Nice PR. Defending 46 out of 49 patents ain't bad especially in a country where the government mandated the uniform use of QCOM CDMA as early as 1994 or 1995.
That still doesn't change the fact that QCOM's upgrade path to 3g only works with the CDMA infrastructure of carriers with only 42-50 million subscribers. The TDMA/GSM carriers with 400 million subscribers will probably follow any combination of fixed wireless and the GPRS/EDGE/WCDMA upgrade path. Just common sense, right? From 2000 to 2002 at least, over 500,000 handsets will be sold daily all around the world and that obviously favors the dominant global 2g standard.
History and status of Motorola vs Qualcomm as of 11/17/99. From the 10K:
ITEM 3. LEGAL PROCEEDINGS
On March 5, 1997, the Company filed a complaint against Motorola, Inc.
("Motorola"). The complaint was filed in response to allegations by Motorola
that the Company's then, recently announced, Q Phone infringes design and
utility patents held by Motorola as well as trade dress and common law rights
relating to the appearance of certain Motorola wireless telephone products. The
complaint denies such allegations and seeks a judicial declaration that the
Company's products do not infringe any patents held by Motorola. On March 10,
1997, Motorola filed a complaint against the Company (the "Motorola Complaint"),
alleging claims based primarily on the above-alleged infringement. The Company's
motion to transfer the Motorola Complaint to the U.S. District Court for the
Southern District of California was granted on April 3, 1997. On April 24, 1997,
the court denied Motorola's motion for a preliminary injunction thereby
permitting the Company to continue to manufacture, market and sell the Q Phone.
On April 25, 1997, Motorola appealed the denial of its motion for a preliminary
injunction. On January 16, 1998 the U.S. Court of Appeals for the Federal
Circuit denied Motorola's appeal and affirmed the decision of the U.S. District
Court for the Southern District of California refusing Motorola's request to
enjoin QUALCOMM from manufacturing and selling the Q Phone. On June 4, 1997,
Motorola filed another lawsuit alleging infringement by QUALCOMM of four
patents. Three of the patents had already been alleged in previous litigation
between the parties. On August 18, 1997, Motorola filed another complaint
against the Company alleging infringement by the Company of seven additional
patents. All of the Motorola cases have been consolidated for pretrial
proceedings. On August 6, 1999, the court granted the Company's motion for
summary judgment that the Q Phone does not infringe two of Motorola's design
patents. On October 5, 1999, the United States District Court in San Diego
granted the Company's motions for summary judgment that the Q Phone does not
infringe the last two Motorola design patents remaining in the case. As a
consequence of these rulings and Motorola's decision to drop one utility patent
from the case, there are no design patents and a total of ten utility patents
remaining in the case. The cases have been set for a final pretrial conference
in April 2000. Although there can be no assurance that an unfavorable outcome of
the dispute would not have a material adverse effect on the Company's results of
operations, liquidity or financial position, the Company believes the claims are
without merit and will continue to vigorously defend the action.
On July 20, 1999, the Company filed a lawsuit against Motorola seeking a
judicial determination that the Company has the right to terminate all licenses
granted to Motorola under a 1990 Patent License Agreement, while retaining all
licenses granted by Motorola to the Company under the same agreement. The
Company's complaint was filed in the United States District Court for the
Southern District of California where the earlier actions between the Company
and Motorola described above have been pending for more than two years. The
complaint alleges that Motorola has committed breaches of the Patent License
Agreement that include pursuing a lawsuit against the Company for infringement
of patents that are in fact licensed to the Company under the agreement and a
failure to grant certain sublicenses to the Company in accordance with the terms
of the agreement. The Company's new filing also seeks a ruling that upon
termination of the Patent License Agreement, the patents formerly licensed to
Motorola would be infringed by CDMA handsets, integrated circuits and network
infrastructure equipment made and sold by Motorola. On August 5, 1999, the
Company amended its complaint to allege that Motorola's CDMA wireless phones
infringe three patents of the Company. The Company's new claims seek damages and
an injunction against Motorola's sale of infringing phones. Motorola has filed
counterclaims alleging breach of the Patent License Agreement and a DS-CDMA
Technology License Agreement also signed in 1990. |
