November 14, 2005
Another Fine Kettle of Fish - Qualcomm vs Broadcom
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These editorial pages have given extensive coverage to legal issues such as patent infringement, theft of trade secrets, employment contracts and relationship with standard making organizations that beset the EDA and electronic industries.
The coverage has been both of a general nature and of specific instances, e.g. Synopsys versus Magma and Rambus versus multiple. This time the focus is Qualcomm, a major player in the technology underpinning cell phones and a consumer of EDA products and services. There are parallels to the Rambus case.
intention of producing and selling any product. They use the patent portfolio and the treat of a lawsuit to exact licensing fees. SCO may be considered an example of this practice. In 1995 through an asset purchase agreement SCO acquired UNIX “IP”, the UNIX business and source code from Novell who had acquired it from AT&T. SCO has gone after Linux on the grounds that some of its UNIX source code had found its way into the Linux kernel.
Patent Office does not determine whether prior art exists. They rely on the filer to uncover and disclose prior art and later on those impacted by a patent to make the case that a patent should be rendered invalid.
Qualcomm was founded in 1985. In 1989 they introduced Code Division Multiple Access (CDMA) technology for wireless and data products. Today, QUALCOMM's patent portfolio includes more than 3,900 United States patents and patent applications for CDMA and related technologies. CDMA is the foundation for the two most widely adopted 3G standards - CDMA2000 and WCDMA (UMTS). QUALCOMM has patent license agreements with more than 125 manufacturers for the cdmaOne and CDMA2000 standards and with more than 50 manufacturers covering the WCDMA and TD-SCDMA standards.
Qualcomm has shipped two billion chips since 1996 when it delivered the first commercial CDMA solutions to wireless handset and infrastructure customers. It has shipped one billion chips since 2003. QUALCOMM solutions power a significant number of the more than 740 commercial CDMA2000 and WCDMA (UMTS) wireless devices available today. There are more than 150 CDMA2000 1X, CDMA2000 1xEV-DO and WCDMA operators in 71 countries who currently support more than 210 million 3G subscribers around the world.
market. In fiscal 2005 QCT, QTL and QWI accounted for approximately 57%, 32% and 11% of total revenue respectively.
determination in the second half of 2006.
Broadcom founded in 1991 is one of the world's largest fabless semiconductor companies. Over the last four quarters Broadcom had revenue of $2.4 billion and net earnings of $287 million. The firm provides manufacturers of computing and networking equipment, digital entertainment and broadband access products, and mobile devices with a broad portfolio of SoC and software solutions.
In early July Broadcom filed a complaint in US District Court asserting that Qualcomm had violated US antitrust laws. The alleged violations relate to Qualcomm's abuse of the wireless technology standards-setting process, its failure to meet its commitments to license technology for cellular wireless standards on fair, reasonable and non-discriminatory terms, and various anticompetitive practices of Qualcomm in the markets for cell phone technology and chipsets.
Louis M. Lupin, senior vice president and general counsel of QUALCOMM. "This case, like the earlier patent cases filed by Broadcom against QUALCOMM, appears to be a desperate attempt by Broadcom to gain bargaining leverage through meritless litigation. Because Broadcom does not hold essential patents for the important cellular standards, Broadcom must feel compelled to resort to these kinds of measures rather than continuing to negotiate for licenses in good faith. Broadcom's unfortunate preference for the litigation forum rather than the negotiating table will require QUALCOMM to proceed with litigation of its own."
Mr. Lupin pointed out Broadcom has a history of initiating litigation and ITC proceedings that do not turn out well for the company. Broadcom's patent litigation and ITC proceedings against Intel resulted in Broadcom's paying Intel a $60 million settlement in 2003. Similarly, Broadcom filed patent claims against Microtune, Inc. in court and in the ITC with the outcome a $22.5 million settlement payment from Broadcom to Microtune in 2004. Broadcom's patent infringement claims against Agere Inc. suffered a similar fate with Broadcom reporting a $27.5 million charge to settle that litigation late last year.
GSM Standards handsets and is infringing the remaining patent by the manufacture and sale of semiconductors for Wi-Fi devices. QUALCOMM seeks an injunction against Broadcom's continued manufacture and sale of these products as well as monetary damages.
In mid-October Qualcomm filed a second suit against Broadcom charging Broadcom with infringing two of Qualcomm's patents. One of the patents describes an image-compression technology and the other video encoding and decoding.
On Oct 28, 2005 Broadcom Ericsson, NEC, Nokia, Panasonic Mobile Communications and Texas Instruments each filed complaints to the European Commission requesting that it investigate and stop Qualcomm's anti-competitive conduct in the licensing of essential patents for 3G mobile technology.
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-- Jack Horgan, EDACafe.com Contributing Editor.
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