I really hope that Qualcomm has more proof than a single email from a PR firm.
signonsandiego.com
Qualcomm says competitors conspiring in patent dispute
By Jonathan Sidener
UNION-TRIBUNE STAFF WRITER
March 21, 2008
Qualcomm has accused rivals Broadcom, Nokia, Texas Instruments and others of collusion and price fixing in their wide-ranging dispute over licensing the San Diego company's patents.
The companies are fighting over how much – if anything – the others must pay Qualcomm for technology that enables high-speed mobile Internet phones and networks.
In court filings, Qualcomm formalized charges of a conspiracy that it has previously alluded to, saying its competitors are coordinating attacks because they don't want to pay royalties for Qualcomm's “key patents” covering so-called third-generation phone networks.
Broadcom and Nokia said there was no collusion.
Qualcomm said its adversaries called themselves “Project Stockholm” and orchestrated a broad strategy against the company, according to its Feb. 29 counterclaim to a lawsuit filed by Broadcom in New Jersey. The filing claims that the goal of Project Stockholm was to reduce the value of Qualcomm's technology and to reduce competition from companies such as Samsung, which relies heavily on Qualcomm technology and has become the second-largest cell phone maker in the world.
The filing said Broadcom and Nokia “conspired” to coordinate global litigation against Qualcomm. Broadcom has filed several lawsuits against Qualcomm in the United States, while Nokia has sued Qualcomm in the United States, Europe and Asia.
Qualcomm quoted a Nokia attorney at a 2005 news conference as saying, “Broadcom is now carrying the torch in the U.S.”
In the New Jersey suit, Broadcom claimed that Qualcomm did not properly notify an industry-standards organization of its patents. Qualcomm disputed the claim but has also asked the federal judge to dismiss Broadcom's claims under what is known as the doctrine of unclean hands.
“The group has even gone so far as to adopt a code name for their anticompetitive conspiracy,” Qualcomm said in its filing. “An e-mail dated Nov. 18, 2005, from a representative of the Brunswick Group, a public relations firm jointly retained by Nokia, Broadcom, Ericsson, Texas Instruments, NEC and Panasonic, identifies the group as 'Project Stockholm.' ”
Broadcom said in a written statement that the companies openly collaborated and jointly announced complaints filed with the European Union.
By definition, collusion involves secret alliances.
“There is no secret about either this commonality of interest or the fact of the companies' cooperation and consultation with regard to Qualcomm's exclusionary conduct, nor need there be,” said David Rosmann, Broadcom's vice president of intellectual property litigation.
The heart of the dispute involves Qualcomm's patents for a technology called WCDMA.
Qualcomm pioneered the use of a technology called CDMA, or code division multiple access, which allows multiple phone calls to exist on the same frequency without interfering with one another. The technology is the basis for Sprint and Verizon's networks and the phones for those networks. Manufacturers pay Qualcomm an estimated 5 percent of the cost of phones to license its patents.
CDMA became one of two dominant technologies in the United States, but it wasn't used in the first generation of digital phones in Europe, where a competing technology, GSM, had been adopted as a unified standard. European wireless companies such as Ericsson and Nokia were able to sell GSM phones and network equipment without paying royalties to Qualcomm.
For third-generation networks, Europe is migrating to wideband CDMA, or WCDMA, which sets up the conflict between Qualcomm and Nokia and Ericsson. Qualcomm, which holds a number of patents in the area, says its WCDMA patents are key to the technology. Broadcom, Ericsson and Nokia each hold some WCDMA patents.
Qualcomm says it is entitled to its 5 percent royalties for WCDMA phones.
The competitors are challenging that with a number of arguments.
In its court filings, Qualcomm said one of those strategies amounts to price fixing. The Project Stockholm companies pushed to limit licensing fees on WCDMA phones to a total of 5 percent to be split among the various companies with patents, Qualcomm said. They hoped to have a government agency or industry-standards body enforce the limit on royalty fees, Qualcomm said.
A Nokia spokeswoman said there was no Project Stockholm and that Qualcomm made up the name.
“There's no plot, no back-door actions,” spokeswoman Laurie Armstrong said. “We've done everything very publicly.”
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