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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting

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Dec 12 9:30 AM EST

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From: Bill Wolf	1/1/2008 8:00:05 AM
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Qualcomm Loses Patent Dispute By DON CLARK December 31, 2007 10:40 p.m. SAN FRANCISCO -- A federal judge ordered Qualcomm Inc. to stop marketing cellphone chips that infringe on three Broadcom Corp. patents, though Qualcomm can keep selling some of the chips for the next 13 months if it pays royalties to Broadcom. The ruling by U.S. District Judge James Selna is the latest in a series of recent court victories by Broadcom against Qualcomm. The two Southern California chip makers have filed a series of suits against each other, after failing to reach an agreement to license each other's patents. Broadcom accused Qualcomm in May 2005 of infringing the three patents in a suit filed in U.S. District Court in Santa Ana, Calif. The patents cover digital video technology, technology for allowing cellphones to use two or more networks simultaneously and a "push-to-talk" feature that allows cellphone users to work like walkie-talkie radios. The chips are used in two kinds of third-generation cellular networks -- one called EV-DO, which Qualcomm developed, and another called WCDMA that is supported by a broader array of chip makers. A jury ruled in Broadcom's favor two years later, awarding Broadcom $19.6 million in damages. Judge Selna then took up the issue of whether Qualcomm's sales of chips that infringed the patents should be enjoined. His order Monday blocks new efforts by Qualcomm to market infringing chips, though chips for some cellphones now on the market can continue to be sold until January 2009 provided that Qualcomm pays Broadcom royalties from the date of the jury's verdict last May 29. The royalty rate for continued sales of chips based on Broadcom's digital video patent was set at 6% of the revenue Qualcomm receives from those products. The royalty rate associated with a patent on using two networks was set at 4.5%; the two companies were ordered to negotiate a royalty rate on the push-to-talk patent. David Rosmann, Broadcom's vice president of intellectual property litigation, said he couldn't estimate how much Qualcomm might have to pay under the ruling. But he added that the company was "very pleased" with the ruling. "We think it will go a long way toward stopping Qualcomm's continued infringement," Mr. Rosmann said. "We have additional cases that we will continue to move forward with." A Qualcomm spokeswoman did not respond to requests for comment. Among other actions, lawyers representing Qualcomm are awaiting a ruling as to whether they should be sanctioned for what a federal judge concluded was litigation misconduct in a patent suit brought by Qualcomm against Broadcom in federal court in San Diego. Write to Don Clark at don.clark@wsj.com1

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