Federal Court Rules That Qualcomm Abused Industry Standard Setting Process
Thursday March 22, 4:52 pm ET
SAN DIEGO, March 22 /PRNewswire-FirstCall/ -- Broadcom Corporation (Nasdaq: BRCM - News), a global leader in semiconductors for wired and wireless communications, announced today that a federal district court adopted a unanimous jury finding that Qualcomm Incorporated (Nasdaq: QCOM - News) violated its duty to disclose patents to an industry standards body and thereby waived its rights to enforce two patents Qualcomm alleged covered the H.264 video compression standard.
Qualcomm filed suit against Broadcom in San Diego federal court in October 2005 alleging that Broadcom® products infringed the two patents, and on January 26, 2007, a unanimous jury found that Broadcom did not infringe the patents. The jury also rendered advisory verdicts that Qualcomm committed inequitable conduct before the USPTO, and that Qualcomm knowingly violated a duty to disclose its patents to the Joint Video Team, or its parent organization, during the JVT's preparation and eventual adoption of the H.264 video compression standard.
In a 34 page opinion, the Court found:
* "Qualcomm waived its rights to enforce the '104 and '767 patents
against H.264 products by its silence in the face of a "clear duty to
speak" to identify to the JVT its IPR related to the development of the
H.264 standard"
* "The non-disclosure of a participant's core patents in such a program
could put the participant in a position in which it could literally
block the use of the published H.264 standard by any company unless the
company obtained a separate license from the participant. Such an
undesirable consequence is likely one factor behind the basis for the
Federal Circuit ruling in Rambus, which the Court applies in this
case."
"We are pleased that the court agreed with the jury's recommendation on standards abuse and believe the evidence that came to light in this case is illustrative of Qualcomm's ongoing abuse of the rules of industry standards bodies," said David A. Dull, Broadcom's Senior Vice President and General Counsel. "It confirms what the industry has long suspected: that Qualcomm does not shoot straight with standards bodies. We are continuing to examine their conduct before various cellular and other standards bodies."
The San Diego Court is scheduled to hear argument on the appropriate remedy for Qualcomm's abuse on May 2, 2007.
Additional Patent Actions
Last fall, a United States International Trade Commission (ITC) judge ruled that Qualcomm's cellular baseband chips infringe five claims of a Broadcom patent. The full Commission affirmed that ruling in December and is now considering the appropriate remedy for Qualcomm's infringement. In May 2007, the U.S. District Court in Santa Ana, Calif. is scheduled to try Broadcom's claims that Qualcomm infringes three additional Broadcom patents relating to cellular technology. Broadcom will later litigate in the Santa Ana court the same three patents that were tried last year in the ITC.
Antitrust Actions
Separately, in other actions, Broadcom has joined five other leading mobile wireless technology companies in filing complaints with the European Commission alleging that Qualcomm has engaged in anticompetitive conduct in the licensing of its patents and the sale of its chipsets for mobile wireless devices and systems. The six companies assert that Qualcomm is violating EU competition law and failing to meet the commitments it made to international standards bodies to license its technology on fair, reasonable and non- discriminatory terms. Broadcom and other wireless technology companies have filed similar complaints before the Korean Fair Trade Commission. Broadcom is also appealing last year's dismissal without prejudice of its federal antitrust lawsuit against Qualcomm. The dismissal, by a U.S. District Judge in New Jersey, was appealed to the U.S. Court of Appeals for the Third Circuit in September 2006 where the appeal will likely be heard in June 2007. A number of standards development organizations, consumer advocacy groups, and other mobile wireless firms have filed amicus briefs with that court in support of the position that violations of industry standards-making processes can give rise to antitrust liability.
About Broadcom
Broadcom Corporation is a major technology innovator and global leader in semiconductors for wired and wireless communications. Broadcom® products enable the delivery of voice, video, data and multimedia to and throughout the home, the office and the mobile environment. We provide the industry's broadest portfolio of state-of-the-art, system-on-a-chip and software solutions to manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices. These solutions support our core mission: Connecting everything®.
Broadcom is one of the world's largest fabless semiconductor companies, with 2006 revenue of $3.67 billion, and holds over 2,000 U.S. and 800 foreign patents, more than 6,000 additional pending patent applications, and one of the broadest intellectual property portfolios addressing both wired and wireless transmission of voice, video and data. |
