ITC Rules on Qualcomm

A U.S. ITC judge ruled today that Qualcomm infringes five claims of a Broadcom patent -- but finds Qualcomm didn't infringe two other patents

October 10, 2006

4 Min Read

WASHINGTON -- Broadcom Corporation (Nasdaq: BRCM), a global leader in semiconductors for wired and wireless communications, announced that a United States International Trade Commission (ITC) judge ruled today that Qualcomm Incorporated (Nasdaq: QCOM) infringes five claims of a Broadcom(R) patent. The Commission is expected to issue a permanent exclusion order barring the importation into the United States of infringing Qualcomm(R) chips, as well as a cease and desist order barring further sales of infringing products that have already been imported into the United States by Qualcomm.

Broadcom asserted infringement of three Broadcom patents by Qualcomm. ITC Administrative Law Judge Charles E. Bullock found all three patents to be valid and one, U.S. Patent No. 6,714,983, to be infringed. The infringing products include cellular baseband processor chips that comprise Qualcomm's core suite of enhanced multimedia and convergence handset platforms.

In his ruling, the judge found that Qualcomm has violated U.S. trade laws by importing chips and chipsets that infringe Broadcom's patent. "We are gratified that Judge Bullock recognized the validity of our claims with a ruling that helps us protect our valuable intellectual property and sends a very strong message to the industry that Qualcomm is not exempt from the rules," said David A. Dull, Broadcom's Senior Vice President and General Counsel. "This ruling highlights just a small part of Qualcomm's ongoing and widespread infringement of Broadcom's intellectual property. We believe Qualcomm infringes at least 15 additional Broadcom patents across its entire product line, and we expect to take those cases to trial over the next twelve months. Today's ruling validates our decision to challenge Qualcomm's illegal conduct, and will invigorate us to aggressively enforce our rights going forward."

In a separate release ...

SAN DIEGO -- QUALCOMM Incorporated (NASDAQ:QCOM) , a leading developer and innovator of Code Division Multiple Access (CDMA) and other advanced wireless technologies, stated today that the Administrative Law Judge (ALJ) in the Broadcom International Trade Commission (ITC) matter has determined that QUALCOMM has not infringed two of the three patents (Broadcom patents '311 and '675) asserted by Broadcom and has recommended that no downstream remedies be implemented against the wireless handsets of third parties that incorporate QUALCOMM chips and software.

The ALJ found infringement of certain claims of the third patent (Broadcom patent '983) and no infringement of the remaining claims of that patent. Broadcom asserted the '983 patent against the functionality of a wireless handset when it is not in service and not in range of network coverage. Although QUALCOMM maintains that the '983 patent is invalid and not infringed and will ask the full Commission to reject the ALJ's recommendation on these issues, QUALCOMM is exploring designs to replace the features accused of infringement with superior functionality.

"QUALCOMM is gratified with the ALJ's determination that our company has not infringed two of the three Broadcom patents," said Dr. Paul E. Jacobs, CEO of QUALCOMM. "We appreciate that the ALJ took additional time to study the implications of a downstream remedy -- which QUALCOMM and industry leaders demonstrated would be extreme and unwarranted -- and concluded that such a remedy was inappropriate. This is a positive step for the wireless industry and millions of consumers whose access to wireless broadband services is threatened by Broadcom's unfounded request for such a remedy. QUALCOMM will continue to work with the industry to ensure that the Commission reaches the same conclusion on downstream remedy."

Before the first of two hearings in the ITC matter, two of the five patents originally asserted by Broadcom were dismissed because Broadcom was found to have breached its contractual agreement to bring those claims in San Diego.

In other litigation between the parties, a federal district court in San Diego will hold a hearing on October 27, 2006 to finalize the scope of a preliminary injunction to issue against Broadcom for misappropriation of QUALCOMM's trade secrets. QUALCOMM also continues to press its patent infringement actions against Broadcom in San Diego federal court. The first of those cases is scheduled for a January 2007 trial and will address infringement of two QUALCOMM patents on video compression technology by Broadcom's chipsets for cellular devices and set top boxes. A federal court recently dismissed as meritless antitrust claims brought by Broadcom in New Jersey.

Broadcom Corp. (Nasdaq: BRCM)

Qualcomm Inc. (Nasdaq: QCOM)

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