQFIV

+VSWWEQSYRXW
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PMEFMPMXMIW PMEFMPMXMIW 
+VSWWEQSYRXW EWWIXWWIXSJJMR TVIWIRXIHMRXLI
SJVIGSKRMWIH XLIGSRWSPMHEXIH GSRWSPMHEXIH
*MRERGMEPEWWIXWPMEFMPMXMIW JMRERGMEP WXEXIQIRXSJ WXEXIQIRXSJ
WYFNIGXXSSJJWIXXMRK EWWIXW PMEFMPMXMIW JMRERGMEPTSWMXMSR JMRERGMEPTSWMXMSR
97v 97v 97v
   
&EROFEPERGIW   z
   
&EROFSVVS[MRKW   z
   
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%WEX(IGIQFIV

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WYFNIGXXSSJJWIXXMRK EWWIXW PMEFMPMXMIW JMRERGMEPTSWMXMSR JMRERGMEPTSWMXMSR
97v 97v 97v
   
&EROFEPERGIW   z
   
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*-,13&-0)0-1-8)(%229%06)4368 

EXHIBIT 26
PAGE 483
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.284 Page 49 of 118

238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
*SVXLI]IEVIRHIH(IGIQFIV

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8LI+VSYTHIXIVQMRIWMXWSTIVEXMRKWIKQIRXWFEWIHSRMRXIVREPVITSVXWVIZMI[IHF]XLIGLMIJSTIVEXMRK
HIGMWMSRQEOIVXLI'LMIJ)\IGYXMZI3JJMGIVJSVXLITYVTSWISJEPPSGEXMRKVIWSYVGIWXSXLIWIKQIRXERHXS
EWWIWWMXWTIVJSVQERGI

8LI+VSYTvWSTIVEXMSRWEVISVKERMWIHMRXSXLVIISTIVEXMRKWIKQIRXWFEWIHSRXLIPSGEXMSRSJGYWXSQIVW{
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 *-,13&-0)0-1-8)(%229%06)4368

EXHIBIT 26
PAGE 484
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.285 Page 50 of 118

238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
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*-,13&-0)0-1-8)(%229%06)4368 

EXHIBIT 26
PAGE 485
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238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
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 *-,13&-0)0-1-8)(%229%06)4368

EXHIBIT 26
PAGE 486
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238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
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7IKQIRXEWWIXWERHPMEFMPMXMIW 'SRXMRYIH
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*-,13&-0)0-1-8)(%229%06)4368 

EXHIBIT 26
PAGE 487
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.288 Page 53 of 118

238)7838,)'32730-(%8)(
*-2%2'-%078%8)1)287
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 *-,13&-0)0-1-8)(%229%06)4368

EXHIBIT 26
PAGE 488
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.289 Page 54 of 118

Exhibit 27
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.290 Page 55 of 118





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EXHIBIT 27
PAGE 489
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.291 Page 56 of 118

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EXHIBIT 27
PAGE 490
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.292 Page 57 of 118

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EXHIBIT 27
PAGE 491
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.293 Page 58 of 118

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EXHIBIT 27
PAGE 492
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EXHIBIT 27
PAGE 493
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.295 Page 60 of 118

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EXHIBIT 27
PAGE 494
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.296 Page 61 of 118

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EXHIBIT 27
PAGE 495
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.297 Page 62 of 118


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EXHIBIT 27
PAGE 496
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.298 Page 63 of 118

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EXHIBIT 27
PAGE 497
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.299 Page 64 of 118

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EXHIBIT 27
PAGE 498
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.300 Page 65 of 118

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EXHIBIT 27
PAGE 499
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.301 Page 66 of 118

Exhibit 28
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.302 Page 67 of 118

EXHIBIT 28
PAGE 500
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.303 Page 68 of 118

PEGATRON SPOKESPERSON
Name: Charles Lin
Title: Chief Financial Officer
Tel. 886(2) 8143-9001
E-mail: ir@pegatroncorp.com

DEPUTY SPOKESPERSON
Name: Ming-Chun Tsai
Title: Deputy Director of Corporate Information
Tel.: 886(2) 8143-9001
E-mail: ir@pegatroncorp.com

CORPORATE HEADQUARTERS
Address: 5F, 76, Ligong St., Beitou District, Taipei City
Tel. 886(2) 8143-9001

MANUFACTURING SITE
Address: No.5, Xingye St., Guishan Township, Taoyuan City
Tel.: 886(3) 319-6899

COMMON SHARE TRANSFER AGENT AND REGISTRAR
Name: Registrar & Transfer Agency Department of KGI Securrries Co. LTD.
Address: 5F, 2, Sec. 1, Chung-Ching South Road, Taipei City
Tel.: 886(2) 2389-2999 Website: https://www.kgieworld.oom.tw

AUDITORS
CPA Firm: KPMG
Name of CPA: Ulyos K.J. Maa and Charlotte WW Lin
Address: 68F, TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City
Tel.: 886(2) 8101-6666 E-mail: http://www.kpmg.oom.tw

OVERSEAS SECURITIES EXCHANGE
Luxemburg Stock Exchange: http://www.bourse.lu

FOR MORE INFORMATION ABOUT PEGATRON
http://www.pegatroncorp.com

EXHIBIT 28
PAGE 501
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.304 Page 69 of 118

This English version of the Pegatron Annual Report is a concise translation of the
Mandarin version. This document is created for the sole purpose of the convenience for
its non-Mandarin readers and is not an official document to represent the financial
status of the Company per Taiwan laws.
Pegatron Corporation does not assure the accuracy of this translated document. Readers
wishing to view the official audited version of Pegatron 's financial reports can obtain a copy of
the Pegatron Annual Report (Mandarin version) on the Pegatron Corporation website
(www.pegatroncorp.com ).

EXHIBIT 28
PAGE 502
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.305 Page 70 of 118

TABLE OF CONTENTS
1. Letter to Shareholders ..................................................................................................... 1
2. Company Profile ............................................................................................................... 3
2.1 Date of Incorporation .......................................................................................... 3
2.2 Company Milestones ........................................................................................... 3
3. Corporate Governance .................................................................................................... 5
3.1 Organization Structure........................................................................................ 5
3.2 Board of Directors and Management Team ..................................................... 8
3.3 Implementation of Corporate Governance ...................................................... 23
3.4 Information Regarding CPA Fees ..................................................................... 45
3.5 Information on Change of CPA ......................................................................... 46
3.6 Management Team Who Had Worked for the Independent Auditor ............. 46
3.7 Status of Net Change in Shareholding and Shares Pledged ......................... 46
3.8 The Relation of the Top Ten Shareholders ..................................................... 47
3.9 Long-Term Investment Ownership ................................................................... 47
4. Capital and Shares ......................................................................................................... 48
4.1 Capital and Shares ............................................................................................ 48
4.2 Issuance of Corporate Bond ..............................................................................55
4.3 Preferred Shares ................................................................................................55
4.4 Issuance of Global Depository Receipts ......................................................... 56
4.5 Employee Stock Option .................................................................................... 57
4.6 Employee Restricted Stocks .................................................................57
4.7 New Shares Issuance in Connection with Mergers and Acquisitions .......... 62
4.8 Financing Plan and Implementation ................................................................ 62
5. Overview of Business Operation .................................................................................. 63
5.1 Business Activities............................................................................................ 63
5.2 Market and Sales Overview .............................................................................. 71
5.3 Status of Employees ......................................................................................... 77
5.4 Expenditure on Environmental Protection ...................................................... 77
5.5 Employee Relations ........................................................................................... 78
5.6 Important Contracts .......................................................................................... 80
6. Financial Information ..................................................................................................... 81
6.1 Five-Vear Financial Summary.......................................................................... 81
6.2 Five-Vear Financial Analysis............................................................................ 89
6.3 Audit Committee's Review Report.................................................................. 97
6.4 Consolidated Financial Statements ............................................................... 98
6.5 Non-Consolidated Financial Statements........................................................ 98
6.6 Financial Difficulties ......................................................................................... 98

EXHIBIT 28
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Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.306 Page 71 of 118

7. Review of Financial Position, Management Performance and Risk Management... 99
7.1 Analysis of Financial Status ............................................................................. 99
7.2 Analysis of Operating Results ........................................................................ 100
7.3 Analysis of Cash Flow ..................................................................................... 101
7.4 Major Capital Expenditure ............................................................................... 101
7.5 Investment Policy............................................................................................. 101
7.6 Analysis of Risk Management.........................................................................101
7.7 Other Major Risks ............................................................................................. 105
8. Other Special Notes ..................................................................................................... 106
8.1 Affiliated Companies ........................................................................................106
8.2 Private Placement Securities .......................................................................... 111
8.3 The Shares of the Company Held or Disposed of by the Subsidiaries ....... 111
8.4 Special Notes.................................................................................................... 111
8.5 Events with Significant Impacts ..................................................................... 111

EXHIBIT 28
PAGE 504
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(English Translation of Financial Report Originally Issued in Chinese)

PEGATRO'll CORPORATIO'll AND ITS SUBSIDIARll<:S

'llOTES TO CONSOLIDATED FI'llANCIAL STATK\1ENTS (CO'llT'D)

D. ()thcr incon1c an<l expenses fron1 Related Pa11ics
For the Years Ended December 31
2015 2014
Others $ 154

(3) Key management personnel compensation:
For the Years Ended December 31
2015 2014
Short-tenn employee benefits $ 602,068 543.857
Post-employment benefits 4,584 4,818
Share-based payn1cnts 169,745 40,022
$_ _ _ _ _ _1_16 ..,_39_7 _ _ _ _ _ _5_ss..,6_9_7

Please refer to Notes 6(21) and 6(22) for further explanations related to share-based payn1cnt
transru:tions.

8. Pledged Assets

As of Dcccn1bcr 31. 2015 and 2014, pledged assets \Vere as fol knvs:
December 31, Decem her 31,
~,\sset Purpose of pledge
2015 2014
Other financial asset (~usto1ns dut}· guarantee, collateral, rental S 44,533 45,255
deposits, travel agency guarantee, etc.
:.Jon-current assets Bank loans 88,517
held-for-sale
Property, pl lint and Bll11k lolln~ 1,616,838 1.858.372
equipn1enL
Long-tenn prepaid Bank loans 12,333
rentals
Refundllble deposiLs (\1stoms duty guarantee. custon1 depo~its, 24,300 27.044
and deposits for petforn1ance guarantee
$___1.,1,.6R.,,.,-,,.6,.71" ___2,.,,.0..
3.,1,,.s.,2..
1

9. Significant Commitments And Contingencies

( l) Major commitlnents and contingencies \Vere as follo\vs:

A. Unused standby letters of credit
December 31, 2015 December 31, 2014
EUR $ 3.01 () 2.973
JPY 3,262.883 5,882,425
USD 7.211 30,633

13. Promissory notes and certificates of deposit obtained for business purpose \Vere as follo\vs:
December 31, 2015 December 31, 2014
NTD $ 6,689 11,997

216

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(English Translation of Financial Report Originally Issued in Chinese)

Pi<:GATRON CORPORATION AND ITS SUBSIDIARll<:S

NOTES TO CONSOLIDATED FI'llANCIAL STATK\1ENTS (CONT'D)

C. As of December 31, 2015 and 2014, the significant contracts for purchase of properties by
the Group amounted to Sl3.223,710 and S5,219,870. of which $6,258.950 and $2.894,149,
respectively, \Vere unpaid.
D. As of December 31, 2015 and 2014, the Group provided endorsement guarantee for bank
loans obtained by the related parties, including Group entities, amounting to $9,841.287 and
S 16,488,504, respectively.
E. As of December 31, 2015, the Group issued a tariff guarantee ofS276,l 75 to the bank for the
purpose of importing goods.
f. The board of directors of Ability (T\V) decided to build a new office building with its own
land on September 15, 2014. Constrnction will be provided by Ta Chen Construction &
Enginccting (\.HT). The whole contract price for this construction is S824,775.

(2) Significant contingent liability: None.

10. LOSSES DUE TO ~IAJOR DISASTERS: None.

11. SUBSEQUE'llT EVENTS:

In order to maintain the Company's credit standing and shareholders' equity, the Board of Directors
resolved to buy back 50,000 thousand shares of the Company during January 22 to March 21, 2016.
Prices for this repurchase ranged between $46.30 to $80.00 per share. Please refer to Market
Observation Post System for details.

12.0THER

The employee benefits, depreciation, depletion m1d mnortization expenses categorized by
function, \Vere as follo\vs:
For the ''{car Ended For the ''{car Ended
Dccc1nbcr 31,2015 Dccc1nbcr 31,:2014
Operating Operating Operating Operating
By iten1 Totlll Total
Cost cxocnsc Cost cxocnsc
En1ployee benefit
Salary $ 45,440,68, 16,965,510 62,406,l 94 37,138,08 13,614,362 50,752,449
Health and labor
4,951,812 1,049,772 6,001,584 3,337,938 818,849 4, 156,787
insurance
Pension 5,268,762 920,554 6, 189,316 3, 152,526 679,551 3,832,077
Others 2,270,572 874,115 3,144,687 1,851,880 666,358 2,518,238
Depreciation 12,164,759 1,295,37 l 13,460,130 l 1,717,766 1,833,947 13,551,713
AinorLizlltion 30,094 193.385 223.479 29,509 170.813 200,322

.A..bovc depreciations <lid not include depreciation in invcstn1L11t property which \Vas accounted
under non-operating expense as fol knvs:
For the Years i<:nded December 31
2015 2014
Depreciation in investment property $
-------- 11,270 10,379

217

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(English Translation of Financial Report Originall~1 Issued in Chinese)

PEGATRON CORPORATIO~ A~D ITS SlJBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONT'D)

13. SEG\'IENT l~FORMATION

( 1) G<.·rn;ral lnfomiation

The Group's operating scgm<.11ts required to be disdoscd arc catcgori;>;c;d as OMS (Design,
Manufacturing and Service) and Strategic Investment Group. DMS's main operating activities
arc designing and manufacturing computer, communication and consumer electronics' <.11d
products, and providing aftcr-saks service. Strategic Investment Group is OMS' s upsti-cam and
do\vnstream supply chain, strategic investments and other related investments anns. The chief
operating decision maker's main responsibility is to integrate strategy that creates operating
synergy throughout the supply chain and to allocate the profit from the operating result. The
Group assesses performance of the segments based on the segments' profit, and report the
amounts of revenues based on the financial infonnation used to prepare the consolidated
financial statements.

(2) Reportable segment profit or loss, segment assets, segment liabilities, and their mcasur<.111<.11t cu1d
rccondliations

The Group uses the internal management report that the chief operating decision maker reviews
as the basis to determine resource allocation and make a performance cval uation. The internal
management rcp011 indudcs profit before taxation, cxduding any extraordinary activity and
forcib'll exchange gain or losses, because taxation, cxtrnordinary activity and forcib'll exchange
gain or losses are managed on a group basis, and hence they are not able to be allocated to each
reportable segment. In addition, not all reportable segments include depreciation and
amortization of significant non-cash items. The reportable a.mount is similar to that in the report
used by the chief operating decision maker.

The operating SCb'111cnt accounting policies arc similar to the ones dcsc1ibcd in Note 4
"si1:,'1lificant accounting policies" except for the recognition cu1d measurement of pension cost,
which is on a cash basis. The Group treated intcrscgmcnt sales and trnnsfixs as third-pai1y
transactions. They arc measured at market pticc.

218

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(English Translation of Financial Report Originally Issued in Chinese)

PEGATRON CORPORATION AND ITS SUBSIDIARIES

'llOTES TO CO'llSOLIDATED FINA'llCIAL STATEMENTS (CONT'D)

The (Jroup's operating scgrncnt infon11ation and reconciliation were as follo\vs:
Strategic A.djustment
For the Year Investment and
Ended December 31, 2015 DMS Groul! eliminations Total
Revenue:
Revenue from exLenu1l custo1ners s 1,114,266,543 99,446,433 1,213,712,976
lnLersegn1ent revenues 2,580,781 7243,274 (9,824,055)
T oLal revenue $ 1,116,84 7,324 106,689,707 (9,824,055) 1,213, 712,976
Share of profit of associates and
joint ventures accounted for using
equity 1neLhod $ 4,838,315 10,092,787 (14,943,956) (12,854)
Other significant non-n1011etary
itcn1s:
Goodvvill $ 111471923 164 859 113121782
Reportahle segment profit or loss $ 30,324,630 23,808,056 (14,949,672) 39,183,014
A~seLs:
Tnvestn1ents accounted for using
$ 47,585,206 89,508,143 (136,669,158) 424,191
equity n1ethod
Reportable segment assets $ 392,071,442 220,643,421 (136,628,200) 4 76,086,663
Reportable segn1ent liabilities $ 241,691,277 42,180,763 (123,902) 283, 748,138

For the Year
Ended December 31, 2014
Revenue:
Revenue fro1n external euston1ers s 922,718,932 97,019,901 1,019,738,833
Interseginent revenues 1,567605 13,604,269 (15,171,874)
Total revenue $ 924,286,537 110,6241170 !151111 1874! 1,019, 7381833
Shllre of profiL of associllte~ and
joint ventures accounted for using
equity nicthod $ 4 145,662 10,561,052 1151021,037) (320,323j
Other ~ignificm1t non-111onetllry
iten1s:
Goodwill $ 1,106,886 164,860 1,271, 746
Reportable segn1ent profit or loss $ 18,894,004 22,389,431 (15,021,348) 26,262,087
Assets:
Investn1cnts accounted for using
$ 47,572,890 82,269,314 (129,351,832) 490,372
equiLy 111ethod
Reportahle segment assets $ 373,500,846 212,802,987 (129,210,692) 457,093, 141
Reportable segment liabilities $ 239,829,916 42,415,715 (23,720) 282,221,911

219

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(i<:nglish Translation of Financial Report Originally Issued in Chinese)

Pl<:GATRON CORPORATION A'llD ITS SlJBSIDIARll<:S

NOTES TO CONSOLIDATED FINANCIAL STATEME'llTS (CONT'D)

(3) Geographic information
In presenting intOr1nation on the basis of geography~ segment revenue is based on the
geographical location of custon1crs and SC.!::,T111cnt assets arc based on the gcOb'Taphical location of
the assets.
A. External Sales
Region 2015 2014
Europe s 510.430.274 316,907,114
USA 273.135,851 301.753,238
Tai"'an 185.605.468 224,249,202
China 100.602.388 55.944.888
Japan 81,751.727 61,244.411
Others 62,187,268 59.639,980
Total 1,213,712,976 1,019,738,833

B. Non-current assets

Region December 31, 2015 December 31, 2014
Tai"'an s 21,546,353 19,067,524
China 57,097,050 60, 116,829
Others 1,018,603 1,100,357
Total $
--------
Non-current assets include property) plant and
79,662,006

equip1nent~ investment
80,284,710

property~ intangible
assets~ and other non-current assets, excluding financial instnnnents~ deterred tax assets~

pension fund assets~ m1d rights arising tfo1n an insurm1ce contract (non-current).

(4) Mai or Customer

Major customers from DMS in 2015 and 2014 were as follows:
c:ustomer 2015 2014
A s 729,205.460 521,007,973
B 122,375.001 120,950.470
c 61,848,011 42.051.907
$ 913,428,472 684,0 I 0,350

220

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Attachment II

(English Translation of Financial Report Originally Issued in Chinese)

PEGATRON CORPORATION

NON-CONSOLIDATED FINANCIAL STATE1\1ENTS

DECEMBER 31, 2015AND 2014

(With Independent Accountants' Audit Report Thereon)

221

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(English Translation of Financial Report Originally Issued in Chinese)

AUDIT REPORT 01'' ll\DJ<.:Pl£ND1£NT ACCOLJ.Yl'A.Yl'S

To the Board of Directors of
Pegatron Corporation

\Ve have audited the accompanyi11g balm1ce sheets of Pegatron Corporation (the "Company"') as of
December 31, 2015 and 2014. and Lhe related statements of comprehensive income. changes in
ettuity and cash flows for the years then ended. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on Lhcse financial statements
based on our audits. Vle did not audit t11e financial statemellts of certain investees accounted for tmder
the equity metl1od, i11 which the Company's long-tenn equity investments represented 4.38% and 5.14%
of total assets as of December 31, 2015 and 2014, respectively, and related share of profit or loss of
subsidiaries, associaLcs and joint ventures accounted for under equity method represented 4.32% and
6.51 % ofprofi.L before Lax for the years ended December 31, 2015 and 2014, rcspccLivcly. The financial
stateme11ts of these investees were audited by other auditors wl1ose reports have been furnisl1ed to us,
and our opinion, insofar as it relates to the amounts for these investees, is based solely on the reports of
other auditors.

We conducted our audits in accordance with "RegulaLion Governing Auditing and Cenifi.cation or
Fi11ancial Statements by Certified Public Accountants"' ai1d auditing standards generally accepted in t11e
Republic or China. Those regulations and standards require thaL we plan and perform Lhc audit to obtain
reasonable assurance about whether the non-consolidated financial statements are free of material
misstatements. An audit includes examining, on a LesL basis, evidences supporting the amoums and
disclosures in the non-consolidated financial statements. An audit also includes assessing the

accounting p1inciples used mid significant estimates made by management, as well as evaluating t11e
overall non-consolidated financial statement presentation. \Ve believe that our audits and the reports
issued by oLher auditors provide a reasonable basis for our opinion.

222

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Jn our opinion. based on our audits and the reports of other auditors. the accon1panylng financial
staten1ents refe1Ted to above present thirly. in all niaterial respects, the financial position of the
Company as of December 31, 2015 and 2014i the results of its operations and its cash flo-..vs for the years
then en<led in conformiLy \Vith the RegulaLions Governing Lhe Prepardtion of Financial Reports by
Securities Issuers.

CPA Ulyos Maa
Securities and Fun1res Comn1ission,
Ministry of Finance, R.O.C~. regulation
(88)Tai-Tsai-Jung(6)No_ 18311

March 17, 2016

Note to Readers

The accon1panying non-consolidated financial slalen1enls are intended only lo present the financial position, results of
operations and ca~h flow~ in accordance \\1ith Regulation~ <Tovcrning the Preparation of Financial Report~ by Securitic~ Issuer~.
in the Republic of China and not those of any other jurisdictions. The standard~, procedure~ and practices to audit 'filch financial
slalements are Lhose generally accepted and applied in Lhe Republic of China.
For the convenience of readers, the accountant~' report and the accompanying non-consolidated financial statement~ have hccn
translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict
bet\veen the English version and the original Chinese version or any difference in the interpretation of the r.vo versions, the
Chinese-language accountants' report and financial slalements shall prevail.

223

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(English Translation of Financial Report Originally Issued in (~hinese)
PEGATRON CORPORATION
NON-CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2015 AND 2014
(A.ll Amounts Expressed in Thousands of Ne"' Tai""'an Dollars)

llecember 31, 2015 llecember 31, 2014
0, 0,
Amount /o .<\mount /o

ASSETS

Current Assets:
Cash llnd Clish equivlllent~ (Note 6(1)) $ 31.919,719 7 31.092,242 7
Financial assets at fair value through profit or loss
288,068
current ('lotc 6(2))
Accounts receivable, net (\fote 6(3 )) 86,443,966 20 I 03, 145,200 24

AccoUI1ts receivable, net- Related parties (:.Jotc 7) 148,231,4 75 34 150,393,887 35

Other receivables, net (Notes 6(3) and 7) 23,581,706 5 12,895,589 3

Tnventories (\rote 6(4)) 26,965,535 6 18,350,385 4

Other f111llncial llSset~-cu1TenL (Nole 6(8)) 41,390 42,141

Other current assets (:.;rote 6(8)) 131,683 136,624

317,603,542 72 316,056,068 73

Non-current assets:
Invest111ents accounted for using equity 111cthod (Note 6(5)) l l 7 ,840,66 l 27 112,093,393 26

Property, planL llnd equipment, net (:>lote~ 6(6) llnd 7) 4,423,894 4,478,327

hllangible a»els ('lote 6(7)) 67,576 48,713

Defe1Ted Lax a~~ets (:>!ote 6( 15)) 291,160 180,305

Other financial assets noncurrent (Note 6(8)) 30,419 26,684

Other noncurrent assets (Note 6(8)) 11,439

122,665, 149 28 116,827,422 27

TOTAL ASSETS $ 440,268,691
- 100 432,883,490
- 100

The accompanying notes are an integral part of the non-consolidated financial statments.

224

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Exhibit 29
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EXHIBIT 29
PAGE 514
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1. Name, Title and Contact Information for Company’s Spokesperson
Spokesperson : Stone Shih
Title : Controller
Tel : 886-2-6616-9999
E-mail : spokesperson@wistron.com

Acting Spokesperson : Mike Liang
Title : Executive Director of PR/Investor Relation
and Treasury Management Division
Tel : 886-2-6616-9999
E-mail : spokesperson@wistron.com
2. Address and Telephone Number of Company’s Registered Office and Headquarters
Office Address Tel
Wistron Corp. 5, Hsin An Rd., Hsinchu Science Park, Hsin- 886-3-577-0707
(Registered office) chu 300, Taiwan, R.O.C.

Wistron Corp. 158, Singshan Rd., Neihu, Taipei, 11469, 886-2-6616-9999
(Headquarters) Taiwan, R.O.C.

Wistron Corp. 21F., No88, Sec.1 ,Hsintai 5th Rd., Hsichih, 886-2-6616-9999
(Headquarters) New Taipei City 22181, Taiwan, R.O.C.

3. The Address and Contact information for Wistron Shareholders Services Office
Address : 158, Singshan Rd., Neihu, Taipei, 11469, Taiwan, R.O.C.
Tel : 886-2-6600-7998
E-mail : stock@wistron.com

4. The Address and Contact information of Auditing CPA in 2016
Name : Ya-Ling, Chen and Li-Li, Lu at KPMG
Address : 68F, TAIPEI 101 TOWER, No.7, Sec.5, Xinyi Road, Taipei, 110,
Taiwan, R.O.C.
Tel : 886-2-8101-6666
Website : www.kpmg.com.tw

5. For more information about Wistron: www.wistron.com
6. For more information about Wistron GDRs:
http://www.bourse.lú
http://www.LondonStockExchange.com
This English version Annual Report is a summary translation of the Chinese version Wistron Annual Report. This
document is created for the sole purpose of the convenience of its readers and is not an official document to represent
the financial position of the company per Taiwan laws.

Wistron Corporation does not guarantee the accuracy of this translated document. Readers wishing to view the official
audited version of Wistron’s financial reports can obtain a copy of the Wistron Annual Report (Chinese version) on the
Wistron Corporation website (www.wistron.com).

EXHIBIT 29
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Wistron Corporation 2016 Annual Report translation

INDEX
1. Letter to Shareholders…………….………….………….………….………….…………. 04
2. Company Introduction
2.1 Quick facts………….………….………….………….………….………….………… 08
2.2 Business summary………….………….………….………….………….………….… 08
2.3 Public listing………….………….………….………….………….………….……… 09
2.4 Milestones………….………….………….………….………….…………. ………… 10
2.5 Organization Structure………….………….………….………….………….……… 20
2.6 Products………….………….………….………….………….………….…………… 23
2.7 Services………….………….………….………….………….………….………… 24
2.8 Long-Term and Short-Term Business Development Plans…………………………… 26
2.9 Market, Production and Sales ……….………………………………………………… 28
2.10 Board of Directors, Supervisors and Key Managers background information……… 34
2.11 Information related to the compensations for directors, president and vice president… 48
2.12 Labor Relations………….………….………….………….………………………… 49
3. Operational Highlights
3.1 Key Accounts in the Past Two Years…………………………………….…………… 52
3.2 Production Value in the Most Recent Two Years……………………………………. 53
3.3 The Sales Value in the Most Recent Two Years…………………………………….… 53
3.4 Taiwan Employee Data during the Past Two Years……………………………………. 53
3.5 Environmental Protection Measures…………………………………….…………… 54
3.6 Corporate sustainability and social responsibility……………………………………. 56
4. Company Shares and Fund Raising
4.1 Capital and Shares…………………………………….……………………………… 60
4.2 Issuance of Corporate Bonds ………………………………………………………… 67
4.3 GDR Issuance………………………………………………………………………… 67
4.4 Employee Stock Options……………………………………………………………… 67
4.5 Implementation of the Company’s Fund Raising and Utilization …………………… 67

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Wistron Corporation 2016 Annual Report translation

5. Financial Standing
5.1 Most Recent 5-Year Concise Financial Information………………………………… 70
5.2 Most Recent 5-Year Financial Analysis……………………………………………… 74
5.3 Audit Committee's Review Report…………………………………………………… 78
6. Financial Analysis
6.1 2016 vs. 2015 financial analysis……………………………………………………… 82
6.2 2016 vs. 2015 operating result analysis……………………………………………… 83
6.3 Cash flow analysis…………………………………………………………………… 84
6.4 Major Capital Expenditures and Impact on Financial and Business…………………… 84
6.5 Investment Policies…………………………………………………………………… 85
6.6 Risk Management……………………………………………………………………… 85
7. Enforcement of Corporate Governance…………………………………………………… 90
8. Enforcement of Ethical Corporate Management………………………………………… 98
9. Enforcement of Social Responsibility……………………………………………………… 104
10. Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016……… F-1
10.1 Independent auditors’ report of the consolidated financial statements of
Wistron Corporation for the years ended December 31, 2016………………………… F-2
10.2 Audited consolidated financial statements of Wistron Corporation as of and
for the years ended December 31, 2016……………………………………………… F-6

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F-76 Wistron Corporation 2016 Annual Report translation

10 WISTRON CORPORATION AND ITS SUBSIDIARIES
Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Group’s debt ratio as of December 31, 2016 and 2015, were as follows:

December 31, December 31,
2016 2015
Total liabilities $ 214,787,109 221,167,831
Total assets $ 282,755,558 290,385,044
Debt ratio 76% 76%

As of December 31, 2016, the Group’s capital management strategy is consistent with the prior year.

(7) Related-party transactions:

(a) Parent company and ultimate controlling party

The Company is the ultimate controlling party of the Group.

(b) Related party transactions

(i) Sales

The amounts of significant sales transactions and outstanding balances between the Group and
related parties were as follows:

Sales Receivables from related parties
December 31, December 31,
2016 2015 2016 2015
Associates $ 1,956,289 5,193,120 5,769 520,060

The selling price and payment terms of sales to related parties depend on the economic
environment and market competition, and are not significantly different from those with third-
party customers.

(ii) Purchases

The amounts of significant purchase transactions and outstanding balances between the Group
and related parties were as follows:

Purchases Payables to related parties
December 31, December 31,
2016 2015 2016 2015
Associates $ 4,701,229 8,806,561 1,186,708 2,093,958

Trading terms of purchase transactions with related parties are not significantly different from
those with third-party vendors.

(Continued)

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Wistron Corporation 2016 Annual Report translation F-77

WISTRON CORPORATION AND ITS SUBSIDIARIES 10

Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(iii) Other income and others

Other receivables from
Amount related parties
December 31, December 31,
2016 2015 2016 2015
Associates:
Rental income $ 11,265 7,109 355 9
Property transactions 679 8,041 137 144
$ 11,944 15,150 492 153

(iv) Operating expense and others

Amount Other payables to related parties
December 31, December 31,
2016 2015 2016 2015
Associates:
Property transactions $ 47,610 115,739 31,069 58,631
Other related parties:
Contribution 2,668 4,907 - -
$ 50,278 120,646 31,069 58,631

(v) Advances to related parties

The Group paid certain expenses on behalf of related parties including purchase, warranty
expense, repair expense and other disbursement were as follows:

Other receivables from related parties
December 31, 2016 December 31, 2015
Associates $ 4,186 15,562

(vi) Advances from related parties

Related parties paid certain expenses on behalf of the Group, including warranty expenses,
traveling expenses, and salaries for overseas employees were as follows:

Other payables to related parties
December 31, 2016 December 31, 2015
Associates $ 12,185 7,470

(Continued)

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F-78 Wistron Corporation 2016 Annual Report translation

10 WISTRON CORPORATION AND ITS SUBSIDIARIES
Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(vii) Receivables from related parties resulting from the above transactions were as follows:

December 31, December 31,
2016 2015
Receivables from related parties:
Notes and accounts receivable $ 5,769 520,060
Other receivable-related parties:
Rental receivable $ 355 9
Receivable from sale of property, plant and
equipment 137 144
Other receivables 4,186 15,562
$ 4,678 15,715

(viii) Payables to related parties resulting from the above transactions were as follows:

December 31, December 31,
2016 2015
Payables to related parties:
Notes and accounts payable $ 1,186,708 2,093,958
Other payables-related parties:
Payable to purchase of property, plant and
equipment $ 31,069 58,631
Other payables 12,185 7,470
$ 43,254 66,101

(c) Transactions with key management personnel

Key management personnel compensation:

2016 2015
Short-term employee benefits $ 57,586 54,752
Post-employment benefits 1,181 1,145
$ 58,767 55,897

(Continued)

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Wistron Corporation 2016 Annual Report translation F-79

WISTRON CORPORATION AND ITS SUBSIDIARIES 10

Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(8) Pledged assets:

The carrying values of pledged assets are as follow:

December 31, December 31,
Pledged assets Object 2016 2015
Property, plant and equipment- Bank loan
lands and buildings $ 333,080 332,461
Other non-current assets -restricted Stand by L/C
bank deposit 9,434 9,524
Other non-current assets -restricted Foreign exchange guarantee
bank deposit 325,745 -
Other non-current assets -restricted Custom guarantee
bank deposit 6,456 6,613
Other non-current assets -restricted Performance guarantee
bank deposit - 10,502
Other non-current assets -restricted Litigation guarantee
bank deposit 980 499
Other current assets -restricted bank Bank loan
deposit - 24,697
$ 675,695 384,296

(9) Commitments and contingencies:

As of December 31, 2016 and 2015, the unused letters of credit were as follows:

December 31, 2016 December 31, 2015
Unused letters of credit $ 90,566 43,648

(10) Losses Due to Major Disasters: None.

(11) Subsequent Events:

The appropriation of earnings for 2016 that was approved at the board of directors meeting on March 20,
2017 were as follows:

2016
Cash dividends $ 3,042,169
Stock dividends 760,542
Total $ 3,802,711

The appropriation of earnings for 2016 are to be presented for approval in the shareholders' meeting to be
held in June.

(Continued)

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F-80 Wistron Corporation 2016 Annual Report translation

10 WISTRON CORPORATION AND ITS SUBSIDIARIES
Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(12) Other:

Total personnel, depreciation and amortization expenses categorized by function for the years ended
December 31, 2016 and 2015 were as follows:

2016 2015
Cost of Operating Cost of Operating
sales expenses Total sales expenses Total
Personnel expenses
ˢSalaries 13,705,128 9,998,975 23,704,103 14,701,406 9,818,310 24,519,716
ˢLabor and health insurance 1,645,473 915,500 2,560,973 1,797,725 960,877 2,758,602
ˢPension 70,681 406,080 476,761 67,805 386,528 454,333
ˢOthers 1,561,656 586,167 2,147,823 1,250,985 592,278 1,843,263
Depreciation 5,695,887 1,961,527 7,657,414 5,600,837 2,241,379 7,842,216
Amortization 8,044 384,063 392,107 9,304 423,702 433,006

The Group had 83,278 and 60,681 employees, respectively, as of December 31, 2016 and 2015.

(13) Segment information:

(a) General information

The major activities of the Group are the design, manufacture and sale of information technology
products. The chief operating decision maker of the Group determines each business group as an
operating segment. According to the provisions of the accounting standard, only the “Research and
Manufacturing Service Department” qualifies under the quantitative threshold criteria as a reportable
segment. Other operating departments are deemed immaterial and need not be disclosed as reportable
segment including the client service group and the related new business investment. The performance
of the department is evaluated based on the operating profit of the Group.

(b) Profit or loss data of the reporting segment (including specific revenues and expenses), assets and
liabilities of the segment, the basis of measurement, and the related eliminations:

No tax expenses or non-operating income and expenses are allocated to the reporting segment. In
addition, the reporting segment does not include depreciation and amortization of significant non-
cash items. The reportable amount is similar to that in the report used by the chief operating decision
maker. The accounting policies of the operating segments are the same as those described in note 4.
The Group evaluates the performance of operating segment on the basis of operating income. The
Group treats intersegment sales and transfers as third-party transactions. They are measured at market
price.

(Continued)

EXHIBIT 29
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Wistron Corporation 2016 Annual Report translation F-81

WISTRON CORPORATION AND ITS SUBSIDIARIES 10

Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Group’s operating segment information and reconciliation are as follows:
2016
R&D and
Manufacturing Others Eliminations Total
Revenues from external customers $ 566,277,457 93,630,774 - 659,908,231
Segment revenues 5,390,073 1,587,130 (6,977,203) -
Total revenues $ 571,667,530 95,217,904 (6,977,203) 659,908,231
Segment profit $ 4,712,175 1,299,895 (1,254,970) 4,757,100
Accounts receivable $ 67,769,096 21,958,386 89,727,482
Inventories 54,568,215 10,648,064 65,216,279
Segment identifiable assets $ 122,337,311 32,606,450 154,943,761
General assets 127,811,797
Total assets $ 282,755,558
Accounts payable $ 108,596,596 14,438,629 123,035,225
Segment identifiable liabilities $ 108,596,596 14,438,629 123,035,225
General liabilities 91,751,884
Total liabilities $ 214,787,109

2015
R&D and
Manufacturing Others Eliminations Total
Revenues from external customers $ 504,428,441 118,845,547 - 623,273,988
Segment revenues 6,430,395 2,588,390 (9,018,785) -
Total revenues $ 510,858,836 121,433,937 (9,018,785) 623,273,988
Segment profit $ 3,074,413 (684,708) (19,340) 2,370,365
Accounts receivable $ 64,044,463 26,896,203 90,940,666
Inventories 50,976,999 16,633,878 67,610,877
Segment identifiable assets $ 115,021,462 43,530,081 158,551,543
General assets 131,833,501
Total assets $ 290,385,044
Accounts payable $ 78,682,911 20,526,408 99,209,319
Segment identifiable liabilities $ 78,682,911 20,526,408 99,209,319
General liabilities 121,958,512
Total liabilities $ 221,167,831

(c) Information about the products and services

Information about the Group’s revenue from external customers was as follows:

2016 2015
Computer, Communication & Consumer electronics $ 566,277,457 504,428,441
Others 93,630,774 118,845,547
$ 659,908,231 623,273,988

(Continued)

EXHIBIT 29
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F-82 Wistron Corporation 2016 Annual Report translation

10
WISTRON CORPORATION AND ITS SUBSIDIARIES
Financial Statements Consolidated With Subsidiaries Audited by CPA of 2016

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(d) Geographical information

In presenting information on the basis of geography, segment revenue is based on the geographical
location of customers and segment assets that are based on the geographical location of the assets.

Revenue from external customers:

Geography 2016 2015
Taiwan $ 430,060,296 390,606,074
Asia 149,968,370 147,565,212
Others 79,879,565 85,102,702
$ 659,908,231 623,273,988

Non-current assets:

December 31, December 31,
Geography 2016 2015
Taiwan $ 6,831,243 7,888,402
Asia 31,648,395 30,674,151
Others 2,796,225 3,586,083
$ 41,275,863 42,148,636

Non-current assets include the property, plant and equipment, intangible assets and other non-current
assets, aside from the financial instruments, deferred tax assets and goodwill.

(e) Information about revenue from major customers

For the years ended December 31, 2016 and 2015, the amounts of sales to customers representing
greater than 10% of net revenue were as follows:

2016 2015
Percentage of Percentage of
Customer Net revenue net revenue Net revenue net revenue
Customer H $ 133,893,200 20 157,977,795 25
Customer B 91,309,525 14 103,461,741 17
Customer G 83,087,174 13 40,234,977 6
Customer F 68,719,028 10 80,761,873 13

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Exhibit 30
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.330 Page 95 of 118

Leading multinationals from Taiwan increase their foreign
assets despite the global crisis

Report dated November 3, 2011

EMBARGO: The contents of this report must not be quoted or summarized in the print,
broadcast or electronic media before 10:00 a.m. Taipei and 2 a.m. GMT on November 3,
2011, and 10:00 p.m. New York on November 2, 2011.

Taipei and New York, November 3, 2011:

The College of Management at Fu Jen Catholic University in Taipei, and the Vale Columbia
Center on Sustainable International Investment (VCC) at Columbia University in New York, are
releasing the first annual report on leading Taiwanese multinationals today, indicating that the
top Taiwanese multinationals are maintaining their growth momentum in their investment abroad
despite the global crisis and a drop in the overall flows of Taiwanese foreign direct investment
(FDI). The research for this report was conducted in 2011 and covers the period 2007 to 2009.1

Highlights

The global financial crisis had a severe negative impact on Taiwan‘s outward investment in 2009.
According to UNCTAD, the FDI outflows of Taiwan dropped dramatically from USD 10.29 billion
in 2008 to USD 5.87 billion in 20092. However, 15 of the top 20 Taiwanese multinationals still
increased their overseas assets in 2009 (table 3 below).

The top 20 Taiwanese multinationals ranked in table 1 below by their foreign assets had around
USD 76 billion in overseas assets, USD 221 billion in foreign sales and employed nearly 1.1 million
persons abroad in 2009 ( see annex table 1 for details other than assets). The total foreign
assets of the 20 multinationals were equivalent to more than 40% of Taiwan‘s outward FDI
stock of around USD 180 billion in 2009. Collectively, the top 20 had 1,164 foreign affiliates in
42 economies. The most prominent industry on the list is electrical and electronic equipment
manufacturing.

1
The research for this report was carried out by Anthony Kuo and Ming-Sung Kao, in association with the College of
Management, Fu Jen Catholic University. The authors would like to thank Professor Yi-Chieh Chang of the Department
of Business Administration at St. John's University, Taipei Campus, for his kind sharing of his data with us. A report on
2010 is expected later this year or next year.
2
UNCTAD, Annex tables to World Investment Report 2010, http://www.unctad.org/Templates/Page.asp?intItemID=55
45&lang=1.
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Table 1. Taiwan: The top 20 non-financial outward investors, 2009a (USD million)

Status
Foreign
Rank Name of company Industry (% of state
assetsc
ownership)b
1 Hon Hai Precision Ind. Co., Ltd. Electrical and electronic equipment Listed (1.62%) 10,699
d
2 Pou Chen Corporation Consumer goods Listed (3.75%) 6,694
3 Asustek Computer Inc. Electrical and electronic equipment Listed (1.11%) 6,416
4 Quanta Computer Inc. Electrical and electronic equipment Listed (1.87%) 5,524
5 Acer Inc. Electrical and electronic equipment Listed (6.56%) 4,897
6 AU Optronics Corp. Electrical and electronic equipment Listed (2.11%) 4,874
7 Wistron Corp. Electrical and electronic equipment Listed (8.82%) 4,667
8 Taiwan Semiconductor Mfg. Co., Ltd. Electrical and electronic equipment Listed (6.73%) 3,661
9 Compal Electronics, Inc. Electrical and electronic equipment Listed (2.16%) 3,458
10 Nan Ya Plastics Corp. Plastics Listed (0.04%) 3,435
11 Delta Electronics, Inc. Electrical and electronic equipment Listed (3.03%) 3,212
12 United Microelectronics Corp. Electrical and electronic equipment Listed (0.65%) 2,591
13 Formosa Chemicals & Fiber Corp. Plastics Listed (0.03%) 2,587
14 Inventec Corporation Electrical and electronic equipment Listed (0%) 2,399
15 Cheng Shin Rubber Ind. Co., Ltd. Rubber and plastics products Listed (2.16%) 2,337
16 Formosa Plastics Corp. Plastics Listed (0.17%) 2,183
17 Yang Ming Marine Transport Corp. Shipping and related services Listed (36.3%) 1,847
18 Synnex Technology International Corp. Electronic products distribution Listed (1.6%) 1,708
19 Far Eastern New Century Corporation Textiles Listed (2.93%) 1,632
20 Qisda Corp. Electrical and electronic equipment Listed (0.25%) 1,323
Total 76,144

Source: Fu Jen-VCC research on leading Taiwanese multinationals, 2009, drawing on the Market Observation Post
System (MOPS) maintained by the Taiwan Stock Exchange (http://emops.twse.com.tw/), the Taiwan Economic Journal
(TEJ) database, and individual firms‘ reports.
a
Financial firms are excluded by the methodology of the international project of which this report is a part. All data
are based on the firms‘ annual reports. For additional data on each firm, see annex I, table 1 and the tables that
follow.
b
The percentage of state ownership shown in parentheses is based on 2009 data.
c
Foreign assets were calculated from the consolidated annual reports of individual firms. Calculations use the
exchange rate provided by the IMF for December 31, 2009: of USD 1 = TWD 31.98.
d
Mainly footwear and sportswear.

Profile of the top 20

Major drivers

The search for new production sites with lower production costs (mainly labor and land costs) or
higher economies of scale was the most important driver for Taiwanese investment abroad.
Accessing markets with high potential and expanding distribution channels were also crucial
determinants for certain firms. Responding to client requirements and following the migration

Page 2 of 29

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Annex table 1. Taiwan: The top 20 multinationals: Key variables, 2009 (USD million and number of employees) a

Rank by Assets Sales Employment Number of Number of
foreign Firm TNI (%) foreign host
assets Foreign Total Foreign Total Foreign Total affiliates economies
1 Hon Hai Precision 10,699 32,036 60,955 61,416 513,240 611,000 72% 314 27
2 Pou Chen 6,694 7,703 6,375 6,471 219,551 332,653 84% 39 6
3 Asustek Computer 6,416 11,599 18,377 19,126 69,128 113,324 71% 142 36
4 Quanta Computer 5,524 11,831 24,456 26,326 21,357 64,719 58% 50 12
5 Acer 4,897 9,123 17,406 17,993 5,564 6,624 78% 139 42
6 AU Optronics 4,874 19,518 10,988 11,264 38,277 51,378 66% 26 13
7 Wistron 4,667 5,637 13,939 17,137 21,974 39,239 73% 43 13
8 Taiwan Semiconductor Mfg. Co. 3,661 18,643 5,103 9,271 2,484 26,390 28% 24 11
9 Compal Electronics 3,458 10,511 21,027 21,169 33,655 58,025 63% 56 15
10 Nan Ya Plastics 3,435 13,276 4,016 7,653 18,454 30,297 46% 38 5
11 Delta Electronics 3,212 4,198 3,624 3,935 44,544 58,000 82% 37 11
12 United Microelectronics Corp. 2,591 7,951 1,771 2,865 5,742 13,051 46% 18 11
13 Formosa Chemicals & Fiber 2,587 14,019 4,016 9,291 10,941 17,936 41% 18 6
14 Inventec 2,399 4,549 11,119 13,951 28,164 29,646 76% 21 10
15 Cheng Shin Rubber 2,337 2,829 2,484 2,649 14,221 23,348 79% 23 10
16 Formosa Plastics 2,183 10,381 2,521 5,645 3,362 5,519 42% 10 7
17 Yang Ming Marine Transport 1,847 3,568 2,787 2,787 729 4,197 56% 46 20
18 Synnex Technology International 1,708 2,306 5,678 6,919 3,987 5,192 78% 24 10
19 Far Eastern New Century 1,632 8,383 2,521 5,186 15,125 20,834 47% 32 8
20 Qisda 1,323 3,485 2,021 4,707 20,552 41,942 43% 64 26
Total (average for percentages) 76,144 201,545 221,184 255,761 1,091,050 1,553,314 61% 1,164

Source: Fu Jen-VCC research on leading Taiwanese multinationals, 2009, drawing on the Market Observation Post System (MOPS) maintained by the Taiwan Stock Exchange
(http://emops.twse.com.tw/), the Taiwan Economic Journal (TEJ) database, and individual firms‘ reports.

a
All calculations use the exchange rate provided by the IMF for December 31, 2009: USD 1 = TWD 31.98. b As indicated earlier, foreign employment figures were mostly unavailable from individual
firms‘ annual reports. Approximations based on the percentage of foreign employment reported by UNCTAD in its World Investment Report 2009 or data from the Investment Commission in the
Ministry of Economic Affairs have been used instead. c The TNI for all firms other than Taiwan Semiconductor was calculated on the basis of the approximate employment ratio mentioned in the
preceding footnote.

Page 15 of 29

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Annex table 1a. Taiwan: The top 20 multinationals: foreign/total ratios, 2009

Rank by foreign Foreign asset/total Foreign sales/total Foreign employment
Firm Industry TNI (%)
assets asset sales /total employment

1 Hon Hai Precision Electrical and electronic equipment 33% 99% 84% 72%
2 Pou Chen Consumer goods 87% 99% 66% 84%
3 Asustek Computer Electrical and electronic equipment 55% 96% 61% 71%
4 Quanta Computer Electrical and electronic equipment 47% 93% 33% 58%
5 Acer Electrical and electronic equipment 54% 97% 84% 78%
6 AU Optronics Electrical and electronic equipment 25% 98% 75% 66%
7 Wistron Electrical and electronic equipment 83% 81% 56% 73%
8 Taiwan Semiconductor Mfg. Co. Electrical and electronic equipment 20% 55% 9% 28%
9 Compal Electronics Electrical and electronic equipment 33% 99% 58% 63%
10 Nan Ya Plastics Plastics 26% 52% 61% 46%
11 Delta Electronics Electrical and electronic equipment 77% 92% 77% 82%
12 United Microelectronics Corp. Electrical and electronic equipment 33% 62% 44% 46%
13 Formosa Chemicals & Fiber Plastics 18% 43% 61% 41%
14 Inventec Electrical and electronic equipment 53% 80% 95% 76%
15 Cheng Shin Rubber Rubber and plastics products 83% 94% 61% 79%
16 Formosa Plastics Plastics 21% 45% 61% 42%
17 Yang Ming Marine Transport Shipping and transportation 52% 100% 17% 56%
18 Synnex Technology International Electrical and electronic equipment 74% 82% 77% 78%
19 Far Eastern New Century Textiles 19% 49% 73% 47%
20 Qisda Electrical and electronic equipment 38% 43% 49% 43%

Source: Fu Jen-VCC research on leading Taiwanese multinationals, 2009, drawing on the Market Observation Post System (MOPS) maintained by the Taiwan Stock Exchange
(http://emops.twse.com.tw/), the Taiwan Economic Journal (TEJ) database, and individual firms‘ reports.

.

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Annex table 2. Taiwan: The top 20 multinationals: Regionality Indexa (%) 2009

Developed
Asia-
Middle Eastern Latin
Rank by Sub- East Asia Pacific
East & South Europe & Other America & North Number of
foreign Firm Saharan & the (Japan,
North Asia Central Europe the America affiliates
assets Africa Pacific Australia
Africa Asia Caribbean
& New
Zealand)
1 Hon Hai Precision Ind. Co., Ltd. 0.0% 0.0% 43.9% 1.3% 1.3% 3.5% 2.2% 38.5% 9.2% 314
2 Pou Chen Corporation 0.0% 0.0% 46.2% 0.0% 0.0% 0.0% 0.0% 51.3% 2.6% 39
3 Asustek Computer Inc. 1.4% 2.1% 43.0% 0.7% 2.1% 3.5% 8.5% 31.7% 7.0% 142
4 Quanta Computer Inc. 0.0% 2.0% 48.0% 0.0% 2.0% 0.0% 4.0% 22.0% 22.0% 50
5 Acer Inc. 0.0% 1.4% 23.7% 0.0% 5.8% 3.6% 33.8% 16.5% 15.1% 139
6 AU Optronics Corp. 0.0% 0.0% 57.7% 0.0% 15.4% 7.7% 7.7% 3.8% 7.7% 26
7 Wistron Corp. 0.0% 0.0% 53.5% 2.3% 4.7% 2.3% 9.3% 18.6% 9.3% 43
8 Taiwan Semiconductor Mfg. Co., Ltd. 0.0% 0.0% 12.5% 0.0% 12.5% 0.0% 8.3% 37.5% 29.2% 24
9 Compal Electronics, Inc. 0.0% 0.0% 46.4% 0.0% 0.0% 1.8% 5.4% 41.1% 5.4% 56
10 Nan Ya Plastics Corp. 0.0% 0.0% 92.1% 0.0% 0.0% 0.0% 0.0% 0.0% 7.9% 38
11 Delta Electronics, Inc. 0.0% 0.0% 67.6% 0.0% 5.4% 0.0% 2.7% 18.9% 5.4% 37
12 United Microelectronics Corp. 0.0% 0.0% 50.0% 0.0% 11.1% 0.0% 5.6% 22.2% 11.1% 18
13 Formosa Chemicals & Fiber Corp. 0.0% 0.0% 88.9% 0.0% 0.0% 0.0% 0.0% 5.6% 5.6% 18
14 Inventec Corporation 0.0% 0.0% 52.4% 0.0% 4.8% 4.8% 0.0% 14.3% 23.8% 21
15 Cheng Shin Rubber Ind. Co., Ltd. 0.0% 0.0% 60.9% 0.0% 0.0% 0.0% 8.7% 17.4% 13.0% 23
16 Formosa Plastics Corp. 0.0% 0.0% 80.0% 0.0% 0.0% 0.0% 0.0% 10.0% 10.0% 10
17 Yang Ming Marine Transport Corp. 0.0% 6.5% 30.4% 2.2% 4.3% 2.2% 26.1% 6.5% 21.7% 46
18 Synnex Technology International Corp. 0.0% 4.2% 58.3% 4.2% 8.3% 0.0% 0.0% 20.8% 4.2% 24
19 Far Eastern New Century Corporation 0.0% 0.0% 59.4% 0.0% 0.0% 0.0% 6.3% 34.4% 0.0% 32
20 Qisda Corp. 1.6% 0.0% 54.7% 1.6% 4.7% 3.1% 17.2% 9.4% 7.8% 64

a
The Regionality Index is calculated by dividing the number of a firm‘s foreign affiliates in a particular region of the world by its total number of foreign affiliates and multiplying
the result by 100.

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Annex table 2a. Taiwan: The top 20 multinationals: Number of affiliates by region, 2009

Developed
Asia-
Middle Eastern Latin
Rank by Sub- East Asia Pacific
East & South Europe & Other America & North
foreign Firm Saharan & the (Japan, Total
North Asia Central Europe the America
assets Africa Pacific Australia
Africa Asia Caribbean
& New
Zealand)
1 Hon Hai Precision Ind. Co., Ltd. 0 0 138 4 4 11 7 121 29 314
2 Pou Chen Corporation 0 0 18 0 0 0 0 20 1 39
3 Asustek Computer Inc. 2 3 61 1 3 5 12 45 10 142
4 Quanta Computer Inc. 0 1 24 0 1 0 2 11 11 50
5 Acer Inc. 0 2 33 0 8 5 47 23 21 139
6 AU Optronics Corp. 0 0 15 0 4 2 2 1 2 26
7 Wistron Corp. 0 0 23 1 2 1 4 8 4 43
8 Taiwan Semiconductor Mfg. Co., Ltd. 0 0 3 0 3 0 2 9 7 24
9 Compal Electronics, Inc. 0 0 26 0 0 1 3 23 3 56
10 Nan Ya Plastics Corp. 0 0 35 0 0 0 0 0 3 38
11 Delta Electronics, Inc. 0 0 25 0 2 0 1 7 2 37
12 United Microelectronics Corp. 0 0 9 0 2 0 1 4 2 18
13 Formosa Chemicals & Fiber Corp. 0 0 16 0 0 0 0 1 1 18
14 Inventec Corporation 0 0 11 0 1 1 0 3 5 21
15 Cheng Shin Rubber Ind. Co., Ltd. 0 0 14 0 0 0 2 4 3 23
16 Formosa Plastics Corp. 0 0 8 0 0 0 0 1 1 10
17 Yang Ming Marine Transport Corp. 0 3 14 1 2 1 12 3 10 46
18 Synnex Technology International Corp. 0 1 14 1 2 0 0 5 1 24
19 Far Eastern New Century Corporation 0 0 19 0 0 0 2 11 0 32
20 Qisda Corp. 1 0 35 1 3 2 11 6 5 64
Total 3 10 541 9 37 29 108 306 121 1,164

Source: Fu Jen-VCC research on leading Taiwanese multinationals, 2009, drawing on the Market Observation Post System (MOPS) maintained by the Taiwan Stock Exchange
(http://emops.twse.com.tw/), the Taiwan Economic Journal (TEJ) database, and individual firms‘ reports.

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Annex table 3. Taiwan: The top 20 multinationals: Stock exchange listings, 2009

Firm Domestic Foreign

Hon Hai Precision Ind. Co., Ltd. Taiwan Stock Exchange London

Pou Chen Corporation Taiwan Stock Exchange None

Asustek Computer Inc. Taiwan Stock Exchange London

Quanta Computer Inc. Taiwan Stock Exchange Luxembourg

Acer Inc. Taiwan Stock Exchange London

AU Optronics Corp. Taiwan Stock Exchange New York (NYSE)

Wistron Corp. Taiwan Stock Exchange Luxembourg

Taiwan Semiconductor Mfg. Co., Ltd. Taiwan Stock Exchange New York (NYSE)

Compal Electronics, Inc. Taiwan Stock Exchange Luxembourg

Nan Ya Plastics Corp. Taiwan Stock Exchange None

Delta Electronics, Inc. Taiwan Stock Exchange Luxembourg

United Microelectronics Corp. Taiwan Stock Exchange New York (NYSE)

Formosa Chemicals & Fiber Corp. Taiwan Stock Exchange None

Inventec Corporation Taiwan Stock Exchange None

Cheng Shin Rubber Ind. Co., Ltd. Taiwan Stock Exchange None

Formosa Plastics Corp. Taiwan Stock Exchange None

Yang Ming Marine Transport Corp. Taiwan Stock Exchange None

Synnex Technology International Corp. Taiwan Stock Exchange Luxembourg

Far Eastern New Century Corporation Taiwan Stock Exchange Luxembourg

Qisda Corp. Taiwan Stock Exchange Luxembourg

Source: Fu Jen-VCC research on leading Taiwanese multinationals, 2009, drawing on the Market Observation Post
System (MOPS) maintained by the Taiwan Stock Exchange (http://emops.twse.com.tw/), the Taiwan Economic Journal
(TEJ) database, and individual firms‘ reports.

Page 19 of 29

EXHIBIT 30
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Exhibit 31
Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.338 Page 103 of 118

         
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K
(Mark one)
     

þ   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 25, 2016
OR
     

o   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from   to   .

Commission File Number 0-19528

QUALCOMM Incorporated
(Exact name of registrant as specified in its charter)

     
     
Delaware 95-3685934
(State or Other Jurisdiction of   (I.R.S. Employer
Incorporation or Organization) Identification No.)
     
5775 Morehouse Dr.
92121-1714
San Diego, California  
(Zip Code)
(Address of Principal Executive Offices)

(858) 587-1121
(Registrant’s telephone number, including area code)

Securities registered pursuant to section 12(b) of the Act:

     
     
Title of Each Class   Name of Each Exchange on Which Registered
Common stock, $0.0001 par value   NASDAQ Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes x No o
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes xNo o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data
File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for
such shorter period that the registrant was required to submit and post such files). Yes x No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
(Check one):

Large accelerated filer x     Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)   Smaller reporting company o

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

         
The aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant at March 27, 2016 (the last
business day of the registrant’s most recently completed second fiscal quarter) was $74,547,554,964, based upon the closing price of the registrant’s
common stock on that date as reported on the NASDAQ Global Select Market.
The number of shares outstanding of the registrant’s common stock was 1,476,886,684 at October 31, 2016.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s Definitive Proxy Statement in connection with the registrant’s 2017 Annual Meeting of Stockholders, to be filed with
the Commission subsequent to the date hereof pursuant to Regulation 14A, are incorporated by reference into Part III of this Report.

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QUALCOMM INCORPORATED
Form 10-K
For the Fiscal Year Ended September 25, 2016
Index

    Page
     
PART I
     
Item 1. Business 4
Item 1A. Risk Factors 17
Item 1B. Unresolved Staff Comments 31
Item 2. Properties 31
Item 3. Legal Proceedings 32
Item 4. Mine Safety Disclosures 32
     
PART II
     
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 33
Item 6. Selected Financial Data 35
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 49
Item 8. Financial Statements and Supplementary Data 50
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 50
Item 9A. Controls and Procedures 50
Item 9B. Other Information 51
     
PART III
     
Item 10. Directors, Executive Officers and Corporate Governance 51
Item 11. Executive Compensation 51
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 51
Item 13. Certain Relationships and Related Transactions, and Director Independence 51
Item 14. Principal Accounting Fees and Services 51
     
PART IV
     
Item 15. Exhibits and Financial Statement Schedules 51
Item 16. Form 10-K Summary 55

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TRADEMARKS

Qualcomm, Snapdragon, MSM, Adreno and Wireless Reach are trademarks of Qualcomm Incorporated, registered in the United States and other
countries. Qualcomm Haven and RF360 are trademarks of Qualcomm Incorporated. CSR is a trademark of Qualcomm Technologies International,
Ltd., registered in the United States and other countries.

Other products and brand names may be trademarks or registered trademarks of their respective owners.

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In this document, the words “Qualcomm,” “we,” “our,” “ours” and “us” refer only to QUALCOMM Incorporated and its subsidiaries and not
any other person or entity. This Annual Report (including, but not limited to, the section regarding Management’s Discussion and Analysis of
Financial Condition and Results of Operations) contains forward-looking statements regarding our business, investments, financial condition,
results of operations and prospects. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar
expressions or variations of such words are intended to identify forward-looking statements, but are not the exclusive means of identifying forward-
looking statements in this Annual Report. Additionally, statements concerning future matters such as the development of new products,
enhancements or technologies, industry and market trends, sales levels, expense levels and other statements regarding matters that are not
historical are forward-looking statements, but are not the exclusive means of identifying forward-looking statements in this Annual Report.
Although forward-looking statements in this Annual Report reflect our good faith judgment, such statements can only be based on facts and
factors currently known by us. Consequently, forward-looking statements are inherently subject to risks and uncertainties and actual results and
outcomes may differ materially from the results and outcomes discussed in or anticipated by the forward-looking statements. Factors that could
cause or contribute to such differences in results and outcomes include without limitation those discussed under the heading “Risk Factors” below,
as well as those discussed elsewhere in this Annual Report. Readers are urged not to place undue reliance on these forward-looking statements,
which speak only as of the date of this Annual Report. We undertake no obligation to revise or update any forward-looking statements in order to
reflect any event or circumstance that may arise after the date of this Annual Report. Readers are urged to carefully review and consider the various
disclosures made in this Annual Report, which attempt to advise interested parties of the risks and factors that may affect our business, financial
condition, results of operations and prospects.

PART I

Item 1. Business

We incorporated in 1985 under the laws of the state of California. In 1991, we reincorporated in the state of Delaware. We operate and report
using a 52-53 week fiscal year ending on the last Sunday in September. Our 52-week fiscal years consist of four equal fiscal quarters of 13 weeks
each, and our 53-week fiscal years consist of three 13-week fiscal quarters and one 14-week fiscal quarter. The financial results for our 53-week fiscal
years and our 14-week fiscal quarters will not be exactly comparable to our 52-week fiscal years and our 13-week fiscal quarters. The fiscal years
ended September 25, 2016, September 27, 2015 and September 28, 2014 included 52 weeks.

Overview

We led the development and continue to be a leader in the commercialization of a digital communication technology called CDMA (Code
Division Multiple Access), and we also continue as a leader in the development and commercialization of the OFDMA (Orthogonal Frequency
Division Multiple Access) family of technologies, including LTE (Long Term Evolution), an OFDM (Orthogonal Frequency Division Multiplexing) -
based standard that uses OFDMA and single-carrier FDMA (Frequency Division Multiple Access), for cellular wireless communication
applications. We own significant intellectual property applicable to products that implement any version of CDMA and OFDMA, including patents,
patent applications and trade secrets. The mobile communications industry generally recognizes that a company seeking to develop, manufacture
and/or sell products that use CDMA- and/or LTE-based standards will require a patent license from us. CDMA and OFDMA are two of the main
technologies currently used in digital wireless communications networks (also known as wireless networks). Based on wireless connections,
CDMA, OFDMA and TDMA (Time Division Multiple Access, of which GSM (Global System for Mobile Communications) is the primary commercial
form) are the primary digital technologies currently used to transmit a wireless device user’s voice or data over radio waves using a public cellular
wireless network.

We also develop and commercialize numerous other key technologies used in handsets and tablets that contribute to end-user demand, and we
own substantial intellectual property related to these technologies. Some of these were contributed to and are being commercialized as industry
standards, such as certain video codec, audio codec, wireless LAN (local area network), memory interfaces, wireless power, GPS (global positioning
system) and positioning, broadcast and streaming protocols, and short range communication functionalities, including NFC (near field
communication) and Bluetooth. Other technologies widely used by wireless devices that we have developed are not related to any industry
standards, such as operating systems, user interfaces, graphics and camera processing functionality, integrated circuit packaging techniques, RF
(radio frequency) and antenna design, sensors and sensor fusion algorithms, power and thermal management techniques and application processor
architectures. Our patents cover a wide range of technologies across the entire wireless system, including the device (such as handsets and
tablets) and not just what is embodied in the chipsets.

In addition to licensing portions of our intellectual property portfolio, which includes certain patent rights essential to and/or useful in the
manufacture and sale of certain wireless products, we design, manufacture, have manufactured on our

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behalf and market products and services based on CDMA, OFDMA and other digital communications technologies. Our products principally
consist of integrated circuits (also known as chips or chipsets) and system software used in mobile devices, wireless networks, broadband gateway
equipment and consumer electronic devices. We also sell other products and services, which include, among others: wireless medical devices and
software products and services designed for health care companies; engineering services; and products designed for the implementation of small
cells. In addition, we continue to invest in new and expanded product areas, such as radio frequency front-end (RFFE), and in adjacent industry
segments, such as automotive, Internet of Things (IoT), data center, networking, mobile computing, the connected home, smart cities, mobile
health, machine learning, including robotics and wearables, among others.

Industry Trends

The mobile industry has experienced tremendous growth over the past 20 plus years, growing from less than 60 million global connections in
1994 (WCIS+, October 2016) to approximately 7.4 billion global connections in September 2016 (GSMA Intelligence, October 2016). As the largest
technology platform in the world, mobile has made peoples’ lives more connected, transforming the way we interact with one another and with the
world. The scale and pace of innovation in mobile, especially around connectivity and computing capabilities, is also impacting industries beyond
wireless.

Extending connectivity. 3G/4G (third generation/fourth generation) multimode mobile broadband technology has been a key driver of the
growth of mobile, providing users with fast, reliable, always-on connectivity. As of September 2016, there were approximately 4.0 billion 3G/4G
connections globally (CDMA-based, OFDMA-based and CDMA/OFDMA multimode) representing nearly 54% of total mobile connections. By
2020, global 3G/4G connections are projected to reach 6.4 billion, with more than 80% of these connections coming from emerging regions (GSMA
Intelligence, October 2016).

3G/4G multimode mobile broadband has also emerged as an important platform for extending the reach and potential of the Internet. In 2010, the
number of broadband connections using mobile technology surpassed those using fixed technologies, making mobile networks the primary method
of access to the Internet for many people around the world. The impact is further amplified in emerging regions, where 3G/4G connections are
approximately six times the number of fixed Internet connections (GSMA Intelligence and WBIS, October 2016). In China, 3G/4G LTE multimode
services have experienced strong adoption since being launched in the fourth quarter of calendar 2013, with more than 655 million connections
reported as of September 2016 (GSMA Intelligence, October 2016). In India, mobile operators are rolling out 3G/4G LTE multimode services,
providing consumers with the benefits of advanced mobile broadband connectivity while creating new opportunities for device manufacturers and
other members of the mobile ecosystem. 3G/4G mobile broadband may be the first and, in many cases, the only way that people in these regions
access the Internet.

Looking ahead, the wireless industry is actively developing and standardizing 5G (fifth generation) technology, which is the next generation of
wireless technology expected to be commercially deployed starting in 2019. While the 5G standard is still being defined, it is expected to provide a
unified connectivity network for all spectrum and service types based on OFDM technology. 5G is expected to support faster data rates and wider
bandwidths of spectrum. Incorporating many of the innovations developed for 4G, 5G is also expected to be scalable and adaptable across a variety
of use cases, which include, among others: enabling new industries and services, such as autonomous vehicles and remote medical procedures,
through ultra-reliable, ultra-low latency communication links; and connecting a significant number of “things” (also known as the Internet of
Things or IoT), such as consumer electronics, including wearables, appliances, sensors and medical devices, with connectivity designed to meet
ultra-low power, complexity and cost requirements. 5G is also expected to enhance mobile broadband services, including ultra-high definition (4K)
video streaming and virtual reality, with multi-gigabit speeds.

Most 5G devices are expected to include multimode support for 3G, 4G and Wi-Fi, enabling service continuity where 5G has yet to be deployed
and simultaneous connectivity across 4G and Wi-Fi technologies, while also allowing mobile operators to utilize current network deployments. At
the same time, 4G will continue to evolve in parallel with the development of 5G and is expected to pioneer many of the key 5G technologies, such
as support for unlicensed spectrum and gigabit LTE user data rates. The first phase of 5G networks are expected to support mobile broadband
services both in lower spectrum bands below 6 Ghz as well as higher bands above 6 GHz, including millimeter wave (mmWave).

Growth in smartphones. Smartphone adoption continues to expand globally, fueled by 3G/4G LTE multimode connectivity, powerful
application processors and advanced multimedia and location awareness capabilities, among others. In 2015, more than 1.4 billion smartphones
shipped globally, representing a year-over-year increase of approximately 14%, and cumulative shipments of smartphones between 2016 and 2020
are projected to reach approximately 8.3 billion (Gartner, September 2016). Most of this growth is happening in emerging regions, where
smartphones accounted for approximately 70% of handset shipments in 2015 and are expected to reach approximately 92% in 2020 (Gartner,
September 2016). Growth in smartphones has not only been driven by the success of premium-tier devices, but also by the number of affordable

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handsets that are fueling shipments in emerging regions and the variety of flexible and affordable data plans being offered by mobile operators.

Consumer demand for new types of experiences enabled by 3G/4G LTE connectivity, combined with the needs of mobile operators and device
manufacturers to provide differentiated features and services, is driving continued innovation within the smartphone. This innovation is happening
across multiple technology dimensions, including connectivity, computing, camera, audio, video, display, location, sensors and security. As a
result, the smartphone has, in many ways, become the go-to device for social networking, music, gaming, email and web browsing, among others. It
is also replacing many traditional consumer electronics devices due to advanced capabilities, including digital cameras, video cameras, Global
Positioning System (GPS) units and music players, combined with an always on and connected mobile platform.

Expansion into new adjacent opportunities. A number of industries beyond mobile are leveraging technology innovations found in
smartphones to bring advanced connectivity and computing capabilities to a broad array of end-devices and access points, which make up the
“edge” of the network. With billions of connected devices projected to be added to the Internet over the coming years, enhancing the capabilities
and performance at the edge of the network will be vital to improving its scalability as it enters this new phase of growth. These enhancements are
helping to transform industry segments, including networking, automotive, mobile computing and the IoT, and enabling companies to create new
products and services.

The proliferation of intelligently connected things is also enabling new types of user experiences, as smartphones are able to interact with and
control more of the things around us. Through the addition of embedded sensors, connected things are able to collect and send data about their
environment, providing users with contextually relevant information and further increasing their utility and value.

Wireless Technologies

The growth in the use of wireless devices worldwide, such as smartphones and tablets, and the demand for data services and applications
requires continuous innovation to further improve the user experience, enable new services, increase network capacity, make use of different
frequency bands and enable dense network deployments. To meet these requirements, different wireless communications technologies continue to
evolve. For nearly three decades, we have invested and continue to invest heavily in research and development of cellular wireless communication
technologies, including CDMA and OFDMA. As a result, we have developed and acquired (and continue to develop and acquire) significant
related intellectual property. This intellectual property has been incorporated into the most widely accepted and deployed cellular wireless
communications technology standards, and we have licensed it to more than 330 licensees, including leading wireless device and infrastructure
manufacturers. Relevant cellular wireless technologies can be grouped into the following categories.

TDMA-based. TDMA-based technologies are characterized by their access method allowing several users to share the same frequency
channel by dividing the signal into different time slots. Most of these systems are classified as 2G (second generation) technology. The main
examples of TDMA-based technologies are GSM (deployed worldwide), IS-136 (deployed in the Americas) and Personal Digital Cellular (PDC)
(deployed in Japan).

To date, GSM has been more widely adopted than CDMA-based standards; however, CDMA technologies are the basis for all 3G wireless
systems. According to GSMA Intelligence estimates as of September 30, 2016, there were approximately 3.4 billion GSM connections worldwide,
representing approximately 46% of total cellular connections. The transition of wireless devices from 2G to 3G/4G continued around the world with
3G/4G connections up 18% year-over-year (GSMA Intelligence, October 2016).

CDMA-based. CDMA-based technologies are characterized by their access method allowing several users to share the same frequency and
time by allocating different orthogonal codes to individual users. Most of the CDMA-based technologies are classified as 3G technology.

There are a number of variants of CDMA-based technologies deployed around the world, in particular CDMA2000, EV-DO (Evolution Data
Optimized), WCDMA (Wideband CDMA) and TD-SCDMA (Time Division-Synchronous CDMA) (deployed exclusively in China). CDMA-based
technologies provide vastly improved capacity for voice and low-rate data services as compared to analog technologies and significant
improvements over TDMA-based technologies such as GSM. To date, these technologies have seen many revisions, and they continue to evolve.
New features continue to be defined in the 3rd Generation Partnership Project (3GPP). The following are the CDMA-based technologies and their
standards revisions:

• CDMA2000 revisions A through E

• 1xEV-DO revisions A through C

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• WCDMA/HSPA releases 4 through 13

• TD-SCDMA releases 4 through 12

CDMA technologies ushered in a significant increase in broadband data services that continue to grow globally. According to GSMA
Intelligence estimates as of October 2016, there were approximately 2.5 billion CDMA-based connections worldwide, representing approximately
33% of total cellular connections.

OFDMA-based. OFDMA-based technologies are characterized by their access method allowing several users to share the same frequency
band and time by allocating different subcarriers to individual users. Most of the OFDMA-based technologies to be deployed through 2016 are
classified as 4G technology. It is expected that 5G will heavily leverage OFDM-based technologies. We continue to play a significant role in the
development of LTE and LTE Advanced, which are the predominant 4G technologies currently in use, and their evolution to LTE Advanced Pro.

LTE is incorporated in 3GPP specifications starting from release 8 and uses OFDMA in the downlink and single carrier FDMA (SC-FDMA) in
the uplink. LTE has two modes, FDD (frequency division duplex) and TDD (time division duplex), to support paired and unpaired spectrum,
respectively, and is being developed by 3GPP. The principal benefit of LTE is its ability to leverage a wide range of spectrum (bandwidths of 10 MHz
or more). LTE is designed to seamlessly interwork with 3G through 3G/4G multimode devices. Most LTE devices rely on 3G for voice services across
the network, as well as for ubiquitous data services outside the LTE coverage area and on 4G for data services inside the LTE coverage area. LTE’s
voice solution, VoLTE (voice over LTE), is being commercially deployed in a growing number of networks.

Carrier aggregation, one of the significant improvements of LTE Advanced, was commercially launched in June 2013 and continues to evolve
to aggregate additional carriers in the uplink as well as the downlink. Along with carrier aggregation, LTE Advanced brings many more
enhancements, including advanced antenna techniques and optimization for small cells. Apart from improving the performance of existing
networks, these releases also bring new enhancements under the umbrella of LTE Advanced Pro, such as LTE Direct for proximity-based device-to-
device discovery, improved LTE broadcast, optimizations of narrowband communications designed for IoT (known as NB-IoT) and the ability to
use LTE Advanced in unlicensed spectrum (LTE Unlicensed). There will be multiple options for deploying LTE Unlicensed for different deployment
scenarios.

• LTE-U, which relies on an LTE control carrier based on 3GPP Release 12, uses carrier aggregation to combine unlicensed and licensed
spectrum and will be used in early mobile operator deployments in countries such as the United States, Korea and India.

• Licensed Assisted Access (LAA), introduced as part of 3GPP Release 13, also aggregates unlicensed and licensed spectrum.

• MulteFire operates solely in unlicensed spectrum without a licensed anchor control channel.

There also have been ongoing efforts to make the interworking between LTE and Wi-Fi more seamless and completely transparent to the users.
The seamless interworking is also intended to enable the device to use the best possible link or links depending on conditions of the LTE and Wi-Fi
links as the applications run on devices. Further integration is achieved with LTE+Wi-Fi link Aggregation (LWA), which will utilize existing and new
carrier Wi-Fi deployments.

LTE releases are often combined and given “marketing” or “trade” names that also indicate their benefits. The name LTE covers releases 8 and
9. Releases 10 and beyond are referred to as LTE Advanced. According to GSMA Intelligence estimates as of September 30, 2016, there were
approximately 1.5 billion global 3G/4G multimode connections worldwide, representing approximately 21% of total cellular connections.

According to the Global mobile Suppliers Association (GSA), as of October 2016, more than 770 wireless operators have commercially
deployed or started testing LTE. In addition, LTE Advanced standards featuring carrier aggregation have begun to be deployed. As of October
2016, 212 operators were investing in LTE Advanced carrier aggregation across 88 countries, and 166 operators have launched commercially in 76
countries (GSA, October 2016).

As we look forward, the wireless industry is actively building the next generation of cellular technologies under the name 5G in 3GPP. While 5G
is still being defined, it is expected that 5G will transform the role of wireless technologies and incorporate advancements on 3G/4G features
available today, including further enhanced mobile broadband services, device-to-device capabilities and use of both licensed and unlicensed
spectrum and connectivity of a significant number of things. 5G is also expected to include operation in emerging higher frequency bands such as
those in the millimeter wave range to significantly increase the data rate offered to users. Furthermore, 5G is expected to offer techniques that will
enable the expansion of cellular networks into new vertical product segments and define a radio link with much higher levels of reliability for control
of vehicles and machines. This development, which builds on the various 3G and 4G features

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addressing IoT, will further sustain the trend of enabling cellular connectivity to non-handset categories of devices. We continue to play a
significant role in driving 5G from standardization to commercialization, including contributing to 3GPP standardization activities to define the 5G
standard and collaborating with industry participants on 5G demonstrations and trials to prepare for commercial network launches.

Other (non-cellular) wireless technologies. There are other, non-cellular wireless technologies that have also been broadly adopted.

Wireless Local Area Networks. Wireless local area networks (WLAN), such as Wi-Fi, link two or more nearby devices wirelessly and usually
provide connectivity through an access point. Wi-Fi systems are based on standards developed by the Institute of Electrical and Electronics
Engineers (IEEE) in the 802.11 family of standards. 802.11ac, which includes advanced features such as multiple user multiple in/multiple out (MU
MIMO) and support for large bandwidths and higher order modulation, primarily targets broadband connectivity for mobile devices, laptops and
consumer electronics devices using 5 GHz spectrum. 802.11ad provides multi-gigabit data rates for short range communication using 60 GHz
spectrum. 802.11ah, which is still under development and targets sub-1 GHz spectrum, is envisioned to be a solution for “connected home”
applications that require long battery life. We played a leading role in the development of 802.11ac, 802.11ad and 802.11ah, and we are actively
involved in the development of 802.11ax, which is an evolution from 802.11ac and will cover both the 2.4GHz and 5GHz unlicensed bands.

Bluetooth. Bluetooth is a wireless personal area network that provides wireless connectivity between devices over short distances ranging
from a few centimeters to a few meters. Bluetooth technology provides wireless connectivity to a wide range of fixed or mobile consumer
electronics devices. Bluetooth functionalities are standardized by the Bluetooth Special Interest Group in various versions of the specification
(from 1.0 to 4.0), which include different functionalities, such as enhanced data rate or low energy (known as Bluetooth Smart). In August 2015, we
acquired CSR plc, a leading contributor to Bluetooth evolution in the areas of mobile devices, HID (human interface device), A/V (audio/video) and
Smart Mesh technologies.

Location Positioning Technologies. Location positioning technologies have evolved rapidly in the industry over the past few years in order
to deliver an enhanced location experience. In the past, satellite navigation systems were predominantly used to provide the accurate location of
mobile devices. We were a key developer of the Assisted-GPS (A-GPS) positioning technology used in most cellular handsets today. For uses
requiring the best accuracy for E911 services and navigational based services, A-GPS provided a leading-edge solution.

The industry has now evolved to support additional inputs for improving the location experience. We now support multiple constellations,
including GPS, GLONASS (Global Navigation Satellite System) and BeiDou; terrestrial-based positioning using WWAN (Wireless Wide Area
Network) and Wi-Fi-based inputs; Wi-Fi RSSI (received signal strength indication) and RTT (round-trip time) signals for indoor location; and third-
party sensors combined with GNSS (Global Navigation Satellite System) measurements to provide interim support for location-based services in
rural areas and indoors, where other signal inputs may not be available.

Other Significant Technologies used in Cellular and Certain Consumer Electronic Devices and Networks

We have played a leading role in developing many of the other technologies used in cellular and certain consumer electronic devices and
networks, including:

• graphics and display processing functionality;

• video coding based on HEVC (High Efficiency Video Codec) standard, which will be deployed to support 4K video content;

• audio coding, including EVS (Enhanced Voice Services);

• the latest version of 3GPP’s codec for multimedia use and for voice/speech use, which is being deployed commercially;

• camera and camcorder functions;

• system user and interface features;

• security and content protection systems;

• volatile (LP-DDR2, 3, 4) and non-volatile (eMMC) memory and related controllers; and

• power management systems.

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Operating Segments

We conduct business primarily through two reportable segments, QCT (Qualcomm CDMA Technologies) and QTL (Qualcomm Technology
Licensing), and our QSI (Qualcomm Strategic Initiatives) reportable segment makes strategic investments. Revenues in fiscal 2016, 2015 and 2014
for our reportable segments were as follows (in millions, except percentage data):

  QCT   QTL   QSI
2016 $ 15,409  $ 7,664  $ 47
As a percent of total 65%   33%   -
2015 $ 17,154  $ 7,947  $ 4
As a percent of total 68%   31%   -
2014 $ 18,665  $ 7,569  $ -
As a percent of total 70%   29%   -

QCT Segment. QCT is a leading developer and supplier of integrated circuits and system software based on CDMA, OFDMA and other
technologies for use in wireless voice and data communications, networking, application processing, multimedia and global positioning system
products. QCT’s integrated circuit products are sold, and its system software is licensed, to manufacturers that use our products in mobile phones,
tablets, laptops, data modules, handheld wireless computers and gaming devices, access points and routers, data cards and infrastructure
equipment, broadband gateway equipment and other consumer electronics. Our Mobile Station Modem (MSM) integrated circuits, which include
the Mobile Data Modem, Qualcomm Single Chip and Qualcomm Snapdragon processors and LTE modems, perform the core baseband modem
functionality in wireless devices providing voice and data communications, as well as multimedia applications and global positioning functions. In
addition, our Snapdragon processors provide advanced application and graphics processing capabilities. Because of our experience in designing
and developing CDMA- and OFDMA-based products, we design both the baseband integrated circuit and the supporting system as well,
including the RF (Radio Frequency), PM (Power Management) and wireless connectivity integrated circuits. This approach enables us to optimize
the performance of the wireless device with improved product features and integration with the network system. Our portfolio of RF products
includes QFE (Qualcomm Front End) radio frequency front-end components that are designed to simplify the RF design for LTE multimode,
multiband mobile devices, reduce power consumption and improve radio performance. QCT’s system software enables the other device
components to interface with the integrated circuit products and is the foundation software enabling manufacturers to develop devices utilizing the
functionality within the integrated circuits. We also provide support, including reference designs and tools, to assist our customers in reducing the
time required to design their products and bring their products to market. We plan to add additional features and capabilities to our integrated
circuit products to help our customers reduce the cost and size of their products, to simplify our customers’ design processes and to support more
wireless devices and services.

QCT offers a broad portfolio of products, including both wireless device and infrastructure integrated circuits, in support of CDMA2000 1X
and 1xEV-DO, as well as the EV-DO Revision A/B evolutions of CDMA 2000 technology. Leveraging our expertise in CDMA, we also develop and
offer integrated circuits supporting the WCDMA version of 3G for manufacturers of wireless devices. More than 80 device manufacturers have
selected our WCDMA products that support GSM/GPRS, WCDMA, HSDPA (High-Speed Downlink Packet Access), HSUPA (High-Speed Uplink
Packet Access) and HSPA+ for their devices. QCT also sells multimode products for the LTE standard, which are designed to support seamless
backward compatibility to existing 3G technologies. Our integrated circuit products are included in a broad range of devices, from low-tier, entry-
level devices for emerging regions, which may use our Qualcomm Reference Design (QRD) products, to premium-tier devices. In fiscal 2016, QCT
shipped approximately 842 million MSM integrated circuits for wireless devices worldwide, compared to approximately 932 million and 861 million in
fiscal 2015 and 2014, respectively.

Our modems are built to work with increasingly complex networks. They support the latest communication technologies and adapt to network
conditions and user needs in real time to enable delivery of faster, smoother data and voice connections. Our 3G/4G modem roadmap delivers the
latest network technologies across multiple product tiers and devices. This roadmap is the result of our years of research into emerging network
standards and the development of chipsets that take advantage of these new standards, while maintaining backward compatibility with existing
standards.

Each Snapdragon processor is a highly integrated, mobile optimized system on a chip incorporating our advanced technologies, including a
Snapdragon modem for fast reliable mobile broadband connectivity, a high performance central processing unit (CPU), digital signal processor
(DSP), graphics processing unit (GPU), image signal processor, multimedia subsystems, including high fidelity audio, high-definition video and
advanced imaging capabilities, our hardware-based suite

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of Qualcomm Haven Security Solutions, and accurate location positioning engines. Our CPU cores are designed to deliver high levels of compute
performance at low power, allowing manufacturers to design powerful, slim and power-efficient devices. Our Qualcomm Adreno GPUs are also
designed to deliver high quality graphics performance for visually rich 3D gaming and user interfaces. The heterogeneous compute architecture of
our Snapdragon processors is designed to help ensure that the CPU, DSP and GPU work efficiently together, each being utilized only when needed,
which enhances the processing capacity, speed and efficiency of our Snapdragon processors and the battery life of devices using our processors.

Our wireless products also consist of integrated circuits and system software for WLAN, Bluetooth, Bluetooth Smart, frequency modulation
(FM) and near field communications as well as technologies that support location data and services, including GPS, GLONASS and BeiDou. Our
WLAN, Bluetooth and FM products have been integrated with the Snapdragon processors to provide additional connectivity for mobile phones,
tablets and consumer electronics. QCT also offers standalone WLAN, Bluetooth, Bluetooth Smart, applications processor and Ethernet products
for mobile devices, consumer electronics, computers, automotive infotainment, IoT applications and other connected devices. Our networking
products include WLAN, Powerline and Ethernet chips, network processors and software. These products help enable home and business
networks to support the growing number of connected devices, digital media, data services and other smart home applications.

QCT currently utilizes a fabless production model, which means that we do not own or operate foundries for the production of silicon wafers
from which our integrated circuits are made. Integrated circuits are die cut from silicon wafers that have completed the package assembly and test
manufacturing processes. The semiconductor package supports the electrical contacts that connect the integrated circuit to a circuit board. Die cut
from silicon wafers are the essential components of all of our integrated circuits and a significant portion of the total integrated circuit cost. We
employ both turnkey and two-stage manufacturing models to purchase our integrated circuits. Under the turnkey model, our foundry suppliers are
responsible for delivering fully assembled and tested integrated circuits. Under the two-stage manufacturing model, we purchase die in singular or
wafer form from semiconductor manufacturing foundries and contract with separate third-party suppliers for manufacturing services such as wafer
bump, probe, assembly and final test.

We rely on independent third-party suppliers to perform the manufacturing and assembly, and most of the testing, of our integrated circuits
based primarily on our proprietary designs and test programs. Our suppliers also are responsible for the procurement of most of the raw materials
used in the production of our integrated circuits. The primary foundry suppliers for our various digital, analog/mixed-signal, RF and PM integrated
circuits are Global Foundries Inc., Samsung Electronics Co. Ltd., Semiconductor Manufacturing International Corporation, Taiwan Semiconductor
Manufacturing Company and United Microelectronics Corporation. The primary semiconductor assembly and test suppliers are Advanced
Semiconductor Engineering, Amkor Technology, Siliconware Precision Industries and STATSChipPAC. The majority of our foundry and
semiconductor assembly and test suppliers are located in the Asia-Pacific region.

QCT’s sales are primarily made through standard purchase orders for delivery of products. QCT generally allows customers to reschedule
delivery dates within a defined time frame and to cancel orders prior to shipment with or without payment of a penalty, depending on when the
order is canceled. The industry in which QCT operates is intensely competitive. QCT competes worldwide with a number of United States and
international designers and manufacturers of semiconductors. As a result of global expansion by foreign and domestic competitors, technological
changes, device manufacturer concentrations and the potential for further industry consolidation, we anticipate the industry to remain very
competitive. We believe that the principal competitive factors for our products include performance, level of integration, quality, compliance with
industry standards, price, time-to-market, system cost, design and engineering capabilities, new product innovation and customer support. QCT
also competes in both single- and multi-mode environments against alternative communications technologies including, but not limited to,
GSM/GPRS/EDGE and TDMA.

QCT’s current competitors include, but are not limited to, companies such as Broadcom Limited, Cirrus Logic, Ericsson, HiSilicon Technologies,
Intel, Marvell Technology, Maxim Integrated Products, MediaTek, Microchip Technology Inc., Nvidia, Realtek Semiconductor, Samsung
Electronics, Skyworks Solutions Inc. and Spreadtrum Communications (which is controlled by Tsinghua Unigroup). QCT also faces competition
from products internally developed by our customers, including some of our largest customers, and from some early-stage companies. Our
competitors devote significant amounts of their financial, technical and other resources to develop and market competitive products and, in some
cases, to develop and adopt competitive digital communication or signal processing technologies, and those efforts may materially and adversely
affect us. Although we have attained a significant position in the industry, many of our current and potential competitors may have advantages
over us that include, among others: motivation by our customers in certain circumstances to utilize their own internally-developed integrated circuit
products, to use our competitors’ integrated circuit products, or to choose alternative technologies; lower cost structures and/or a willingness and
ability to accept lower prices and lower or negative margins for their products, particularly in China; foreign government support of other
technologies or competitors;

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better known brand names; ownership and control of manufacturing facilities and greater expertise in manufacturing processes; more extensive
relationships with local distribution companies and original equipment manufacturers in emerging geographic regions (such as China); and/or a
more established presence in certain regions.

QTL Segment. QTL grants licenses or otherwise provides rights to use portions of our intellectual property portfolio, which, among other
rights, include certain patent rights essential to and/or useful in the manufacture and sale of certain wireless products, including, without limitation,
products implementing CDMA2000, WCDMA, CDMA TDD and/or LTE standards and their derivatives. Our licensees manufacture wireless
products including mobile devices (also known as subscriber units, which include handsets), other consumer devices (e.g., tablets and laptops),
machine-to-machine devices (e.g., telematics devices, meter reading devices), plug-in end user data modem cards, certain embedded modules for
incorporation into end user products, infrastructure equipment required to establish and operate a network and equipment to test networks and
subscriber units. QTL licensing revenues include license fees and royalties based on sales by licensees of products incorporating or using our
intellectual property. License fees are fixed amounts paid in one or more installments. Royalties are generally based upon a percentage of the
wholesale (i.e., licensee’s) selling price of complete licensed products, net of certain permissible deductions (including transportation, insurance,
packing costs and other items). Revenues generated from royalties are subject to quarterly and annual fluctuations. The vast majority of QTL
revenues have been generated through our licensees’ sales of CDMA2000- and WCDMA-based products, such as feature phones and
smartphones. We have invested and continue to invest in both the acquisition and development of OFDMA technology and intellectual property
and have generated the industry leading patent portfolio applicable to LTE and LTE Advanced. Nevertheless, we face competition in the
development of intellectual property for future generations of digital wireless communications technologies and services.

In February 2015, we reached a resolution with the National Development and Reform Commission (NDRC) in China regarding its investigation
and agreed to implement a rectification plan that modifies certain of our business practices in China. The rectification plan provides, among other
things, that for licenses of only our 3G and 4G essential Chinese patents for branded devices sold for use in China starting on January 1, 2015 (and
reported to us in the third quarter of fiscal 2015), we will charge running royalties at royalty rates of 5% for 3G CDMA or WCDMA devices
(including multimode 3G/4G devices) and 3.5% for 4G devices that do not implement CDMA or WCDMA (including 3-mode LTE-TDD devices), in
each case using a royalty base of 65% of the net selling price.

Separate and apart from licensing manufacturers of wireless devices and network equipment, we have entered into certain arrangements with
competitors of our QCT segment, such as Broadcom and MediaTek. A principal purpose of these arrangements is to provide our QCT segment and
the counterparties certain freedom of operation with respect to each party’s integrated circuits business. In every case, these agreements expressly
reserve the right for QTL to seek royalties from the customers of such integrated circuit suppliers with respect to such suppliers’ customers’ sales
of CDMA-, WCDMA- and OFDMA-based wireless devices into which such suppliers’ integrated circuits are incorporated.

Upon the initial deployment of OFDMA-based networks, the products implementing such technologies generally have been multimode and
implement CDMA-based technologies. The licenses granted under our existing CDMA license agreements generally cover multimode
CDMA/OFDMA (3G/4G) devices, and our licensees are obligated to pay royalties under their CDMA license agreements for such devices. Further,
over 210 companies (including Huawei, LG, Microsoft, Oppo, Samsung, Sony, vivo, Xiaomi and ZTE) have royalty-bearing licenses under our
patent portfolio for use in LTE or other OFDMA-based products that do not implement any CDMA-based standards.

Since our founding in 1985, we have focused heavily on technology development and innovation. These efforts have resulted in a leading
intellectual property portfolio related to, among other things, wireless technology. We have an extensive portfolio of United States and foreign
patents, and we continue to pursue patent applications around the world. Our patents have broad coverage in many countries, including Brazil,
China, India, Japan, South Korea, Taiwan and countries in Europe and elsewhere. A substantial portion of our patents and patent applications relate
to digital wireless communications technologies, including patents that are essential or may be important to the commercial implementation of
CDMA2000, WCDMA (UMTS), TD-SCDMA, TD-CDMA (Time Division CDMA) and OFDMA/LTE products. Our patent portfolio is the most
widely and extensively licensed in the industry, with over 330 licensees. Additionally, we have a substantial patent portfolio related to key
technologies used in communications and other devices and/or related services, some of which were developed in industry standards development
bodies. These include certain video codec, audio codec, wireless LAN, memory interfaces, wireless power, GPS and positioning, broadcast and
streaming protocols, and short range communication functionalities, including NFC and Bluetooth. Our patents cover a wide range of technologies
across the entire wireless system, including the device (handsets and tablets) and not just what is embodied in the chipsets. Over the years, a
number of companies have challenged our patent position, but at this time, companies in the mobile communications industry generally

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recognize that any company seeking to develop, manufacture and/or sell subscriber units or infrastructure equipment that use CDMA-based,
and/or OFDMA-based technologies will require a license or other rights to use our patents.

We have licensed or otherwise provided rights to use our patents to hundreds of companies on industry-accepted terms. Unlike some other
companies in our industry that hold back certain key technologies, we offer companies substantially our entire patent portfolio for use in cellular
subscriber devices and cell site infrastructure equipment. Our strategy to make our patented technologies broadly available has been a catalyst for
industry growth, helping to enable a wide range of companies offering a broad array of wireless products and features while increasing the
capabilities of and/or driving down average and low-end selling prices for 3G handsets and other wireless devices. By licensing or otherwise
providing rights to use our patents to a wide range of equipment manufacturers, encouraging innovative applications, supporting equipment
manufacturers with integrated chipset and software products and focusing on improving the efficiency of the airlink for wireless operators, we have
helped 3G CDMA evolve and grow and reduced device pricing, all at a faster pace than the 2G technologies such as GSM that preceded it.

Standards bodies have been informed that we hold patents that might be essential for all 3G standards that are based on CDMA. We have
committed to such standards bodies that we will offer to license our essential patents for these CDMA standards on a fair, reasonable and non-
discriminatory basis. We have also informed standards bodies that we hold patents that might be essential for certain standards that are based on
OFDM/OFDMA technology (e.g., LTE, including FDD and TDD versions) and have committed to offer to license our essential patents for these
OFDMA standards on a fair, reasonable and non-discriminatory basis. We have made similar commitments with respect to certain other
technologies implemented in industry standards.

Our license agreements also may provide us with rights to use certain of our licensees’ technology and intellectual property to manufacture
and sell certain components (e.g., Application-Specific Integrated Circuits) and related software, subscriber units and/or infrastructure equipment.

QSI Segment. QSI makes strategic investments that are focused on opening new or expanding opportunities for our technologies and
supporting the design and introduction of new products and services (or enhancing existing products or services) for voice and data
communications. Many of these strategic investments are in early-stage companies in a variety of industries, including, but not limited to, digital
media, e-commerce, healthcare and wearable devices. Investments primarily include non-marketable equity instruments, which generally are
recorded using the cost method or the equity method, and convertible debt instruments, which are recorded at fair value. QSI also held wireless
spectrum, which was sold in the first quarter of fiscal 2016 for a gain of approximately $380 million. In addition, QSI segment results include
revenues and related costs associated with development contracts with one of our equity method investees. As part of our strategic investment
activities, we intend to pursue various exit strategies for each of our QSI investments in the foreseeable future.

Other Businesses. Nonreportable segments include our mobile health, data center, small cell and other wireless technology and service
initiatives. Our nonreportable segments develop and sell products and services that include, but are not limited to: development, other services and
related products to U.S. government agencies and their contractors; products and services for mobile health; license of chipset technology and
products for data centers; software products and content and push-to-talk enablement services to wireless operators; and products designed for
implementation of small cells to address the challenge of meeting the increased demand for data.

Additional information regarding our operating segments is provided in this Annual Report in “Notes to Consolidated Financial Statements,
Note 8. Segment Information.” Information regarding seasonality is provided in this Annual Report in “Part II, Item 7. Management’s Discussion
and Analysis of Financial Condition and Results of Operations, Our Business and Operating Segments” under the heading “Seasonality.”

Strategic Realignment Plan

In the fourth quarter of fiscal 2015, we announced a Strategic Realignment Plan designed to improve execution, enhance financial performance
and drive profitable growth as we work to create sustainable long-term value for stockholders. As part of this Strategic Realignment Plan, among
other actions, we implemented a cost reduction plan, which included a series of targeted reductions across our businesses, particularly in QCT, and
a reduction to annual share-based compensation grants. Additional information regarding our Strategic Realignment Plan is provided in this
Annual Report in “Management’s Discussion and Analysis of Financial Condition and Results of Operation, Fiscal 2016 Overview” and “Notes to
Consolidated Financial Statements, Note 10. Strategic Realignment Plan.”

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Acquisitions

In January 2016, we announced that we had reached an agreement with TDK Corporation to form a joint venture, under the name RF360
Holdings Singapore Pte. Ltd., to enable delivery of RFFE modules and RF filters into fully integrated products for mobile devices and IoT
applications, among others. The joint venture will initially be owned 51% by us and 49% by TDK. Certain intellectual property, patents and filter
and module design and manufacturing assets will be carved out of existing TDK businesses and be acquired by the joint venture, with certain
assets acquired by us. The purchase price of our interest in the joint venture and the assets to be transferred to us is $1.2 billion, to be adjusted for
working capital, outstanding indebtedness and certain capital expenditures, among other things. Additionally, we have the option to acquire (and
TDK has an option to sell) TDK’s interest in the joint venture for $1.15 billion 30 months after the closing date. TDK will be entitled to up to a total
of $200 million in payments based on sales of RF filter functions over the three-year period after the closing date, which is a substitute for and in
lieu of any right of TDK to receive any profit sharing, distributions, dividends or other payments of any kind or nature. The transaction is subject
to receipt of regulatory approvals and other closing conditions and is expected to close in early calendar 2017.

On October 27, 2016, we announced a definitive agreement under which Qualcomm River Holdings, B.V., an indirect, wholly owned subsidiary
of Qualcomm Incorporated, will acquire NXP Semiconductors N.V. Pursuant to the definitive agreement, Qualcomm River Holdings will commence a
tender offer to acquire all of the issued and outstanding common shares of NXP for $110 per share in cash, for estimated total cash consideration of
$38 billion. NXP is a leader in high-performance, mixed-signal semiconductor electronics in automotive, broad-based microcontrollers, secure
identification, network processing and RF power products.

The transaction is expected to close by the end of calendar 2017 and is subject to receipt of regulatory approvals in various jurisdictions and
other closing conditions, including the tender of specified percentages (which vary from 70% to 95% based on certain circumstances as provided in
the definitive agreement) of the issued and outstanding common shares of NXP in the offer. An Extraordinary General Meeting of NXP’s
shareholders will be convened in connection with the offer to adopt, among other things, certain resolutions relating to the transaction. The tender
offer is not subject to any financing condition; however, we intend to fund the transaction with cash held by foreign entities and new debt. As a
result, we secured $13.6 billion in committed financing in connection with signing the definitive agreement.

Qualcomm River Holdings and NXP may terminate the definitive agreement under certain circumstances. If the definitive agreement is
terminated by NXP in certain circumstances, including termination by NXP to enter into a superior proposal for an alternative acquisition
transaction or a termination following a change of recommendation by the NXP board of directors, NXP will be required to pay Qualcomm River
Holdings a termination fee of $1.25 billion. If the definitive agreement is terminated by Qualcomm River Holdings under certain circumstances
involving the failure to obtain the required regulatory approvals or the failure of NXP to complete certain pre-closing reorganization steps in all
material respects, Qualcomm River Holdings will be required to pay NXP a termination fee of $2.0 billion.

Corporate Structure

We operate our businesses through our parent company, QUALCOMM Incorporated, and multiple direct and indirect subsidiaries. We have
developed our corporate structure in order to address various legal, regulatory, tax, contractual compliance, operations and other matters.
Substantially all of our products and services businesses, including QCT, and substantially all of our engineering, research and development
functions, are operated by QUALCOMM Technologies, Inc. (QTI), a wholly-owned subsidiary of QUALCOMM Incorporated, and QTI’s
subsidiaries. QTL is operated by QUALCOMM Incorporated, which owns the vast majority of our patent portfolio. Neither QTI nor any of its
subsidiaries has any right, power or authority to grant any licenses or other rights under or to any patents owned by QUALCOMM Incorporated.

Revenue Concentrations, Significant Customers and Geographical Information

Consolidated revenues from international customers and licensees as a percentage of total revenues were 98%, 99% and 99% in fiscal 2016,
2015 and 2014, respectively. During fiscal 2016, 57%, 17% and 12% of our revenues were from customers and licensees based in China (including
Hong Kong), South Korea and Taiwan, respectively, compared to 53%, 16% and 13% during fiscal 2015, respectively, and 50%, 23% and 11% during
fiscal 2014, respectively. We report revenues from external customers by country based on the location to which our products or services are
delivered, which for QCT is generally the country in which our customers manufacture their products, or for licensing revenues, the invoiced
addresses of our licensees. As a result, the revenues by country presented herein are not necessarily indicative of either the country in which the
devices containing our products and/or intellectual property are ultimately sold to consumers or the country in which the companies that sell the
devices are headquartered. For example, China revenues could include revenues related to shipments of integrated circuits to a company that is
headquartered in South Korea but that manufactures devices in China,

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which devices are then sold to consumers in Europe and/or the United States. Additional geographic information is provided in this Annual Report
in “Notes to Consolidated Financial Statements, Note 8. Segment Information.”

A small number of customers/licensees historically have accounted for a significant portion of our consolidated revenues. In fiscal 2016, 2015
and 2014, revenues from Samsung Electronics and from Hon Hai Precision Industry Co., Ltd./Foxconn, its affiliates and other suppliers to Apple
Inc. each comprised more than 10% of consolidated revenues.

Research and Development

The communications industry is characterized by rapid technological change, evolving industry standards and frequent new product
introductions, requiring a continuous effort to enhance existing products and technologies and to develop new products and technologies. We
have significant engineering resources, including engineers with substantial expertise in CDMA, OFDMA and a broad range of other technologies.
Using these engineering resources, we expect to continue to invest in research and development in a variety of ways in an effort to extend the
demand for our products and services, including continuing the development of CDMA, OFDMA and other technologies, developing alternative
technologies for certain specialized applications, participating in the formulation of new voice and data communication standards and technologies
and assisting in deploying digital voice and data communications networks around the world. Our research and development team has a
demonstrated track record of innovation in voice and data communication technologies and application processor technology, among others. Our
research and development expenditures in fiscal 2016, 2015 and 2014 totaled approximately $5.2 billion, $5.5 billion and $5.5 billion, respectively.

We continue to invest significant resources towards advancements in 4G OFDMA-based technologies (including LTE) and 5G-based
technologies. We also make acquisitions to meet certain technology needs, to obtain development resources or to pursue new business
opportunities.

We make investments to provide our integrated circuit customers with chipsets designed on leading-edge technology nodes that combine
multiple technologies for use in consumer devices (e.g., smartphones, tablets, laptops), consumer electronics and other products (e.g., access
points and routers, data cards and infrastructure equipment). In addition to 3G and 4G LTE technologies, our chipsets support other wireless and
wired connectivity technologies, including WLAN, Bluetooth, Ethernet, GPS, GLONASS, BeiDou and Powerline communication. Our integrated
chipsets often include multiple technologies, including advanced multimode modems, application processors and graphics engines, as well as the
tools to connect these diverse technologies. We continue to support Android, Windows and other mobile client software environments in our
chipsets.

We develop on our own, and with our partners, innovations that are integrated into our product portfolio to further expand the opportunity for
wireless communications and enhance the value of our products and services. These innovations are expected to enable our customers to improve
the performance or value of their existing services, offer these services more affordably and introduce revenue-generating broadband data services
ahead of their competition.

We have research and development centers in various locations throughout the world that support our global development activities and
ongoing efforts to develop and/or advance 4G OFDMA, 5G and a broad range of other technologies. We continue to use our substantial
engineering resources and expertise to develop new technologies, applications and services and make them available to licensees to help grow the
communications industry and generate new or expanded licensing opportunities.

We also make investments in opportunities that leverage our existing technical and business expertise to deploy new and expanded product
areas, such as RFFE, and enter into adjacent industry segments, such as products for automotive, the IoT, including the connected home, smart
cities and wearables, data center, networking, mobile computing, mobile health and machine learning, including robotics, among others.

Sales and Marketing

Sales and marketing activities of our operating segments are discussed under Operating Segments. Other marketing activities include public
relations, advertising, digital marketing and social media, participation in technical conferences and trade shows, development of business cases
and white papers, competitive analyses, industry intelligence and other marketing programs, such as marketing development funds with our
customers. Our Corporate Marketing department provides company information on our Internet site and through other channels regarding our
products, strategies and technology to industry analysts and media.

14

EXHIBIT 31
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Case 3:17-cv-01010-WQH-JMA Document 35-3 Filed 05/24/17 PageID.353 Page 118 of 118

Competition

Competition faced by our operating segments is discussed under Operating Segments. Competition in the communications industry
throughout the world continues to increase at a rapid pace as consumers, businesses and governments realize the potential of wireless
communications products and services. We have facilitated competition in the wireless communications industry by licensing our technologies to,
and therefore enabling, a large number of manufacturers. Although we have attained a significant position in the industry, many of our current and
potential competitors may have advantages over us that include, among others: motivation by our customers in certain circumstances to utilize
their own internally-developed integrated circuit products, to use our competitors’ integrated circuit products, or to choose alternative
technologies; lower cost structures and/or a willingness and ability to accept lower prices and lower or negative margins for their products,
particularly in China; foreign government support of other technologies or competitors; better known brand names; ownership and control of
manufacturing facilities and greater expertise in manufacturing processes; more extensive relationships with local distribution companies and
original equipment manufacturers in emerging geographic regions (such as China); and/or a more established presence in certain regions. These
relationships may affect customers’ decisions to purchase products or license technology from us. Accordingly, new competitors or alliances
among competitors could emerge and rapidly acquire significant market positions to our detriment.

We expect competition to increase as our current competitors expand their product offerings and introduce new technologies and services in
the future and as additional companies compete with our products or services based on 3G, 4G or other technologies. Although we intend to
continue to make substantial investments in developing new products and technologies and improving existing products and technologies, our
competitors may introduce alternative products, services or technologies that threaten our business. It is also possible that the prices we charge for
our products and services may continue to decline as competition continues to intensify.

Corporate Responsibility and Sustainability

We strive to better our local and global communities through ethical business practices, socially empowering technology applications,
educational and environmental programs and employee diversity and volunteerism.

• Our Governance. We aim to demonstrate accountability, transparency, integrity and ethical business practices throughout our operations
and interactions with our stakeholders.

• Our Products. We strive to meet or exceed industry standards for product responsibility and supplier management.

• Our Workplace. We endeavor to provide a safe and healthy work environment where diversity is embraced and various opportunities for
training, growth and advancement are encouraged for all employees.

• Our Community. We have strategic relationships with a wide range of local organizations and programs that develop and strengthen
communities worldwide.

• Our Environment. We aim to expand our operations while minimizing our carbon footprint, conserving water and reducing waste.

• Qualcomm Wireless Reach. We invest in strategic programs that foster entrepreneurship, aid in public safety, enhance delivery of health
care, enrich teaching and learning and improve environmental sustainability through the use of advanced wireless technologies.

Employees

At September 25, 2016, we employed approximately 30,500 full-time, part-time and temporary employees. During fiscal 2016, the number of
employees decreased by approximately 2,500 primarily due to actions initiated under the Strategic Realignment Plan.

Available Information

Our Internet address is www.qualcomm.com. There we make available, free of charge, our annual report on Form 10-K, quarterly reports on
Form 10-Q, current reports on Form 8-K and any amendments to those reports, as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the Securities and Exchange Commission (SEC). We also make available on our Internet site public financial
information for which a report is not required to be filed with or furnished to the SEC. Our SEC reports and other financial information can be
accessed through the investor relations section of our Internet site. The information found on our Internet site is not part of this or any other report
we file with or furnish to the SEC.

15

EXHIBIT 31
PAGE 548
Case 3:17-cv-01010-WQH-JMA Document 35-4 Filed 05/24/17 PageID.354 Page 1 of 4

1 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
2 echesler@cravath.com
CRAVATH, SWAINE & MOORE LLP
3 825 Eighth Avenue
New York, NY 10019
4 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
5
David A. Nelson (pro hac vice)
6 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
7 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
8 Chicago, Illinois 60661
Telephone: (312) 705-7400
9 Facsimile: (312) 705-7401
10 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, California 92121
Telephone: (858) 314-1200
13 Facsimile: (858) 345-3178
14 Attorneys for Plaintiff
QUALCOMM INCORPORATED
15
16 UNITED STATES DISTRICT COURT
17 SOUTHERN DISTRICT OF CALIFORNIA
18 QUALCOMM INCORPORATED, Case No. 3:17-CV-1010-WQH-JMA
19 Plaintiff, DECLARATION OF ALEX
ROGERS IN SUPPORT OF
20 v. PLAINTIFF QUALCOMM
INCORPORATED’S MOTION
21 COMPAL ELECTRONICS, INC., FIH FOR A PRELIMINARY
MOBILE LTD., HON HAI INJUNCTION
22 PRECISION INDUSTRY CO., LTD,
PEGATRON CORPORATION, and Date: June 26, 2017
23 WISTRON CORPORATION, Courtroom: 14B
24 Defendants. Judge: Hon. William Q. Hayes
25 No Oral Argument Unless Requested
by the Court.
26
27 (ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28
Case No. 17-cv-1010 WQH JMA
Declaration of Alex Rogers
Case 3:17-cv-01010-WQH-JMA Document 35-4 Filed 05/24/17 PageID.355 Page 2 of 4

1 I, Alex Rogers, declare as follows:
2 1. I am the Executive Vice President and President of Qualcomm
3 Technology Licensing (“QTL”), a division of Qualcomm Incorporated
4 (“Qualcomm”). QTL is the business segment of Qualcomm that grants patent
5 licenses and provides rights to use portions of Qualcomm’s intellectual property
6 portfolio. I have been employed by Qualcomm since 2001. I have held my current
7 position, in which I oversee Qualcomm’s licensing business, since 2016. Prior to
8 becoming the Executive Vice President and President of QTL, I held various
9 positions in Qualcomm’s Corporate Legal department, including the position of
10 Deputy General Counsel.
11 2. Through my work in the Corporate Legal department and now as the
12 Executive Vice President and President of QTL, I am familiar with Qualcomm’s
13 licensing practices. I have actively participated in the negotiation of license
14 agreements on behalf of Qualcomm, including in recent negotiations with Apple
15 Inc. (“Apple”).
16 3. In my current position, I oversee Qualcomm’s business relationship
17 with each licensee. My work at Qualcomm over the past 16 years has required
18 familiarity with Qualcomm’s various agreements with Qualcomm licensees. As a
19 result, I am familiar with the license agreements Qualcomm has entered into during
20 my tenure at the company, as well as certain of the active license agreements that
21 were entered into prior to my employment at Qualcomm.
22 4. The contents of this declaration are true and correct to the best of my
23 knowledge, information, and belief, and are based on my personal knowledge or, as
24 applicable, on my review of Qualcomm records. If called upon as a witness in this
25 action, I could and would competently testify thereto.
26 Qualcomm’s Relationship with Defendants
27 5. Compal Electronics Inc., Hon Hai Precision Industry Co. and FIH
28 Mobile Ltd. (together, “Foxconn”), Wistron Corporation, and Pegatron Corporation
Case No. 17-cv-1010 WQH JMA
2 Declaration of Alex Rogers
Case 3:17-cv-01010-WQH-JMA Document 35-4 Filed 05/24/17 PageID.356 Page 3 of 4

1 (collectively the “Defendants”), have entered into license agreements with
2 Qualcomm. (Lavely Decl., Exhibits 1-5.) The license agreements provide
3 Defendants with the right to make, use, and sell certain cellular devices that practice
4 certain Qualcomm intellectual property, generally including cellular standard-
5 essential patents (cellular “SEPs”), non-cellular SEPs, and non-standard-essential
6 patents (“NEPs”).
7 Qualcomm’s Relationship with Apple
8 6. Apple’s cellular products, including the iPhone and iPad, are
9 manufactured by Defendants under their license agreements with Qualcomm. It is
10 through this arrangement that Apple receives the right to practice certain
11 Qualcomm patents. Apple has never entered into a direct license agreement with
12 Qualcomm. Instead, the Defendants make Apple products subject to their license
13 agreements with Qualcomm and pay royalties to Qualcomm pursuant to those
14 agreements.
15 Qualcomm’s Licensing Business
16 7. Research and development is critical to Qualcomm’s licensing
17 business. In order to remain a leader in this industry, it is essential for Qualcomm
18 to commit significant resources and funding to R&D of new technologies. This is
19 especially true given the changing landscape of companies seeking to innovate in
20 the field of wireless technology. It is Qualcomm’s ongoing investment in R&D that
21 allows it to invent the cellular technologies critical to the function of cellular
22 networks and devices.
23 8. Qualcomm has spent decades in relationships with numerous licensees
24 around the world. In order to develop goodwill, Qualcomm strives to treat
25 similarly situated licensees fairly and maintain consistency in its licensing program.
26 9. Qualcomm’s licensing business depends on its ability to license its
27 tens of thousands of patents to cellular manufacturers that use its valuable
28 technology in return for royalties. Qualcomm has hundreds of other licensees in
Case No. 17-cv-1010 WQH JMA
3 Declaration of Alex Rogers
Case 3:17-cv-01010-WQH-JMA Document 35-4 Filed 05/24/17 PageID.357 Page 4 of 4

1 addition to Defendants. Qualcomm’s other licensees include competitors of Apple
2 and Defendants. By refusing to pay royalties for Qualcomm’s licensed technology,
3 Defendants (and Apple) have created a significant competitive imbalance. Their
4 competitors are paying to use Qualcomm’s valuable intellectual property under
5 their respective license agreements, while Apple and Defendants are not.
6 10. If Defendants’ non-payment of royalties continues, other licensees
7 may use Defendants’ non-payment as leverage to improperly argue that they may
8 also decline to pay under their respective agreements, or use the non-payment as
9 leverage in renegotiations, so long as Apple and Defendants continue to refuse to
10 pay. In this way, Apple’s and Defendants’ actions threaten to undermine
11 Qualcomm’s licensing business beyond the scope of the dispute with Apple.
12 11. Defendants’ continued non-payment of royalties also may harm
13 Qualcomm’s ability to enter into new agreements. Prospective licensees are aware
14 of competitors’ practices with respect to the payment of royalties for intellectual
15 property rights. If a major competitor is not paying at all, particularly despite the
16 existence of a valid agreement, a prospective licensee could claim it is
17 disadvantageous to sign a license agreement with Qualcomm.
18 Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
19 foregoing is true and correct and that I executed this declaration on May 24, 2017 in
20 Brussels, Belgium.
21
22
Alex Rogers
23
24
25
26
27
28
Case No. 17-cv-1010 WQH JMA
4 Declaration of Alex Rogers
Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.358 Page 1 of 8

1 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
2 echesler@cravath.com
CRAVATH, SWAINE & MOORE LLP
3 825 Eighth Avenue
New York, NY 10019
4 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
5
David A. Nelson (pro hac vice)
6 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
7 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
8 Chicago, Illinois 60661
Telephone: (312) 705-7400
9 Facsimile: (312) 705-7401
10 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, California 92121
Telephone: (858) 314-1200
13 Facsimile: (858) 345-3178
14 Attorneys for Plaintiff
QUALCOMM INCORPORATED
15
UNITED STATES DISTRICT COURT
16
SOUTHERN DISTRICT OF CALIFORNIA
17
QUALCOMM INCORPORATED, Case No. 3:17-CV-01010-WQH-JMA
18
Plaintiff, REDACTED DECLARATION OF
19 ABBASEH SAMIMI IN
v. SUPPORT OF
20 PLAINTIFF QUALCOMM
COMPAL ELECTRONICS, INC., FIH INCORPORATED’S MOTION
21 FOR A PRELIMINARY
MOBILE LTD., HON HAI INJUNCTION
22 PRECISION INDUSTRY CO., LTD,
PEGATRON CORPORATION, and Date: June 26, 2017
23 WISTRON CORPORATION,
Defendants. Courtroom: 14B
24
Judge: Hon. William Q. Hayes
25
No Oral Argument Unless Requested
26 by the Court.
27 (ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28
Case No. 17-cv-1010 WQH JMA
Declaration of Abbaseh Samimi
Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.359 Page 2 of 8

1 I, Abbaseh Samimi, declare as follows:
2 1. I am Vice President, Strategic Market Analysis and Contracts at
3 Qualcomm Technology Licensing (“QTL”), a division of Qualcomm Incorporated
4 (“Qualcomm”). QTL is the business segment of Qualcomm that grants licenses and
5 provides rights to use portions of Qualcomm’s intellectual property portfolio. I
6 have been employed by Qualcomm since 1996. I have held my current position
7 since 2007.
8 2. For more than twenty years, I have overseen Qualcomm’s license
9 compliance group. Qualcomm’s license compliance group is responsible for
10 reviewing licensee royalty reports, overseeing royalty audits of licensees,
11 confirming complete royalty payment by licensees, and handling all regular
12 correspondence with licensees. Following the receipt and review of licensee
13 royalty reports, the compliance group also works with Qualcomm’s finance group
14 to invoice licensees. The compliance group tracks the royalty payment compliance
15 for hundreds of Qualcomm licensees, including Compal Electronics Inc.
16 (“Compal”), FIH Mobile Ltd. and Hon Hai Precision Industry Co., Ltd. (together
17 “Foxconn”), Wistron Corporation (“Wistron”) and Pegatron Corporation
18 (“Pegatron”) (collectively, “Defendants”). The compliance group regularly
19 communicates with each of the Defendants and Qualcomm’s other licensees. I
20 receive regular notifications regarding licensee royalty reporting, payment
21 compliance, and correspondence.
22 3. In around 2001, I formed Qualcomm’s contracts group and have
23 overseen the group since that date. The contracts group tracks each license
24 agreement entered into by Qualcomm, as well as any amendments or sublicense
25 agreements related to Qualcomm’s license agreements. The contracts group also
26 tracks the licensing terms for each of Qualcomm’s licensees. I receive notification
27 upon entry of any new license agreements, sublicense agreements, or amendments.
28 4. The contents of this declaration are true and correct to the best of my
Case No. 17-cv-1010 WQH JMA
2 Declaration of Abbaseh Samimi
Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.360 Page 3 of 8

1 knowledge, information, and belief, and are based on my personal knowledge or, as
2 applicable, on my review of Qualcomm records. If called upon as a witness in this
3 action, I could and would competently testify thereto.
4 Defendants’ License Agreements with Qualcomm
5 5. Qualcomm entered into a license agreement with Compal on February
6 10, 2000. The parties have executed various amendments to the license agreement,
7 including on March 12, 2002; November 4, 2002; September 30, 2005; February 1,
8 2006; June 22, 2007; April 15, 2008; November 8, 2011; and February 27, 2014.
9 (See Lavely Decl., Exhibit (“Ex.” or “Exs.”) 1.)
10 6. Qualcomm entered into a license agreement with FIH Mobile Ltd.
11 (formerly Foxconn International Holdings Ltd.) on October 18, 2005. (Ex. 2.) Hon
12 Hai Precision Industry Co., Ltd. (“Hon Hai”) also signed the agreement with
13 respect to two sections. (Id.) Also on October 18, 2005, Qualcomm entered into a
14 Request for Consent to Sublicense with Hon Hai and FIH Mobile Ltd., which made
15 Hon Hai a sublicensee pursuant to the terms of the license agreement. (Ex. 3.) The
16 parties have executed various amendments to the license agreement, including on
17 March 27, 2006; November 29, 2007 (since terminated); April 14, 2009; and
18 September 24, 2012. (Ex. 2.)
19 7. Qualcomm entered into a license agreement with Wistron on May 23,
20 2007. (Ex. 4.) The parties have not executed any amendments to the license
21 agreement.
22 8. Qualcomm entered into a license agreement with Pegatron on April 29,
23 2010. The parties have executed various amendments to the license agreement,
24 including on June 1, 2010 (two amendments); June 30, 2010; and May 23, 2011
25 (since terminated). (Ex. 5.)
26 9. Compal began paying royalties under its license agreement in 2002.
27 Compal did not start manufacturing and paying royalties on Apple Inc. (“Apple”)
28 products under its license agreement until 2014.
Case No. 17-cv-1010 WQH JMA
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Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.361 Page 4 of 8

1 10. Foxconn began paying royalties under its license agreement in 2005.
2 Foxconn did not start manufacturing and paying royalties on Apple products under
3 its license agreement until 2008.
4 11. Pegatron began paying royalties under its license agreement in 2010.
5 Pegatron did not start manufacturing and paying royalties on Apple products under
6 its license agreement until 2011.
7 12. Wistron began paying royalties under its license agreement in 2013.
8 Wistron did not start manufacturing and paying royalties on Apple products under
9 its license agreement until 2014.
10 13. The royalty rate in each Defendant’s license agreement has remained
11 the same both before and after each Defendant began manufacturing Apple
12 products.
13 14. In 2015 and 2016, Defendants’ combined royalty payments for Apple
14 products averaged approximately per quarter.
15 15. Prior to Q4 2016, each Defendant made regular royalty payments to
16 Qualcomm on Apple and non-Apple devices. Each Defendant has continued to
17 make royalty payments to Qualcomm under its license agreement for non-Apple
18 products, including for Q4 2016 and Q1 2017.
19 Defendants’ Failure To Pay Royalties
20 16. In a letter dated February 3, 2017, Apple told Qualcomm that it was
21 withholding a total of approximately $963 million in payments to the Defendants
22 for the royalties they owed Qualcomm for Q4 2016. (Ex. 7, at 1.) Apple stated that
23 it withheld this amount based on the amounts at issue in a separate dispute
24 regarding the Business Cooperation and Patent Agreement between Apple and
25 Qualcomm. (Id.) Aside from the approximately $963 million withheld, Apple paid
26 Defendants the amounts owed for reported royalties for Q4 2016. (Id.)
27 17. Foxconn’s Q4 2016 royalty reports certified that it owed
28 to Qualcomm for Apple products ( for iPhones
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1 and for iPads). (Exs. 8-10.) Qualcomm invoiced Foxconn for the
2 reported royalties. However, Foxconn only paid Qualcomm in
3 royalties on Apple products for Q4 2016 ( for iPhones and
4 for iPads). Foxconn stated that it had received roughly one-third of
5 the royalties due from Apple and that the remaining amount would “not be issued”.
6 (Ex. 11.) Qualcomm notified Foxconn of its non-compliance and reminded
7 Foxconn that it must fulfill its payment obligations. Foxconn paid the full Q4 2016
8 royalties that it reported for non-Apple products.
9 18. Qualcomm received Pegatron’s Q4 2016 royalty report on January 22,
10 2017. Pegatron’s Q4 2016 royalty report showed that it owed to
11 Qualcomm for Apple iPhones. Pegatron’s total royalty amount owed was
12 calculated by summing the individual amounts listed in Pegatron’s report. (Ex. 12.)
13 Qualcomm invoiced Pegatron for that amount. However, Pegatron only paid
14 Qualcomm in iPhone royalties for Q4 2016. Qualcomm notified
15 Pegatron of its non-compliance and reminded Pegatron that it must fulfill its
16 payment obligations. Pegatron paid the full Q4 2016 royalties that it reported for
17 non-Apple products.
18 19. Wistron submitted its Q4 2016 royalty report two weeks late, and the
19 report was missing the required sales data for Apple products. Instead, the report
20 simply showed that Wistron owed in royalties for Apple iPhones.
21 (Ex. 13.) According to Apple’s February 3, 2017 letter, however, Wistron owed
22 Qualcomm in royalties for Q4 2016. (Ex. 7.) But Wistron only paid
23 Qualcomm in iPhone royalties for Q4 2016. Qualcomm notified
24 Wistron of its non-compliance and reminded Wistron that it must fulfill its payment
25 and reporting obligations. Wistron told Qualcomm that the information it sent was
26 all that its “customer allowed [Wistron] to provide”. (Ex. 14.) Wistron paid the
27 full Q4 2016 royalties that it reported for non-Apple products.
28 20. Compal’s Q4 2016 royalty report was received by Qualcomm on
Case No. 17-cv-1010 WQH JMA
5 Declaration of Abbaseh Samimi
Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.363 Page 6 of 8

1 January 25, 2017, and Compal paid the full amount it reported for Q4 2016
2 royalties for Apple and non-Apple products. (Ex. 15.) According to Apple’s
3 February 3, 2017 letter, Compal received nearly full payment from Apple for Q4
4 2016. (Ex. 7.)
5 21. On April 25, 2017, Apple notified Qualcomm that it would not pay
6 any funds to Defendants for royalties due to Qualcomm for Q1 2017, and will not
7 be paying any funds to Defendants until court and antitrust agency matters “are
8 resolved”. (Ex. 16.)
9 22. On April 19, 2017, Qualcomm received Compal’s Q1 2017 royalty
10 report for Apple products. Compal’s Q1 2017 royalty report showed that it owed
11 in royalties to Qualcomm for Apple iPads. (Ex. 17.) But, on April 27,
12 2017, Qualcomm received an email from Compal stating: “Our customer [Apple]
13 has recently formally requested [C]ompal stop the royalty payment to [Q]ualcomm
14 that [is] associated to their business until legal action is completed.” (Ex. 18.) On
15 May 3, 2017, Compal told Qualcomm that “Apple will not be transmitting funds to
16 [Compal] for the [Q1 2017] quarterly royalty payment to Qualcomm”, so Compal
17 “will only submit non-Apple’s report/payment”. (Ex. 19.) Qualcomm reminded
18 Compal that it must comply with its obligations under its license agreement by
19 paying royalties on both Apple and non-Apple products. Compal was required to
20 remit Q1 2017 royalty payments by . Compal has not paid any
21 royalties to Qualcomm for Apple products for Q1 2017. Compal paid the full Q1
22 2017 royalties that it reported for non-Apple products.
23 23. Foxconn’s Q1 2017 royalty reports certified that it owed
24 in royalties to Qualcomm for Apple products (
25 for iPhones and for iPads). (Exs. 20-22.) But, on April 26, 2017,
26 Qualcomm received an email from Foxconn stating: “Still wa[i]ting for funds from
27 customer [Apple], I have no idea when [Foxconn] can release pa[y]ment to you.”
28 (Ex. 23.) On a subsequent call, Foxconn informed Qualcomm that its Apple royalty
Case No. 17-cv-1010 WQH JMA
6 Declaration of Abbaseh Samimi
Case 3:17-cv-01010-WQH-JMA Document 35-5 Filed 05/24/17 PageID.364 Page 7 of 8

1 payments are on hold, and that Apple had instructed Foxconn’s legal team to
2 contact Apple’s legal team. Qualcomm notified Foxconn of its non-compliance and
3 reminded Foxconn that it must fulfill its payment obligations. Foxconn was
4 required to remit Q1 2017 royalty payments by . Foxconn has not
5 paid any royalties to Qualcomm for Apple products for Q1 2017.1 Foxconn has
6 paid a portion of its reported Q1 2017 royalties for non-Apple products and has
7 informed Qualcomm that it will make the remaining payments in the immediate
8 future.
9 24. Qualcomm received Pegatron’s Q1 2017 royalty report for Apple
10 products on April 15, 2017, and it showed that Pegatron owed in
11 royalties to Qualcomm for Apple iPhones. Pegatron’s total royalty amount owed
12 was calculated by summing the individual amounts listed in Pegatron’s report. (Ex.
13 24.) Pegatron was required to remit Q1 2017 royalty payments by ,
14 but Pegatron has not paid any royalties to Qualcomm for Apple products for Q1
15 2017. Qualcomm notified Pegatron of its non-compliance and reminded Pegatron
16 that it must fulfill its payment obligations. Pegatron paid the full Q1 2017 royalties
17 that it reported for non-Apple products.
18 25. As of the date of this Declaration, Qualcomm has not received a
19 royalty report from Wistron for Apple products for Q1 2017, despite Qualcomm’s
20 repeated requests for the report. Wistron was required to remit Q1 2017 royalty
21 payments by . Wistron has not paid any royalties to Qualcomm for
22 Apple products for Q1 2017. Wistron paid the full Q1 2017 royalties that it
23 reported for non-Apple products.
24
25
26
27 1
Foxconn CMMSG Industria De Electronicos LTDA, which I understand is
not a defendant in this action, paid approximately in royalties under a
28 separate license agreement.
Case No. 17-cv-1010 WQH JMA
7 Declaration of Abbaseh Samimi
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Case 3:17-cv-01010-WQH-JMA Document 35-6 Filed 05/24/17 PageID.366 Page 1 of 3

1 Evan R. Chesler (pro hac vice)
(N.Y. Bar No. 1475722)
2 echesler@cravath.com
CRAVATH, SWAINE & MOORE LLP
3 825 Eighth Avenue
New York, NY 10019
4 Telephone: (212) 474-1000
Facsimile: (212) 474-3700
5
David A. Nelson (pro hac vice)
6 (Ill. Bar No. 6209623)
davenelson@quinnemanuel.com
7 QUINN EMANUEL URQUHART & SULLIVAN, LLP
500 West Madison St., Suite 2450
8 Chicago, Illinois 60661
Telephone: (312) 705-7400
9 Facsimile: (312) 705-7401
10 Karen P. Hewitt (SBN 145309)
kphewitt@jonesday.com
11 JONES DAY
4655 Executive Drive, Suite 1500
12 San Diego, California 92121
Telephone: (858) 314-1200
13 Facsimile: (858) 345-3178
14 Attorneys for Plaintiff
QUALCOMM INCORPORATED
15
16 UNITED STATES DISTRICT COURT
17 SOUTHERN DISTRICT OF CALIFORNIA
18 QUALCOMM INCORPORATED, Case No. 3:17-CV-1010-WQH-JMA
19 Plaintiff, DECLARATION OF JAMES J.
CATHEY IN SUPPORT OF
20 v. PLAINTIFF QUALCOMM
INCORPORATED’S MOTION
21 COMPAL ELECTRONICS, INC., FIH FOR A PRELIMINARY
MOBILE LTD., HON HAI INJUNCTION
22 PRECISION INDUSTRY CO., LTD,
PEGATRON CORPORATION, and Date: June 26, 2017
23 WISTRON CORPORATION,
Courtroom: 14B
24 Defendants.
Judge: Hon. William Q. Hayes
25
No Oral Argument Unless Requested
26 by the Court.
27 (ORAL ARGUMENT REQUESTED BY MOVING PARTY)
28
Case No. 17-cv-1010 WQH JMA
Declaration of James J. Cathey
Case 3:17-cv-01010-WQH-JMA Document 35-6 Filed 05/24/17 PageID.367 Page 2 of 3

1 I, James J. Cathey, declare as follows:
2 1. I am Senior Vice President and President of Asia Pacific & India at
3 Qualcomm Technologies Inc. (“QTI”), a subsidiary of Qualcomm Incorporated
4 (“Qualcomm”). QTI operates substantially all of the products and services
5 businesses owned by Qualcomm Incorporated, including Qualcomm CDMA
6 Technologies (“QCT”), and substantially all of its engineering, research, and
7 development functions. I have been employed by Qualcomm since 2006. I have
8 held my current title since 2016.
9 2. In my role at QTI, I oversee all of QTI’s sales and customer relations
10 for Qualcomm’s Asia Pacific and India region (which includes Korea, Japan,
11 Taiwan, and Indonesia, among many other countries). As a result, I frequently
12 meet with, or otherwise communicate with, QTI’s customers and potential
13 customers across the region. For many years, I have had long-standing
14 relationships with numerous cellular device manufacturers, including Compal
15 Electronics Inc., Hon Hai Precision Industry Co. and/or FIH Mobile Ltd. (together,
16 “Foxconn”), Wistron Corporation, and Pegatron Corporation (collectively,
17 “Defendants”). I regularly interact with representatives from each Defendant.
18 3. The contents of this declaration are true and correct to the best of my
19 knowledge, information, and belief, and are based on my personal knowledge or, as
20 applicable, on my review of Qualcomm records. If called upon as a witness in this
21 action, I could and would competently testify thereto.
22 Apple’s Agreement To Indemnify Defendants
23 4. I am aware that each Defendant has entered into a license agreement
24 with Qualcomm. Under their respective license agreements, the Defendants are
25 required to pay Qualcomm royalties for the manufacture and sale of cellular
26 products.
27 5. I am also aware that each Defendant recently stopped paying the
28 royalties owed to Qualcomm under its license agreement for the sale of Apple, Inc.
Case No. 17-cv-1010 WQH JMA
2 Declaration of James J. Cathey
Case 3:17-cv-01010-WQH-JMA Document 35-6 Filed 05/24/17 PageID.368 Page 3 of 3

1 (“Apple”) products.
2 6. During a meeting in Taiwan in late February 2017, a Foxconn
3 representative informed me that Apple agreed to indemnify Foxconn for any claims
4 arising from Foxconn’s failure to honor its obligations under its license agreement
5 with Qualcomm. During a teleconference in April 2017, a Compal representative
6 also informed me that Apple promised similar indemnification to Compal. In early
7 May 2017, during another trip to Taiwan, a Wistron representative also informed
8 me that Apple made a similar indemnification promise to Wistron.
9 7. By early May 2017, representatives from Foxconn, Wistron and
10 Compal had informed me that Apple was instructing each such Defendant not
11 to make royalty payments to Qualcomm related to the sale of Apple products.
12
13 Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the
14 foregoing is true and correct that I executed this declaration on May 24, 2017
15 in Tokyo, Japan.
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Case No. 17-cv-1010 WQH JMA
3 Declaration of James J. Cathey
Case 3:17-cv-01010-WQH-JMA Document 35-7 Filed 05/24/17 PageID.369 Page 1 of 2

1 CERTIFICATE OF SERVICE
2 The undersigned hereby certifies that a true and correct copy of the foregoing
3 Notice of Motion and Motion for Preliminary Injunction, Memorandum of Points
4 and Authorities in Support, and accompanying declarations and exhibits, have been
5 served on May 24, 2017, to all counsel of record who are deemed to have consented
6 to electronic service via the Court’s CM/ECF system per Civil Local Rule 5.4.
7 In addition, a true and correct copy of the Notice of Motion and Motion for
8 Preliminary Injunction, Unredacted Memorandum of Points and Authorities in
9 Support, and accompanying declarations and exhibits, have been served on May 24,
10 2017, to all defendants identified below by depositing true copies of the same in
11 postage prepaid, Priority Mail Express wrappers in a depository under the exclusive
12 care and control of the United States Postal Service, located within the State, City
13 and County of New York, to wit: the James A Farley Post Office, 421 Eighth
14 Avenue, New York, NY 10001.
15 I certify under penalty of perjury that the foregoing is true and correct.
16 Executed May 24, 2017.
17
Hon Hai Precision Industry Co., Hon Hai Precision Industry Co., Ltd.
18 Ltd. Attn: President
C/O Robert Shei 5F-1, No. 5, Hsin-an Road, Hsinchu Science
19
500 S Kraemer Blvd., Suite 100 and Industrial Park, East Area
20 Brea, CA 92821 Hsinchu City, Taiwan, R.O.C.
FIH Mobile Ltd. FIH Mobile Ltd.
21
C/O Vistra (Cayman) Limited Attn: President
22 P.O. Box 31119 Grand Pavilion No. 18 Youyi Road
Hibiscus Way Langfang Economic and Technological
23
802 West Bay Road Development Zone
24 Grand Cayman, KY1-1205 Hebei Province, People’s Republic of China
Wistron Corporation Wistron Corporation
25
Attn: President Attn: President
26 21F, No. 88, Section 1, Hsin Tai No. 5, Xin’an Rd., East Dist.
27 Wu Road, Hsichih Hsinchu City 300, Taiwan R.O.C.
Taipei Hsien 221, Taiwan, R.O.C.
28
Case No. 3:17-cv-1010-WQH-JMA
Certificate of Service
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1 Pegatron Corporation Compal Electronics, Inc.
2 Attn: President Attn: President
5F, No. 76, Ligong Street, Beitou Nos. 581 & 581-1 Ruiguang Road, Neihu
3 District District
Taipei City 112, Taiwan, R.O.C. Taipei City 11492, Taiwan, R.O.C.
4
5
6 By: /s/ Evan R. Chesler
Evan R. Chesler
7 echesler@cravath.com
8 Attorney for Plaintiff
QUALCOMM INCORPORATED
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Case No. 3:17-cv-1010-WQH-JMA
2 Certificate of Service