Daily Business Report-Jan. 23, 2017
Apple accused San Diego-based Qualcomm of overcharging for its chips and for refusing to pay some $1 billion in promised rebates for chip purchases in the lawsuit.
Apple Accuses Qualcomm of Overcharging;
Files $1 Billion Lawsuit
Times of San Diego
Computer giant Apple announced Friday that it sued Qualcomm, accusing the defendant of withholding $1 billion, but the San Diego-based company dismissed the claims as “baseless.”
“For many years Qualcomm has unfairly insisted on charging royalties for technologies they have nothing to do with,” Apple said in a statement. “The more Apple innovates with unique features such as TouchID, advanced displays, and cameras, to name just a few, the more money Qualcomm collects for no reason and the more expensive it becomes for Apple to fund these innovations.”
Cupertino-based Apple claimed Qualcomm, which provides technology for mobile devices, “reinforces its dominance through exclusionary tactics and excessive royalties.”
“Despite being just one of over a dozen companies who contributed to basic cellular standards, Qualcomm insists on charging Apple at least five times more in payments than all the other cellular patent licensors we have agreements with combined,” Apple said.
“To protect this business scheme Qualcomm has taken increasingly radical steps, most recently withholding nearly ($1 billion) in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them,” the statement said.
The Apple lawsuit comes three days after the Federal Trade Commission sued Qualcomm for business practices that were allegedly designed to gain a monopoly.
Qualcomm said in its own statement by Don Rosenberg, executive vice president and general counsel, that “Apple has intentionally mischaracterized our agreements and negotiations, as well as the enormity and value of the technology we have invented, contributed and shared with all mobile device makers through our licensing program.”
“Apple has been actively encouraging regulatory attacks on Qualcomm’s business in various jurisdictions around the world, as reflected in the recent KFTC decision and FTC complaint, by misrepresenting facts and withholding information,” Rosenberg said, also referring to a complaint in South Korea.
“We welcome the opportunity to have these meritless claims heard in court where we will be entitled to full discovery of Apple’s practices and a robust examination of the merits.”
In its complaint, the FTC contended that Qualcomm signed Apple to an exclusivity deal from 2011 to last year that lowered royalty payments but prevented Apple from acquiring processors from Qualcomm’s competitors unless they pay a penalty.
Apple accused San Diego-based Qualcomm of overcharging for its chips and for refusing to pay some $1 billion in promised rebates for chip purchases in the lawsuit. The complaint says that Qualcomm withheld the rebates because of Apple’s discussions with South Korea’s antitrust regulator.
“We are extremely disappointed in the way Qualcomm is conducting its business with us and unfortunately after years of disagreement over what constitutes a fair and reasonable royalty we have no choice left but to turn to the courts,” Apple told the Wall Street Journal.
Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The company has said it will fight the FTC suit, which it says is based on inaccurate information.
San Diego City College Launches
New Manicuring Program
San Diego City College has launched a new job-training program for future nail technicians, one of the faster growing professions in California.
City College’s Manicuring Program is approved by the Board of Barbering and Cosmetology in Sacramento. Besides being versed in performing a variety of manicures, pedicures, and hand and foot massages, graduates will be well trained on the finer points of sanitizing a salon and sterilizing technician tools.
The program is aimed at preparing students to pass the State Board Exam and receive their Manicuring License.
Establishing the Manicuring Program comes at an opportune time. With more than 113,600 jobs available nationwide in 2014, the federal Bureau of Labor Statistics foresees an employment growth in the profession of 10 percent in the 10-year period ending in 2024. The California Economic Employment Department sees a growth of 19 percent during that time, with the EDD noting that most employers are looking for candidates with postsecondary vocational training.
“We often hear from salons in the region that are looking for trained manicurists, so the minute we had the opportunity to add this program, we moved forward to approve it,” said Sudie Phillips, chair of the Cosmetology Department. “And at only $46 per class unit, students will be paying a fraction of what they would be paying for comparable programs elsewhere.”
The City College Manicuring Program comprises two, 10-week sessions, with the first session beginning March 13. Classes are scheduled daily from 5 to 9:30 p.m. to meet Board of Barbering and Cosmetology requirements for 400 hours of instruction before taking the licensing exam.
The City College Cosmetology Salon and Spa, at 1081 16th St., is open to the public for a wide range of low-cost services, including hairstyling, hair coloring, haircuts, manicures, pedicures, and facials at prices beginning as low as $5. Walk-ins are welcome.
San Diego County Jobless
Rate Drops to 4.2 Percent
The unemployment rate in the San Diego County was 4.2 percent in December 2016, down from a revised 4.3 percent in November 2016, and below the year-ago estimate of 4.8 percent, the state Employment Development Department reported.
This compares with an unadjusted unemployment rate of 5.0 percent for California and 4.5 percent for the nation during the same period.
Between November and December 2016:
Total nonfarm employment decreased from 1,442,200 to 1,441,300, a loss of 900 jobs. Agricultural employment decreased by 400 jobs, or 4.8 percent.
- The largest over the month increase was reported in trade, transportation and utilities (up 2,200 jobs). Wholesale trade accounted for 59 percent of the growth (up 1,300 jobs), while retail trade contributed 32 percent (up 700 jobs) and transportation, warehousing and utilities added 9 percent (up 200 jobs).
- Educational and health services added 1,000 jobs, led by growth in health care and social assistance (up 1,300 jobs).
- Financial activities was the only other sector to report payroll employment growth, with scattered gains and losses resulting in the overall addition of 100 jobs.
- Construction and leisure and hospitality each reported employment declines of 1,700 jobs. Manufacturing and government fell by 300 jobs each, while other services reported a loss of 200 jobs.
Between December 2015 and December 2016:
Total nonfarm employment increased by 28,900 jobs, or 2.0 percent. Agricultural employment decreased by 300 jobs, or 3.6 percent.
Government recorded the largest year over gain with the addition of 6,300 jobs. Local government accounted for 65 percent of the growth (up 4,100 jobs).
Educational and health services added 5,700 jobs, with health care and social assistance accounting for 86 percent of the growth (up 4,900 jobs). Other growth sectors included professional and business services (up 5,500 jobs), leisure and hospitality (up 5,400 jobs), trade, transportation and utilities (up 2,500 jobs), financial activities (up 2,200 jobs), other services (up 2,100 jobs), construction (up 400 jobs), and information (up 400 jobs). Mining and logging reported no change over the year.
Manufacturing was the only sector to report a year over decline with an overall employment loss of 1,600 jobs, or 1.5 percent.
San Diego One of 10 Autonomous
Vehicle Proving Grounds in U.S.
The U.S. Department of Transportation has designated the San Diego region as one of 10 proving grounds for autonomous vehicles in the nation. The region has advanced features in its local transportation network and a global reputation as a high-tech hub for research and wireless innovations.
SANDAG, Caltrans, and the city of Chula Vista jointly submitted the application to the federal government for the designation. The application garnered support from major auto manufacturers and technology companies, including Toyota, Qualcomm, Teradata, and DENSO International America, Inc.
As part of the nationwide pilot, proving ground sites will bring together auto manufacturers, local cities, public agencies and private companies to test autonomous vehicles on designated facilities. The test sites will share information and work together to develop best practices.
The San Diego region has three distinct proving ground environments: The I-15 Express Lanes, the South Bay Expressway and City of Chula Vista streets and roadways.
GoJet to Offer Internships to
Students in Pilot Training Program
GoJet Airlines has signed an agreement with San Diego Christian College to provide promising pilots currently enrolled in a professional airline training program an internship at GoJet while they build flight hours. Program participants become GoJet First Officers upon completion of airline training program minimums.
Participating students represent GoJet on campus and at recruiting events, and are mentored by GoJet pilots throughout the duration of their internships. Additionally, the program prepares student pilots for the GoJet First Officer training program by providing course materials months in advance.
The internship also includes a two-day visit to GoJet’s corporate headquarters in St. Louis, where participants have the opportunity to talk with new pilots who are actually in systems training, as well as sit in on a new hire class to get a feel for what their training will be like.
In addition to $11,000 in tuition reimbursement, participating students can earn $2,500 for each successful pilot they refer to GoJet during their time as an intern (funds are banked until the students become official GoJet pilots).
SDG&E Seeks OK to Install Electric
Vehicle Charging Stations in County
San Diego Gas & Electric filed a request with the California Public Utilities Commission to install tens of thousands of electric charging stations in new, key areas to encourage the transition to zero-emission electric vehicles (EVs), trucks, shuttles, and delivery fleets, among other areas.
If SDG&E’s proposals are approved, additional electric charging stations would be installed at San Diego International Airport, Port of San Diego, for delivery fleets, taxi/rideshare, Park-and-Rides and residential homes throughout the region. These proposed programs would build upon the company’s efforts to install electric charging infrastructure at 350 apartments, condos and businesses as part of the Power Your Drive program.
Lori Fleet-Martin Appointed
Board Chair of NTC Foundation
Point Loma resident Lori Fleet-Martin has been appointed board chair of the NTC Foundation. Fleet-Martin, who joined the board in 2010, has been active in the continued development of the Arts & Culture District. Martin replaces Richard Opper, also a Point Loma resident, who will remain on the board.
Fleet-Martin’s great-grandfather and grandfather helped develop the Fleetridge neighborhood of Point Loma and community philanthropy has been a bedrock of her family for generations.
Joining Fleet-Martin on the Board are new members, Jason Paguio (and Linda Mamer. Paguio is a small business owner, nonprofit founder, and public policy adviser who lives in Chula Vista.
Mamer has more than 20 years’ experience in commercial and business banking. She is a senior vice president/senior relationship manager at Banc of California.
Convention Center Board Officers Named
Candace M. Carroll, an appellate attorney with more than 30 years of experience handling appeals in the federal, state and bankruptcy appellate courts, has been named the 2017 chair of the San Diego Convention Center Board of Directors. Gil Cabrera will serve as the board’s vice chair and Xema Jacobson has been named the board’s secretary. The seven-member Board of Directors sets policy for the public benefit corporation that was created by the city of San Diego to exclusively manage, market and operate the 2.6 million-square-foot waterfront facility.
Mike Cully Takes Helm of San Diego
North Economic Development Council
Mike Cully, an experienced business leader and San Diego native, has been appointed chief executive officer of the San Diego North Economic Development Council. (SDNEDC).
Cully has leadership experience in both the public and private sectors. He was recently part of the global leadership team for car2go N.A., a division of Daimler AG, and was instrumental in ushering in a new era of mobility for the San Diego region by introducing the world’s first all-electric car sharing fleet.
Prior to his work in the private sector, Cully served as president and CEO of both the San Diego East County and the Visalia, Calif. chambers of commerce. He received his MBA from San Diego State University in 2011.
Cully’s experience includes more than a decade of work as an on-air television reporter/anchor; serving as Public Relations lead for Kaiser Permanente in California’s Central Valley and leading the marketing team for the Fresno County Workforce Investment Board. In 2004 he accepted the position of president and CEO of the Visalia Chamber of Commerce, where he was the driving force behind marketing and revitalizing that organization and orchestrating a major capital campaign to finance a new 8,000-square-foot office.
San Diego Office Market Ends
2016 at Record Low Vacancies
Fourth-quarter office vacancy in San Diego County fell to a record low and leasing activity was the highest ever in any single quarter, according to the latest CBRE research. Demand was particularly strong in Downtown where startups and co-working places have been drawn to the neighborhood’s newly renovated office spaces.
2.55 million square feet were leased in San Diego this quarter, making the fourth quarter the most active quarter in history — the top three submarkets were Downtown, UTC and Rancho Bernardo.
“Downtown San Diego led the county in 2016 in net absorption and leasing activity, and is currently at historic peak rents,” said Matt Carlson, senior vice president of CBRE in the San Diego region. “Downtown accounted for more than one-third of all the county’s absorption in 2016.
The central business district is luring innovative startup companies because of the attractiveness of the live-work-play environment, and I believe we will continue to see an increase in leasing activity coupled with high rents.”
The city’s downtown neighborhood has continued to up its appeal as older buildings have been converted into creative office or retail spaces and towers have received upgrades. Among those companies that have been adding space in this part of town has been WeWork, which opened two of their six leased floors at 600 B Street, joining several smaller-scale co-working operators in the area. Another co-working operator, Level Office out of Chicago, purchased a building in the third quarter and will open upon the completion of renovations currently under way.
Overall, 446,794 square feet of new office space was delivered in San Diego County last year, less than the yearly amounts in 2014 and in 2015.
Charles T. Hoge Launches
Hoge Law Firm in La Jolla
Charles T. Hoge has launched the Hoge Law Firm in Downtown La Jolla. Hoge, a 20-year La Jolla resident, will continue working with clients on partnership, real estate, employment, intellectual property, unfair competition, trade secret and professional liability matters.
Hoge Law Firm specializes in high stakes business litigation, often called “Bet the Company” cases, in which an organization’s existence may be at stake. “We solve problems,” said Hoge. “At Hoge Law Firm, our goal is to work collaboratively and thoughtfully with our clients to help them achieve the best possible solution for their legal problems.”
The firm works with both plaintiff and defendants, and represents large companies and organizations, as well as “mom-and-pop” shops and individuals. Focus industries include biotechnology, real estate/ construction, consumer products, sports and technology companies.
Prior to opening the new firm, Hoge served as managing partner for San Diego’s Kirby Noonan Lance & Hoge. He joined the firm in 1988 and was the managing partner for 14 years, while maintaining a full-time litigation practice.
Samuel Donk Joins Heying & Associates
Samuel Donk, a San Diego native, has joined public relations agency Heying & Associates as an intern account coordinator. During his internship, Donk will serve as an account assistant with several of the firm’s marketing, legal image, and education clients.
Donk will graduate from San Diego State University in May with a double major in Communication and Spanish. Prior to joining the team at Heying & Associates, he held positions in the food industry for the last five years.
Bryan Teel Joins Kidder Mathews
Bryan Teel has joined Kidder Mathews’ San Diego office as a vice president. He specializes in the sale and leasing of industrial properties in the South Bay area of San Diego County.
Teel has been in the commercial real estate industry for over 12 years. Prior to joining Kidder Mathews, he was a director with Newmark Grubb Knight Frank.
Noah Woods Named Brown Law Group Partner
San Diego-based Brown Law Group has named Noah J. Woods as partner at the firm. Woods, who joined Brown Law Group in September 2012, defends employers in all areas of employment-related litigation, including claims of wrongful termination, retaliation, discrimination, sexual harassment, breach of contract, and violations of wage and hour laws.
Woods handles labor and employment matters at both the state and federal level.
Prior to joining Brown Law Group, Woods worked at the Jordan Law Group, a management-side labor and employment law firm, defending clients in labor and employment-related claims in federal and California state courts.