Dropped Apple supplier Imagination Technologies said there’s been ‘no progress’ in its dispute with Apple (IMG, AAPL)

Imagination Technologies CEO Andrew HeathImagination Technologies

LONDON, July 4 (Reuters) – British chip designer Imagination Technologies said it had made no progress in its battle with its biggest customer Apple , and the sale of the company triggered by the dispute was continuing with talks with potential buyers.

Imagination said in April that Apple had decided to develop its own graphics chips and would no longer use Imagination’s processing designs in 15 months to two years time, sending its shares down 70 percent on the day.

The company, which put itself up for sale last month, said it returned to profitability in the year to end-April, with reported operating profit of 7.8 million pounds ($ 10.1 million) against a loss of 26.8 million pounds a year earlier.

Chief Executive Andrew Heath said: “Apple’s unsubstantiated assertions and the resultant dispute have forced us to change our course, despite the clear progress we have been making.”

Here’s the full section on the Apple dispute from Imagination Technologies’ results:

Apple informed us at the end of March that it will no longer use the Group’s intellectual property in its new products in 15 months to two years’ time, and as such Imagination will not be eligible for royalty payments under the current license and royalty agreement.

Apple has used Imagination’s technology and intellectual property for many years. It has formed the basis of Graphics Processor Units (“GPUs”) in Apple’s phones, tablets, iPods, TVs and watches. Apple has asserted that it has been working on a separate, independent graphics design in order to control its products and will be reducing its future reliance on Imagination’s technology. Apple has not presented any evidence to substantiate its assertion that it will no longer require our technology, without violating our patents, intellectual property and confidential information. This evidence has been requested of Apple, but they have declined to provide it. 

We believe that it would be extremely challenging to design a brand new GPU architecture from basics without infringing our intellectual property rights, accordingly we have not accepted Apple’s assertions. We initiated the dispute resolution procedure under the license agreement with a view to reaching an agreement through a more structured process.

To be clear Apple made an unsubstantiated claim, which obliged us to inform the markets, leading to a significant decrease in our share price. The claim has led us to invoke a contractual dispute resolution procedure and has created significant uncertainty with respect to our business, including our employees. We do not believe this to be acceptable business practice nor in line with Apple’s own ethics statements regarding suppliers. 

At the time of writing this report, we remain in dispute. Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights.

($ 1 = 0.7727 pounds) (Reporting by Paul Sandle; editing by Jason Neely)

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Martin is an enthusiastic programmer, a webdeveloper and a young entrepreneur. He is intereted into computers for a long time. In the age of 10 he has programmed his first website and since then he has been working on web technologies until now. He is the Founder and Editor-in-Chief of BriefNews.eu and PCHealthBoost.info Online Magazines. His colleagues appreciate him as a passionate workhorse, a fan of new technologies, an eternal optimist and a dreamer, but especially the soul of the team for whom he can do anything in the world.

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