Ericy Having A Hard Time Swallowing The Chip>
Ericsson Says It's Still in Talks About Qualcomm Suit (Update2)
Ericsson Says It's Still in Talks About Qualcomm Suit (Update2) (Adds comments from companies
in 2nd and 8th paragraphs. Updates share activity.)
Stockholm, Feb. 22 (Bloomberg) -- Ericsson AB, the world's No. 3 mobile phone maker, said it's still
in talks to settle a patent lawsuit against rival cellular-equipment maker Qualcomm Inc., though it
doesn't expect an agreement anytime soon.
The Stockholm-based company denied a report in today's Wall Street Journal that the companies
are close to an agreement and said there's been no change recently in the talks. Officials of San
Diego-based Qualcomm declined to comment.
Ericsson first filed the suit in September 1996, claiming a new standard for digital cellular networks
developed by Qualcomm violated Ericsson patents, and Qualcomm countered, claiming Ericsson's
suit was invalid and anticompetitive. Pre-trial hearings on the suit are scheduled to begin today in
Marshall, Texas, with a full trial in federal court to follow in April.
The Wall Street Journal, citing unidentified people familiar with the matter, said the companies are
about to sign an accord allowing each to use the other's technology. ''We hope we'll be able to
solve this issue in a more civilized way than going to court,'' said Eric Oesterberg, an Ericsson
spokesman. However, ''we're still discussing.''
Qualcomm shares rose 6 3/16 to 71 1/16 in early afternoon trading, while Ericsson American
depositary receipts rose 1 3/16 to 27 3/4.
Under the proposed settlement reported in the Journal, Stockholm-based Ericsson could sell
phones using code-division multiple access, or CDMA, technology that Qualcomm developed.
Qualcomm would get access to Ericsson's patents to a rival digital technology called global
system for mobile communication, or GSM.
Ericsson in the past has said it won't make phones or other equipment for CDMA networks
because the market is much smaller than GSM. Kathy Egan, a company spokeswoman, said that
strategy hasn't changed.
CDMA is used in the U.S. by operators like Sprint PCS, Bell Atlantic Corp. and AirTouch
Communications Inc., while GSM is used throughout Europe.
An agreement could also help resolve a looming trade conflict over the future of wireless
standards, the paper said. Ericsson and Qualcomm are battling to have their own standards
adopted worldwide for the networks, which will allow users to send video and pictures, e-mail and
surf the Internet over wireless phones.
The proposed settlement would also allow Qualcomm, which gets much of its revenue from
making semiconductors for phones, to make chips for phones using both technologies and might
also make such telephones itself, the paper said.
Last October, Ericsson dropped claims for three patents from the suit, which now concerns 8
Ericsson patents. |
