Judge Rules Qualcomm Infringed on Broadcom Patent

In at least a partial victory for the plaintiff in one of the most heated intellectual property disputes in the history of telecommunications, US International Trade Commission Judge Charles Bullock ruled that defendant Qualcomm did indeed infringe upon one of the three Broadcom patents under contention.

Specifically, the judge ruled that imported equipment containing Qualcomm chipsets infringe upon Broadcom’s critical “ 983” patent, which specifies a portable communications device with transceivers for both wired and wireless networks.

As is the case with major IP trials these days, both sides claimed victory, with Qualcomm cheering it had effectively one two out of three. “Qualcomm is gratified with the [administrative law judge’s] determination that our company has not infringed two of the three Broadcom patents,” the company’s CEO, Dr. Paul E. Jacobs, stated immediately following the ruling.

Qualcomm notes that the judge did not order an injunction against the sale of Qualcomm phones and equipment using the infringing technology.

While some cited the lack of an injunction order as an immediate victory, other sources close to the case note that any penalty recommended by Judge Bullock would have to be reviewed by the entire six-member ITC board, and that a final decision on that penalty may not come until next February. The judge did recommend that any ban that may be placed on Qualcomm-brand equipment in the future not extend to assembled devices such as handsets –- particularly from Qualcomm’s customers -– that may contain the infringing technologies.

Despite the judge’s recommendation, Broadcom interpreted the decision as the first step toward an injunction anyway, come February. “The Commission is expected to issue a permanent exclusion order barring the importation into the United States of infringing Qualcomm chips,” reads a Broadcom statement this afternoon, “as well as a cease and desist order barring further sales of infringing products that have already been imported into the United States by Qualcomm.”

Qualcomm, meanwhile, looks forward to a hearing in just over two weeks’ time, looking into its countersuit alleging Broadcom infringed upon Qualcomm’s IP by means of misappropriation of trade secrets.

But in a “statement after the statement” late this afternoon to Reuters, Qualcomm admitted that, while it intends to appeal today’s ruling (no surprise to anyone), it will seek other technological alternatives. “Qualcomm is exploring designs to replace the features accused of infringement with superior functionality,” Reuters quotes a Qualcomm spokesperson as stating.

While today’s ruling isn’t exactly a home run for Broadcom, it may still give ammunition to that company’s ongoing efforts, along with six other telecom firms -– including Nokia -– to press for antitrust action against Qualcomm by the European Commission. There, Broadcom has been arguing that Qualcomm uses its massive patent portfolio as a tool to keep its competitors submissive – for instance, by forging industry standards around wireless broadband, and forcing companies who want to live up to the standard to license Qualcomm’s intellectual property.

Qualcomm shares traded sharply higher on the NASDAQ exchange, jumping nearly 2.5 points at the time of the announcement before settling to a one-day gain of just over 2%. Broadcom shares, meanwhile, rolled steadily lower before closing down 2.66% on the day. So while both sides claim victory, the lack of an order changing the state of the telecom market today is being perceived by investors, at least, as a win for Qualcomm.