Apple's dual-camera technology in the iPhone 7 Plus and iPhone 8 Plus was reportedly used in breach of a patent.
Reuters reports that Apple used the technology without approval from Israeli start-up Corephotonics, which supposedly owns the patent. The case was filed on Monday (6 November) in the federal court in San Jose. Corephotonics is based in Tel Aviv.
The dual-lens camera allows iPhone users to take portrait mode photos, blurring the background to make the subject of the picture clearer. It also allows for optical zoom.
Corephotonics chief executive David Medlovic said Apple praised the company's technology but refused to license it. The complaint reads: "Apple's lead negotiator expressed contempt for Corephotonics' patents, telling DR Mendlovic and others that even if Apple infringed, it would take years and millions of dollars in litigation before Apple might have to pay something."
Apple is yet to comment on the lawsuit.
Corephotonics has raised $50m (£38.2m) since its inception. Its latest funding round in January yielded $15m and includes high-profile investors such as Foxconn and chipmaker MediaTek Inc. Samsung Ventures has also invested.
Apple has been caught in its own feud with rivals Samsung for years, originating from claims the Galaxy phones stole the iPhone's 'swipe to unlock' method. Samsung lost the case in 2014 but managed to have it overturned in 2016. Just days ago, however, the verdict was flipped again back to the original ruling. Samsung must now pay Apple $120m. Apple was originally demanding $2 billion from the lawsuit.
The two smartphone juggernauts still need to face off in court in May 2018 over claims from Apple that Samsung copied its entire design. Apple was awarded $930m in a ruling, but through appeals that figure has now dropped to $400m.