Qualcomm argued that Broadcom's demand for licensing fees could disrupt the mobile phone market in the United States. (Seokyong Lee/Bloomberg News)
SAN FRANCISCO: In a decision watched closely by the mobile phone industry, the Bush administration let stand an earlier ruling that requires Qualcomm to pay licensing fees to its competitor Broadcom.
Qualcomm, which makes chips used in many mobile phones, has argued that the ruling, made in June by the U.S. International Trade Commission, could lead to a ban on the importation of millions of new phones that use power management technology covered in a patent controlled by Broadcom.
But serious disruption in the phone market is unlikely, said Susan Schwab, the U.S. trade representative, in upholding the ruling Monday.
Schwab noted that since the June ruling, two major mobile phone carriers had reached agreements to pay licensing fees to Broadcom, allowing them to bring the latest phones into the country.
Schwab also noted that Broadcom had agreed to give a royalty-free license to public safety organizations using new phones, a move that she said ameliorated Qualcomm's claim that Broadcom's demand for fees could hamper public safety. The decision is a blow to Qualcomm, which makes chips for phones used on mobile phone networks operated by Verizon Wireless, Sprint and AT&T. Qualcomm has argued that the licensing fees of $6 a phone that Broadcom demanded were prohibitively expensive.
Broadcom, a chip maker, has countered that Qualcomm is using its power management technology without paying royalties. Broadcom has sued Qualcomm over the issue, but the suit was stayed pending a decision by the trade representative.
Lou Lupin, general counsel for Qualcomm, said the company planned to appeal for an emergency stay of the ruling. He said Qualcomm's argument that the June ruling would hamper public safety appeared to have been at least partly undermined by Broadcom's agreements with the two mobile carriers. Verizon reached a deal with Broadcom last month. The other company has not been publicly identified.
David Rosmann, vice president for intellectual property litigation at Broadcom, said the company would seek an immediate enforcement of the ruling that would bar the importing of phones with unlicensed Broadcom technology. Rosmann said such a ban would probably affect fewer than 10 percent of phones, and only new models that are not yet on the market.
Qualcomm loses patent rights
Qualcomm said a U.S. judge has ruled that the company has waived its rights to enforce certain patents asserted against Broadcom related to a video compression standard, Reuters reported from New York on Tuesday.
The court held that Qualcomm had deliberately concealed two patents from the standard-setting body responsible for developing the H.264 video standard and therefore was precluded from enforcing the patents, Qualcomm said. The company plans to appeal the decision.
continue reading.....
