Exclusive: Engineers Allege Judicial Misconduct in Long-Running Patent Dispute, Raising Stakes for U.S. Tech Giant
By Xiaoping Guo| Beijing
April 11, 2025
BEIJING— Apple Inc. is facing renewed scrutiny in China as a group of 60 engineers have filed a public complaint accusing the company of benefiting from judicial corruption in a high-stakes patent dispute involving WAPI, a Chinese-developed wireless security standard. The allegations, centered on systemic judicial misconduct, could expose the U.S. tech giant to new regulatory risks just as Beijing signals it may expand sanctions on American firms.
The case, which has drawn comparisons to the 2013 GlaxoSmithKline bribery scandal, comes at a time of heightened geopolitical tension. Reports that China is preparing a broader retaliatory measure against U.S. companies following fresh tech restrictions from Washington have increased investor unease.
The engineers, all affiliated with Xi’an-based IWNCOMM Co. Ltd., allege that Apple used its financial and legal clout to delay or distort judicial proceedings. According to the whistleblower complaint, trial authority in a key WAPI-related patent lawsuit was effectively “outsourced” to Apple’s legal team, with court documents allegedly authored by Apple’s counsel and rubber-stamped by the judiciary.
“This is not merely a patent dispute,” said a source close to the matter. “It’s about the credibility of China’s legal system, and whether it can fairly protect domestic innovation in the face of foreign tech giants.”
A Parallel to GSK?
The case has drawn comparisons to the GSK（GlaxoSmithKline） corruption probe, in which the British pharmaceutical company was fined nearly $500 million after Chinese authorities found it guilty of bribery. Apple has not been accused of direct bribery, but the engineers’ allegations, which include interference by senior judicial officials and suppression of legal rights, suggest potential violations of due process.
“If Beijing acts on these claims, Apple could face severe consequences—not only in court but in regulatory and consumer arenas,” said Chen Qiming, a Shanghai-based technology policy analyst. “The political atmosphere is far less forgiving than it was even two years ago.”
The WAPI patent, Chinese homebrew secure wireless communications. IWNCOMM holds numerous global patents related to the protocol, and has long alleged that Apple devices operating in China unlawfully incorporated WAPI technology without proper licensing.
Regulatory and Investor Fallout
So far, Apple’s stock has declined nearly 20% over the past three months besides ongoing antitrust proceedings in the U.S. A U.S. Department of Justice lawsuit filed in March accused the company of monopolistic practices, including stifling competition through its App Store and hardware-software bundling strategies.
Should Chinese regulators escalate their response to the IWNCOMM complaint—either by opening a formal investigation or restricting Apple’s local operations—the company could face a repeat of GSK’s precipitous stock drop, which shaved over 30% off its valuation at the time.
“The risk to Apple isn’t limited to China,” said an emerging markets analyst at Ashbourne Capital. “If more details emerge suggesting a pattern of legal manipulation, it could spark class actions or broader regulatory pushback elsewhere.”
A “Reverse Patent Hold-Up”?
Critics allege that Apple has systematically used what’s known as a “reverse patent hold-up” strategy—employing litigation delay tactics and regulatory lobbying to pressure smaller patent holders into settlements or litigation exhaustion. In the IWNCOMM case, filings allege the company spent nearly a decade trying to secure judicial recognition of its WAPI patent claims before many of the patents expired.
IWNCOMM’s engineers also claim that appellate judges nullified a lower court’s damage award—reportedly worth 143 million yuan ($19.8 million)—through what they describe as a procedurally dubious ruling that eliminated additional claims worth up to 400 million yuan ($55 million).
The case has become a lightning rod in China’s ongoing debate over judicial independence and the protection of domestic intellectual property. State-linked media outlets have begun to amplify the engineers’ complaint, raising questions about whether authorities are preparing to act.
The Bigger Picture
The dispute has implications far beyond Apple. China’s leadership has made technological self-reliance a national priority, and the perception that its legal system is biased/manupulated in favor of foreign multinationals could erode public support for reforms designed to attract foreign investment.
“If Beijing wants to signal a shift in how it treats foreign companies, Apple may be the canary in the coal mine,” said an executive at a European tech firm, speaking on condition of anonymity.
For now, investors are watching closely. A decision by China to formally investigate Apple, or impose market restrictions, could shake confidence in the company’s largest international market and trigger ripple effects across global supply chains.
Whether Apple can weather the storm may depend less on its legal arguments and more on Beijing’s political calculus.